Ohio's state constitution requires that the state's biennial budget be approved by June 30. That deadline has come and gone and Ohio's Legislature has not yet passed a budget. The house and senate both approved a measure that extends state funding at current levels for 17 days while lawmakers try to compromise on the 3,000+-page budget bill.
One of the key provisions at the heart of the budget impasse is a proposed change to the Business Income Deduction (BID.) The Senate version of the bill would keep the BID cap at $250,000 for Pass-Through Entity (PTE) business owners. The House version of the bill would reduce the BID cap to $100,000 and would make the change retroactive to January 1, 2019.
Both the House and Senate voted to eliminate the 3% flat-rate tax on income greater than $250,000, so that provision of the proposed budget is unlikely to be added back into the bill.
Other key provisions of the proposed bill include an across-the-board income tax reduction (the House's version would reduce it by 6.6% while the Senate's reduction would be 8%.) Other issues in the proposed budget include changes to education funding and health care reform.
The Ohio Society of CPA has urged lawmakers to adopt the Senate's version of the bill leaves the BID with the higher cap at $250,000 with no retroactive impact. For further updates on Ohio's new budget, keep up to date on our blog.
