Groveport prepares for income tax collection changes

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By Rick Palsgrove
Southeast Editor

The city of Groveport, as well as its residents and businesses, will have to adjust how income taxes will be collected and paid.

This past summer the city of Columbus informed area municipalities that it will no longer collect income taxes for them as of Jan. 1, 2019.

The city of Groveport has a 2 percent income tax.

In a letter to city officials dated June 22, 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.

Groveport City Council approved legislation for the city to join the Regional Income Tax Agency (RITA) to replace Columbus for income tax collection.

“RITA is a council of governments that makes decisions cooperatively,” said Groveport Finance Director Jeff Green. “Everyone is on an equal footing.”

With the change to RITA, Groveport City Administrator Marsha Hall said city residents and businesses will all have to make an income tax filing. She said there will be some exemptions for retirees and pensions.

“Mandatory filing means every resident over the age of 18 must file an annual city of Groveport tax return even if no tax is due, said Bob Curtin, income tax administrator for the city of Groveport. “Nothing as far as what is or what is not taxable is changed as a result of mandatory filing.”

Curtin gave the following example: “A resident of Groveport earns $10,000 for working in Columbus and has $250 withheld from that income for city tax. Prior to mandatory filing, this person would not have needed to file a return since their Groveport tax liability of $200 has been met by the $250 withheld from their pay for working in Columbus. Now this taxpayer will have to file a city income tax return (RITA) and attach a copy of the W-2. In this example the taxpayer would owe no tax.”

Curtin said Groveport’s income tax ordinance is based on three types of taxpayers: 1) gross salaries, wages and other compensation including gambling winnings earned by residents and non-residents for work performed in the city; 2) the net profit of unincorporated entities for work performed in the city by residents and non-residents; and 3) the net profits of corporations.

“There will be no change in what is taxable or non-taxable,” said Curtin.
Curtin said the municipality where one works receives the income tax.

He added that all businesses operating in the city must pay the city’s income tax even if their corporate headquarters are elsewhere.

Curtin said city income tax filings are due by April 15 for both businesses and individuals but added, “If company is on a fiscal year then three and a half months after year end.”

Curtin said individuals and businesses will submit their city income taxes on a form furnished by, or obtainable from RITA, and by either checking their W-2 for proper withholding or checking for unincorporated income on a federal return and multiplying by 2 percent.

“Filings are made with RITA but we can help at (Groveport) city hall,” said Curtin. “Individuals and businesses must file an annual return with payment, if applicable, but anyone over $200 needs to file a declaration of estimated tax. There’s no change in the tax ordinance.”

He added pension income and Social Security are not taxable.

Curtin said RITA started in 1973 as a council of governments to collect the municipal income tax.

“The agency collects municipal income tax for over 200 Ohio municipalities,” said Curtin. “It would be too expensive for the city of Groveport to maintain its own tax department.”

The city of Groveport will pay RITA approximately 1.2 to 1.5 percent of all collections for its service.

Curtin said the change to RITA should have no impact on Groveport’s operations and revenue flow. He said approximately 15 percent of Groveport’s total revenue stream comes from business income taxes and about 5 percent comes from individual income taxes.

Added Green, “The bulk of local income tax revenue, the remaining 80 percent, comes from employee withholdings, mostly from the warehouses.”
For information visit www.ritaohio.com or call Curtin at 614-352-8725.

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