"TAXMAN" beatles
Seems like a full agenda on Monday night's Council Meeting. 01/07/13 Guess no one cares to watch Notre Dame vs. Alabama?
The one thing that sticks out to me in Ohio House Bill 601. This is the bill brought forward AGAIN by two Republicans Mike Henne (R) Clayton and Cheryl Grossman (R) Grove City to change the manner that city municipal tax is collected.
Seems these two believe the present way we do it puts a strain on businesses and most Chamber of Commerce believe it is a good plan. Not so most Villages and Cities. Collections will take longer to get into there coffers.
I believe our new Representative John Rogers should be informed of Painesville position on this Bill.
Call me suspicious but after suggesting Painesville change tax collectors from CCA to RITA out of the blue last year we make the change? RITA cross checks IRS filing to see if say you work in a Township and live in Painesville they will probably find you out. A word to the wise.
Also looking at RITA's web site Property Owners who say live in Cleveland or Painesville and have rental property in Painesville that they collect say $10,000 a year rent on will owe Painesville $200.00 in city income tax. Go to there web site to see what income can be taxed.
One odd thing I have noticed the calling of a city income tax seems to have morphed into City Municipal tax?
With the state sending our city and many others less back in tax revenue what if cities quit crediting your city income tax you pay in city or village you work in?
My oldest daughter moved out of University Hts. because she and her husband paid city income tax to Cleveland and University Hts. 2% +2% = 4%
It is my belief that city income tax should only be paid once not twice.
We will keep an idea on how Painesville plans on raising revenue this year. They seem to worry little on how to spend it
posted by terminator1 @ 9:18 AM
14 Comments
14 Comments:
ARE you prevy to information the rest of us don't?
No, just something to think about.
Someone under the "Golden Dome" is always looking for new revenue.
Speaking as a CPA, HB 601 is long overdue. The main purpose of HB 601 is to attempt to standardize things such as taxable income, tax deductons and credits as well as loss carryforwards. Currently there are several hundred cities, villages and tax districts in Ohio each having their own rules. It is an impossible system and a huge detriment to attracting businesses in Ohio as Ohio is only one of a dozen or so states that permits municipal income taxation and has by far the most convulted system.
Just to illustrate how onerous and ridiculous Ohio municipal income tax is immagine you are for instance an electrical contractor serving both residences and businesses in Northeast Ohio with 3 employees and your business is physically located in Painesville city. Now lets say during the course of the year you and your employess perform work throughout Lake, Cuyahoga and Geauga Counties.
Each municipality requires you to track, calculate, withhold and remit their income tax for time each employee spent working in their municipality. Lake County alone has 9 cities, 9 villages and 5 townships (townships cannot have an income tax). Addditionally at the end of the year each municipality requires full payroll tax reporting to them as well as an income tax return for the business to each one of them. I have seen small family owned servcie providers have to file as many as 73 sepearate income tax returns each with their own seperate rules. It can cost thousands of dollars just to file the returns.
This is a system that has run wild and the municpalities do not want anything to change ( I get that they want to protect what they have). The municipalities want more which is why they are looking at things like changing reciprocity (giving credit for taxes paid to other cities) however this needs to be looked at from an overall standpoint. Ohio should study how othr states are fnding their local governments and try to develop a far less complicated systeme.
I have long wondered how the double taxation in municipal taxes came to be.
There are a few communities (Shaker and Cleveland Hts come to mind) that do not have tax reciprocity so it you live there and work elsewhere, you get your city taxes doubled. BTW, it works in reverse also.
How is this even legal? You only earned the money once but both they and your city of residence get their 2%.
If all communities were to do this your tax bill would quickly double but you can bet that nothing would improve in your community.
Give a politician $1 and they will always try to spend $2. After all, it isn't their money.
In that light, why does the City farm this out? Why can't the tax collections be done in house? Seems like a way to save money.
7:00/7:46 Great responses.
Tax reciprocity that was the word i couldn't remember. Propably the main reason for calling it Municipal Tax instead of City income tax.
