News and Analysis
This week, Sen. Kristina Roegner (R-Hudson) gave sponsor testimony on Senate Bill 352, which would repeal the temporary municipal income taxation rule for employees who are working from home due to COVID-19. That provision, passed early in the pandemic to protect cities’ income tax revenues, allowed employers to continue to send withholdings to an employee’s principal city of work rather than to the city in which the employee lives.
The issue has created much conversation since Ohio’s state of emergency remains in place. The OMA fought for the creation of the temporary provision so employers’ tax systems would not be overwhelmed as many employees work remotely for an indefinite period of time. The OMA created a tax working group to address the issue, which will be discussed at the next OMA Tax Committee meeting. 9/24/2020
The Internal Revenue Service is reminding taxpayers who filed an extension that the Oct. 15 due date to file 2019 tax returns is approaching. The agency has also issued a reminder about the home office deduction, which may allow taxpayers working from home to deduct certain expenses. 9/23/2020
A group that advocates for Ohio municipalities is concerned about two legislative proposals that seek to make changes in how income taxes are collected.
According to a report by the Statehouse News Bureau, House Bill 754 and Senate Bill 352 would repeal a provision in House Bill 197 passed early in the pandemic to protect cities’ income tax revenues. That provision was spearheaded by the OMA and its allies to ensure Ohio’s businesses would not have to worry about new withholdings in addition to COVID-19 challenges. HB 754 and SB 352 would instead redirect local income taxes paid by employees working from home to where they live — not the cities in which their normal workplaces are located.
The Greater Ohio Policy Center says the bills would cost Ohio’s six largest cities, which generate more than half of the state’s GDP, more than $300 million a year. The issue remains a top concern for manufacturers with so many office workers continuing to work from home. 9/16/2020
Preliminary data from Ohio’s Office of Budget and Management (OBM) show that August tax receipts to the state’s general revenue fund (GRF) exceeded estimates. Total tax receipts beat estimates by 3.2%, or $69 million above the budget forecast.
In its monthly report, OBM said the commercial activity tax (CAT) fell below estimates by 9.9%, but this period reflects the second quarter, which included the most severe drop in economic activity during COVID-19. In August, personal income tax saw a year-over-year increase of $116.5 million (16.2%). Non-auto sales tax increased by $17.3 million (2.2%), and auto sales grew by $11 million (7.6%). Year to date, Ohio’s overall tax receipts are $830.4 million (21.6%) above last year. 9/15/2020
According to a new comparison by the Tax Foundation, Ohio’s property taxes — levied and collected by local governments — are ninth highest in the U.S. when taken as a percentage of owner-occupied housing value.
Roughly two-thirds of Ohio’s property taxes go to school districts, according to the County Commissioners Association of Ohio. The Ohio Department of Taxation reports that in tax year 2019, Ohio school districts’ operating levies yielded approximately $11 billion in taxes on property. 9/9/2020
On Thursday, Sept. 24, from 11:30 a.m. to 12:30 p.m. (ET), OMA Connections Partner GBQ Partners will host a free webinar to review the flurry of tax-related activity at the state and local levels. This webinar will qualify for one hour of continuing professional education based on Ohio CPE requirements. Learn more. 9/10/2020
OMA Connections Partner Crowe LLP has developed a series of scorecards to help compare the presidential candidates’ tax positions. Here is Crowe’s first scorecard covering the candidates’ proposals on individual tax issues, including capital gains, deductions, and credits. Click here for additional scorecards. 9/10/2020
This week Rep. Kris Jordan (R-Ostrander) introduced House Bill 754 which would repeal Sec. 29 from House Bill 197. That section has allowed manufacturers and other Ohio businesses to continue withholding employee income tax from the company’s principal location and not employees’ home jurisdictions.
With many Ohioans working remotely due to COVID-19, the General Assembly acted wisely to save businesses the burden, expense and compliance nightmare of revamping their tax systems in the midst of the pandemic.
The bill is a companion to Sen. Kristina Roegner’s (R-Hudson) Senate Bill 352 which also repeals Sec. 29. The provision has garnered attention as the pandemic continues to drive employers’ work-from-home policies.
The OMA is tracking the matter and will be discussing it in its November 18 Tax and Finance Committee. 9/3/2020
In Ohio, nearly 150,000 loans were made to small businesses under the federal Paycheck Protection Program (PPP). Currently there is no specific guidance in U.S. generally accepted accounting principles (GAAP) that addresses when a business entity obtains a loan that is forgivable by a government entity.
OMA Connections Partner RSM has prepared this white paper to provide borrowers with accounting guidance for PPP loans. 9/1/2020
This week, the Small Business Administration (SBA) released additional guidance related to loan forgiveness under the Paycheck Protection Program (PPP). Under the SBA’s interim final rule, an owner-employee with less than a 5% ownership stake in a C- or S-corporation is not subject to the owner-employee compensation limitation. Also, guidance was issued for forgiveness eligibility for related-party rent payments. Read more in this analysis by OMA Connections Partner RSM. 8/26/2020