As outlined in previous posts (I & II), House Bill 59 promised to decrease state sales tax while significantly increasing Ohio’s sales tax base, a proposal which raised serious concerns among consumers and business owners alike. Faced with resistance from many constituencies, several changes were adopted and the amended bill was passed through the Ohio House of Representatives on April 19th and is currently making its way to the Ohio Senate.
According to the amendments, the bill no longer contains the following:
1. The reductions in the state and local sales tax rates.
2. The expansion of services subject to the sales tax.
3. The business income tax deduction for proprietors and owners of pass-through entities.
The amended bill retains most other tax provisions found in the original bill, including the reduction in the state personal income tax rates. However, it will expand the nexus rules for sales tax purposes which will have an effect primarily on internet commerce involving transactions with out-of-state vendors.