The Ohio Society of CPAs was involved with dozens of legislative issues in 2018, many of which have directly impacted the accounting profession and Ohio’s business environment. Thanks to OSCPA’s government relations team tirelessly defending the CPA license (among other successful efforts), there were many pieces of legislation that positively affected the profession and protected the work done by Ohio’s CPAs, and several potentially harmful legislative and regulatory efforts were successfully blocked.
By the numbers
Of the 51 total issues with which OSCPA was involved, 33 of them were successfully resolved in 2018 – a resounding 65%. Fifteen will continue into 2019, including further efforts on municipal tax reform, scaling back on ODT’s sales/use tax audits over electronic information services (EIS), achieving uniformity of the 3% withholding rate for pass-through entities, and repealing the marriage tax penalty. Other broader business issues remaining include HB 160, which will prohibit discrimination on the basis of sexual orientation or gender identity or expression, and HB 694, which will reduce the statute of limitations for contract actions. Only three of the issues OSCPA supported were not successful in 2018.
OSCPA led efforts for 24 of the 51 issues, which means the Society supported other pro-business organizations that led efforts for the other 27. Of the issues led by OSCPA, 70% were successfully resolved and 30% will continue into 2019. None of the issues led by OSCPA were unsuccessful in 2018.
The Ohio Legislature passed Senate Bill 8 in the final days of 2017, providing that wages and guaranteed payments paid by a professional employer organization (PEO) to the owner of a pass-through entity that has contracted with the organization may be considered business income, combining provisions laid out in SB 186 and HB 334, both of which were initially supported by OSCPA. According to ODT, impacted taxpayers should save up to $2 million annually going forward; and the retroactive provision in the bill could provide for potentially up to $10 million in refunds/foregone audit revenue.
The Ohio House passed SB 22 in Feb. 2018 and the Senate concurred in March, allowing Ohio conformity with federal law changes made in the 2017 Tax Cuts and Jobs Act, including authorization for taxpayers to claim an exemption for dependents on their Ohio return and the expansion of Ohio’s 529 education savings plan.
Also in February, Judge David E. Cain cleared the path for Ohio businesses to continue using the new, streamlined municipal tax filing system through the Ohio Department of Taxation. This protected the municipal income tax reforms passed into law as part of Am. Sub. HB 49. Businesses may continue to register for centralized collection of municipal net profits taxes, a reform that could save all businesses collectively up to $800 million per year in compliance costs, according to ODT. Taxpayers who operate on a calendar year basis are required to opt in to file on or before March 1, 2019 for taxable year 2019.
On June 7, 2018, the Ohio House approved three of OSCPA’s legislative priorities, including the decision to re-establish a bright-line presumption of domicile test for determining an individual’s state of residence for Ohio personal income tax purposes. One week later, Sub. HB 292 was signed into law. A second priority, an amendment to HB 292 supported by OSCPA, also reinstated the authority to appeal some Ohio Board of Tax Appeals’ decisions directly to the Ohio Supreme Court.
The third priority addressed in June 2018 fixed an unclear tax policy that was costing businesses money. In HB 133, the calculation of interest penalties on underpaid estimated taxes during the course of the year for certain individuals and pass-through entities was changed, which provided uniformity and clarity to taxpayers by mirroring the process utilized on the federal level.
Senate Bill 255 was passed in December 2018, requiring that the Ohio General Assembly, over a six-year cycle, review all occupational licensing boards to see if their continued existence is necessary to protect the public interest. At the urging of OSCPA, certified public accountants became the lone profession earning a safe harbor from changes to the profession’s laws and regulations – a significant victory. As we reported in December, without the safe harbor, interstate mobility for Ohio CPAs was at risk and they could have been forced to again obtain multiple state licenses.
Of course, the government relations team tackled much more throughout 2018, but none of their work would be possible without the Ohio CPA/PAC. Without the Society’s political action committee, OSCPA’s successful legislative track record would be in jeopardy. Support the issues that matter most by visiting ohiocpa.com/advocacy/pac. Or, contact Barb Benton, vice president of government relations, or Greg Saul, Esq., CAE, OSCPA’s tax policy director, to learn more about OSCPA’s 2019 legislative priorities.