Legislation prohibiting Ohio municipalities from requiring insurance companies to withhold income taxes from disability benefit payments became effective July 1, 2007. As a result of legislation enacted in 2004, municipalities were permitted to require DI carriers to withhold taxes from benefit payments. In recent months, a small number of cities demanded that DI insurers comply with the withholding requirement, creating a significant administrative burden for insurers. The key problem was that the withholding was to be based on place of employment; insurers’ records include beneficiaries’ home addresses. This year’s amendment effectively exempts disability income benefits from the municipal withholding requirement.