OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 105 Bill Analysis
135th General Assembly
Click here for H.B. 105’s Fiscal Note
Version: As Reported by House Ways & Means
Primary Sponsor: Rep. J. Thomas
Effective Date:
Zachary P. Bowerman, Attorney
SUMMARY
 Limits the circumstances under which municipal income tax inquiries or notices may be
sent to a taxpayer subject to a filing extension.
 Limits the penalty that may be imposed on a taxpayer for failing to timely file municipal
income tax returns.
DETAILED ANALYSIS
The bill makes two changes to the administration and enforcement of municipal income
taxes, whether such taxes are remitted to and administered by a municipal corporation, i.e., a
city or village, or the Tax Commissioner. Under continuing law, taxpayers generally report and
remit municipal income tax to municipal tax administrators, but a business that owes taxes on
its net profits may elect to report and remit municipal net profits taxes to the Department of
Taxation, which then disperses payments to each municipality to which such tax is owed. The
bill’s first change limits when a municipal tax administrator or the Tax Commissioner may make
inquiries or send notices to taxpayers whose tax filing deadline has been extended. The second
change limits the penalty that may be imposed for failing to timely file a municipal income tax
return. Both changes apply to taxable years ending on or after January 1, 2023.1
Prohibited inquiries and notices
Under current law, the due date of a taxpayer’s municipal income tax return, whether
filed with a municipality or the Tax Commissioner, may be extended under various
circumstances, including any of the following:
1 Section 3.
May 3, 2023
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 The taxpayer has requested an extension of the deadline to file the taxpayer’s federal
income tax return.
 The taxpayer has requested an extension of the deadline to file the taxpayer’s municipal
income tax return from the municipal tax administrator or Commissioner.
 The Commissioner extends the state income tax filing deadline for all taxpayers.
When a taxpayer receives an extension, the bill prohibits a municipal tax administrator
or the Commissioner from sending any inquiry or notice regarding the return until after either
the taxpayer files the return or the extended due date passes. If a tax administrator sends a
prohibited inquiry or notice, the municipality must reimburse the taxpayer for any reasonable
costs incurred in responding to it up to $150. If the Commissioner sends such an inquiry or
notice, the taxpayer’s costs, up to $150, are reimbursed from the GRF.
The bill’s new limitations do not apply, and a municipal tax administrator or the
Commissioner may send an otherwise prohibited inquiry or notice, if either has actual
knowledge that the taxpayer did not actually file for a federal or municipal income tax
extension.2
Penalty limitations
The bill also limits the penalty a municipal corporation or the Tax Commissioner may
impose for the failure to timely file a municipal income tax return. Currently, a municipal
corporation may impose a penalty of $25 for each month a taxpayer fails to file a required
income tax or withholding return, up to $150 for each return. The Commissioner may impose
the same monthly penalty on those unfiled returns as well as on unfiled estimated tax
declarations. The bill reduces these penalties to a one-time $25 penalty. The bill also exempts a
taxpayer’s first failure to timely file from the penalty, requiring the municipal corporation or
Commissioner to either refund or abate the penalty after the taxpayer files the late return.3
HISTORY
Action Date
Introduced 03-14-23
Reported, H. Ways & Means 04-26-23
ANHB0105RH-135/ts
2 R.C. 718.05 and 718.85.
3 R.C. 718.27 and 718.89.
P a g e |2 H.B. 105
As Reported by House Ways and Means