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That’s a wrap: Legislative lame-duck round-up

Written on Dec 16, 2022

By Greg Saul, Esq., CAE, director of tax policy

Ohio’s lame-duck legislative session was plenty busy, culminating with an overnight, marathon session that lasted until around 6 a.m. Thursday morning.

House Bill 45, drafted initially to create a temporary tax amnesty program, became the vehicle doling out nearly $6 billion of mostly federal ARPA funds. Of note, the legislation authorizes a deposit of $749 million into Ohio’s Budget Stabilization Fund – commonly referred to as the Rainy-Day Fund. This deposit will take the fund’s balance from $2.71 billion to $3.46 billion, representing the statutory maximum of 8.5% of the FY 2022 General Revenue Fund (GRF).

At any time in the calendar year 2023 (but before November 1, 2023), H.B. 45 also requires the Director of Budget and Management to determine if it is necessary for the state to administer a tax amnesty program. The Director shall make that determination only if the Director finds that the GRF will require additional proceeds from the amnesty program to meet obligations required to be paid from the GRF in the calendar year 2023.  

This scenario is not likely to play out because Ohio currently has a FY 2023 surplus of $478.5 million (4.3% above estimates). However, on the very small chance it does occur, it would be a two-month “amnesty” period during which taxpayers owing past-due state taxes and certain fees may discharge the debt by paying the delinquent tax or fee without having to pay the penalty and accrued interest normally due.  The most recent general tax amnesty was conducted by the Ohio Department of Taxation in early 2018. 

House Bill 66, originally drafted to require the reporting and review of property tax exemptions, became the tax-related vehicle that passed. The legislation picked up an OSCPA-supported amendment allowing taxpayers to apply to the Tax Commissioner or Superintendent of Insurance for a refund of any amount the taxpayer overpaid, including tax-related penalties and fees.  In general, current law specifies that the Commissioner or Superintendent may only refund overpaid taxes, with interest.

Another issue clarified in H.B. 66 specifies that the maximum amount of an existing income tax credit for donations to scholarship granting organizations (SGOs) that can be claimed by spouses filing jointly is $1,500.  Current law limits the credit to $750 per taxpayer, but it did not include specific language regarding the treatment of joint returns.  For more information on the scholarship donation credit and a list of eligible SGOs, please visit the Ohio Department of Taxation’s website.

Both bills now head to Gov. DeWine’s desk for his signature.  Since both pieces of legislation contain appropriations, the Governor is permitted to exercise line-item veto authority over any of the provisions before signing the bills into law.