Less taxing

Next year, when the tax man cometh, companies that do work in many cities in Ohio will have a much shorter stack of paperwork.

Provisions of Substitute House Bill 477 take effect Jan. 1 and create uniformity for municipal tax filings across the state.

“[Under current law] it’s not unusual for a small contractor to have to fill out 40, 50, 60 returns — in addition to your federal income tax return and your state income tax return,” says Donn Ellerbrock, vice president for governmental affairs for Associated General Contractors of Ohio.

Luther Liggett Jr., a law partner with Columbus-based Bricker & Eckler LLP, explains that current law requires employers to withhold tax and file forms for any employee working within a municipality’s limits, even if neither the employee nor the employer reside in that city.

Contractors who, for example, go into a subdivision for a day or two of repairs may end up owing only a few dollars, says Liggett, who also is a legislative agent for a variety of construction associations, such as the National Electrical Contractors Association.

“Interestingly enough,” says Ellerbrock, “before 477, frequently firms would have to spend more to comply than they owed.”

The new law’s benefits, effective Jan. 1, 2001, include:

  • A city cannot tax income if an individual performs services on 12 or fewer days in the calendar year and neither the employee’s residence nor the company’s principal place of business are in the municipal corporation. That individual’s employer will not have to count such compensation in payroll factors used to report the business’s income to the municipal corporation.

    In addition, the law says no municipality may require any nonresident employer to deduct and withhold income taxes “unless the total amount of tax required to be deducted and withheld for the municipal corporation on account of all the employers’ employees … exceeds $150 for a calendar year beginning on or after that date.”

  • All municipalities must accept any generic tax form from a taxpayer, provided it contains all the information necessary for filing. Rules and tax forms must be available through the Internet by 2002.

    “If you work in 60 different suburbs in Cleveland, you’ve got to go get 60 different forms under the current law,” Liggett says.

  • Municipalities must have an appeals process by which an employer can contest payments.

“Because of the size of some of these returns, it didn’t behoove the contractor to fight claims by municipalities,” says Ellerbrock, noting that often the municipalities did not have an appeals process, forcing the business to go to court to battle disputes. “If they say you owe $100 and you say you owe $50, how much time are you going to spend fighting it? You can’t justify the cost.”

The new law sets up appeals guidelines — and requires municipalities to establish boards of appeals. A taxpayer will have 30 days to appeal a tax administrator’s decision, and appeals boards must schedule hearings within 45 days of the appeal. The board must issue a decision within 90 days after the final hearing and send a notice of its decision to the taxpayer within 15 days. How to reach: Luther Liggett Jr., Bricker & Eckler LLP, (614) 227-2399. Details and links regarding the new law are available on the firm’s Web site at www.bricker.com/legislation/HB477.asp. For the full text of the law, go to www.legislature.state.oh.us/bills.cfm?ID=123_HB_477 on the 123rd Ohio General Assembly’s Web site.

Governor honors technology innovators

Gov. Bob Taft has honored eight Ohio companies for their dedication to technology.

Cleveland-based Keithley Instruments Inc. received the 2000 Thomas Edison Award, which recognizes one outstanding Ohio company or organization that has demonstrated global leadership in fostering or implementing innovation. The award honors a firm that utilizes technology to impact not only its own operations but also the quality of life in its community, the state of Ohio and around the world.

The governor also presented Emerging Technology Awards to small, technology-oriented firms that are making valuable progress in the advancement of new or existing technologies. The winners were BIOMEC Inc. and USB Corp. of Cleveland, Exciton Inc. of Dayton, fourthchannel inc. and LeadScope Inc. of Columbus, PlanetFeedback.com of Cincinnati and Sorbent Technologies Corp. of Twinsburg.

For more information about the awards, contact the Ohio Department of Development’s Technology Division, (800) 848-1300, or visit www.odod.state.oh.us/tech.

Business mission set for March

The governor has announced plans to lead a delegation of Ohio companies on a business mission March 3-17, 2001, to South America.

Gov. Taft aims to enhance Ohio’s trade position in the South American market, introduce Ohio companies to business opportunities in South America and assist Ohio companies already doing business in the region.

Business sectors to be featured on the mission include telecommunications, pollution control, medical and health care, plastics machinery, automotive, processed foods, packaging and food processing equipment, as well as agriculture and mining industry equipment.

The cost of the mission is expected to be approximately $13,500 per person, which includes all air and group ground transportation, accommodations and business meetings.

Ohio companies interested in participating should contact Randy Hochstetter, mission coordinator, in the Ohio Department of Development’s International Trade Division at (614) 466-5017 or (800) 848-1300. Agribusinesses should contact Liana Lee, chief of the Ohio Department of Agriculture’s Division of Markets, at (614) 466-5338. Joan Slattery Wall ([email protected]) is an associate editor and statehouse correspondent for SBN.