June 26, 2019
To: Senate and House Conferees of Sub HB 166
From: Americans for Tax Reform
Dear Members of the Conference Committee on the Budget,
On behalf of Americans for Tax Reform and our supporters across Ohio, as you negotiate budget legislation, I urge you to seize this great opportunity to maximize tax relief for families and businesses across the state.
Both the Senate and House have passed budgets that are net tax cuts – a win for Ohio taxpayers. The Senate substitute for House Bill 166 provides more savings to Ohio taxpayers, returning more than $300 million per year to taxpayers. The House’s very strong income tax proposal would return over $100 million to taxpayers, though other tax policies in the plan cut into that relief.
The House budget reduces the amount of income small businesses can deduct from $250,000 to $100,000. It also removes a 3 percent cap on the tax rate for income over $250,000 – meaning businesses earning more than that could face a tax rate over 4.67 percent, a significant increase. It is also retroactive, which can be very difficult for small business owners who would face unexpected costs.
The House budget also includes a tax hike on booking travel, as it imposes occupancy tax on service fees for online travel agent services. These services, like Expedia, Travelocity, and others, already pay taxes on the price of a room. The House proposal adds taxes to service fees, driving up costs for Ohioans and out-of-state visitors when they use travel booking services. This negatively impacts people who book hotels or other accommodations online, and hurts tourism, as these platforms are a boon for restaurants, shops, and other local businesses.
The Senate budget does not include these policies. It also includes regulatory reform that will help reduce burdens that have Ohio ranked as one of the more overregulated states in the nation.
Both plans would make ridesharing more expensive – perhaps unintentionally. Language that would require online marketplaces to collect and remit sales taxes also ensnares for-hire vehicles. The straightforward impact is the state sales tax will hit ridesharing.
It’s not only bad if unintentional, but this is also a form of double taxation. Ridesharing drivers are already paying income tax on their earnings, and now will have to deal with sales tax. This burden will only make life tougher for drivers, and more expensive for Ohioans, and should be avoided.
In light of a significant increase in the gas tax, which will impact working people the most, it is vital the budget finds as much tax relief as possible to make up for it.
There is also a misguided tax hike on vaping products in the Senate plan. This tax is not only regressive, hurting lower-income Ohioans in particular, but is a health risk as it will push people away from safer alternatives to smoking cigarettes.
Thank you for your service and focus on tax relief. We encourage you to agree on policies in the budget that will do the most to help Ohioans keep their hard-earned money in their pockets. If we can be of assistance, please do not hesitate to contact me, or ATR State Projects Director Doug Kellogg at 202-785-0266, or [email protected].
Americans for Tax Reform