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%.