(THE CENTER SQUARE) – Some Ohio taxpayers who file city income taxes late could end up paying more in fees than in taxes under state law, but a bill in the Ohio House could change that.
State Reps. Bill Roemer, R-Richfield, and Laura Lanese, R-Grove City, introduced legislation that caps penalties municipalities can charge on late filing fees.
“Ohio taxpayers deserve to be treated fairly and with respect,” Roemer said. “This legislation will ensure that Ohio taxpayers aren’t faced with the burden of excessive or arbitrary penalties, and that no taxpayer with zero liability will be punished for failure to file.”
House Bill 519 had its second hearing Tuesday in the House Ways and Means Committee.
Currently, a taxpayer can be charged late filing fees that are greater than the actual amount owed if the tax liability is relatively small. In some cases, a taxpayer can be charged up to $150 in fees even if they owe no tax, Roemer said.
(Editor's Note: In Mount Vernon, the current late filing penalty is assessed at the rate of $25 per month, not to exceed $150 for each failure to timely file, according to Tax Administrator Lisa M. Brown. This penalty applies regardless of the tax liability on the return.)
The new bill would cap late filing fees to the lesser of 50% of the tax liability or $150. Tax auditors also would be prohibited from sending notices to taxpayers who have received a filing or payment extension before their extended due date.
“I was first alerted of this issue by a very long social media post, where many of my constituents complained about being charged excessive late fees from their regional tax collection agency even though they did not owe any municipal tax,” Lanese testified in committee.
An Ohio Legislative Service Commission fiscal note said the bill is likely to reduce municipal income tax revenue but, in most cases, the loss would be small.
