House Bill 5

January 5, 2015
Legal Update

On December 19, 2014, Governor Kasich signed House Bill 5, known as the Municipal Tax Reform Bill, into law. The Governor’s signature comes after the Ohio House of Representatives voted 60-32 to support the changes made by the Ohio Senate. House Bill 5 is an attempt by the State legislature to standardize the municipal income tax system across the State. The controversial law, however, will have a significant impact on all municipalities.

Most importantly, the new law requires Ohio municipalities to make significant changes to their existing local tax ordinances. All local tax ordinances must be amended by January 1, 2016, to comply with the provisions of the law. Municipalities will be prohibited from enforcing any ordinance that conflict with the law as amended by the bill.

Some of the key provisions of the Bill that will require municipalities to amend their existing tax ordinances are listed below:


Residency and Exemptions


Furthermore, the new law makes several additional changes to the municipal tax system and will have a significant effect on municipal tax codes.

Additional client alerts will be forthcoming as Frost Brown Todd and a number of municipalities and associations move forward on developing a model municipal income tax code.  In the meantime, for more information, please contact Gene Hollins, Yazan S. Ashrawi, Jeremy Hayden or any member of the Frost Brown Todd Government Services Practice Group.