CPA Voice December 2011 : Page 4
Latest News New legislative proposal would ease tax compliance for Ohio businesses Income tax withholding might become less of a headache if pending federal legislation becomes law. The Mobile Workforce State Income Tax Simplifi cation Act of 2011 (H.R. 1864), would simplify tax burdens for those working in multiple states. It would enable employees to pay taxes in just their home state for income earned unless they work elsewhere for more than 30 days in a calendar year. This greatly simplifi es what has been a burdensome process for businesses and CPA fi rms. At press time, the legislation had cleared the House Judiciary Committee and awaits a fl oor vote. Because of the myriad of state income tax withholding laws, and varying de minimis exemption periods, compliance is extremely diffi cult and time consuming. The state-by-state regulatory morass requires that income tax be paid for days worked in locations other than employees’ home offi ces – even for a single day’s work. Having a uniform national standard will signifi cantly simplify compliance with all of the different state and local tax laws, and will mean most employers will be better able to judge which employees will need to withhold income taxes in states other than Ohio. In a letter to House Judiciary Committee Member Congressman Steve Chabot, R-Ohio, OSCPA expressed its strong support of the legislation. “This simplifi ed compliance will signifi cantly ease the regulatory burden on the employer and should enhance compliance when withholding is required,” the letter reads. “Additionally, it is our understanding that this change in law will have a negligible effect on state revenues.” Reciprocity agreements between states are not affected by the bill. The legislation only applies when a person is subject to state income tax under state law, which is not the case if covered under a state reciprocity agreement. A provision extending the legislation to income taxes assessed by municipalities was removed prior to the Committee vote. OSCPA continues to work to secure uniformity of municipal income tax defi nitions and collection at the state level. For more information, contact Amy Mignogna, OSCPA director of tax policy, at amignogna@ohio-cpa.com. DON’T BE LEFT OUT IN THE COLD! Oswald Companies presents an exclusive offer to OSCPA members only Accountants Professional Liability Risk Purchasing Group By leveraging the purchasing power of all participating members, we are able to “pool” the collective insurance needs of the group and provide the following benefits: • • • • • Preferred pricing Enhanced coverage offerings Underwriting flexibility Multiple payment options Multi-year policy options See if you qualify. Contact Carmen Edgehouse: cedgehouse@oswaldcompanies.com 216-658-5202 The endorsed broker of The Ohio Society of CPAs 4 The Ohio Society of CPAs | CPA Voice | December 2011
New legislative proposal would ease tax compliance for Ohio businesses
Income tax withholding might become less of a headache if pending federal legislation becomes law.<br /> <br /> The Mobile Workforce State Income Tax Simplification Act of 2011 (H.R. 1864), would simplify tax burdens for those working in multiple states. It would enable employees to pay taxes in just their home state for income earned unless they work elsewhere for more than 30 days in a calendar year. This greatly simplifies what has been a burdensome process for businesses and CPA firms.<br /> <br /> At press time, the legislation had cleared the House Judiciary Committee and awaits a floor vote.<br /> <br /> Because of the myriad of state income tax withholding laws, and varying de minimis exemption periods, compliance is extremely difficult and time consuming. The state-by-state regulatory morass requires that income tax be paid for days worked in locations other than employees’ home offices – even for a single day’s work.<br /> <br /> Having a uniform national standard will significantly simplify compliance with all of the different state and local tax laws, and will mean most employers will be better able to judge which employees will need to withhold income taxes in states other than Ohio.<br /> <br /> In a letter to House Judiciary Committee Member Congressman Steve Chabot, R-Ohio, OSCPA expressed its strong support of the legislation.<br /> <br /> “This simplified compliance will significantly ease the regulatory burden on the employer and should enhance compliance when withholding is required,” the letter reads. “Additionally, it is our understanding that this change in law will have a negligible effect on state revenues.”<br /> <br /> Reciprocity agreements between states are not affected by the bill. The legislation only applies when a person is subject to state income tax under state law, which is not the case if covered under a state reciprocity agreement.<br /> <br /> A provision extending the legislation to income taxes assessed by municipalities was removed prior to the Committee vote. OSCPA continues to work to secure uniformity of municipal income tax definitions and collection at the state level.<br /> <br /> For more information, contact Amy Mignogna, OSCPA director of tax policy, at amignogna@ohio-cpa.com.<br />
