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Lima City Council's Finance Committee Recommends Tax Code Changes

Strategic Insights

— 1 min read

The Lima City Council's Finance Committee has approved several tax code changes to make the city's tax code consistent with state and federal law. The changes, requested by the administration, aim to address issues such as taxation of Ohio Lottery winnings, minimum tax collection and refund amounts, and business loss deductions. The legislation is expected to be ready for the City Council meeting on December 18.

Key Takeaways:

  • The first change removes the exemption for gaming income in the city's tax code, making all income, including Ohio Lottery winnings, taxable.
  • The second change establishes a minimum dollar amount of $100 before a tax collection or refund is required, reducing administrative costs for the city.
  • The third change clarifies that an income tax credit is based on a rate, not a dollar amount, ensuring consistency with state and federal law.
  • The fourth change allows sole proprietor business owners to deduct business losses on their W2 income tax forms, potentially retaining jobs in the city.
  • The clarification on income tax credits would be retroactive to the 2005 tax year, with a deadline for claim by April 15, 2007.
  • City residents working in other cities and paying income tax there can receive a credit from Lima of up to 1.5 percent of their income tax.

Statistics:

  • $100: the minimum dollar amount before a tax collection or refund is required.
  • 1.5 percent: the credit city residents can receive from Lima for income tax paid in other cities.
  • 2005: the year the income tax credit change would be retroactive to.
  • April 15, 2007: the deadline for claiming the income tax credit.
  • December 18: the expected date for the City Council meeting to vote on the tax code changes.

Sources:

  • The Lima News, Ohio (c) 2006 McAfee News.
  • McClatchy-Tribune Business News: for reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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