In early September 2020, GOPC raised the alarm on SB352, HB754, and a recently filed lawsuit, all of which would seriously limit the contributions Ohio’s cities make to the state GDP. These bills and lawsuits seek to undo six decades of precedent—changing the location eligible to collect income tax from employees. In the current work-from-home era, these bills and lawsuit would immediately allow municipalities to collect taxes from residents who are working from home instead of the municipality where the employer is located, as has been case, historically.
Without a clear transition to a new way of collecting income taxes that is fair to all parties, Ohio’s major cities—and thus the state itself—could experience major contractions in their ability to provide services to employers and residents in the region. This will set off a chain reaction of unintended consequences.
The Columbus Dispatch covered this situation in a front page story; and it has received attention from the Ohio Statehouse News Bureau, Canton Repository, Dayton Daily News, and Highland County Press.
We expect this will become a major issue in Spring 2021, during debates around the state operating budget. In the past several decades, the state budget has become a major vehicle for introducing new policies, and given the likelihood that a portion of Ohio’s workforce will still be working from home, Ohio will need an orderly transition and resolution on this issue. A leading law firm in Ohio, Vorys, has already gone on record expressing concern about the current bills and lawsuits, saying, “much time and consideration should be given to SB 352. SB 352, in its present form, seemingly creates more problems than it attempts to solve.”
GOPC will continue to monitor this issue and advocate for a solution to the pandemic municipal income tax issue, which is fair to all parties.