The state legislature has a few days to iron out their final priorities for Ohio's next two years of policy in a multi-billion-dollar spending bill that sets the state budget. Last week the Ohio Senate passed their version of a proposed FY20-21 budget. A final bill will be presented to the Governor by month’s end and after the Ohio House and Senate conference.
Among the many issues GCP is engaged in, the Senate’s budget bill would require state agencies to review and repeal regulatory restrictions over the course of the next four years, an element of regulatory reform measure Senate Bill 1, legislation which GCP supported.
In addition, the Senate budget maintains language for an Opportunity Zone tax credit, including allowing the transfer of credits and increasing the share of invested assets in zone property from 90% to 100%. An amendment supported by GCP—to create an Opportunity Zone Study Committee to study best implementation practices from other states and impact investment strategies that support more highly distressed rural and urban communities—was not included in the final bill.
After the Governor prescribed no significant tax changes earlier this year, the Ohio Senate recommended an 8% income tax decrease and the Ohio House approved a 6.6 percent income tax cut. That aside, GCP has continually requested state leaders consider the following:
Preserve Ohio’s current small business tax deduction, which is utilized by our members for reinvestment back into their companies, workforces, and communities. Reducing the deduction for business income, as proposed by the House, by 60% is significant and it would seriously jeopardize future planning and investments.
Maintain the 3% flat tax rate that pass-through businesses pay on earnings over $250,000. Should elected officials choose to eliminate the current rate and increase the tax rate on these Ohio businesses, allowing entrepreneurs an opportunity to plan and budget for it in the future, as outlined in the Senate’s proposal, is absolutely critical. Because most businesses are set up as pass-through entities, they pay taxes on business income at the income tax rate of their individual owners. Ensuring the proper treatment for a variety of business types, expenses, and investments made by business owners—to support the growth of their businesses—is a crucial focus in deliberations on tax policy.
Late last week the House and the Senate named members of the budget bill conference committee. To view a summary document of the Senate’s latest amendments, click here.