July 12, 2018
To OSBA Taxation Law Committee’s pleasure, effective date set for new Brightline Domicile Test
Following the Governor’s signature in June, Sept. 13, 2018 is the date that Ohio's new brightline domicile test for determining Ohio residency for tax purposes takes effect (though some provisions of the bill took effect immediately). Once again, congratulations to the OSBA’s Taxation Law Committee for raising the issue, coming up with a solution, and working closely with sponsor Representative Gary Scherer (R-Circleville) and many other legislators to see House Bill 292 through. It will bring much needed clarity for tax practitioners and taxpayers alike.
You can check out the bill, as enrolled, here
or for a walk down memory lane, check out our previous weekly reports here
, and here
Senate passes bill to rein in payday lending
Tuesday was a payday of sorts for consumer advocates who have long been pushing to rein in the payday lending industry. The Ohio Senate adopted its version of House Bill 123
, sponsored by Representatives J. Kyle Koehler (R-Springfield) and Michael Ashford (D-Toledo) by a vote of 21 to 9 after the bill lingered more than one year in the Ohio House. The Senate moved the "Fairness in Lending Act” in the course of a month and it was the last major bill it had hoped to pass before going on the traditional pre-election recess.
The bill would force payday lenders to abide by a 28 percent interest rate cap for loans up to $1,000 for up to 12 months. The reforms are projected to save Ohioans $75 million a year in interest fees for the estimated 1 in 10 Ohioans who take out payday loans. The payday lending industry has opposed the bill throughout the process and has warned that even with the Senate’s changes to loosen some restrictions, it will significantly impact their ability to provide access to credit for Ohioans who cannot get it elsewhere.
Before the bill can go to Governor Kasich for his signature, the Ohio House will need to concur in Senate changes to the bill (a good summary list of which you can find courtesy of the Cleveland Plain Dealer
) but they are not likely to be back in session before September.
State makes big deposit into Rainy Day Fund
Happy belated fiscal new year to all! The state has celebrated by making a $657 million deposit into its Rainy Day Fund, taking the total to nearly $2.7 billion, which is the statutory maximum. This was possible because of a $1.2 billion surplus from Fiscal Year 2018. According to the Kasich Administration, state spending came in below projections and income tax revenues came in above projections.
Governor Kasich has made it a priority to refill this state savings account, insisting that the money will be needed in leaner times to protect the state’s must vulnerable. Meanwhile, opponents continue to criticize his pinching and saving saying it’s already raining for many local governments and low-income Ohioans who could use the money now.
We likely won’t see state legislators until mid-September, though the Senate does have an if-needed voting session penciled in for Aug. 22. We’ll keep you posted. But never fear, it will be a busy summer for the OSBA Weekly Legislative Report with statewide elections to watch, a U.S. Supreme Court nominee to approve, and what we expect will be a very busy lame duck session to prepare for.
Tracking OSBA legislation