COLUMBUS — The state's online business tax-payment portal is forwarding millions of dollars to Ohio cities, but can't tell some municipalities which businesses have paid their taxes — and in what amounts.
Glitches in the Ohio Business Gateway also are prompting other cities to complain about late-arriving tax payments and accompanying reports, The Dispatch discovered.
"Just about every municipality has experienced the same problems. They are kind of universal," said Kent Scarrett, executive director of the Ohio Municipal League, said Tuesday.
Megan Kilgore, city auditor of Columbus, said the state is days behind in delivering the reports the city needs to identify and credit more than $1 million in delivered tax payments to the accounts of about 1,200 city businesses.
"It's a real problem," she said on Tuesday. "We do not want to accidentally penalize someone" for failure to pay taxes, Kilgore said.
In addition to the state computer system being tardy in forwarding municipal net profits taxes paid quarterly by businesses, some payments appear to be less than what cities are actually owed, Scarrett said.
Ohio Department of Administrative Services spokesman Tom Hoyt acknowledged problems with its system have caused delays since Jan. 15. Despite Columbus' quandary, Hoyt said, "As of (Monday), we are completely caught up. DAS staff continue to closely monitor the balancing process to identify and address issues as quickly as possible."
Department of Taxation spokesman Gary Gudmundson said the problem rests with the gateway, not the taxation department. "We handle the process and distribution (of taxes) to municipalities. All of that is on track. We're good ... whatever problems there are have nothing to do with our role."
Tina Timberman, tax administrator for the city of Athens, said a tax payment and reports that she should have received Jan. 15 did not arrive until six days later — and the amount the city received was higher than the amounts listed as paid by city businesses.
The city can't release the money from the bank to fund city operations until it balances the reports with what businesses actually owed and paid, Timberman said.
"Meanwhile, I had businesses freaking out they had made their payment, but it had not been withdrawn from their bank yet," she said.
The Ohio Municipal League's Scarrett said the confusing state payments and reports, and shortfalls in amounts what cities were expecting, can have "a significant impact on our cash flow and our ability to pay for services."
Local governments had objected to legislation passed last year requiring their tax payments to be routed through the state instead of receiving them directly from those paying taxes. The state billed it as a business-friendly move since companies could make one filing and payment instead of dealing with multiple city filings in some cases.
The launch of the new version of the $22-million-plus Ohio Business Gateway last summer generated complaints about its failure to provide timely tax payments to municipalities.
The system collects about $600 million in annual tax payments destined for municipalities, with the state keeping one-half of 1 percent of collections as its handling fee. Cities had objected to the fee as an illegal tax.
In a ruling Tuesday, the Franklin County Court of Appeals, in a 2-1 decision, upheld a lower-court ruling finding that the law enacting the state's collection of local taxes was legal. The city of Athens had challenged the legislation.
The County Commissioners Association Ohio reported no problems receiving county sales taxes handled by the state system.