In his two-year budget (House Bill 59), Governor Kasich proposes to expand Ohio’s sales tax to help pay for a $4 billion reduction in the state income tax. This will be accomplished by taxing a wide range of services never before subject to the sales tax.
Ohio is not the first state to try expanding its sales tax base to more services. In fact, it’s been tried here before. We looked at how it played out.
As part of his budget introduced in February, 2003, Gov. Taft proposed to expand the sales tax to a number previously untaxed services in order to cope with a sluggish economy. The bill that ended up taking effect, however, was markedly different, with far fewer services subject to the sales tax expansion. We took a look at how it played out.
Passage of the Kasich sales tax on service is all but certain. Republican legislators have had as many questions in hearings held to date as minority Democrats. Hearings continue in the House Ways and Means subcommittee this week.