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Home My WebLink About25-03 Resolution RECORD OF RESOLUTIONS Dayton legal Blank Ca., Farm No. 30045 Ii :1 i; 25-03 :1 Resolution No. Passed .. I: ............, YEAR '.:c=:.'c:=:~-~11 " " A Resolution Expressing Opposition To House Bill 95 Relating To The Proposed Changes To Municipal Taxes That Are Not Revenue Neutral WHEREAS, Ohio Revised Code Section 718 authorizes municipalities to tax, within specific guidelines, earned income generated within their territorial jurisdiction to fund necessary safety and other municipal services; and WHEREAS, during 2002 as well as early 2003, the State has made public pronouncements at hearings which suggest action would be taken by the State of Ohio that would serve to impact the collection of local earned income tax, such as a proposed requirement to allow a five year Net Operating Loss deduction; and WHEREAS, the Dublin City Council and Administration strongly oppose the proposed potential for a significant loss of revenue such a change would unfairly impose on a significant number of municipalities, and would cause a reduction or elimination of services to Dublin citizens - residential as well as corporate. NOW, THEREFORE BE IT RESOLVED by the Council of the City of Dublin, State of Ohio, (~ of the elected members concurring that: Section 1. The Dublin City Council formally expresses its strong opposition to any proposed State legislation that would enable the State of Ohio to force the City of Dublin and other municipalities to allow a five year Net Operating Loss deduction. It is Dublin's opinion that municipalities must remain as self- sufficient components of the State of Ohio to assure current level and quality of services and infrastructure for our residential citizens, corporate citizens, and visitors. Any effort made to impact the source of those local services will harm not only Dublin residential and corporate citizens, but ultimately the State of Ohio. Section 2. The Clerk of Council is hereby directed to forward a copy of this resolution to appropriate State of Ohio officials. Section 3. That this Resolution shall take effect and be in force at the earliest time provided by law. M~ ,2003. Mayor - Presiding Officer ATTEST: ~ a~ Clerk of Council I hereby certify that copIes of this Ordinance/Resolution were posted in the City of Dublin in accordance with Section 731.25 of the Ohio Revised Code. f)~ Cle Office of the City Manager 5200 Emerald Parkway · Dublin, OH 43017 CITY OF DUBLIN Phone: 614-410-4400 · Fax: 614-410-4490 Memo To: Members of Dublin City Council From: Jane S. Brautigam, City Manager Date: April 30, 2003 Initiated By: Faye Gibson, Director of Taxation Re: RESOLUTION NO. 25-03, AMENDED SUBSTITUTE HB 95 AND MUNICIPAL INCOME TAX SUMMARY Last year two tax committees were formed to look at Ohio's overall tax system and charged with making recommendations to reform the tax system in Ohio (including municipal tax) by March 2003. This committee was also charged with making any reforms revenue neutral city by city. The committees have completed their work and some of their recommendations were included in the Governor's Budget Bill (HB95) and the remaining ones are still in HB58. The House included some reform issues in the Budget Bill before sending it to the Senate and the remainder stayed in HB58. The Ohio Municipal Task Force (comprised of tax groups throughout Ohio), of which I am chair, has been actively involved in working with Ohio Tax Commissioner Zaino, the Central Ohio Municipal Alliance, the Ohio Municipal League, the Ohio Chamber of Commerce and the Ohio Society of CP As to bring some uniformity to all 541 municipalities with a municipal tax. This group has developed: uniform definition for net profit taxable income, uniform definition of the withholding tax base, and uniform due dates (Federal due dates). We have committed to working with the Ohio Department of Taxation to develop the Ohio Business Gateway to permit optional payment of net profits tax/extensions in 2005 and withholding in 2007 on the condition municipal administrators will be included on the Development and Steering Committees. We CANNOT agree that the Net Operating Loss Deduction (NOL) should be five years. Currently, the City of Dublin does not allow NOLs. This provision, if enacted, would significantly impact our revenue, as well as over 100 other municipalities in Ohio. It would unfairly impose a reduction or elimination of services to Dublin citizens - residential as well as corporate. It is our contention that an NOL provision should be discretionary (0-5 years) allowing each individual jurisdiction, in concert with their residents and the business community, to formulate responsible tax policy at the local level meeting local needs. Weare continuing to work on this issue. Since it is now in the hands of the Senate Finance Committee and they have indicated they want municipal support, it would be helpful if Council and the Dublin City Administration went on record opposing the NOL provision. I have attached letters to all members of the Senate Finance Committee as well as Senator Stivers and Representative Wolpert, which should be attached to Resolution 25-03. RECOMMENDATION Staff recommends that Resolution No. 25-03 be passed on May 5, 2003. Sample letter- Attachment to Resolution 25-03 ,.CITY OF DUBLIN May 6, 2003 Dublin City Council 5200 Emerald Parkway Dublin, Ohia 43017-1006 Larry Wolpert 'h, roD: 614-410-4400 Ohio House of Representatives _23rd District Fax: 614-761-6590 77 S. High Street, 13th Floor Web Site: www.dublin,oh.us Columbus, Ohio 43215-6111 Mayor Thomos M. McCosh Dear Representative Wolpert: Vice Mayar Cathy A. Boring The purpose of this letter is to express the City of Dublin's strong opposition to the Marilee Chinnici-Zuercher State's proposed legislation, which would force the City of Dublin and a Charles W, Kranstuber significant number of other municipalities to allow a five-year Net Operating Loss Timothy A. lecklider (NOL) deduction against income in subsequent years. This would result in John G. Reiner Amy J. Salay significant loss of revenue to the City of Dublin and would cause a reduction or Clerk of Cauncil elimination of services to Dublin citizens - residential as well as corporate. Anne C. Clarke It was the charge of the Committee reviewing these tax modifications that any solution proposed be revenue neutral. Faye Gibson our Director of Taxation, along with the Tax and Finance Directors of many other municipalities, has recommended that NOLs be discretionary (0-5 years) allowing each individual jurisdiction, in concert with their residents and the business community, to formulate responsible tax policy at the local level meeting local needs. If NOLs are set based upon local needs, the City of Dublin could support this change. We have already given our support to the following issues: . Regarding the proposed uniform definition of taxable income on net profits, Dublin agrees a uniform definition is important. The definition, as amended, should be the uniform definition. . Regarding the common definition of withholding tax base, we believe the uniform definition should be Medicare wages, including sub-pay, with no addi tions/ subtractions. This definition is fair and equitable, and revenue- neutral for Ohio's municipalities. Representative Larry Wolpert Page 2 May 6, 2003 . Regarding tax return due date changes, Dublin agrees that uniform dates are necessary and supports the dates as outlined in the legislation. . Regarding the use of the Ohio Business Gateway to file municipal net profit ~" "\,<,,, returns in 2005 and withholding in 2007, we are willing to work with the Ohio Department of Taxation and the Steering Committee to develop such a system and request there be municipal representatives appointed to any oversight committees. Your consideration of our opinions and strong opposition to the NOL provision as currently proposed would be most appreciated. It is critical that municipalities remain as self-sufficient components of the State of Ohio. Please feel free to contact us if you have any questions. Sincerely, CITY OF DUBLIN - COUNCIL AND ADMINISTRATION Thomas McCash Jane S. Brautigam Mayor City Manager