The budget proposal Gov. John Kasich will unveil Monday will include reforms that would eliminate state income tax on nearly all small businesses in Ohio and increase exemption levels for lower- and middle-income Ohioans.
Kasich revealed his plan in an appearance Thursday before a conference of the Ohio Association of Community Action Agencies. He also used the event to highlight initiatives in his budget that will help to lift the poor out of poverty and make Ohio’s welfare programs operate more effectively.
His tax plans, touted as “a comprehensive plan for helping all Ohioans share in our state’s prosperity, call for:
- Elimination of income tax from small businesses — pass through entities such as sole proprietorships and S-corp. companies that report income on the owners’ individual tax returns.
- Increasing the personal exemption for Ohioans earning less than $40,000 a year from $2,200 to $4,000 in 2015.
- Increasing the personal exemption for Ohioans earning $40,000 to $80,000 a year from $1,950 to $2,850.
The reform for small business is intended to bolster hiring possibilities. Small businesses provide employment for more than half of Ohio’s workers.
The 100 percent income deduction would be available to all small businesses with annual gross receipts of $2 million or less. They still would be subject to Ohio’s commercial activities tax, which corporations also pay.
For 2011, there were 970,570 tax filers with small businesses that had gross receipts of up to $2 million. The administration estimates that the tax elimination would cost Ohio about $696 million over the life of the two-year budget.
Click here to read more of this story.
About Marion Online News
