25-03 Resolution
RECORD OF RESOLUTIONS
Dayton legal Blank Ca., Farm No. 30045
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i; 25-03
:1 Resolution No. Passed ..
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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:
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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
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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