OSCPA tackles tax conformity, PTE SALT Cap Form and more

OSCPA staff report

The OSCPA advocacy team has been hard at work ensuring our members’ interests are being represented at the Statehouse.

Recently, OSCPA-backed Senate Bill 10, the annual federal/state tax conformity legislation and the accompanying emergency clause, passed both the Ohio Senate on Feb. 8 with a vote of 30-0 and then the Ohio House on March 1 by a vote of 88-7.

Senate Ways & Means Chair Bill Blessing, R-Cincinnati, was the sponsor of S.B. 10, which he said incorporates into Ohio law recent changes to the Internal Revenue Code that took effect after Feb. 17, 2022, when H.B. 51 (134th GA) brought Ohio into conformity with federal law and its applicability to Ohio’s income taxes.

The two federal acts requiring the update to Ohio’s code are H.R. 5376—the Inflation Reduction Act from August 2022, and H.R. 2617—the Consolidated Appropriations Act from December 2022. The most significant changes affecting Ohio law on S.B. 10 are available online.

Greg Saul, director of tax policy for The Ohio Society of CPAs, testified as a proponent before both the Ohio Senate and House Ways & Means Committees, stating that OSCPA has advocated for tax simplicity for years and unless the Ohio General Assembly and the Governor again amend the Ohio Revised Code, many taxpayers will have to make “add-backs” on their 2022 income tax returns.

Saul said OSCPA also strongly supports the emergency clause given that the normal 90-day effective date for legislation would already occur after the current tax deadline of April 18. The OSCPA has traditionally supported legislation incorporating federal tax law changes into the Ohio Revised Code to bring conformity to most federal and state tax calculations.

S.B. 10 now heads to Governor DeWine and will become law immediately upon his signature. On March 9, OSCPA held a CPE webinar to cover the new IT 4738 Form with Matt Dodovich, an attorney supervisor in the Tax Appeals Division at the Ohio Department of Taxation, joining Tom Zaino and Steve Hall from Zaino Hall & Farrin.

The webinar followed the Ohio Department of Taxation’s release on Jan. 20 of a third round of guidance for passthrough entities who “elect” to be subject to a new entity-level tax in response to the federal $10,000 SALT deduction cap limit placed on individuals. The ODT created the new Form IT 4738 after the enactment of OSCPA-supported Senate Bill 246, also known as Ohio’s version of the SALT cap deduction parity/workaround.

The advocacy team is also reviewing the Ohio budget bill (House Bill 33) and will have more insight to offer in the coming months as to what this could mean for the business environment.