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Current News

Senate Takes Up Fix For Small Firm Income Tax Reduction

The Senate Ways and Means Committee started hearings Wednesday on tax-law cleanup from the biennial budget and plans to pass the measure soon, according to Sen. Bob Peterson (R-Sabina), the committee chairman. 

The final version of HB64 (R. Smith) inadvertently turned an intended tax cut into a temporary tax increase for some small firms under the state's small business exemption. Lawmakers created a 3 percent, flat-rate tax for small business income above $250,000, the threshold for the small business exemption. But in 2015, taxpayers can only exempt 75 percent of income up to $250,000, and application of the 3 percent rate on the last 25 percent could represent a tax increase versus application of the usual graduated rates. 

Sen. Bill Beagle's (R-Tipp City) SB208 fixes this error by applying the graduated rates to the final 25 percent of income up to $250,000. The problem goes away in 2016, when a full 100 percent of small business income up to $250,000 is deductible. 

Beagle told Sen. Larry Obhof (R-Medina) that the bill also should simplify the filing process, meaning there'll be greater participation among business owners in claiming the deduction, leading to greater tax relief. 

Peterson said after the hearing he expects a vote on the bill in two weeks. 

Senate Committee Hears Transportation Insurance Contracts Bill (HB71)

The Senate Civil Justice Committee took sponsor testimony June 20 regarding HB71 which would prohibit certain indemnity agreements in motor vehicle carrier transportation contracts.

Rep. Roegner told the committee HB71 "is a significant step in leveling the playing field between the motor carriers and shippers, by preventing shippers, in the case of their own negligence, from demanding that the motor carriers (or the motor carrier's insurance provider) pay for the defense and damages arising from the shipper's negligent actions," in testimony identical to that which she gave before the House Judiciary Committee on March 3, 2015. She did add that now 42 states have enacted "anti-indemnification" statutes with the addition of Arkansas.

Senate Budget Bill Keeps Personal and Business Income Tax Reductions

The Senate Republican Caucus Monday released highlights of their FY16-17 budget proposal, HB64 (R. Smith), but details are still to come as the actual bill will be unveiled Tuesday in the full Senate Finance Committee and/or as negotiations continue -- both now and into the conference committee later this month.

Senate President Keith Faber (R-Celina) told reporters that, "This is a balanced budget that invests in Ohio's priorities, while still making our tax rate more competitive, saving for emergencies and putting millions of dollars back into the hands of the people who earned it. We're continuing to build on our commitment to fund what matters and return what isn't essential."

Read more: Senate Budget Bill Keeps Personal and Business Income Tax Reductions

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