Government Resources

Municipal Net Profit Tax

  • Overview
  • Distribution of the revenue received for a given month will be paid directly to the municipalities by the fifth of the 2nd subsequent month.
    (i.e. Revenue accounted for in April is due June 5th)  
  • Allocation Worksheet- Provides detailed definitions of the categories of monies distributed to the municipality. 

Municipality Distribution Webinar *NEW

On August 30th 2018, The Revenue Accounting Division hosted a webinar intended for use by municipalities seeking more information regarding the newly enacted Municipal Net Profit Tax.  Topics covered in the webinar included general information regarding the tax, a detailed description of the distribution process, an explanation of the monthly distribution reports, and commonly asked questions.  The presentation can be accessed below for those unable to attend or for anyone seeking additional information.  

Distribution Webinar Presentation (PPT)
  

Statute

Current Year Distributions

  • July 2018 (XLS)  - Distribution paid September 2018
  • June 2018 (XLS) - Distribution paid August 2018
  • May 2018 (XLS) - Distribution paid June 2018
  • April 2018 (XLS) - Distribution paid May 2018
  • March 2018 (XLS) - Distribution paid April 2018

Certification of Municipal Income Tax Information

FAQs

How much is the administrative fee?

  •  The Department of Taxation applies a fee of 0.5% for the state's administration of the tax

How does the taxpayer get credit for their entire payment if the state is taking an administrative fee?

  • The taxpayer's account is credited for the entire payment amount
  • The admin fee is calculated as part of the allocation to the municipalities

How should the municipality account for the admin fee?

  • The Department serves as the 'system of record'
  • The Auditor of State performs annual audits on the Department
  • If the municipality uses the Uniform Accounting Network (UAN), please contact the Auditor of State to determine how the fees should be accounted

How are the Investment Earnings calculated and distributed?

  • Each municipality is distributed a pro rata share of investment interest that was calculated by the Office of Budget and Management
  • Interest earned is deposited on a quarterly basis into the Municipal Income Tax Fund each January, April, June and October
  • Please note: the investment interest is divided proportionately between MNPT and MELT based upon the monthly cash balances of the two taxes

How should the municipality account for interest earned?

  • The Department serves as the 'system of record'
  • The Auditor of State performs annual audits on the Department
  • If the municipality uses the Uniform Accounting Network (UAN), please contact the Auditor of State to determine how the fees should be accounted

How is an estimated payment for taxable year 2019 possible?

  • An estimated payment for taxable year 2019 may be received in 2018 because the tax year used by the taxpayer is determined by when their tax year ends, rather than when it begins
    • The first declaration is due May 2018 for a fiscal year filer with a taxable year ending in 2019

Why are there negative values on the detailed distribution report?

  • To properly calculate interest penalty when the annual return is filed, declarations do not stand alone
    • As the 2nd-4th quarter declarations are filed, previous payments are reapportioned according to the most recently filed declaration
    • Previously, this would have resulted in a refund once the return was filed

How do negative distributions impact the administrative fee?

  • The fee is calculated net of negative distributions that result from a reapportionment, meaning that the admin fee charged to the municipality is reduced

Why did the municipality receive a detailed distribution report for a zero dollar net distribution?

  • In the event that a municipality's net distribution total is a negative amount, the information generating the negative value will be on the report
  • The negative amount will be forwarded to the next distribution

How can the municipality see the detailed tax liability filed by the taxpayer?

  • Semi-annually in May and November, municipalities will be provided a report of returns filed during the previous six months with each taxpayer's apportionment factor and municipal taxable income apportioned to your specific municipality

What if the taxpayer that the municipality received a distribution for does not conduct business in their municipality?

  • Contact the Department's Business Tax Division (844) 238-0403
    • They will reach out to the taxpayer to determine the root cause of the issue
    • If the taxpayer realizes the error when filing the return the issue will be corrected
      • Please note that this may result in a future negative distribution

 

 

Contacts

  • If you have questions regarding the distribution and/or allocation of payments contact Revenue Accounting at (614) 466-7150
  • Any questions relating to the certification process, taxpayer and/or return concerns should be directed to the Business Tax Division at (844) 238-0403