On July 4, 2023, Governor Mike DeWine signed the Ohio Biennial Budget Bill into law. There are significant business and personal tax changes included in the bill. Below are highlights of the various tax impacts, including DeWine's line-item veto provisions.
Personal Income Tax: The bill introduces a two-year phase-in of income tax reduction, reducing the number of brackets from four to two. Marginal rates will be set at 2.75 percent for incomes over $26,050 and 3.5 percent for incomes over $100,000. Ohio residents earning $26,050 or less will be exempt from paying income taxes.
Commercial Activity Tax (CAT): The law change makes significant changes to the CAT, including exclusions based on taxable gross receipts. For tax periods starting in 2024, all taxable gross receipts of $3 million or less will be exempt from CAT. This exclusion will increase $6 million or less for tax periods beginning in 2025. Amounts above these thresholds will continue to be subject to the existing 0.26 percent rate. This marks the first major change to the CAT since its inception in 2005.
Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).