Ohio’s Temporary Law for Muni Income Tax Faces Another Legal Challenge

The debate continues at the Statehouse and in the courts over Ohio’s temporary law that allows municipal income tax withholdings to be based on an employee’s principal work location — not where he/she is working remotely during COVID-19. As another legal challenge is filed, the House Ways and Means Committee proceeds with hearings on House Bill 157 — a bill to expedite the repeal of the temporary law.

The OMA continues to voice its concerns over an immediate repeal of this temporary provision. “Companies are concerned that their payroll staff and systems will not be able to handle required withholding and income tax changes without ample lead time, and they are concerned about making substantial changes in the middle of any tax year,” the OMA’s Rachael Carl told lawmakers this week.

Meanwhile, several Ohio newspapers have reported on the high stakes for cities should HB 157 become law. Ohio’s six biggest cities (Cleveland, Columbus, Cincinnati, Akron, Toledo, and Dayton) get about 88% of their revenue from income taxes, according to The Columbus Dispatch (subscription). 3/18/2021