Senate Budget Proposes Significant Tax Relief

In its version of the state’s FY2024-25 budget (House Bill 33), the Senate has proposed the following tax changes:

• Expand the House-approved income tax relief plan by reducing the number of tax brackets from four to two, 2.75% and 3.5%. This would move Ohio closer to a flat tax, but the brackets would no longer be indexed to inflation.
• Reduce by 25% the Commercial Activity Tax rates and minimums. This would be phased in over two years.
• Create a new expanded sales tax holiday to replace the current back-to-school tax holiday. It would be used when there’s more than $50 million in excess state revenue.

The full Senate will vote on the budget in mid-June. Meanwhile, House Speaker Jason Stephens (R-Kitts Hill) has said little regarding the Senate’s tax changes, telling Gongwer News Service that Ohio continues to be in a “once in several decades cycle, from a fiscal standpoint, to invest in the future.” 6/7/2023