1. O HIO H OUSE B ILL 601, A S INTRODUCED, PROPOSED REVISIONS TO MUNICIPAL INCOME TAX

2. P ROPOSED HOUSE BILL OVERVIEW Sidney has a NEGATIVE revenue impact of about $95,000. Other cities who do not permit a net operating loss (NOL) carryforward will see a more severe impact on revenues. (proposed 5 year NOL) Circumvents local control Challenges Home Rule Authority

3. P OSITIVE I MPACT ON TAX REVENUE Broaden definition of taxable gambling winnings. Sweepstakes, gambling, sports winnings, games of chance, prizes & awards would be taxable net any related deductions  Approximately $3,600 (gross winnings) Employee business expenses (reported on Form 2106) would no longer be an allowable deduction  Average of $11,000 Increase minimum tax due and refund amount to $5.00  Revenue neutral

4. N EGATIVE I MPACT ON TAX REVENUE Proposed “20 day rule” verses the current “12 day rule”  Approximately $86,000 Interest rate at Ohio annual certified interest rate  Calculated roughly $15,000 Late filing penalty for individuals is $25  Nearly $1,200 Late payment penalty for maxed at 10% of tax due  Possibly $6,100

5. IMPACT ON PROCEDURES Semimonthly withholding reporting for employers > $11,999 per year Federal extensions not required at original due date of return. Governor appointed municipal tax policy board  7 members  Create forms, reports, schedules and attachments required

6. HB 601 S UMMARY HB 601 is complicated and confusing piece of legislation Not revenue neutral Indicates loss of about $95,000 per year Loss of local control (“Home Rule”) Other cities have adopted resolutions of opposition

7. QUESTIONS!