by Karen Brenneman, CPA, MT, Managing Partner

 Governor Kasich signed Ohio House Bill 64 into law on July 2 providing new tax rate reductions that will benefit both individuals and small businesses in our fine state. The newly enacted law may have a funny name (Amended Substituted House Bill 64) but it contains a number of positive tax changes for Hall, Kistler & Company clients and all Ohioans, including:

  • An across the board tax rate cut of 6.3% for individuals, making the top tax bracket less than 5% retroactive to January 2015. This is the lowest Ohio rates have been since 1982. New withholding tables will be coming to employers later in July.
  • The small business deduction of 75% on the first $250,000 of business income is continued for 2015 and will increase to 100% for 2016 and beyond. A new flat tax of 3% of business income from pass-through entities will be in effect for 2015 on business income above $250,000.
  • There are now two Ohio tax apps you may want to deploy. One checks on your tax refund and the other is a sales tax rate finder based on your current location. The latter may come in handy for business owners on the move that have to charge sales tax.

There are also a few things the budget didn’t include, which I find positive as well. Two of these significant omissions are

  • No increase, as proposed, in the Ohio CAT rate
  • No base expansion of state sales tax on professional services

Giving us some indication of where our state tax system is headed, the law also called for a tax policy study commission to make recommendations on further reforming Ohio’s tax system. Specific questions include determining how best to:

  • Transition Ohio’s personal income tax to a 3.5% – 3.75% flat tax
  • Reform the tax code to maximize Ohio competitiveness
  • Reform the state’s severance tax by October 1
  • Make some of Ohio’s tax credits work more efficiently by converting them to grant programs

The last piece of good news is a sales tax holiday slated to run from August 7 through August 9. It exempts sales tax on Ohio purchases of school clothes up to $75 per item as well as school supplies and other school related items up to $20 each during these days.

With this new set of tax laws, you have a real opportunity to devise strategies that will lower your tax liability and enhance your overall financial position for years to come. Hall, Kistler & Company is happy to help you determine the best approach for your situation, so that you can take full advantage of the changes in House Bill 64.

Published by Karen Brenneman

Karen has worked with local and regional firms from small to large over the last 28 years and has brought to Hall, Kistler the best features of each. She has been with Hall, Kistler since 1998 and had served previously as Hall, Kistler's tax partner before assuming the managing partner role in 2011. Karen's depth of accounting knowledge includes consulting on tax saving strategies and she also covers the areas of acquisitions, reorganizations and succession planning for closely held companies. Although Karen specializes in corporate tax and Physician organizations, her breadth of knowledge of the accounting industry allows her to serve a wide range of clients. Karen earned both her Master of Taxation and Bachelor of Science Degree in Accounting from The University of Akron. She is a member of the American Institute of Certified Public Accountants and the Ohio Society of Certified Public Accountants and sits on the BKR International America's Region Board (the United States, Canada and all of Latin America). She recently served as chair for the U.S. Tax Committee for BKR International. Actively involved in the community, Karen currently serves as a Trustee on the Stark Development Board and is a past president of the Canton Regional Chamber Commerce and Canton Rotary. She is a founding member of Women’s Impact Inc., where she serves on the executive board and is treasurer. Karen is also the treasurer of Meyers Lake YMCA and is a member of the 15th Class of Leadership Stark County. In her spare time Karen enjoys spending time with her family and sailing her sailboat on Lake Erie.

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