Bloomberg Tax
June 2, 2022, 10:07 PM

Ohio Lawmakers Unanimously Approve Pass-Through Entity Tax Break

Alex Ebert
Alex Ebert
Staff Correspondent

Ohio business owners selling stakes in pass-through entities stand to score big state income tax breaks under a measure the Ohio House and Senate passed unanimously Wednesday.

The bill (H.B. 515) ensures sales of pass-through entities qualify as “business income” instead of personal income for state income tax purposes so long as the taxpayer hasn’t “materially participated” in the running of the business in recent years. The change would qualify for Ohio’s generous treatment of pass-through business income—deducts first $250,000 in earnings, taxes above that at flat 3%—and eliminate a disparity between in-state and out-of-state investors.

“Currently, for ...

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