By Rick Palsgrove
This past summer the city of Columbus sprung a tax surprise on area suburbs when it informed area municipalities that it will no longer collect income taxes for them as of Jan. 1, 2019.
Last June, Columbus City Auditor Megan Kilgore stated Columbus would no longer serve as a third party administrator for the collection of municipal income taxes because the task has “grown more difficult, in part due to the state’s recent mandated amendments to municipal income tax provisions…”
The state recently instituted the centralized collection of business income taxes through its Ohio Business Gateway.
Smaller cities use third party collection of income taxes because it would be costly to maintain their own taxation departments.
Canal Winchester Finance Director Amanda Jackson said the city of Canal Winchester will join the Regional Income Tax Agency (RITA) to replace Columbus for income tax collection starting Jan. 1, 2019 and will pay RITA around 2 percent of what is collected for its service.
Currently, the city of Columbus acts as the city’s third party administrator for income tax collection. This administrative change only switches the collector of the municipal income tax, with no other changes being made, according to Canal Winchester city officials.
RITA started in 1973 as a council of governments to collect the municipal income tax and currently the agency collects municipal income tax for over 200 Ohio municipalities.
“The only change to the income taxes that is being made with Columbus ending their contract is who will be collecting the taxes. Everything else remains the same,” said Jackson. “Mandatory filing requires all residents age 18 and older to file, even if no tax is due. There are always exceptions to the rule, however.”
Jackson said, for example, there is an exemption form that can be filed by retirees and those with no taxable income to prevent them from having to file each year the exemption applies.
“Filing requirements for non-residents vary depending on if they were subject to withholding by their employer, if they earned non-wage income within the city, and if they conducted business within the city,” said Jackson.
More information is available on RITA’s website at www.ritaohio.com.