Thursday, January 15, 2015

Municipal Tax Reform Cuts Red Tape, Grows Economy

Guest Column from State Representative Jim Buchy

Of the many steps we have taken to improve Ohio’s economic situation, our latest effort involved making serious reforms to the way municipalities collect income taxes. House Bill 5, which passed the legislature at the end of the previous General Assembly, was signed by the governor and will go into effect this spring. The new approach to municipal income tax collection is paving the way for economic growth and more jobs for Ohioans.

Under the previous tax structure, around 600 different municipalities utilized more than 300 different tax forms to file and process their municipal income tax. Complications from this system created numerous obstacles for business, often requiring them to spend more time and money on preparing the tax forms than the actual tax levied against the business.

This situation illustrates a perfect example of how government can obstruct economic growth and job creation. It also shows how leaders can identify and solve these complex problems for the betterment of all.

The legislature took the appropriate steps to remedy this problem by creating uniform due dates, withholding requirements, and procedures for audits and appeals. All of this simplifies navigation of the municipal income tax system for employers, letting them do what they do best—grow and create more jobs.

This legislation also makes Ohio more competitive in relation to neighboring states. Businesses looking to relocate to Ohio or expand their operations into the state were deterred from coming by the significant flaws of the system. Now, simplification of our tax system will provide even more incentives to bring jobs back inside Ohio’s borders.

Under the leadership of Governor Kasich we are working to improve the climate for job growth in Ohio. These reforms make substantial improvements and progress to grow our economy and put people back to work. We will continue to cut red tape and get government out of the way of business growth and development.

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