The Ohio House Ways and Means Committee passed S.B. 18 unanimously. The bill would conform the state's tax code to several changes to federal law that would directly affect the tax base of many Ohio income taxpayers by adjusting their federal adjusted gross income, according to a bill summary.
The committee amended the bill to allow the state tax commissioner to temporarily waive any interest or penalties if a taxpayer does not make a full and timely payment of state and school district income taxes due to unemployment benefits received in 2020. Eligible taxpayers would have to pay a timely annual return for the year, according to an amendment summary.
The provision would also reimpose any underpayment of interest or penalties waived by the tax commissioner if the taxpayer fails to pay the tax due by June 30, 2023.
Rep. Derek Merrin, R-Monclova Township, said during the hearing that the amendment is a reasonable compromise for committee members.
"We're in exceptional times here with many people receiving unemployment benefits, and we don't have the ability right now for them to check the box to have their state taxes withheld, so the question becomes how many people lose the ability to know that they owed the taxes?" Merrin said. "The goal here all along is to make sure that people paid what is owed and not necessarily to lay down the hammer with penalties and interest."
The bill was amended to limit the permanent exclusion from the commercial activity tax included in the bill for Bureau of Workers' Compensation dividends paid to employers to only those dividends paid to employers in 2020 and 2021.
The bill, approved by the Senate in February, also includes a temporary look-back rule for determination of earned income for purposes of the earned income tax credit, the allowance of a 30-year depreciation period for certain residential rental property and the temporary allowance of a full deduction for business meals.
The measure would also clarify the tax treatment of Paycheck Protection Program loan forgiveness, including a clarification that expenses paid with covered loans can be deductible, according to a bill summary.
The measure would also exempt second-draw PPP loan amounts forgiven under federal law from the commercial activity tax. A similar exemption already exists for first-draw loan amounts forgiven under the Coronavirus Aid, Relief and Economic Security Act
. The committee also adopted a technical amendment pertaining to the bill's federal paycheck program provisions.
The bill was introduced by Sens. Kristina Roegner, R-Hudson, and Tim Schaffer, R-Lancaster. It will next be considered by the House Rules Committee.
Representatives for Democratic and Republican members of the state House did not immediately respond to a request for comment Tuesday.
--Editing by Neil Cohen.
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