7:00 can you explain why a city like Painesville would fight this? Does it take longer to receive the money, does the state charge?
I'd love to tell you the story I faced along with other when I worked on commission at Lockie_Lee.
Earen $16.00 per day in Painesville, $400mo. in Bedford, $600mo. in Maple Hts.$500mo. Garfield Hts. $250mo Solon. These figures changed monthly. In the end we all just payed all to Painesville Income Tax.
Term, no HB601 has nothing to do with how long it takes to get the money. The municipalities do not want any changes to current system as they have total control of the rules. They do not remotely recognize how onerous their system is on businesses even when confronted with the facts. The municipalities have fought this bill tooth and nail from the begining. During 2012 there was hearing where a business owner brought in his mountain of city income tax form which he had spent several hundred dollars to an accountant to prepare (most of them with zero tax liability) and the representatives from the municipalities dismissed him as an exception. They don't get it as there are thousands of service businesses in Ohio that have to deal with this same issue. what a waste of time and resources.
Regarding using CCA or RITA as opposed to their own tax department. Painesville began outsourcing this function (as do most cities) to the big taxing agencies probably 15 years ago. It is probably a pretty good deal for the cities as the agencies are much more efficient in administrating the tax processing than the cities. I can recall dealing with many of the cities years ago before CCA and RITA had as many as they now do and most of those cities were not very good at administrating the taxes collection process. I am sure RITA and CCA charge a fee but it is probably far cheaper than staffing an income tax department.
FYI, if you only paid taxes to Painesville back in the day on your commissions back in the day you would probably have exposure to those cities income tax rules depending on how each of them defined income and where they defined it was earned. Despite you paying tax on all of it to Painesville, it would not matter as each of those cities would have the right to "their" share of the tax. They would require you to pay them and then it would have been up to you to prove to Painesville why you would not owe Painesville on those commissions.THAT is part of why the system is a nightmare.
To 7:46 yes you actually are able to be taxed twice on the same income by 2 municipalities if their tax ordinance does not grant reciprocity. Also think about this for a while, when you work in a city where you do not live is that not taxation withOUT representation?
brew.. at tonites council meeting council_President Hada claimed this change would cost the city over $20,000 in revenue. More importantly instead of receiving tax dollars twice a month. Painesville would only receive payments quarterly. As most of you know cash flow is very important to all cities. I asked who were the "special interests' pushing this. Seems like the Chamber of Commerce was the biggest supporter. It was put on 2nd reading. I believe in the best interests of Painesville, council should oppose this.
Term, I am not sure from your post what change is it they are to vote for. Are they voting to publically oppose HB 601 or are they voting to switch from CCA to RITA? Is the change on when the city gets paid coming from the change in agencies or something from Ohio?
By the way RITA and CCA do not create the tax rules (in reference to your post about rental income) , the individual municipalities do and RITA and/or CCA administrate as the rules are written. Rental income (after expenses) in every municipality that I can think of is taxed, that is not just a RITA thing.
It was to oppose House Bill 601. But I believe a fast one was pulled on council when the two known Republicans wanted it to go to three readings. Delone wanted it on three reading and I believe DiNallo seconded it. The problem with three readings put the last reading in February the vote is coming at the end of the month so there will be no letter to oppose this from Painesville.
RITA checks alot closer than CCA.
CCA never checked IRS filing against city income tax.
Who writes your original posts, the ones with the musical titles?Why, I ask? Because there are never any spelling, grammar or punctuation errors in any of them. Then on to the "Term" comments... well just read some of the above. I don't believe you write your original material.The originals are perfect.
Do you have a ghost writer?
I take more time with a post than I do a comment. I will try to do better. Doubting Thomas.
I not only doubt it, I don't believe it for a minute, not at all. Can not do that good, in fact perfect and then so poorly.
Thomas if you got time I will arrange to do a post for you at the library. My next one concerns the Charter Review.
Sorry, No time left for you.
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