Provided by Hannah News Service
An amendment made to House Bill 51 adopted Tuesday in the Senate Ways & Means Committee would conform the state tax code to recent federal changes, something lawmakers typically do annually.
The original purpose of H.B. 51 is to allow county auditors to initiate property valuation adjustments for destroyed or damaged property. The committee passed the bill after adopting the amendments, including one permitting government bodies to again meet virtually through June.
Sen. Louis Blessing, R-Cincinnati, said the conformity language is needed to address recent federal changes affecting water and sewage disposal entities. These federal changes to IRC section 118 were made in the Infrastructure Investment and Jobs Act (effective Nov. 15, 2021). The conformity amendment likewise has an emergency clause, allowing the tax conformity to take effect immediately upon the Governor’s signature instead of the normal 90-day wait period.
According to the LSC analysis, the most significant of the federal law changes affecting Ohio law is a modification of the tax treatment of contributions to the capital of a corporation. The modification will allow certain regulated water and sewer utilities to exclude amounts that qualify as contributions of capital of the taxpayer from gross income. If these utilities are organized as a pass-through entity and owned by individuals, such reduced gross income would lead to reduced FAGI.
The bill on Wednesday was unanimously passed on the Senate floor. Next up: a House concurrence vote when the lower chamber is next in session.