The following is an update from the Ohio Auto Dealers Association.
OADA is happy to report that Ohio House and Senate leaders have agreed on a compromise budget that retains the full Business Income Deduction (BID) for dealers and most other businesses (excluding lobbyists and attorneys) set up as pass through entities (PTEs). Negative changes to the BID were made in both the House and Senate versions of the budget, however with continued advocacy from OADA staff, dealer members and other interested businesses, the BID was fully restored in conference committee. Governor DeWine, who played a key role in the BID negotiations, signed the budget today.
The BID allows owners of PTEs to exclude the first $250,000 in business income from Ohio income tax, with income above that threshold taxed at a 3% flat rate (versus the normal rate based on income). OADA worked with legislators in 2013 to create the BID to help spur investment, and we have been advocating for BID retention over the last few months during the budget debate, where it has been on the chopping block to help pay for state services.
Check with your CFO or accounting team to calculate what you have realized in BID savings since 2013. It is significant!
In addition to retaining the BID, under the state budget:
- No increase in the CAT or sales tax rates
- No sale tax expansion on services used by dealers and other businesses
- No increase in the dealer title fee or dealer license fee
- Preserves the trade-in credit on new motor vehicle purchases and the vendor discount, which is the portion of the sales tax dealers retain for collecting it on behalf of the state
OADA would like to thank the dealers, dealership employees and metro association executives for their efforts in contacting legislators to urge support for the BID retention and other issues important to our industry. Dealer grassroots with legislators and participation in the Dealers Investment Group (DIG) remain key to our success. Dealers may contact Zach Doran at firstname.lastname@example.org or Joe Cannon at email@example.com with any questions regarding the state budget, or to find out how you can join the team in supporting our advocacy efforts going forward.