Three Issues NFIB/Ohio Members Need To Know
TAXES
The state of Ohio Operating Budget as introduced by Governor Kasich looks to reduce income tax rates for all Ohioans further. It brings the top marginal rate down to 4.335% and collapses brackets from the current 9 to only 5. This cut is replaced with increases in taxes on sales of tobacco, vapor products, wine and beer, as well as expanding the tax to new industry sectors. It also includes a .5% sales rate increase.
A major goal of NFIB/Ohio is to maintain the small business investor deduction from the last operating budget where all pass-through entities in the state of Ohio, which makes up approximately 70% of NFIB members. Pass-through entities also pay no income tax on their first $250,000 of business income and then pay only a rate of 3% above that.
Also included in the budget is a centralized system of municipal income tax collection that would save our members who do business in multiple cities across the state time and dollars as they would only file one return through the Ohio Business Gateway potentially collectively saving small business owners hundreds of millions of dollars.
The Ohio Department of Taxation states that this change would save $800 million in compliance costs. This provision was not included in municipal income tax reform from 2014.
NFIB/Ohio’s position is that while we support the reduction in the income tax and collapsing of tax brackets, maintaining the small business investor deduction, and are very much for centralizing municipal income tax collection. We are not for increasing and expanding taxes on business owners in new sectors and shifting the tax burden.
UNEMPLOYMENT COMPENSATION REFORM
Unemployment compensation reform is still lingering from the last Ohio General Assembly. A comprehensive reform package to guarantee long-term solvency during a future recession fell apart in the final days of the legislative calendar.
Both business and labor are working to come to an agreement to present to the legislature this spring. Items that could be considered to help Ohio avoid borrowing from the federal government in the future and seeing huge penalties levied on employers could include:
- Freeze the indexed benefits until a minimum safe level is achieved in the fund;
- Adjusting the taxable wage base while remaining competitive with neighboring states;
- Eliminate certain outlier benefits like the dependency allowance;
- Reduce the number of weeks of eligibility which currently stands at 26;
- Create a special fund allowance for certain industries through an opt-in structure.
WORKERS' COMPENSATION REFORM
In the 131st Ohio General Assembly workers’ compensation reform led by NFIB/Ohio in the area of subrogation was finally realized after a lengthy fight. Employers will no longer see their experience with the Ohio Bureau of Workers’ Compensation tarnished due to an accident that is not their fault that could see them become ineligible for group rating benefits.
This Ohio General Assembly, NFIB/Ohio is seeking to roll back the statute of limitations on the time an injured worker has to file an injury claim from two years to one year. This reform will bring Ohio more in line with neighboring states. These claims are very hard for business owners to defend as they try to recall back two years to remember exactly what happened on a certain date.
Data shows that earlier treatment leads to a better outcomes for everyone. Shortening the statute of limitations ensures quicker treatment for injured workers.
The entire Legislative Update for bills NFIB/Ohio monitors on behalf of our members in on the webpage www.nfib.com/oh under the Issues Tab. Questions regarding specific bills may be directed to NFIB/Ohio Legislative Director Chris Ferruso at [email protected] or at 614-221-4107.
