Ohio bill proposes significant personal income, sales tax, and severance tax changes

February 2013


House Bill 59 was introduced on February 12, 2013, incorporating Ohio Governor John Kasich's proposed state budget for 2014-2015. H.B. 59 proposes to: (1) cut personal income tax rates by 20%; (2) cut personal income tax on pass-through income; (3) reduce the sales tax rate from 5.5% to 5.0%; (4) expand the sales tax base to include most services; and (5) modify the severance tax.

If enacted as they currently read, the proposals are expected to result in a net tax cut of $1.4 billion across three fiscal years while shifting some of the tax burden from income to consumption. Taxpayers performing and receiving services in Ohio should anticipate the increased transaction taxes and collection responsibilities that would result should H.B. 59 be enacted. [Ohio House Bill 59, Ohio Operating Budget, Fiscal year 2014-2015]

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