Ohio Senate passes state operating budget with several OSCPA priorities

The Ohio Senate sent the state operating budget to the Ohio House on June 11 with a 23-10 vote after months of testimony.   

The chamber’s final version of Substitute House Bill 96 includes a flat tax on nonbusiness income phased in over two years. If the provision remains in H.B. 96, those making above $100,000 will pay 3.125% in tax year 2025, and everyone above $26,050 will pay 2.75% in tax year 2026.  

The budget bill was not supported by any Democrats during the committee process or on the Senate floor. Several Democrat members offered amendments on the floor, but they were ultimately voted down by the majority caucus. Senator Lou Blessing (R-Cincinnati) was the only Republican to vote with the Democrats against the budget. 

The Senate maintained many of the tax provisions implemented in the House version of the bill, including changes to the municipal income tax refund period and modifications to public accounting firm registration requirements. The Ohio Society of CPAs played a key role in supporting these provisions throughout the budget process.   

The alterations to the municipal income tax refund period would allow taxpayers who receive a filing extension on their return date to file refund claims within three years after the extended due date. See TAXCD72.   

Another OSCPA-backed provision adds clarity to ownership requirements for public accounting firms operating under an Employee Stock Ownership Plan (ESOP) structure, which are part of an alternative practice structure (APS). See ACCCD3.   

OSCPA also secured a new provision that allows nonprofit taxpayers with an unextended federal income tax return to extend the initial due date of their municipal net profit tax filing from April 15 to May 15 to match the federal income tax return due date. See TAXCD119.  

Finally, OSCPA was able to reinstate the pass-through entity tax provision that would permit an electing PTE tax credit to be claimed by a PTE that owns another PTE that has paid the electing pass-through entity tax (IT 4738) or the traditional composite return (IT 4708). See TAXCD74.   

The Ohio House voted 84-1 against concurring with the Senate version of Sub H.B. 96, the operating budget, leading the two chambers to conference committee to work out the differences. Rep. Jason Stephens (R-Kitts Hill) was the only “yes” vote.