OSCPA staff report
After months of meetings, conference calls and digging into the technical details of all things tax by OSCPA and its member experts, plus even more discussions with key legislators, Ohio’s massive biennial budget bill (Am. Sub. HB 166) was signed into law this morning and included very good news for Ohio’s business owners: continuation of the BID as is for almost all businesses. The Business Income Deduction (BID) was kept at $250,000 and maintains the 3% flat rate cap on income above it. Further, OSCPA was successful in convincing legislators to avoid tying the BID to the federal 199A law. This harmful provision was mentioned multiple times as an option and would have negatively impacted a broad array of specified service trades and businesses (SSTB) – including CPAs.
“OSCPA’s robust lobbying efforts have resulted in a strong outcome for the CPA profession,” said OSCPA President & CEO Scott Wiley, CAE. “Key legislators were seriously considering adopting the federal 199A language as late as this past Friday. Our Government Relations team, leveraging the expertise of OSCPA members, quickly engaged and convinced key elected officials that adopting the provision into Ohio law would be bad for Ohio. As the voice of Ohio’s CPAs, we are pleased this negative proposal failed to gain support and appreciate all the hard work by the DeWine Administration and House and Senate leaders to not only understand the nuances of complex tax law but ultimately to largely keep the BID intact.”
The House, Senate and DeWine Administration, working tirelessly over many late nights, reached a last-minute compromise to keep the rates as is but eliminated BID eligibility for lawyers and lobbyists – two professions at the center of BID concerns by some legislators. There are still some questions about the possible impact on other businesses who employ Ohio-licensed attorneys or have out-of-state corporate counsel. OSCPA is currently evaluating that language to better understand potential ramifications.
While our government relations team is still digging through the bill to evaluate possible impact on other issues of concern, OSCPA’s advocacy work on behalf of the profession resulted in these noteworthy accomplishments within the budget bill:
- Lawmakers approved an amendment promoted by OSCPA to exempt supplemental executive retirement plans (SERPs) from municipal income tax, effective Jan. 1, 2020.
- OSCPA ensured that already regulated CPAs were excluded from penalties for failure to provide their Preparer Tax Identification Number (PTIN) on tax forms; other paid tax preparers can be penalized.
- Across-the-board cuts to the personal income tax will be 4%, down from 6.6% in the House version and 8% in the Senate version. That extra money will go into wraparound services for students.
- The OSCPA-backed medical marijuana language protecting CPA licensure was included in the bill.
See below for more information: