Is it time for city income tax reform in Ohio? Here are the communities with the highest burdens

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Lockbourne
Tax rate: 1%
Revenue: $74,421
Credit: 0

Laura Newpoff

Assistant Managing Editor-Digital- Columbus Business First

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The Buckeye Institute is making a case for income tax reform in Ohio, saying the state has "the most complicated, absurd and punitive systems of municipal taxation in the nation."

The conservative think tank argues in a policy brief that failing to fix the municipal tax would be bad news for entrepreneurs and the state's economy. It calls for the state General Assembly to make the system more uniform and equitable for small businesses.

One of the big problems, the Buckeye Institute contends, is that Ohioans who don't live in the same community where they work may have to pay taxes in separate municipalities, sometimes for differing amounts and there's no uniform system for tax credits to offset those taxes.

"Local governments in Ohio raise their revenues through an unduly complicated income tax scheme that the vast majority of our sister states have long-since abandoned," the brief says. "In fact, only 17 states still levy any form of municipal or county income tax at all, and of those, only 10 states tax both individual and business income at the municipal level. By contrast, Ohio had 601 municipalities levy taxes in 2012 – only Pennsylvania topped that."

Click on the slideshow to find the Ohio municipalities with the lowest and highest tax rates based on data from the state Department of Taxation, which communities offer credits for those who live and work in different municipalities and how much revenue they brought in for 2012, which is the most recent data available.

You can read the institute's full brief by clicking here.

Robert Lamb, community and economic development manager at the City of Upper Arlington, said the municipal income tax is the foundation of local government funding in Ohio.

Laura Newpoff co-directs daily online coverage for Columbus Business First.