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Simplified Tax Structure Good for Job Creation

By Rep. Marlene Anielski (R-Independence)
April 2, 2013
Republican Newsroom

House Bill 5 is currently being considered in the Ohio House of Representatives that would simplify the state’s tax system and lower compliance costs on local businesses.

On March 27th, I met with many of the mayors and fiscal officers of the 6th House District, the President of the Northeast Ohio Mayors and City Managers Association and other interested parties to discuss the issue and resolve any misunderstandings. I was also pleased to be joined by State Representative Cheryl Grossman of Columbus, who sponsored the legislation. The meeting was extremely productive and constructive in developing solutions on differences. A summary of our progress was presented at a meeting for the Cuyahoga County Mayors and City Managers Association on March 28th.

Ohio is the only state in the country that allows every municipality to set its own rules and regulations regarding tax compliance. This has resulted in as many as 600 different sets of rules by which businesses must follow in order to be in compliance of the law.

Having to comply with numerous, burdensome taxes and costs can force some businesses to go under or relocate to another state, neither of which are good options for Ohioans, particularly in small communities.

“The lack of municipal tax uniformity is cited by international site selectors as the number two reason to not locate a business in Ohio,” Rep. Grossman said. “As we work to make Ohio competitive with other states to grow our economy, we must achieve uniformity of municipal income tax. It is not uncommon for employees and employers to have 25 or 30 different municipal tax forms to prepare every April 15th. This patchwork system is not business-friendly or efficient.”

House Bill 5 would establish a uniform set of compliance definitions and regulations (extensions, due dates, penalties), while reserving the right of cities to set their own tax rates. Therefore, a small business could put more of its capital towards more useful means like hiring, research and equipment, rather than filling out mountains of paperwork.

A strong business climate is essential to maintaining the momentum Ohio has experienced in recent years and in order to maximize the state’s competitiveness. Unnecessary roadblocks that stand in the way of job creation and business expansion can severely hurt workers and families.

I believe the proper role of government should be to provide a simple framework within which business can flourish. A simpler, fairer and more predictable tax system is attractive to businesses, which can lead to more jobs and greater options for consumers.