Ohio ~ Multiple Taxes: Budget Proposal Would Cut Income Tax Rates, Increase Sales Tax Rate

Ohio Gov. John Kasich has issued his executive budget proposal for fiscal years 2016-2017. Proposed tax changes include the following:

— individual income tax cuts of 15% in 2015 and an additional 8% in 2016 (23% total), with matching withholding rate cuts;

— elimination of income tax for businesses and pass-through entities with gross receipts of $2 million or less;

— increase of the personal exemption from $2,200 to $4,000 for taxpayers earning less than $40,000 and from $1,950 to $2,850 for those earning between $40,000 and $80,000;

— repeal of the retirement income credit, Social Security deduction and senior credit;

— increase of the sales tax rate from 5.75% to 6.25%, including expansion of the tax base to include services, such as debt collection, lobbying, and public relations;

— reduction of the motor vehicle and watercraft trade-in value tax exemption to 50%;

— capping the vendor’s discount for timely filing at $1,000 per month;

— increase of the commercial activity tax (CAT) rate from 0.26% to 0.32%;

— decrease the alternative minimum tax on the CAT from $800 to $150 for those with gross receipts from $1 million to $2 million;

— elimination of early payment discounts for cigarette tax and other tobacco products tax; and

— imposition of severance tax at a rate of 6.5% on the gross market value of hydrocarbons.

Budget Recommendations: The State of Ohio Executive Budget Fiscal Years 2016-2017, Office of Ohio Governor John Kasich, February 2, 2015

 

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

All stories by: Wolters Kluwer Tax and Accounting