On May 23, GCP member Michael Stanek, co-owner of Hunt Imaging and Cleveland Cycle Tours, testified in support of preserving the small business income deduction, which is slated to be reduced by 60% in the current biennial budget proposal, House Bill 166 (HB 166). Under the proposal, the amount of business income entities may deduct from their Ohio taxes would be reduced from $250,000 to $100,000. In addition, the proposal eliminates the flat 3% rate for qualified income above $250,000 and increases the rate to almost 5%. Stanek, who also served as the former Board Chair of the Council of Smaller Enterprises (COSE), reiterated GCP’s support for various other budget proposals, but urged the Senate Finance Committee to consider the growing amount of feedback that GCP continues to receive from members related to this policy.
GCP has supported the business income tax deduction since its inception because it allows small businesses to reinvest in their companies and employee compensation. GCP has also been a long-standing advocate for a sustainable and predictable tax and regulatory environment. From the time this deduction was enacted in 2013, it has undergone a series of legislative changes that have continually altered its impact on small business owners and their ability to plan for the future and grow. “My companies have consistently used our tax incentives to try to position ourselves for long-term success and stability,” Stanek stated in his testimony, highlighting several investments that have allowed both his companies to grow and expand into new markets.
GCP has called on its small business members to consider signing a letter to demonstrate their concern over the proposed changes. If you would like to show your support for the preservation of the small business tax deduction, you can opt-in to sign GCP’s letter here.
You can read Michael Stanek’s full testimony here.