State Budget Bill Passes; Business Income Deduction Largely Preserved

Ohio lawmakers passed the state’s biennial budget Wednesday with bipartisan support. Notably, Ohio’s tax deduction for business income will largely be preserved. The budget deal keeps the first $250,000 of income for limited liability corporations and other business entities tax-free, as well as keeping an existing 3% flat rate on income above that.

Language will be included that make lobbyists and lawyers ineligible for the deduction. This change is supposedly meant to address one of the primary complaints with the tax deduction—that individuals can form businesses without hiring any employees. 

The deal also eliminates taxes for people in Ohio’s lowest two tax brackets, while cutting other tax rates by 4%.

GCP supported:

  • Preserving Ohio’s current small business tax deduction, which is utilized by our members for reinvestment back into their companies, workforces, and communities. 
  • Maintaining the 3% flat tax rate that pass-through businesses pay on earnings over $250,000.

GCP will continue to track ongoing budget developments that impact our members. 

The Governor received the budget bill late last night and is expected to sign it, with possible line-item vetoes, today.


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  • Next up: State Budget Correction Bill Would Tweak Ohio Business Income Tax Deduction

    State Budget Correction Bill Would Tweak Ohio Business Income Tax Deduction

     

    Among the key issues GCP was engaged in throughout the Ohio budget bill process and over the course of the last several years was our members’ intent to preserve Ohio’s small business tax deduction, which is utilized by our members for reinvestment back into their companies, workforces, and communities.  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.

    On Thursday, the Ohio House passed SB 26 unanimously which, in part, reverses provisions that policymakers made in the operating budget bill that required lawyers and lobbyists to pay taxes on all levels of business income, even though all other businesses are exempt on the first $250,000 of income.  SB 26 aims to restore the deduction for those industries reportedly because Ohio tax forms do not require one’s occupation to be listed in the same way that federal tax documents do.  Therefore, SB 26 would also require those to list their occupations going forward on state tax forms.

    Under the plan, the 100% business tax deduction on the first $250,000 in business income remains in place.  And, the bill will now head back to the Ohio Senate for review.

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  • Next up: State Designates $125M of CARES Act Funding to Small Business Relief Grants; Learn How to Apply for the Program Here

    State Designates $125M of CARES Act Funding to Small Business Relief Grants; Learn How to Apply for the Program Here

     

    On Friday, Governor Mike DeWine announced the designation of $125 million of federal CARES Act funding to provide $10,000 grants to aid small businesses hurt by the current crisis. Designation of additional funding was also announced for bars and restaurants, higher education, and nonprofits and arts organizations. The Small Business Relief Grant application period will open Monday, November 2, 2020 at 10:00 a.m. Applications will be approved on a first-come, first-served basis and eligible small businesses are encouraged to get ready to apply. 

    Click here to read GCP’s comprehensive guide to apply for the Small Business Relief Grant program.

    GCP was a key advocate on behalf of small business members, encouraging a portion of remaining CARES Act funds to be used for the creation of such a program. In a September letter to Governor DeWine, Senate President Obhof, and Speaker Cupp, Marty McGann, Executive Vice President of Advocacy, urged that “as policymakers decide where to direct federal CARES Act dollars, it is critical that a portion of Ohio’s remaining allocation support our small businesses.” 

    In addition to the Small Business Relief Grant program, the state will designate $37.5 million of funding to provide $2,500 assistance payments to on-premise liquor permit holders to help them through the financial difficulties experienced during the pandemic. Both programs, the Bar and Restaurant Assistance Fund and the Small Business Relief Grant program, will begin accepting applications on November 2. 

     
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  • Next up: Substitute HB 166: State Budget Process Continues

    Substitute HB 166: State Budget Process Continues


    A temporary Ohio budget extension was recently approved to keep the government open for business.  Ohioans may expect the Ohio General Assembly to vote on a final state budget bill between now and July 17; the lengthy legislation will then be sent to the Governor for his review and approval. 

    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 percent 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 when it comes to predictable tax policy entrepreneurs can plan for:

    • Preserve Ohio’s current small business tax deduction, which is utilized by our members for reinvestment back into their companies, workforces, and communities. 
    • Maintain the 3% flat tax rate that pass-through businesses pay on earnings over $250,000.

    To a view a comparison of budget priorities up until this point between the Governor, Ohio Senate, and Ohio House click here.

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  • Next up: 3 Things to Know: Supporting Diversity and Inclusion in the Workplace

    3 Things to Know: Supporting Diversity and Inclusion in the Workplace

    Diversity and inclusion is an important part of any successful business. Here are three things to know about supporting D&I in your workplace—as well as information on a new webinar series from GCP's Equity & Inclusion Division.

     

    First thing to know: No business is too small for D&I

    Diversity and inclusion is just as—if not more—valuable for a small business as it is for a larger company. Having a diverse group of workers—both physically and in terms of ways of thinking—can create more innovation, creativity, and productivity. You probably don’t have a staff member dedicated to diversity and inclusion so it’s important you know how to manage this area with your small business. 

    Check out this quick, 3-minute interview with Compass Consulting Services that discusses how a small business can implement diversity and potential benefits for doing so.

    Second thing to know: It starts with a conversation

    Simply broaching the subject of race and diversity and possible relevant initiatives is the first step in supporting an inclusive culture at work. But where do you begin and how do you make sure these conversations are effective? 

    Check out this recent GCP webinar for some great information about how to effectively approach and continue to discuss topics such as race and supplier diversity in the workplace.

    Third thing to know: GCP and COSE are here to support you

    GCP’s Equity & Inclusion Division offers helpful programs and resources to support you as you support diversity and inclusion in your workplace. Join us on Tuesday, January 26, 2021 from noon to 1:15 p.m. as we kick off our 2021 programming with our new webinar series, “But what does it mean?” This series is devoted to translating research studies and data into meaningful action. 

    Our guest presenter this month will be Marlene Orozco, Lead Research Analyst with the Stanford Latino Entrepreneurship Initiative at the Stanford Graduate School of Business and CEO of Stratified Insights, a research consulting firm. Ms. Orozco will share research on the State of Latino Entrepreneurship and The Impact of Covid-19 on Latino Businesses.

    Learn more about this series and save the dates for future webinars on the topic of diversity and inclusion.

    Check out more articles in our 3 Things to Know series.

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  • Next up: The Effective Capability Statement

    The Effective Capability Statement

    An effective capability statement is a marketing tool that will showcase the services/products that your company offers, its qualifications and accomplishments.

    An effective capability statement is a marketing tool that will showcase the services/products that your company offers, its qualifications and accomplishments. In a recent webinar, Rich Delisio of OU PTAC reviewed the importance of a well written capability statement, how to stand out against competitors, and the components to include as you prepare for the Cleveland B2B Matchmaker.

    Watch the full webinar below:

     

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