Ohio ~ Multiple Taxes: Budget Bill Sent to Governor

The budget bill, H.B. 153, was sent to Ohio Gov. John R. Kasich for his signature after the House approved the bill, which includes income, sales and use, estate, and other tax changes summarized below.

Income Tax Proposals

The bill would:

— establish a nonrefundable income tax credit for individuals, estates, trusts, or certain pass-through entities for eligible investments in small businesses that employ at least 50 full-time employees in Ohio, or more that one-half of the businesses’ employees employed anywhere in the United States are employed in Ohio;

— establish a refundable job tax credit, to be granted on or after July 1, 2011, and before January 1, 2014, to an eligible business with a total annual payroll of at least $20 million, that invests a minimum of $5 million at a project site within the same political subdivision that the business has its principal place of business; and

— extend the historic building rehabilitation tax credit into perpetuity, rather than letting the credit expire June 30, 2011.

Sales and Use Tax Proposals

The bill would:

— provide a partial or complete sales and use tax exemption on purchases of computer data center equipment and on the installation, delivery, and repair of such equipment, for a business that invests at least $100 million in the computer data center project site during a period of three consecutive years and maintains an annual payroll of at least $5 million at the center;

— implement a temporary consumer use tax amnesty period for use taxes that were due and payable on or after January 1, 2010;

— clarify that the sales and use tax exemption for livestock-related property applies to purchases of building materials and related services incorporated into a building or structure used for keeping fish or horses or for keeping captive deer;

— exclude from sales and use tax the value of gift cards or certificates redeemed by a consumer in purchasing tangible personal property or services if (1) the vendor is not reimbursed and does not receive compensation from a third party to cover all or part of the gift card value and (2) the gift card or certificate is distributed through a customer award, loyalty, or promotional program; and

— exempt any transfer or lease of tangible personal property between the state and a successful proposer as long as the state is retaining ownership of the project. A “proposer” is defined as a private sector entity, local or regional public entity or agency, or any group or combination thereof, in collaboration or cooperation with other private sector entities, local or regional public entities, submitting qualifications or a proposal for providing highway services.

Estate Tax Proposals

The bill would repeal the state’s estate tax, the Ohio inheritance tax, for estates of individuals dying on or after January 1, 2013. The bill would also require that all claims and inquiries regarding the repealed estate tax be submitted to the Department of Taxation before 2013.

Additional Tax Proposals

The bill would:

— implement an amnesty period from May 1, 2012, to June 15, 2012, for certain delinquent state and local taxes, including sales and use taxes, income taxes, and tangible personal property taxes, which were due and payable as of May 1, 2011;

— authorize the Tax Commissioner to adopt rules to require tax returns or payments for employer income tax withholding, use tax, motor fuel tax, cigarette and tobacco product excise tax, and severance tax to be filed electronically;

— extend deadlines for the qualified energy projects property tax exemption by an additional three years; and

— extend the authority of local governments to offer enterprise zone economic development incentives, which is set to expire on October 15, 2011, by an additional year.

H.B. 153, as passed by the Ohio Legislature and sent to the governor on June 29, 2011


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