On July 18, 2019, Ohio Governor Mike DeWine signed the Ohio budget into law. There were an estimated $700 million in across the board tax cuts. The changes include:

• For pass-through entities, the $250,000 business income tax deduction and 3% flat tax remains. However, the tax break was eliminated for lawyers and lobbyists.
• The elimination of the state’s bottom two income brackets and a corresponding 4% cut to the remaining five brackets for personal income tax.
• Required remittance of sales tax for sellers with gross receipts of at least $100,000 from sales into Ohio or engage in 200 or more separate sales. The bill also requires Marketplace facilitators to collect.
• The Film Tax Credit has been broadened to cover post-production work and Broadway-style productions.
• All state manufacturers will be able to apply for a “job retention” tax credit. To qualify, manufacturers need to make a capital investment equal to 5% of tangible property at the facility site, or $50 million, whichever is less.
• Ohio will piggyback off the federal Opportunity Zone program with a state income tax credit equal to 10% of an investment into a qualified fund up to $1 million every two years.

Other measures include:

• Raising the age to buy cigarettes from 18 to 21.
• Creating a new tax on vape products of 10 cents per milliliter.
• Creating a tax credit for property owners worth up to $10,000 for lead paint removal.

Please contact Suzanne Leighton of the HBK Tax Advisory Group at SLeighton@hbkcpa.comfor more information on how these changes to state law could affect your business.