Two weeks ago, Gov. Mike DeWine presented his initial budget proposal for fiscal years 2020 and 2021. This week, more details emerged as the budget was introduced in legislative form. House Bill 166 checks in at 1810 pages long, and contains changes to 26 of the 34 chapters of Ohio’s Revised Code.
While the Ohio Chamber team continues to review all the proposed changes to identify ones that most directly impact your business or Ohio’s business climate, it appears as if there are very few surprises contained in HB 166.
Most importantly, the budget does not include any new taxes or tax increases nor any proposals to shift taxes onto the business community. There are two tax-related changes of note, however.
First, the governor has proposed authorizing a ten percent, nonrefundable state income tax credit for investments in an Ohio Opportunity Zone. Opportunity Zones were created as part of the 2017 Federal Tax Reform Act to drive investment into economically depressed areas in each state. The HB 166 provisions match those in SB 8, which is currently pending in the Senate Ways & Means Committee and is supported by the Ohio Chamber as a way to enhance local economic development efforts.
The second tax-related change doesn’t directly impact businesses, but it improves an administrative glitch in the process enacted as part of the budget bill two years ago that allows employers the option of filing a single return for all of their municipal net profit taxes electronically through the state. Approximately 3,600 companies are already using this centralized filing system, and the Ohio Tax Department anticipates that number will grow.
Under current law, after taxpayers make year-end adjustments to their quarterly combined annual estimated tax liability, there is no requirement that a city repay any overpayments sent to them by the Tax Department. HB 166 remedies this issue by requiring cities to either refund these overpayments to the Tax Department or have future distributions withheld until the amount owed is paid back.
Unfortunately, HB 166 does include a new health insurance mandate, requiring health plans to provide coverage for telemedicine services. The Ohio Chamber has longstanding concerns about any health care mandates, which typically result in higher health insurance premiums. The HB 166 language mirrors a bill that was considered and not enacted in 2018, a bill to which the Ohio Chamber requested an amendment. Telemedicine holds much promise for expanding and enhancing access to health care while, at the same time, reducing the cost of health care. However, providers frequently tack separate “facility fee” charges onto their telemedicine visit bills – and these fees eat away at the potential cost savings. That’s why we asked for – and will continue to pursue this year – a ban on facility fees for telemedicine visits.
While the list of budget provisions in the as-introduced version of HB 166 that impact businesses is not extensive, plenty of changes are forthcoming nonetheless. In fact, lawmakers are already preparing their own amendments to either change what’s already in HB 166 or to add new provisions to the bill. HB 166 may be just 1810 pages long right now. It’s a safe bet, though, that it’ll be significantly longer once legislators send it back to the governor to sign at the end of June.