Ohio lets too many residents off the hook with income tax

Policy Matters testifies before House Ways and Means Committee

Most states require people who spend at least 183 days a year there to pay income tax. Ohio, on the other hand, allows people to live in the state for well over half the year without paying income taxes. The policy amounts to a giveaway for the wealthiest and should be changed, according to Policy Matters Ohio testimony submitted to the Ohio House Ways and Means Committee.

Unlike most other states, Ohio uses what the state calls “contact periods” for measuring how much time individuals spend in the state and whether they are required to pay the income tax. A contact period is defined as an overnight stay, so someone coming to Ohio on a Monday and leaving Tuesday has one such period, not two. Under existing law an individual is presumed to be a nonresident if they have no more than 212 contact periods during the year.

House Bill 292 makes some improvements through new residency requirements. For example, anyone with a valid Ohio driver’s license or who receives in-state college tuition is considered a resident and must pay the state income tax. The bill fails to address the extremely long time one can be in Ohio without becoming a resident.

“While it may be beneficial to certain Florida snowbirds, it distorts what it means to be an Ohioan and is out of line with general practice,” said Policy Matters Research Director Zach Schiller. “We urge the committee to scale back the residency requirement to 183 days, so someone who is in Ohio most of the time is in fact an Ohioan under tax law.”