Taxes
Estate/Death Tax Repeal/Reduction
Issue Overview: While efforts have been made at the federal level and by a majority of other states to reduce or eliminate the estate or "death" tax, Ohio has been reluctant to take on this anti-family-business tax.
Issue Background: In the state of Ohio, the death tax generates approximately $300-400 million per year with the proceeds split between state and local governments. Although legislation has been introduced during recent general assemblies both state and local government officials have strongly opposed any efforts to lessen or repeal the tax. NFIB has advocated for complete repeal of both the state and local components of the death tax and will continue to do so.
NFIB Position: NFIB supports efforts to reduce or eliminate the estate tax and will continue to champion repeals/reductions during the 127th General Assembly.
Issue Status: Despite efforts of NFIB and Ohio small-business owners -- efforts that resulted in legislation being drafted and considered among the priority bills for the 127th General Assembly -- plans to reduce or eliminate Ohio's harmful death tax were delayed in the most recent biennial budget process.
What to Do: Contact your state representative and state senator and ask them to support small businesses by making repeal/reduction of the death tax a priority.
Personal Income Tax
Issue Overview: Many small employers, because they are incorporated as pass-through entities (S-Corporations, LLCs, LLPs, etc.), pay most or all of their business taxes at the personal income levels. During the 126th General Assembly legislation was passed to reduce the personal income tax rates by 21 percent over a period of four years. While this legislation was helpful in reducing the small-business tax burden, income tax rates remain high compared to our competitor states.
Issue Background: While Ohio has been focused on stimulating the economy and growing jobs, more attention should be paid to small-business tax reform. Nearly all new jobs are created by small employers.
NFIB Position: NFIB will work towards introduction of legislation to reduce the small-business tax burden during the 127th General Assembly.
Issue Status: NFIB is pleased to report that the 21 percent personal income tax reduction passed by the 126th General Assembly was retained in the biennial budget adopted by the 127th General Assembly.
What to Do: Check back www.nfib.com/OH as legislation is introduced.
Streamlined Sales Tax
Issue Overview: Ohio joined a multi-state movement towards sales tax uniformity that would result in destination-based sales tax sourcing. Instead of charging sales tax based upon the point of sale, business owners would be required to know sales tax rates for all 88 counties in Ohio and the 49 other states and charge the appropriate rate based upon where the product or service would be delivered. This unfunded mandate would create an administrative and record-keeping nightmare for Ohio's small employers.
Issue Background: Ohio joined the multi-state streamlined sales tax compact originally as a way to capture additional sales tax dollars that were not being collected. Initial estimates predicted that the state would collect additional revenue in the tens of millions of dollars, but as business participation has increased, both on a voluntary and mandatory basis, tax collections have drastically underperformed. Recognizing the tremendous administrative burden this issue has created for small employers, NFIB has worked with members of the Legislature and the Ohio Department of Taxation to indefinitely delay the mandatory participation by small employers.
NFIB Position: NFIB supports efforts to shield small employers from the costly and burdensome mandate to adopt destination-based sales taxes.
Issue Status: NFIB worked to secure higher exemption thresholds for the Streamlined Sales Tax so that vendors with less than $3million in deliverable sales would be exempt from the destination-based sourcing requirements. Most recently, NFIB testified before the Streamlined Sales Tax Project (SSTP) governing board about the harmful affect that destination-based sales taxes would have on small businesses. In late 2007, the SSTP governing board voted to permit states to elect to keep origin-based sales taxes for intrastate sales and still become associate members of the compact. As a result, the Ohio General Assembly is considering legislation put forth by Sen. Ron Amstutz and Rep. Bob Gibbs to authorize origin-based sales tax sourcing for all intrastate transactions in Ohio.
What to Do: Check back www.nfib.com/OH as legislation is introduced.
