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This week the Senate Finance Committee accepted a substitute version of House Bill 59, the biennial budget bill. The upper chamber removed the House’s proposal to cut the state income tax by seven percent, instead opting to restore the governor’s proposal to provide small business income tax relief. The substitute bill permits taxpayers reporting business income on their personal tax return to reduce the income tax on the first $750,000 of business income by 50 percent. Pass-through entities, trusts and estates are not permitted to claim the deduction. This provision is estimated to save taxpayers who qualify $690.2 million in fiscal year 2014 and $724.6 million in fiscal year 2015.

The substitute bill reflects the inclusion of roughly 300 amendments. The following provisions are among the changes included:

  • Removes the provision from the bill requiring that if a state institution of higher education issues a student a letter or utility bill to use as proof for voting purposes in Ohio, the student must be granted residency status by rule of the Chancellor of the Board of Regents for the purpose of state subsidy and tuition surcharges.
  • Removes the bill's provision prohibiting the sale or purchase of a lottery ticket by telephone or by the use of computer, credit card, debit card, or facsimile.
  • Allows the Administrator of Workers' Compensation, with the advice and consent of the Bureau of Workers' Compensation Board of Directors, to adopt rules with respect to the collection, maintenance and disbursements of the State Insurance Fund to provide for a system of prospective payment of workers' compensation premiums. Click here for more information.
  • Restores a provision to allow up to 15 percent of Home Energy Assistance Program dollars to be used for home weatherization purposes.
  • Requires an owner to file with the Division of Oil and Gas Resources Management a disclosure form that specifies the country in which each oil country tubular good initially used in a production operation was manufactured unless that country cannot be determined by the owner.
  • Creates an exemption for real estate broker or salesperson license applicants who hold a valid Ohio real estate appraiser license or certificate under existing law's requirement that an applicant complete classroom instruction in real estate appraisal.
  • Generally requires that a pharmacy, prescriber or wholesale distributor of dangerous drugs must submit information each day that the entity conducts business to the Ohio Automated Rx Reporting System (OARRS).
  • Removes a provision that requires a Medicaid managed care company to give 90 days notice before terminating a provider (unless specified differently in contract) or before making certain changes to a prescription drug formulary.
  • Removes the expansion of Schedule II prescriptive authority for advanced practice nurses and physician assistants to certain residential care facilities.
  • Provides that, as applied to receipts arising from motor fuel sales, the commercial activity tax (CAT) applies to only one transaction in the supply chain—either at the terminal or refinery rack or when fuel is sold that was acquired from an out-of-state unregistered seller and imported into Ohio—and that the rate of the tax on such receipts is .65 percent instead of the current CAT rate of .26 percent. Also exempts such receipts from the current prohibition against the taxpayer billing or invoicing the tax to another person.

Additional changes will be made to the bill on June 4, when the committee is expected to accept an omnibus amendment prior to voting the bill out of committee on June 5. The full Senate is scheduled to take up the bill for a vote on June 6.

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