Ohio House Bill HB126

Ohio 2023-2024 Regular Session

• Introduced: 3/21/23

Caption

Expand municipal income tax exemption for military pay

Impact

If enacted, HB126 will potentially reduce the tax burden for military personnel stationed in Ohio. By exempting military pay from municipal income taxes, the bill seeks to acknowledge the unique sacrifices made by service members. This change may influence a municipal corporation's revenue stream, as fewer individuals would contribute to the local tax base, particularly in areas with a significant military presence. It also aligns Ohio's tax policies more closely with federal standards that already exempt certain types of military compensation from taxation.

Summary

House Bill 126 proposes amendments to section 718.01 of the Ohio Revised Code to expand the municipal income tax exemption specifically for military pay. The bill aims to make adjustments to the definitions of taxable income for both residents and non-residents while ensuring that certain military service members are not taxed on their military pay at the municipal level. This legislative effort reflects a commitment to support military personnel and their families by providing them with financial relief on municipal taxes that would otherwise impact their income.

Contention

Some potential points of contention surrounding HB126 may include concerns regarding the financial impact on local governments that rely on income tax revenue. Opponents may argue that widespread exemptions could weaken municipal budgets, which could affect local services and infrastructure improvements. Additionally, discussions may arise about fairness issues related to exempting only military pay while other forms of income remain taxable, leading to debates on equitable tax structures and the prioritization of different constituents in tax policy.