PIQUA — During the Piqua City Commission meeting earlier this week, the commission approved joining in litigation against the state in opposition to substitute House Bill 49, challenging the state’s centralization of income tax collection.
The commission went into executive session to discuss this litigation before voting on it.
“This litigation seeks to challenge the bill as unconstitutional,” City Attorney Stacy Wall said. “Several things the bill does is that it dictates that a city has to adopt certain ordinance language, and if does not do that by Jan. 31, it takes away the income taxing authority of the city.”
Wall added that the bill allows taxpayers to choose between going to centralized filing or completing it locally, to which Wall said, “The individual taxpayer is not normally educated in knowing which path to take in that regards.”
The bill also charges the city 0.5 percent of the municipal revenue as an administrative cost to administer centralized income tax collection. The state can also penalize cities.
“If the state makes a request to the city for history of a taxpayer and the city does not provide that, the city is charged a 50 percent penalty of collected net profit revenue,” Wall said. “Then all audits and refunds are by the state only, and the city has no involvement or say into the kind of audit.”
The city is arguing that it is taking away their “home rule authority” to administer income taxes locally and it is also taking from their net revenue.
A lawsuit was filed in Franklin County last week. The city is joining approximately 130 municipalities in litigation against the state, including cities like Columbus, Cincinnati, and Cleveland.
Commissioner Joe Wilson responded to the point of view that this house bill is “business-friendly” legislation.
“This is supposed to be a business-friendly item to help businesses when they file, but in reality, they have the opportunity to file with the state already without this bill,” Wilson said, referencing the Ohio Business Gateway. “When you take that away it becomes a money grab from the state.” Wilson added later, “It doesn’t add anything that doesn’t already exist, it just takes our money for that privilege.”
The commission approved the city’s share of the retainer of Frost Brown Todd, LLC would be $4,000 to join the litigation.
Commissioner Bill Vogt was absent Tuesday evening.
Reach Sam Wildow at firstname.lastname@example.org or (937) 451-3336