(OHIO) — Ohio House lawmakers passed House Bill 503, a measure that would require voter approval before a municipality can reduce or repeal a municipal income tax reciprocity credit and would allow voters to use an initiative to authorize, modify, or repeal such a credit.

The bill, sponsored by Republican state Reps. Bill Roemer and Heidi Workman, cleared the House in the 136th General Assembly and now moves to the Senate. House records marked it Passed By House.

At the center of the proposal is a new requirement that a city secure approval at a general or special election before changing an existing reciprocity credit. The same voter-approval requirement would apply before a municipality could repeal a reciprocity credit.

House Bill 503 also creates a path for residents to put the question on the ballot themselves. Under the bill, voters could use an initiative to authorize, modify, or repeal a reciprocity credit.

The proposal reaches backward as well as forward. It applies retroactively to modifications approved on or after August 1, 2025.

Any modification adopted by ordinance or resolution after August 1, 2025 but before the bill’s effective date would be void and without effect unless voters approved it. That language would sweep in local changes made during that period and subject them to the bill’s election requirement.

Workman framed the measure as a direct check on city action affecting residents’ tax bills. On the House floor, Workman said the bill ensures that “if a city wants to lower the reciprocity rate it offers residents paying income taxes elsewhere, voters need to agree.”

Roemer cast the issue in tax terms. He said lowering a reciprocity credit is effectively a tax increase for residents.

The legislation sets a threshold for ballot access through petition. According to the bill analysis, petitioners would need signatures equal to at least 10% of the votes cast in the most recent governor’s race to place an initiative on the ballot.

If voters approve such an initiative at a general election, it would take effect on January 1 after that election. That gives the proposal a fixed implementation date tied to the election calendar.

The measure focuses on municipal income tax reciprocity credits, which cities use in dealing with residents who pay income taxes elsewhere. Under House Bill 503, a municipality could no longer modify or repeal an existing credit on its own without first taking the question to voters.

That requirement would apply whether city officials sought to change a credit at a general election or a special election. The bill’s text, as summarized in the House material, treats modification and repeal alike by putting both before voters.

The initiative provision adds a separate route that does not depend on city officials placing the issue on the ballot. Residents who gather enough signatures could ask voters to authorize a credit, change one, or remove one.

Retroactivity is one of the bill’s most consequential features. By making modifications approved on or after August 1, 2025 subject to voter approval, the proposal would not stop with future local decisions.

It would also invalidate any modification adopted after that date and before the bill takes effect unless voters sign off. In practice, that means some municipal actions already taken could lose force if the bill becomes law without subsequent voter approval.

Workman and Roemer have presented the bill as a protection for local voters rather than a transfer of power to city councils. Their argument on the House floor centered on who should decide whether a reciprocity credit is reduced.

Roemer’s statement tied that question directly to household cost. By calling a lower reciprocity credit a tax increase for residents, he placed the bill inside a broader fight over who bears the burden when local tax policy changes.

The Senate now takes up the measure after its House passage. Senators will decide whether to move House Bill 503 as written, revise its retroactive language, or alter the voter-initiative process before any final version can head forward.

If the bill advances, municipalities would face tighter limits on changing reciprocity credits without an election. Voters, meanwhile, would gain a defined petition route, backed by the 10% signature threshold, to force those questions onto the ballot.

The proposal’s next test will come in the Senate, where any amendment could reshape both the retroactive reach back to August 1, 2025 and the future rule that residents, not city officials alone, must approve any move to lower or repeal a reciprocity credit.