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Terra Goodnight · May 8, 2019

Statehouse Preview: House Budget Plan Includes Big Tax Changes

Last week, the House revealed its changes to the state budget (HB166) and, for the most part, we like them. Many of the highlights worth noting are changes to eliminate or scale back various tax loopholes. By closing or scaling back tax breaks and loopholes, the House generates some new revenue to pay for most of the Governor’s priorities while adding some of its own, even while scaling back on DeWine’s two-year revenue estimate to better conform with projections from legislative budget analysts.

Among the highlights of the House plan:

  • Shrinks the so-called “LLC Loophole,” under which owners of certain pass-through businesses collect their first $250K in income tax-free and get a preferential rate for revenue beyond that.
  • Applies the sales tax to ride-sharing trips from Lyft and Uber.
  • Requires out of state online retailers to collect Ohio’s sales tax.
  • Eliminates various breaks for owners of private jet time-shares, motor racing teams, purchases of flight simulators and motion picture productions.
  • Eliminates state income taxes on the bottom income brackets and lowers rates on middle earners.
  • Requires graduating high school seniors to complete the FAFSA – a policy shown to substantially improve college financial aid awards
  • Increases funding for the enforcement wage and hour laws
  • Doubles funding for rape crisis centers
  • No school funding plan, but backers continue to work on tweaks that could address concerns from low-income rural and urban districts. Stay tuned.
Pro-tip: see all proposed House changes to the Governor’s proposed budget by reviewing the comparison document and appropriations spreadsheet.

Next Up

On Tuesday and Wednesday, the House Finance committee will hear more public testimony (read all submitted testimony, listed by hearing date) on the plan, and is expected to vote on amendments and to pass the bill at its Wednesday meeting (agenda). After that, the bill heads to the full House for a vote on Thursday afternoon or, if needed, Friday morning. We’ll send more details about what’s in the House amendments later this week to our budget list – sign up if you’re not already a subscriber.

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Tagged in these Policy Areas: Ohio State Budget | Statehouse Update