Ohio Lawmakers Debate Fix On Small Business Tax In Budget

Sep 30, 2015

Ohio lawmakers are continuing to work on a fix to a budget provision that imposes an unintended tax increase on some small businesses.

At issue is a tax deduction contained in the two-year state budget.

The budget allows small business owners to deduct up to 75 percent of their first $250,000 of business income this tax year, then 100 percent in 2016. A 3-percent flat tax is applied on the remaining net business income both years. For some, the rate for this tax year is higher than that paid prior to the budget.

Lawmakers had wanted the flat tax applied on business income over $250,000 and are considering legislation clarifying their intent.

Senate Ways and Means Chairman Bob Peterson said Wednesday that changes to the bill were still being finalized.