Bill would leave Ohio income tax with city where work is actually done


(The Center Square) – An Ohio Senate committee heard testimony for the first time Tuesday regarding a bill that would return Ohio’s income tax collections to its pre-COVID-19 state.

State Sen. Kristina Roegner, R-Hudson, introduced a bill that keeps worker income taxes within the city where the work actually took place, rather than in the city of the business’ physical location.

Her bill, SB 352, which appeared before the Local Government, Public Safety and Veterans Affairs Committee, received its first hearing.

“It doesn’t change anything. It’s not radical. It just says you pay taxes where you work,” Roegner said.

She testified that it’s reasonable to assume more Ohioans will continue to work from home even after the pandemic.

“Prior to March, many people had never heard of Zoom. Now, six months into the pandemic, it is part of our vernacular as workers and students have become quite comfortable with video conferencing, telecommuting and generally working from home,” Roegner testified. “The question is: once SB 352 passes or the pandemic is over and the state of emergency is lifted, will workers who have become accustomed to working from home flock back to the cities? There is a high probability that at least a statistically significant portion of them will not and in either case municipal tax revenue will see a dramatic shift.”

In March, the General Assembly unanimously passed HB 197 that, among other things, continued to tax workers in the city where they use to work, even though they were working from home following Gov. Mike DeWine’s stay-at-home order.

Six months later, Roegner believes the legislature needs to fix what she calls an unfair reality from what was supposed to be a temporary fix. Those working from home are utilizing more services in their home cities but still paying taxes to their corporate cities, leaving home cities to pay for more services without additional tax revenue.

“It’s far better that the legislature determines the best way forward for Ohio’s cities and communities now, rather than wait and simply watch the language in HB 197 expire at the end of the state of emergency, enacting the status quo with much less discussion and debate,” Roegner said.

Roegner’s bill comes a little more than two months after The Buckeye Institute, a Columbus think tank with a mission to advance free-market public policy in Ohio, and three of its employees filed a lawsuit to stop the city of Columbus from collecting income tax from workers mandated to work from home outside of the city.

“The law in this case is straight out of a dystopic novel: the state first prohibited workers from going into their offices during the stay-at-home order, then passed an emergency law absurdly ‘deeming’ all work that was actually performed at home to have been performed in the higher-taxed office location instead,” Robert Alt, president and CEO of The Buckeye Institute, said. “It is legal fiction, and it is unconstitutional.”

By J.D. Davidson

The Center Square

An Ohio native, J.D. Davidson is a veteran journalist with more than 30 years of experience in newspapers in Ohio, Georgia, Alabama and Texas. He has served as a reporter, editor, managing editor and publisher.

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