NWOTCA
Meeting Date:
Call to Order
The meeting
was called to order at
Updates on legislation/OML
Meetings reviewed were OML meetings from September 23 and November 4. The meetings were with Representative Henne or his assistant to discuss uniformity legislation that the cities could mostly agree on with minimal revenue impact.
Net operating loss uniformity was discussed with possible 5, 7 or 10 year limits but since more than 100 cities not currently allowing any prior year loss carryforward, the issue will negatively impact the revenue of these cities. Mr. Henne had mentioned a phase-in period but this remains a difficult issue to resolve.
Stock options are taxed by 95% of the cities but Cincinnati does not tax them as an incentive for Proctor and Gamble to remain based in Cincinnati (P&G could easily move across the river to Cincinnati’s loss). This issue was then dropped.
Employee business expenses deducted on form 2106 is another issue where cities vary in its enforcement. Cities would like this deduction to be removed from state law.
This month several of the city tax officials will be meeting with some from the OSCPAs and with 3 state congressmen (Grossman, Henne, and Beck). The NWOTCA meeting with Representatives Barbara Sears and Robert Gardner went well. While the meeting gave a chance for the cities to voice their concerns of lack of city input with the Kasich administration, it was also felt that Sears and Gardner were sympathetic to the city concerns. The representatives were unaware of the loss of municipal seats on the OBG steering committee.
The 2012 OML seminar will be only a 2 day seminar instead of spanning 3 days as in the past. This next year’s seminar will be located at the same place. Angie asked for input as to topics for next year. Many felt the 2011 topics were very informative.
Staff Seminar and Preparer Seminar for 2012
It was proposed to again plan for a staff seminar for 2012 but not the preparer seminar that would normally be held this year. Many felt that it could be more productive to work on uniformity by meeting with congressmen and local preparers. The rational is that the threat of centralization has fueled a fire to enable uniformity movement that has stalemated in the past. Members were asked to begin dialog with local CPAs and preparers to establish a working relationship with them as we all seek viable solutions to local tax complexities throughout the state. It is hoped that preparers and local administrators could meet as a group later this year with some areas that can be tackled and solved. With the failure of SB5, we hope to establish common ground with preparers and make them aware of the stand of the OSCPA leadership. Tax office members are also encouraged to meet with legislators and establish relationships for asking of questions and watchful eyes for coming possible legislation.
Uniformity Discussion
The list of uniformity issues specified by Representative Henne was next discussed to find out from present members if support for a single rule is possible.
1. Net operating losses is a big issue pushed by
Henne and businesses but also strongly impacts municipalities who do not
currently allow any losses.
2. There was agreement that federal extensions
accompanying the local return could be ac
3. All agreed to the use of uniform (federal) estimated due dates
4. All agreed to setting the minimum tax due and refund amounts to $5.00.
5. While all cities would like the 2106 deduction to go away, it was also stated that it would be best if cities were not given an option to allow it if they chose, as this would be contrary to uniformity.
14. All agreed to allowing taxpayers to split overpayments between refund and credit carry forward.
13. All agreed to tax stock options.
12. Several municipalities do not currently tax cancellation of debt; however, the general consensus was that for those who did tax it, they could be willing to give it up. It is not a big revenue impact issue.
6. The allowing of losses against W-2 income is not uniform and likely would be an issue to be worked out at a later date.
8. All agreed to ac
9. 10. The sick pay/third party sick pay issue is also not uniform. One sticking point is when is third party simply short term sick pay and taxable and when it becomes disability/long term sick pay and should not be taxed. Some stated that when sick pay reaches the 7th month, it becomes long term and should no longer be included in Medicare wages. Because of the way this issue is worded and punctuated in ORC, the issue is clouded as to whether cities can tax any sick pay or at what point it is no longer to be taxed.
Other Issues
Because of
the volume of e-mail the past several months, Angie has experienced e-mail
difficulties and asked for any who would be willing to work to establish a
strategy. Deb Cartledge of
In setting
up area meetings and topics for 2012, it was suggested that we could ask Bob
Meeker of CCA to explain their program of local membership that would allow
members access to
As to dates
for meetings next year, it was decided to keep flexibility to allow for
meetings with legislators, CPAs and preparers to work on uniformity. The next meeting was set for Tuesday January
17th in
Information Sharing
Most cities reported increases in revenue year-to-date with respect to last year.
Ottawa Hills +18%