Ohio Republicans Nix Sales Tax Expansion

Earlier this year, Governor John Kasich (R) presented a FY 2014-15 budget plan that included a large cut in income tax and a broad expansion of sales tax to services. Last week, Republicans in the Ohio House of Representatives introduced their own version of the budget--one that includes a reduction in income tax but not a broadening of sales tax.

The governor's plan would have expanded sales tax to previously untaxed professional services, such as hair cuts, architecture, and accounting and legal services. In exchange, it would have dropped the state sales tax rate from 5.5% to 5%.

Under the alternative budget plan, services will not be taxed and the rate of sales tax will not be reduced.

This alternative plan promises to be just as controversial as the governor's original plan. The Governor's press secretary says the governor "will continue to pursue tax reform and a larger tax cut…"

The full House is expected to approve the new plan next week.

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