Tuesday Keynote - Ohio Municipal Income Tax and PTE

1 27th Annual Tuesday & Wednesday, January 23 24, 2018 Hya Regency Columbus, Columbus, ohio ohio Tax ohio Tax & Jobs Significant Developments in Taxation of Pass-Through Entities & Personal Income Tax J. Donald Mottley Of Counsel Taft, Stettinius & Hollister LLP Columbus Tuesday , January 23, 2018 10:00 to 12:15 Biographical Information J. Donald Mottley, Of Counsel, Taft Stettinius & Hollister LLP 65 East State Street, Suite 1000, Columbus, OH 43215 Fax J. Donald Mottley is Of Counsel in the Tax practice area of Taft Stettinius & Hollister LLP.

2 His law practice focuses on state and local tax matters, tax controversies (federal, state, and local), and on public agency law. As a public agency lawyer, Mottley both represents public agency clients (such as the Millcreek Valley Conservancy District) and represents other clients before public agencies. Mottley has been able to draw upon 30 years of experience as a public official and as an attorney and financial manager to the benefit of his clients. He is admitted to practice before ohio courts as well as the Supreme Court of the United States, the District Court for the Southern District of ohio , the Sixth Circuit Court of Appeals, the United States Tax Court, and the Internal Revenue Service.

3 He is also the founding Director of Focused Capitol Solutions LLC, a business affiliate of the law firm of Taft Stettinius & Hollister LLP, which provides governmental relations and public policy services at its offices in Cincinnati and Columbus. In this role, Mottley represents clients before ohio state government agencies and the ohio General Assembly. Starting in 1993, Mottley served eight years in the ohio House of Representative where he represented part of Dayton and several suburban communities in Montgomery County. While in the state legislature, he chaired the House Ways and Means and Joint Agency Rule Review Committees and served on the Finance, Insurance, Education, State Government, and Local Government Committees.

4 He is the sponsor of House Bills 477 and 483 of 2000, both of which made important contributions to Municipal Income tax uniformity. He previously served in various positions for the Montgomery County Commissioners and County Auditor s Office. Mottley began his career in public service as a member of the West Carrollton Board of Education for 12 years. After leaving the General Assembly, Mottley was appointed by the Governor as Chairman of the Committee to Study the Impact of Gambling in ohio , which issued its final report in 2002.

5 Prior to being admitted to the ohio Bar in 1991, Mottley served as a financial manager with NCR Corporation for over 10 years, culminating in his appointment as Treasurer of NCR Credit Corporation (an equipment financing/leasing subsidiary) He holds a Bachelor of Arts degree in Political Science, magna cum laude, and a Master of Science degree in Economics from Wright State University. He received his Juris Doctor degree from the Salmon P. Chase College of Law at Northern Kentucky University, finishing first in his law school graduating class.

6 Mottley also received a Certificate in Employee Benefits Taxation from Capital University s graduate law program. He is an active member of the Taxation Committees of the ohio State Bar Association (where he has chaired the full committee and the Municipal Income Tax Subcommittee), the ohio Manufacturer s Association, and the ohio Chamber of Commerce. He is a frequent presenter on ohio tax issues, including sales and use tax, State Income tax, and Municipal Income tax. 1 ohio and Municipal Income Tax and Pass-Through EntitiesPresented by: J.

7 Donald MottleyJanuary 23, 20182 ohio and Municipal Income TaxTOPICSM unicipal Income Tax Statute & Rule UpdatesMunicipal Income Tax Case LawOhio Income Tax Legislative ActivityAdministrative PronouncementsState Income Tax Cases3 Municipal Income Tax Legislative & Rule Updates Major change made in HB 49 (budget bill), effective with 2018 tax year: Option of online, centralized filing of Municipal net profits returns through ohio Business Gateway ( OBG ). Other changes included in HB 49: Repeal of sales factor throwback rule starting with tax year 2018.

8 Changes in estimated tax due dates. Withholding tax penalty changed to not to exceed 15%.4 Municipal Income Tax Legislative & Rule Updates (continued)OBG Centralized Filing of Municipal Net Profits Tax Prior law allowed filing though OBG, but information and payments were still sent to and processed by each individual Income Tax Legislative & Rule Updates (continued) The new option allows for a single, multi-jurisdiction return to be filed with the ohio Department of Taxation and for a single payment to be made to the Department. Department periodically forwards money, with interest, to the receiving municipality.

9 Process also provides for centralized assessment and collection by the Department and for direct appeal to the Board of Tax Income Tax Legislative & Rule Updates (continued)OBG Centralized Filing Administrative actions to implement centralized filing. New ohio Admin. Code Section 5703-41-01. Rule for centralized electronic filing and payment. New ohio Admin. Code Section 5703-41-02. Requires certain information regarding JEDDs and JEDZ to be reported to the Tax Commissioner to permit centralized electronic filing of their Income Tax Legislative & Rule Updates (continued) New ohio Admin.

10 Code Section 5703-41-03. Changes in taxable years for Municipal net profits tax. Department began issuing Tax Alerts for Municipal net profits tax, announcing the process for opting in to centralized filing (October 19, 2017).8 Municipal Income Tax Legislative & Rule Updates (continued) Other Municipal Income tax legislative changes. Elimination of sales factor throwback rule. In some situations, the law prior to tax year 2017 allowed a sale shipped from one municipality to another to be included in the sales factor of both the shipped from and shipped to municipality.