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Home > Resources + Tools > Blog > Ohio Tax Law Changes. Will Your Small Business Benefit?

Ohio Tax Law Changes. Will Your Small Business Benefit?

July 30, 2013

Governor Kasich along with the Ohio General Assembly recently approved a new state budget that includes tax law changes.  These changes will result in a $2.7 billion tax cut for Ohio businesses and individuals over the next three years.

Among the changes includes a tax deduction for many small business owners.  Effective immediately with the current tax season, Ohio small businesses will be able to take a 50% state income tax deduction on the first $250,000 of business income.  If the business has multiple owners, each is eligible to claim a deduction.  The exclusion does have a cap and is only available to owners/investors of Ohio businesses that are structured as pass-through entities (PTEs).  Owners and investors in these businesses pay federal and state income taxes on their personal returns.  PTEs include:  sole-proprietors, partnerships, S corporations and limited liability companies (LLCs). 

  Other provisions of the new budget include:  
  • A 10% personal income tax cut to be phased in over the next 3 years.
  • Changes to the Commercial Activity Tax calculations.
  • State sales and use tax rate will increase 0.25%.

We are here to answer any questions you may have on how this will affect you and your business.

When I was the Executive Director of the Central Ohio Community Improvement Corporation, Parms + Company served as our auditor. When I began as Executive Director, the books had been poorly maintained. Parms + Company provided invaluable assistance in helping me resolve this matter. I would recommend them whole-heartedly to everyone. - Joel Teaford Executive Director Central Ohio Community Improvement Corporation