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Ohio House Eliminates Governor Kasich's Proposed Tax Reform

State and Local Tax

By William Vohsing

On February 4, 2013 Ohio Republican Governor John Kasich issued his Executive Budget to the Ohio General Assembly. Governor Kasich proposed wide-ranging tax reform to shift Ohio from an income-tax-dominant state to that of a consumption-based state. The highlights of his budget proposal were reported previously in an Insight on Schneider Downs’ website.

In reaction to the Governor’s budget proposal, the Republican-led Ohio House of Representatives introduced Sub. H.B. 59 which eliminates or reduces all of Governor’s Kasich’s tax proposals and, instead, proposes the following:

Income Tax

  • Provides a 7% across-the-board reduction effective in 2013

Sales Tax

  • Includes a new provision that provides that a “hotel intermediary” is required to collect sales tax from its customers
  • Changes the definition of “substantial nexus” to adopt click-through nexus

CAT Tax

  • Exempts licensed agricultural commodity handlers from the Commercial Activities Tax

Severance Tax

  • Removes the $25,000 horizontal well impact fee

Motor Vehicle Fuel Tax

  • Reduces the motor vehicle fuel tax on liquefied natural gas to 28 cents per gallon (from the existing 44 cents per gallon)

The Ohio Senate began holding hearings on Sub. H.B. 59 on April 16, 2013, with a vote tentatively scheduled for June 5, 2013.

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