Hinshaw noted that the last change was in July 2004, and these 2010 changes were made in an effort to get the code more in line with other communities.
These are the codes that were changed, and what each means to the taxpayer:
880.05 Net Operating Loss and Business Expenses
This amendment does not allow an individual to decrease the tax liability on wages based on business losses typically found on Federal Schedules C, E, and/or K1.
The city is seeking to create equity in the tax rate for all residents for wages.
Under the current code, residents can claim business losses on any business, whether or not it is located in Centerville, if they had a Centerville tax liability.
Once this business loss is applied to individual wage tax liability, then the tax rate applied to the individual wages is decreased, thus creating an inequity in the tax rate applied to wages.
Of the 95 cities and villages in Southwest Ohio, only 10 (or 10 percent) allow business losses to be deducted from wages. Those cities are Carlisle, Centerville, Cheviot, Eaton, Felicity, New Miami, Phillipsburg, Ripley, Tipp City and West Milton.
In 2009, this would have impacted 116 of the 12,413 tax filers (or 0.93 percent).
This tax amendment will not increase the tax rate. It does not impact businesses in Centerville. It is an individual wage base issue. And it promotes equity in the tax rate for all residents.
The effective date of this change is recommended to be Jan. 1, 2011, for tax years beginning on or after Jan. 1, 2010.
880.09 Collection at Source
The addition of Section (g) will require 1099s to be submitted with the annual tax returns from businesses to determine any tax liability to the payees for reportable income on the 1099s issued.
The businesses would be required to submit, to the city, all 1099s issued to individuals and businesses.
The taxpayers who received taxable income reported on a 1099 would then be required to file their tax returns and pay any applicable taxes.
The effective date of this change is recommended to be Jan. 1, 2011, for tax years beginning on or after Jan. 1, 2010.
The addition of Section (h) clarifies the definition of a “person,” and gives the city the ability to reference a specific section of our code that defines person as shareholders, officers, owners, managers, employees and trustees.
The effective date of this change is Aug. 19.
880.10 Declarations
This change brings the deadline for filing estimated taxes from April 30 to April 15.
This has been the state law since 2004, so this change brings this section of the local ordinance in compliance with state law.
Aug. 19 is the effective date of this change.
880.11 Duties and Powers of the Superintendent
This change gives the income tax superintendent the ability to authorize payment plans up to 12 months instead of the current six months.
This will reduce the number of issues reviewed by the Board of Tax Adjudication.
In addition, the superintendent would have the ability to charge for bounced checks and electronic payments.
There is no significant impact on the city’s revenue.
The delinquent taxpayer could receive a decision on an acceptable payment plan in a more expedited time frame.
The effective date of this change is Aug. 19.
880.13 Interest and Penalties
The threshold for charging penalty and interest would increase from $1 to $10.
The cost of processing the penalty and interest charges was considered in determining the increase.
The taxpayer would not have a penalty and interest charge for $10 or less, and delinquent taxpayers would have a late filing penalty of $25 if the tax return is filed within 120 days of the original due date and $50 if filed more than 120 days late.
The effective date of this change is recommended to be Jan. 1, 2011, for tax years beginning on or after Jan. 1, 2010.
880.14 Collection of Unpaid Taxes; Refunds of Overpayments
Refunds for overpayments and collection for underpayments is changed from a $1 threshold to $5.
The cost of processing the under- and overpayments was considered in determining the increase.
The taxpayer would not be required to submit an underpayment of up to $5 and would not receive a tax refund of up to $5.
The effective date of this change is recommended to be Jan. 1, 2011, for tax years beginning on or after Jan. 1, 2010.
880.15 Violations
The elimination of the reference to a specific Ohio Revised Code section allows for future changes in the ORC that would not require future amendments to the Tax Ordinance.
There is no impact on the taxpayer.
The effective date of this change is Aug. 19.
880.19 Collection of Tax after Termination of Chapter; Authorization for Collection Agency and Recovery of Collection Expenses
This change makes explicit the ability to utilize a collection agency to collect unpaid taxes, interest, penalty, and collection agency fees.
The delinquent taxpayer would be required to pay any applicable collection agency fees.
The effective date of this change is Aug. 19.
Contact this reporter at (937) 225-7325 or jikelley@DaytonDailyNews.com.
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