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Ohio Republicans Nix Sales Tax Expansion


 Haircuts may remain tax-free in Ohio.

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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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.