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OSCPA testifies on bonus depreciation as budget and muni tax measures advance

Written on Apr 21, 2023

OSCPA staff report

OSCPA spoke in favor of House Bill 116 on Tuesday in front of the Ohio House Ways & Means Committee, a bill that would assist Ohio taxpayers by keeping Ohio competitive compared to other states by encouraging capital investment by Ohio pass-through entities and individual business.  

“This bill allows Ohio businesses to retain funds sooner by “re-coupling” to federal income tax law,” said Greg Saul, Esq., CAE, OSCPA director of tax policy, in proponent testimony.  

H.B. 116, sponsored by State Rep. Bob Peterson (R-Washington Court House) and State Rep. Thad Claggett (R-Newark)., seeks to amend R.C. 5747.01 to allow taxpayers to deduct in a single year the full bonus depreciation and enhanced expensing allowances the taxpayer deducts for federal income tax purposes. The bill creates an election allowing taxpayers to eliminate the addback and phase out subtraction.   

“Ohio businesses have been unable to take advantage of several pro-taxpayer provisions enacted at the federal level and instead are required to make add-backs to their Ohio tax returns, resulting in additional state tax burdens in the short term,” Saul said. “In essence, a provision in current law triggers a cash-flow issue for Ohio businesses, so H.B. 116 would allow businesses to continue to compute their Ohio tax liability based upon federal methodology – taking the depreciation sooner rather than later and retaining much-needed dollars in Ohio’s economy.”  

Municipal Net Profits Tax Safe Harbor.  State Rep. Monica Robb Blasdel (R-Columbiana) and State Rep. Adam Mathews (R-Lebanon) on Tuesday also gave sponsor testimony on OSCPA-backed House Bill 121, which allows businesses with remote and/or hybrid employees or owners to use a modified apportionment formula. It would provide the following: when an employee or owner works at a remote work location, the business may elect to apportion any property, payroll, or sales (gross receipts) attributable to that employee or owner to a designated location owned or controlled either by the business or one of its customers. The Ohio Society of CPAs will provide proponent testimony in support of H.B. 121 at the second hearing on April 25.  

Municipal Notices and Late Filing Fees. OSCPA previously offered proponent testimony to the Ohio House Ways & Means Committee on March 28 in support of House Bill 105, legislation sponsored by State Rep. Jim Thomas (R-Jackson Twp.). H.B. 105 was amended this week into the substitute version of House Bill 33, Ohio’s biennial budget legislation for fiscal years 2024-2025. H.B. 33 also now contains an OSCPA priority that would extend the due date for filing municipal net profits tax returns from October 15 to November 15 (pages 594-595 of Sub. H.B. 33). For other tax issues that are currently pending in H.B. 33, click here for the comparison document

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