Contractors Working on Projects in the City of Akron Must Comply with New Registration and Reporting Requirements

    Beginning February 1, 2017, construction contractors doing work in the City of Akron will have to meet new requirements in order to obtain permits. Contractors will have to register with the City and report details of their projects or face a penalty of $5,000.

    The City is still finalizing the logistics of the registration process, which must be met annually. The legislation provides, however, that applicants must disclose or provide: (1) the identity of those who hold at least 15% ownership interest in the company; (2) proof of liability insurance; (3) a copy of a current Ohio Bureau of Workers Compensation policy; (4) a license number if the company has a state-required license; and, (5) proof that the company is properly registered with the City Tax Administrator. The initial registration fee is $100, and the fee for each renewal application is $50. All registrations will be valid through the June 30th following the date of issuance.

    In order to secure a permit, contractors must submit permits to the City Tax Administrator within seven days of issuance and supplement them with the following: (1) proof of contractor registration; (2) a good faith estimate of the total work hours necessary to complete the project; (3) a good faith estimate of the hourly wage of each person employed to complete the project; and (4) a list of all known contractors and subcontractors that will be working on the project. The legislation imposes a duty on the contractor to update or supplement that information if it changes.

    The penalty for failure to comply with these requirements is a fine of $5,000.

    The third component of the new legislation is a complaint process which will enable the City Tax Administrator to accept complaints from third parties about contractors who have failed to comply with the registration requirement and/or have improperly withheld and failed to pay required income tax to the City.

    Akron City Council passed the enabling legislation for these new rules on December 19, 2016. The legislation stems from the City’s Blue Ribbon Task Force recommendation to increase income tax revenue from contractors and subcontractors. In a press release, Akron Mayor Horrigan said: “This legislation will streamline enforcement by preventing contractors from obtaining building permits until they have registered with the City. We will then be able to track when and where contractors are doing work and ensure they are licensed by the State, remitting taxes, and maintaining workers compensation coverage and liability insurance to protect their employees and customers. This is an efficient way to use our existing resources to increase compliance and raise revenue.”