Writer rebuts recent article

To the Editor:

I’m writing to correct some misinformation conveyed in your recent article (“Council considers opposing state budget”) about the village of Covington joining a campaign to defeat a proposal by Governor John Kasich that will help all Ohio, including its cities and villages.

The Governor wants to centralize and streamline the municipal tax on business income to remedy a big problem for Ohio businesses that are required to file tax returns in every city where they earn income.

Imagine having to file 50, or hundreds of returns with different municipalities, all having their own tax rates, rules and filing requirements.

That is the compliance nightmare businesses face in Ohio. Many report that it costs them more to file all those returns than the amount of tax they owe.

The Governor’s proposal would have businesses file just one form in one place and be subject to one consistent set of rules. The Department of Taxation would process the tax and send all payments quarterly — plus interest — back to the respective city or village, minus a 1 percent administration fee. That fee would cover thorough and rigorous auditing of business taxpayers, which the article incorrectly states would not happen.

The article also reports that the proposal “appears to be a plan to redistribute municipal revenue for non-municipal purposes.” That statement is unfounded; in fact, quite the opposite is true.

Cities are typically paying from 2 percent to more than 6 percent to collect the tax. Because of the state’s low fee, Ohio cities and villages would save $9 million a year that could be used to pay for services instead of paying to collect the tax.

Cities would continue to control tax rates and credits, and responsibility for collecting most of their municipal income tax revenue from employer withholding and individual filings.

This is a “pro-business” proposal that would enhance the business climate in Ohio and is being supported by nearly every major business group in the state.

There is no valid reason for municipalities to cling to their obsolete and counterproductive tax system. Ohio must continue improving its economic environment to compete for new businesses and jobs.

— Joe Testa, Ohio Tax Commissioner