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OSCPA sees movement on priority tax issues

Written on Apr 28, 2023

OSCPA staff report

OSCPA testified in support of House Bill 121 on Tuesday in front of the Ohio House Ways & Means Committee, a bill that allows businesses with remote and hybrid employees or owners to use a modified apportionment formula if they choose to make the election.   

“The three-factor apportionment formula for the net profits tax is based on the business’ payroll, sales, and property,” said OSCPA tax director, Greg Saul, CAE, in his proponent testimony. “The election effectively treats the three factors generated by a remote worker at a remote work location as being located at the remote worker’s regular reporting location at the employer’s place of business.” 

The bill is sponsored by State Rep. Monica Robb Blasdel (R-Columbiana) and State Rep. Adam Mathews (R-Lebanon) who gave testimony last week. Rep. Bill Roemer, CPA (R-Richfield), Chair of the House Ways & Means Committee, has been scheduling several tax policy bills for hearings since taking over the gavel earlier this year. Saul said this “is simpler for taxpayers,” as H.B. 121 essentially restates the original apportionment provision in Ohio Revised Code 718.02 or 718.82 and then adjusts that language.   

Another important benefit of H.B. 121 is the optional reporting method eliminates the barrier for Ohio and non-Ohio employers to hire Ohio-based remote workers who can stay here. Without this language, such employers would be faced with filing net profits tax returns in multiple municipalities simply because they use remote employees. 

The Ohio House on Wednesday passed House Bill 33 (Ohio’s biennial budget legislation for fiscal years 2024-2025) by a 78-19 vote, and the Ohio Senate has already begun hearings on the budget bill. The comparison document of the current tax policy provisions can be found here. Several of our priorities below were amended into H.B. 33 – references to TAXCD## below are to the comparison document. 

Deduction of Bonus Depreciation and Expensing Allowances. House Bill 116 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. The sponsors are State Rep. Bob Peterson (R-Washington Court House) and State Rep. Thad Claggett (R-Newark). OSCPA provided proponent testimony in favor of H.B. 116 at its second hearing in the House Ways & Means Committee on April 18. H.B. 116 was amended into H.B. 33 (the budget bill) prior to passing the Ohio House. See TAXCD72 in the comparison document. 

Municipal Notices and Late Filing Fees. House Bill 105 places limits on late filing notices and penalties. H.B. 105 is sponsored by State Rep. Jim Thomas (R-Jackson Twp.). OSCPA provided proponent testimony in favor of H.B. 105 at its second hearing in the House Ways & Means Committee on March 28. H.B. 105 was amended into H.B. 33 (the budget bill) prior to passing the Ohio House, along with another OSCPA priority that would extend the due date for filing municipal net profits tax returns from October 15 to November 15. See TAXCD61 and 62 in the comparison document.