“The bottom line for us is making sure everyone is paying their fair share,” said city manager Mark Schwieterman, who believes the present number of filings may double.
He estimates that city revenues would increase by a net of $900,000 in the first year as a result and $200,000 in subsequent years.
The first-year total is bigger because the ordinance includes a six-year statute of limitations.
“Someone who should have been paying probably didn’t do so in previous years,” Schwieterman said.
Estimated revenue increases take into account anticipated staff and equipment costs in the Income Tax Division, which offers free walk-in assistance.
The permanently retired and disabled who earn no income would be exempted from filing in the future, but would need to apply for an exemption.
Social security, payouts from qualified pensions, interest and dividends are not taxable by the city.
“There are likely some people who don’t realize they need to be paying. They think what’s being held out of their paycheck covers it. But that isn’t always the case,” Schwieterman said.
An amnesty program will be offered during the last three months of 2012 for those who knew they should have been filing city returns. Penalties will be waived if back taxes and interest are paid.
Schwieterman said Kettering and Dayton are among “only nine of 95 cities in southwest Ohio that don’t have mandatory filing.”
The community where an individual works generally takes precedence when it comes to collecting local income tax. If the city of residence taxes at a higher rate, the individual pays the difference to that city.
“We believe there are some people who don’t realize they need to be paying taxes to Kettering. They think what’s being held out of their paycheck covers it. That isn’t always the case,” Schwieterman said.
Discussions are under way about requiring local taxation to be uniform across the state and to centralize collection.
“We need the best available database possible,” Schwieterman said.
Kettering City Council will give the new law a first reading at its March 27 meeting.
Contact this reporter at (937) 225-2377 or tmorris@DaytonDailyNews.com.
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