Tax law debated amid work-from-home shift

Dayton among cities that could lose millions in income tax revenue.

Ohio lawmakers are debating again how cities should collect income taxes amid the growing work-from-home trend.

One Ohio group says a change in local tax laws would alter a tax structure that’s been in place for more than six decades and jeopardize $306 million annually that Ohio’s six largest cities collect, including Dayton.

Senate Bill 352 and House Bill 754 would “redirect work-fromhome employees to pay their income taxes where they live, not where their workplace is located,” according to Alison Goebel, executive director of the Greater Ohio Policy Center, a nonprofifit that advocates for cities.

Dayton Mayor Nan Whaley said she and other members of the Ohio Mayors Alliance are “vehemently opposed” to the bills because they don’t favor the timing.

SB 352 sponsor Kristina Roegner called her proposal an “issue of fairness.”

Roegner, R-Hudson, said “the bill simply restores the law to where it was prior to the pandemic. Senate Bill 352 would direct municipal taxes paid by workers to the municipalities where they work and live. It’s that simple.”

The Dayton Daily News also reached out to HB 754 sponsor state Rep. Kris Jordan, ROstrander. His office did not respond by Tuesday afternoon.

Both bills would repeal House Bill 197, ameasure approved earlier this year after the coronavirus caused many businesses to shut down or implement a plan for the employees to work from home. It keeps workers paying income taxes to where their employer is located at a time when more jobs are being done from home.

“Here we are in a period of great uncertainty and to bemessingwith the tax policy amidst it, wethink is a really bad idea,” said Whaley, a Democrat. “There’s so much transition going on and it would be a nightmare for folks to manage when they’re trying to manage everything else.”

Whaley said no signifificant Dayton employer has told the city that they plan to have their workforce performtheir jobs at home permanently.

Columbus- based NationwideMutual Insurance Co., which has an estimated 32,000workers, is among 27 businesses listed by flflexjobs as having recently switched to long-term remote work. Others include Mastercard, Amazon, Facebook, Adobe and Ancestry.com.

“You’re going to fifind it’s morecommongoingforward without adoubt,” saidBryan Hunter, president of 937 Payroll inDayton.“Tosay it’snot going to be a trend going forward, I don’t think you can say that.”

Hunter’s company works with clients on payroll, human resources and other services.

“There’s just no reason anymore for people being uncomfortable doing things remote, for companies to feel like they have to have employees on staff in-person,” he said.

Synchrony Financial, one of Kettering’s largestemployers, cited last week a company-wide strategy shift for its decision to send its 1,900 workerstoworkpermanently athome. Thedepartureofthe Stamford, Connecticut- based businesswith17,000workers globally will leave Kettering with a “signifificant decline in our tax revenue,” City ManagerMarkSchwietermansaid.

Whethermorecompanies willmake a similar decision as Synchrony, Hunter said, will depend on the economy and what businesses experience in the comingmonths.

“Although I think the bottom line is ultimately going to win, most people are not goingtomakeanypermanent decisionsuntiltheyabsolutely have to,” he said.

“If things don’t change in 2021 vs. what’s happening right nowin 2020, then people are going to have to start thinking about permanent shifts, permanent changes,” Hunter said.