Each electric light company and each local exchange telephone company having taxable nexus with Ohio and having property, payroll or sales in any Ohio municipality that has enacted a municipal income tax is subject to the Ohio Revised Code Chapter 5745 municipal income tax. The Chapter 5745 municipal income tax is administered and enforced by the Ohio Department of Taxation (rather than by the various Ohio municipalities that have enacted a municipal income tax).
In computing the tax, federal taxable income after certain adjustments is apportioned first to Ohio and then to each Ohio municipality that has enacted a municipal income tax and in which the electric light company or local exchange telephone company has nexus. After determining the taxpayer’s Ohio income apportioned to a particular municipality the tax for that municipality is computed by multiplying that income by the tax rate determined by the municipality (for each municipality the same tax rate applies to Chapter 5745 taxpayers as applies to Chapter 718 general taxpayers). The State of Ohio then distributes to each municipality the tax collected less an administration fee.
To calculate the tax and file your tax return, you must download the "Tax Spreadsheet" shown below. The spreadsheet is a Microsoft Excel template containing the forms, calculations and formatting for uploading the file to us. In addition, we suggest that you download the "Legal Instructions" document. This is an Adobe PDF file containing all necessary instructions pertaining to this tax. Finally, you can download a PDF file containing the required "Record Formats" for upload files if you choose not to use the Excel template for that purpose.
To file this tax return online, you must first register with us by clicking on the "New Taxpayer Registration" link below (Electric Light Companies and Local Exchange Telephone Companies that have previously registered need not register through this link). Through this process we will assign you a unique user id and password that you can then use to e-file your tax return. The "e-File a Form" link below will then guide you through the process of uploading your tax data to us.
If you have questions or experience problems with this site, please call us at (855) 466-3921.
NOTE: When filing an amended municipal income tax return please insert an "X" in the amended return cell on line 5 of the annual return and show as a fourth quarter estimated payment for each municipality the sum of (1) the fourth quarter estimated payment actually made for the municipality and (2) any payment submitted with the original return for that municipality.
For additional information on amended returns or refunds, refer to the legal instructions below.
UPDATE TO 2021 INSTRUCTIONS: After the instructions for taxable year 2021 were published, the legislature passed Sub. S.B. 18, effective March 31, 2021. The bill amended R.C. 5701.11 to incorporate federal tax law changes into Ohio income tax law, including the changes made to federal law by the “Consolidated Appropriations Act, 2021" and the "American Rescue Plan Act, 2021." The last line of the instructions for taxable year 2021 for Line 2 should now read as follows: "See Substitute Senate Bill 18, 134th General Assembly."
|Tax Spreadsheet||Legal Instructions||Record Format|
Registered taxpayers, eFile a Form
Information for Municipalities
Tax administration and fee. The Chapter 5745 municipal income tax is administered and enforced by the Ohio Department of Taxation rather than by the various Ohio municipalities that have enacted an income tax. To defray the tax commissioner’s expense of administering this tax, the Ohio Department of Taxation receives a fee equal to 1.5% of the tax remitted. R.C. 5745.03(A).
Municipality must certify the tax rate to the tax commissioner. On or before the 31st day of January each year, each municipality imposing a tax on income must certify to the tax commissioner the income tax rate in effect on the first day of January of that year. If a municipality fails to certify its tax rate, the director of budget and management will withhold from each payment made to the municipality 50% of the amount of the payment otherwise due as computed on the basis of the tax rate most recently certified. The director must withhold such payment until the municipality certifies the tax rate in effect on the first day of January of that year. R.C. 5745.03(F).
Disclosure of tax information to municipalities. Administrative rule 5703-27-01 – “Providing Municipal Income Tax Information” governs tax return information that the tax commissioner can share with the municipalities in which the taxpayer is subject to tax and the terms and conditions under which the tax commissioner can share that information. The rule prohibits disclosure of taxpayer returns or information to any person other than a properly authorized officer, employee or agent of a municipality. Furthermore, the only taxpayer information that the tax commissioner can share with a municipality is that information necessary for the properly authorized officers, employees or agents of the municipality to ascertain the municipality’s share of a taxpayer’s net income to be apportioned to that municipality.
Overpayments and refunds. If the tax commissioner finds that a refund is appropriate, then included in the amount that the municipality must refund the taxpayer is the Department of Taxation’s 1.5% administrative fee relating to the overpayment. The department will reimburse the municipality for the department’s administrative fee that the municipality refunded the taxpayer not later than the first day of March, June, September or December immediately following the Department of Taxation’s issuance of the notice to the municipality. Included in the amount that the municipality must refund the taxpayer is the Department of Taxation’s 1.5% administrative fee relating to the overpayment. Note, the department will reimburse the municipality for the department’s administrative fee that the municipality refunded to the taxpayer.