Ohio Governor Signs State Budget Into Law

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.

About the Author(s)
Sue is a Senior Manager in the Pittsburgh, Pennsylvania office of HBK. She began her career in 1990 spending 14 years in public accounting followed by 14 years in government. Sue is Certified Public Accountant and has extensive experience in state taxation and pass through entities. While working at the PA Department of Revenue, she was the Director of the Pass-Through Business Office for 11 years prior to being promoted to Deputy Secretary for Compliance and Collections. She is the leader of HBK's State and Local Taxes (SALT) group and is a member of the HBK’s Tax Advisory Group (TAG).
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.