Changes to Ohio Personal Income Tax May Result in Significant Tax Savings
SALT Alert , February 2007

Recent legislation was signed into law by Ohio Governor Bob Taft. This change in law has considerably changed the residency requirements for Ohio personal income tax. The bill makes the law effective for tax years beginning January 1, 2007 and thereafter. The changes will most likely benefit individuals that have a residence outside the State of Ohio.

The legislation has changed the following requirements for Individuals to be considered non-residents for the Ohio Income Tax purposes:

• Increased the number of contact periods that an individual may have with the State of Ohio from 120 to 182. The change in legislation increases the amount of time that an individual may spend in the State of Ohio and still be considered a non-resident for State of Ohio income tax purposes.
• An individual has a contact period if the individual is away overnight from the individual's abode located outside the State of Ohio and while away overnight from that abode spends at least some portion, however minimal, of each of two consecutive days in Ohio.
• Requires that an individual file an annual statement with the Ohio Tax Commissioner verifying that the individual was not a resident with the State of Ohio. The annual statement must be filed with the Tax Commissioner by April 15th for calendar year end taxpayers.
• The statement filed with the Ohio Tax Commissioner must specify the following:
  • During the entire tax year the individual was not domiciled in the State of Ohio.
  • During the entire tax year, the individual had at least one abode outside the State of Ohio.
  • The individual must specify the location of their abode outside of the State.

The recent legislation has significantly changed the Ohio residency requirements and if you have any questions, please contact Michael Baker, Ohio State and Local Tax Leader at 800.430.0931, Adam Garn at 614.849.3031, or Julie Corrigan at 216.274.6509.



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