• Ohio: House Revised Biennial Budget Bill Eliminates Most of Governor's Tax Proposals
  • April 24, 2013
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • The Ohio House of Representatives' revised budget bill (Sub. H.B. 59) rejects nearly every major tax change proposed by Ohio Governor Kasich in his original budget bill. Among the major changes from Governor Kasich’s proposed budget bill are the following:

    • Eliminates the much-debated expansion of sales tax to myriad services previously not subject to sales tax.
    • Eliminates the 20 percent rollback in personal income tax and replaces it with a seven percent across the board cut that would take effect retroactively on January 1, 2013.
    • Eliminates the rollback in Ohio sales tax from five-and-a-half percent to five percent.
    • Eliminates the increase in severance tax on shale oil and gas extraction.
    • Eliminates the reduction by half in income tax imposed on small businesses.

    Ongoing severance tax discussions

    State Tax Commissioner, Joe Testa, has publicly addressed his concerns over the change in severance taxes from Governor Kasich’s proposal. Commissioner Testa finds the stance taken by the House perplexing because he believes Ohio should fairly share in the exploitation of its natural resources (noted to be valued in the billions of dollars). Even with Governor Kasich’s changes, Commissioner Testa notes that the rise in severance taxes would simply change Ohio from the lowest taxing state to among the lowest.

    Ohio’s current severance tax rates have remained unchanged for decades. Lawmakers and administrators have been showing increasing interest in the severance tax. Proponents of change contend that current severance tax laws no longer address the activity occurring in the state and believe they are out of date.

    Ohio’s budget bill was also covered in several of our previous publications:

    • The most recent revisions to Ohio's budget bill were also covered in the April 12, 2013 edition of the Ohio Statehouse Update
    • Governor Kasich's proposed state budget was previously covered in the March 14, 2013 and February 14, 2013 editions of the Multistate Tax Update