Edwards, Cutrona's House Bill 482 Passes House Vote

COLUMBUS – A new commission that will study income tax fraud is one step closer to reality.

The Ohio House of Representatives today has approved House Bill 482, sponsored by State Representatives Al Cutrona and Jay Edwards, which would create the Tax Fraud Study Commission.

The commission could study all types of income tax fraud, but the bill specifically directs it to focus on fraud by taxpayers operating a trade or business, and on fraud related to the misclassification of workers as employees or independent contractors.

“Worker misclassification and tax fraud negatively impact everyone from legitimate contractors to the loss of tax revenue that negatively impacts local communities,” said Cutrona (R-Canfield). “It’s important that Ohio workers and taxpayers are treated fairly, and that we bring tax fraud to an end. That’s our goal with this legislation.”

This nine-member commission will be bipartisan, with three members each from the House and Senate. It will also have a representative of labor as well as the contractors’ association, along with the state tax commissioner.

Within 13 months after the bill’s 90-day effective date, the Commission must submit a report discussing its findings and recommendations on the prevention of income tax fraud to the Governor and General Assembly. After issuing this report, the Commission will dissolve.

Edwards (R-Nelsonville) said a 2009 report from the attorney general’s office estimated 459,000 workers were misclassified. This meant unemployment insurance losses to Ohio workers of nearly $35 million, forgone state income tax revenue of between $112 million and $223 million annually, and a loss of more than $510 million in Bureau of Workers’ Compensation premiums annually.

“This has been an ongoing and growing problem in Ohio,” he said. “But I’m optimistic this commission will be able to take a comprehensive look at the problem and provide thoughtful recommendations to address it.”

The bill now goes to the Ohio Senate for consideration.