The Impact of Centralized Municipal Business Tax Returns
Ohio businesses have the opportunity to file one municipal return for all Ohio cities, which could save them considerable time and costs. HB 49 provides Ohio business taxpayers with the option, beginning with tax year 2018, to file one municipal net profit tax return through the Ohio Business Gateway with the state of Ohio. The Ohio Department of Taxation (ODT) will administer the centrally filed return along with a single payment system for all municipalities on the form. Ohio will separately distribute the taxes to the municipalities. The ODT will handle the audits and appeals for all municipalities filed on the tax return. This potentially could save businesses time and costs on defending business municipal audits and appeals.
Business taxpayers or their representative must make the election to file with Ohio by the first day of the third month of their tax year. For example, taxpayers that operate on a calendar year basis for 2018 must make the election by March 1, 2018. The election will remain in effect until terminated by the taxpayer.
Making the Election
Business taxpayers or their representative must elect through one of two ways:
- Electronically through the ODT’s registration portal. Taxpayers may submit a single spreadsheet with Schedule A and B (if applicable) listing every municipality for the taxpayer.
- By submitting a paper registration form MNP-R available at http://www.tax.ohio.gov/Forms.aspx.
Important Election Details
Business taxpayers who are not registered with the ODT for the municipal net profits tax must first register (see “Making The Election” above) before filing any return, making any estimated payments, or electing to file a consolidating municipal return. Business taxpayers that are eligible include C-Corporations, S-Corporations, Trusts, LLPs, LPs, General Partnerships, Estates, and multi-member LLCs. Sole proprietors and single member LLCs are not eligible to opt-in with the department and should continue to file with municipalities. Business taxpayers that miss the opt-in deadline must continue to file with municipalities for the year.
Affiliated groups of corporations may elect to file a consolidated return on the Municipal Net Profit Tax Registration Form. Generally, the municipal net profits tax administered by the Ohio Department of Taxation will follow Ohio Revised Code Chapter 718 Municipal Net Profit Tax.
If you have questions, please contact Cody Cain or a member of our State and Local Tax Practice.