(The Center Square) – With more employees working from home than from offices, Ohio income tax laws continue to be challenged, and the latest opposition comes in at the General Assembly.
Senator Kristina Roegner, R-Hudson, has tabled a bill tracing the state's income tax law back to prepandemic regulations, which means that most employees pay taxes in the city they live in and the city they work in. However, since last March, many employees have been working and living in the same city.
Senate Act 97 repeals a stopgap pandemic solution passed by Ohio legislature last spring that allowed business-based cities to continue collecting income taxes from employees who worked from home in another community.
According to Roegner, once Ohio is passed, the bill will simply revert to its original law that allows local authorities to tax workers where they work and where they live.
"After a few months (the pandemic) you created a situation that I believe is unconstitutional," Roegner said. "You have people paying taxes to a town that people haven't set foot in for months."
The General Assembly made efforts last spring to adjust the laws as the pandemic worsened. Topics such as school attendance, graduation requirements, school exams, driver's licenses and vehicle registrations, and income taxes were addressed.
Legislators at the time froze income rules to keep the revenue the cities budgeted prior to the stay-at-home contracts, and companies encouraged or offered employees the option to work from home.
"We didn't want the system to suddenly suffer a tax shock," said Roegner. “We all thought it would be two or three weeks to smooth the curve. Lo and behold, this pandemic has dragged on. "
The opposition is likely to come from the largest cities in Ohio, where some of the majority of employees work in one city while living in another. Many of these workers tend to have higher paying jobs, and many of these cities tend to have higher tax rates. Removing these workers from major cities' tax bases would significantly reduce government revenue streams.
The Buckeye Institute, an independent research and education group, submitted Lawsuits earlier this month on behalf of Eric Denison and Josh Schaad against the cities of Columbus and Cincinnati. The trials will ask the court to clarify Ohio's unconstitutional law that allows cities to tax workers who do not live or work in those cities.
Roegner introduced a similar bill in the last legislative period, but it did not leave the committee. She hopes to at least have a hearing on the new legislation. She also said she plans to offer it as a budget change.
"It's such a simple calculation. All it does is undo what we did," said Roegner. "Let's go back to the state before the pandemic. I hope I get at least one first hearing on the bill. I will also introduce it as an amendment to the budget. I will keep pushing for it to be the right thing to do. "