SHELBY, Ohio – The city of Shelby halfheartedly passed legislation amending the city’s municipal income tax on Monday night, waiting until the last possible moment to do so according to state mandates.
The Ohio General Assembly enacted House Bill 5 in December 2014 mandating that municipal income tax codes be amended by Jan. 1, 2016. By passing the new legislation at their Dec. 21 meeting and declaring by emergency that the legislation be published within 10 days, Shelby City Council just barely meets the deadline.
The amendments to the codified ordinances of the city of Shelby regarding municipal income tax will affect deadlines for estimated taxes as well as penalties and interest rates charged for missed deadlines. The ordinance will establish uniform due dates across the state of Ohio for estimated taxes and the amount taxpayers owe, making the job of tax preparers easier.
Starting Jan. 1, 2016, those who pay estimated taxes in the state of Ohio will have deadlines on April 15, June 15, Sept. 15 and Dec. 15. The ordinance also mandates all cities charge the same penalty and interest rate for those who don’t pay taxes when they’re supposed to.
The passage of these amendments was met with great protest by Shelby Council members during each of its three readings.
“There are so many levels on which I totally disagree with this, but I cannot do anything that would jeopardize the city income tax plan or put at risk the services the citizens deserve from us,” said council member Pat Carlisle. “I think state legislatures have overstepped, and I would hope that at some point in time the excrement will hit the ventilating system.”
Council members’ displeasure with the legislation was even written directly into the ordinance language.
“Council also finds and determines that the constitutionality of certain provisions of the state-mandated code may have been put in question by recent decisions of the Ohio Supreme Court,” the ordinance reads. “But these provisions must be included if the municipal income tax code is to be ‘levied in accordance with the provisions and limitations specified in Chapter 718’ and thus reluctantly are adopted by this council but are disclaimed to the extent they are unlawful or unconstitutional.”
In 2014, the General Assembly determined it was necessary to review and amend Chapter 718 of the Ohio Revised Code to set forth statutory requirements for municipal income tax codes in Ohio. According to Finance Director Steve Lifer, all municipalities in Ohio that collect income tax will have to adopt this new tax ordinance.
If council had elected not to pass the ordinance, the city’s ability to collect income tax would have been in jeopardy. Still, many members felt the lawmakers in Columbus have stepped outside their bounds.
“I think this is a great folly by our elected leaders in Columbus,” said council member Nathan Martin. “They have basically put it among themselves to solve a problem that we are best equipped to solve, that we are closer to the local businesses to be able to solve, and frankly what we’re elected to solve.
“Do not for one second take my ‘yes’ vote as a complete support of the ordinance itself. It’s not.”
In order to meet the state’s deadline for enacting the legislation, Law Director and acting mayor Gordon Eyster was forced to sign the ordinance during Monday night’s meeting as Mayor Steve Schag was out of town. Eyster’s signing of the ordinance also allowed for council to appoint former finance director Bob Lafferty to the income tax board of review, another requirement from the state.
“The new tax ordinance says we have to have a board of review in case there’s a question about the tax ordinance,” explained Lifer. “If it’s appealed it must go to this board of review; one appointee is by the mayor, the other two appointed to this committee will be by council.”
Shelby citizens interested in serving on the income tax board of review may submit applications to the position to Shelby City Hall by 4:30 p.m. on Jan. 13.
“As unpopular as this has been for us, we owe a thanks to the people that worked hard to put this together so that we would be in compliance with the state,” said council member Derrin Roberts. “It seems they were held at sword point to do it and it was not something that anybody wanted, but it’s something we had to do.”
“There are so many levels on which I totally disagree with this, but I cannot do anything that would jeopardize the city income tax plan or put at risk the services the citizens deserve from us,” said council member Pat Carlisle. “I think state legislatures have overstepped, and I would hope that at some point in time the excrement will hit the ventilating system.”
