Ohio House Republican Re-Introduces Legislation Aiming to Limit Tax Penalties

A Republican Ohio House representative re-introduced legislation that would place limits on municipal income tax late filing penalties.

House Bill (HB) 105, sponsored by State Representative Jim Thomas (R-Jackson Township), aims to put in place protections for Ohio taxpayers against excessive late penalties and notices.

According to Thomas, he was alerted to this issue by an Ohioan who discovered that he or she was being penalized for reporting their municipal taxes late, even though the person did not owe anything to the municipality.

Thomas said that Ohio’s current practices “do not treat our tax payers with respect, ” so he reintroduced HB 105.

Under current law, municipal income tax penalties are a firm dollar amount of $25.00 for each month a taxpayer fails to file a required return, up to $150.00 for each return. According to Thomas, this does not account for the actual amount of tax owed; it only penalizes taxpayers for not filing, even if they owe little to no tax.

In addition, municipalities or the Ohio Department of Taxation may also notify a taxpayer regarding a late return, even if the taxpayer has already filed for an extension.

According to Thomas, this practice creates confusion for Ohio taxpayers.

“At best, this is an annoyance. At worst, this could create confusion for taxpayers who have received an extension,” Thomas said.

HB 105 tries to make two changes to the municipal income tax law, which Thomas said “would be fairer for taxpayers than the current law.”

The measure forbids the commissioner or a municipal tax administrator from contacting a taxpayer about a return when they have been granted an extension until the taxpayer has filed the return or the extended due date has passed.

Additionally, if the tax owed is less than $150.00, the law caps late filing fines to fifty percent of the tax due. Because of this, penalties are proportional to the amount of tax due, and no taxpayer may be assessed more in fees and penalties than their tax liability.

According to Thomas, these changes to the municipal income tax law will safeguard Ohio families.

“By making this change and putting a cap on late fees, we are protecting Ohioans and their families,” Thomas said.

The legislation is currently under review in the Ohio House Ways and Means Committee, receiving support from the Ohio Society of CPAs and the Council On State Taxation (COST).

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Hannah Poling is a lead reporter at The Ohio Star and The Star News Network. Follow Hannah on Twitter @HannahPoling1. Email tips to [email protected]
Photo “Jim Thomas” by The Ohio House of Representatives. Background Photo “Ohio Capitol” by . CC BY-SA 4.0.




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