Income Tax Reform 2020
Income Tax Reform 2020
On May 7th , 2019, the residents of Canal Fulton voted for Issue #14. The City Income Tax will increase its income tax rate from 1.5% to 2.0% on January 1st, 2020, but the residents will receive 100% credit for income taxes paid to other municipalities up to 2 %. The new tax code does not take effect until the tax year 2020.
Income tax is paid by all persons eighteen years of age or older who are residents of, or are employed within the city limits of Canal Fulton. The tax also applies to the net profits of corporations, partnerships and businesses within the City of Canal Fulton.
The City is proposing to reform its tax code in a way that could have a significant impact on the citizens. Specifically, the City is proposing to increase its income tax rate from 1.5% to 2.0%, but then giving the citizens 100% credit for income taxes paid to other municipalities (citizens currently receive 50% credit). The following are three documents that may help you better understand the proposal and your decision to vote.
1) Income Tax Presentation 11/15/18 – This is a copy of a presentation that Bill Rouse, Finance Director gave to City Council on November 15, 2018 to help explain the need for tax reform.
2) Income Tax Newsletter – This is a copy of an article that will appear in the next community newsletter that answers various questions regarding tax reform.
3) Ordinance #51-18 – This is a copy of the ordinance that City Council will vote on at the January 15, 2019 meeting. The wording of the ordinance specifically states “If the citizens of Canal Fulton approve a proposed 0.5% increase in the income tax rate (takes total income tax rate to 2.0%), then Chapter 182.06 of the Administrative Code will be amended as follows….Subject to division (c) of this section, if the tax rate of the other municipality is the same or lower than Canal Fulton’s tax rate, the credit shall not exceed 100 percent of the tax paid to the other municipality. If the other municipality’s tax rate is higher than Canal Fulton’s tax rate, the credit shall not exceed 100 percent of the Canal Fulton tax rate.”
If you have any questions regarding the tax proposal, please contact Bill Rouse at 330-854-6761 or Bill Keltner at 330-854-9448.