I'm starting a business.  What do I need to do about city taxes?

You will normally have to remit two types of city taxes: the net profits tax and (if you have employees) the employee withholding tax.

The first is the tax due on profits of your business, whether your business is a sole proprietorship, corporation or partnership. Incidentally, all the cities whose taxes are administered by Columbus tax the net profits earned within each city by S-corporations at the corporate level. As such, the individual shareholders of S-corps are not taxed. Columbus and Harrisburg  require partnerships and the limited liability companies (LLC's) to file and remit at the business level on behalf of all partners. All businesses, with the exception of sole proprietorships, file their city taxes using Form BR-25.  Additional information on the net profits tax for businesses other than sole proprietorships is available in the instructions for the BR-25. 

Sole proprietorships file by reporting their Federal Schedule C income on the proprietor's individual city return (Form IR-22 or, if reporting tax to more than two cities, Form IR-25). Additional information is available in the instructions for the IR-22 or IR-25. Click on Tax Forms to view and download the IR-22, IR-25 or the BR-25 and the instructions to each. You will need Adobe Acrobat to view the download. If you don't have Adobe Acrobat, you can download it free at http://www.adobe.com.

To remit the second type of tax, the tax withheld from your employees' wages, you will need to establish a withholding account with us. You do this by filing a Form IT-47, which is a simple questionnaire. Employers are liable for all city withholding taxes that should have been withheld from their employee's wages EVEN if those taxes were not, in fact, withheld. Because of this obligation, you'll want to make sure you set-up your employer withholding account as soon as you hire employees. You can call (614) 645-7370 to request to have a copy of the IT-47 mailed to you or click on Tax Forms to view and download Form IT-47.

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