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State Lawmakers Weigh Plan to Eliminate Ohio's Main Business Tax

Two conservative legislators want to do away with it

The coronavirus pandemic has been hard for Ohio businesses.  They have faced mandatory closures, capacity limits, staffing shortages and, not surprisingly, revenue losses. But the one thing that has not changed is their state taxes. Ohio, unlike most other states, doesn't have a corporate income tax. Instead, businesses pay taxes on their total receipts rather than their total profits.

"You could be losing money and still have to pay a tax," said Ulrik Boesen, senior analyst for a conservative nonprofit called the Tax Foundation. "This can be particularly damaging to struggling businesses."

That's why a pair of Republican lawmakers want to get rid of the Commercial Activity Tax or CAT. House Bill 234 would phase the CAT out over five years by reducing it 20 percent a year starting in 2022.

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