Ohio Gov. John Kasich has proposed across the board personal income tax cuts as part of his 2014 Mid-Biennium Review (H.B. 472). The proposed bill would decrease personal income tax levels by 8.5% over the next three years. If the bill passes as proposed, that would bring Ohio’s top income tax rate below 5%. Currently, the top rate is taxed at 5.392%. The top rate would be reduced to 4.88% in 2016.
The bill, as proposed, would also:
— increase the earned income tax credit for low-income Ohioans by raising its benefit from 5% to 15% of the federal credit;
— raise the personal exemption from $1,700 to $2,700 for Ohioans earning less than $40,000 annually and from $1,700 to $2,200 for those with annual incomes between $40,000 and $80,000;
— raise the commercial activity tax (CAT) from 0.26% to 0.30%;
— raise the cigarette tax from $1.25 per pack to $1.85 per pack and increase the tax on other tobacco products such as e-cigarettes to a level equivalent to the cigarette tax;
— update the gas severance tax rate to a rate of 2.75% of producers’ gross receipts; and
— eliminate severance taxes for small conventional gas producers.
H.B. 472, as introduced; 2014 Mid-Biennium Review Fact Sheet, March 2014