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Government & Politics

Head of Ohio Municipal League Says Business Gateway Causing Cash Flow Issues For Communities

photo of Kent Scarrett
Kent Scarrett (center) says the 150 communities that filed the suit over the law -- which allows the state to collect business taxes -- will likely appeal.

A controversial online system for collecting business tax payments is causing problems for some communities. 

The Ohio Business Gateway online portal added a section last year to allow businesses to file net profit tax payments more efficiently -- especially when filing with multiple cities.

But Kent Scarrett, executive director of the Ohio Municipal League, says the software was not tested thoroughly, and glitches have resulted in payments to municipalities showing up late, or for the wrong amount. “It has meant that there’s been a significant amount of cash flow interruption and problems. Our reports don’t balance.” Scarrett disputes the value of the service to businesses, saying only 13 percent of Ohio businesses have to file in four or more communities.

The Ohio Business Gateway, which is run by the state's Department of Administrative Services, acknowledged the glitch. In a statement it said: 

The Ohio Business Gateway (OBG) started experiencing some issues beginning on Jan. 15 that caused the balancing process to be delayed in some instances by as much as three days during the past two weeks. As of Monday, Jan. 28 we are completely caught up. DAS staff continue to closely monitor the balancing process to identify and address issues as quickly as possible.

This issue came up during the same week that the 10th District Court of Appeals in Franklin County ruled 2-1 that the law allowing the state to collect the taxes is legal. A lawsuit filed by 150 communities, all of them municipal league members, argued that the law violates home-rule. Scarrett believes they will appeal, which could put the case before the Ohio Supreme Court. 

Editor's note: This story has been corrected to reflect that the issue with payments not reaching municipalities is not directly related to the lawsuit filed by the Ohio Municipal League.