New State-Wide Centralized Filing for Ohio Municipal Net Profit Tax

Ohio’s budget bill for fiscal years 2018 and 2019 provides a new statewide centralized filing and collection process for municipal net profit tax returns for many businesses starting with the 2018 tax year. Under this new centralized collection process, the Ohio Department of Taxation (“Department”) will be responsible for all administrative functions of municipal net profit tax returns, including assessments, audits, and appeals. 

1. A single return can be filed for all municipalities through the Department’s online portal, the Ohio Business Gateway. 

2. If eligible taxpayers wish to use the centralized collection methodology, they must opt in to the program by making an election by the first day of the third month of their taxable year, March 1, 2019, for calendar year taxpayers, for all municipalities in which they have a filing obligation; the election remains valid until it is revoked by the taxpayer.

3. Taxpayers electing the centralized collection methodology must register and notify each municipality in which they were doing business during the tax year prior to the year for which the election is made.

4. Eligible taxpayers do not include sole proprietors and entities that are disregarded for federal income tax purposes, including single-member limited liability companies, qualifying subchapter S subsidiaries, or any other entity that is a disregarded entity for federal income tax purposes. 

5. Pursuant to the centralized collection methodology, annual returns and declarations of estimated tax must be filed electronically using the Ohio Business Gateway. 

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