Columbus, OH, USA – On July 22, 2022, Ohio Republicans introduced a new legislative proposal aimed at expanding tax relief for small businesses in the state, in an effort to support recovery from the economic impact of the COVID-19 pandemic. The bill, which was backed by Governor Mike DeWine, focuses on reducing the state’s business income tax for companies with fewer than 100 employees. This initiative is part of a broader strategy to improve Ohio’s economic competitiveness and stimulate growth by easing the financial burden on small businesses.
The proposed tax relief plan would raise the income tax deduction for small businesses from $250,000 to $400,000, allowing companies to keep a greater portion of their earnings. Additionally, the bill proposes eliminating certain taxes on business equipment and supplies used by small businesses, which Republicans argue will lead to increased reinvestment in business operations and employee hiring.
Governor Mike DeWine expressed strong support for the proposal, calling it a vital step to help Ohio’s small businesses recover from the ongoing economic challenges. He emphasized that small businesses are the backbone of Ohio’s economy, and providing tax relief will allow these businesses to reinvest in their operations, expand their workforce, and ultimately contribute to job creation.
Representative Jena Powell, who introduced the bill in the Ohio House of Representatives, argued that the tax relief will help Ohio compete with neighboring states that have already implemented similar tax cuts. Powell has been vocal about the need for Ohio to maintain a business-friendly environment, particularly as businesses continue to face rising inflation and supply chain disruptions. According to Powell, this tax relief will provide businesses with the resources they need to weather economic uncertainty while fostering long-term growth.
The Ohio Chamber of Commerce has strongly supported the tax relief proposal, noting that small businesses in Ohio have struggled with increased costs, labor shortages, and uncertainty in the marketplace. The organization’s president, Steve Stivers, remarked that these changes would give Ohio small businesses a competitive edge and help them expand more rapidly in the post-pandemic economy.
Polling data from a July 2022 survey conducted by Quinnipiac University revealed that 61% of Ohioans supported tax relief for small businesses, with higher approval ratings among Republican respondents (78%) and lower approval among Democrats (43%). While some critics of the proposal argue that it could reduce state revenue at a time when the state is facing budgetary pressures, supporters contend that the long-term economic benefits of tax relief will outweigh any short-term challenges.
As the bill makes its way through the state legislature, it is expected to be a key point of debate during the upcoming budget discussions. If passed, the tax relief measures are projected to take effect in the 2023 fiscal year, providing small businesses with a much-needed financial boost. Governor DeWine has expressed confidence that the bill will pass, given the widespread support for small businesses in Ohio.
