Ohio Bill Could Eliminate Tax Filing Penalties When No Tax Is Owed
Ohio lawmakers are reviewing legislation that would prevent taxpayers from facing penalties for failing to file certain state tax returns when no tax is due.
Senate Bill 284, introduced by Rep. Tim Schaffer (R-Lancaster) last fall, aims to amend sections of the Ohio Revised Code so that the state cannot impose penalties or interest on returns reporting zero tax. The bill received its first hearing in the Senate Ways and Means Committee in October and held a second hearing earlier this month.
Under current law, individuals and businesses can be penalized for failing to submit required returns, even if no income, sales, or commercial activity tax is owed. Schaffer described the proposal as a “fairness measure,” noting it was inspired by a constituent who is a certified public accountant with clients penalized despite owing no tax.
“This legislation ensures that the state of Ohio does not punish individuals or businesses when no taxes are owed,” Schaffer said during the October hearing.
S.B. 284 would apply to major taxes including sales and use tax, individual income tax, and the commercial activity tax. The bill clarifies that other penalties—such as those for late payments, underpayment, fraudulent returns, or false refund claims—would remain in effect.
Business groups expressed support for the legislation. Jacob Flowers, assistant state director for the National Federation of Independent Business, said the bill is a “commonsense update” that allows small business owners to focus on running their companies rather than navigating unnecessary penalties.
Liz Baumgartner, director of economic development and tax policy for the Ohio Chamber of Commerce, added that the bill promotes fairness while maintaining accountability for actual tax violations.
The bill is still under review in the Senate Ways and Means Committee.
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