As Introduced
136th General Assembly
Regular Session S. B. No. 3
2025-2026
Senators Lang, Huffman
Cosponsors: Senators Roegner, Romanchuk, Brenner, O'Brien, Wilson, Schaffer,
Wilkin
A B I LL
To amend section 5747.02 of the Revised Code to
phase-down the state income tax to a flat rate
of 2.75% over two years.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5747.02 of the Revised Code be
amended to read as follows:
Sec. 5747.02. (A) For the purpose of providing revenue for
the support of schools and local government functions, to
provide relief to property taxpayers, to provide revenue for the
general revenue fund, and to meet the expenses of administering
the tax levied by this chapter, there is hereby levied on every
individual, trust, and estate residing in or earning or
receiving income in this state, on every individual, trust, and
estate earning or receiving lottery winnings, prizes, or awards
pursuant to Chapter 3770. of the Revised Code, on every
individual, trust, and estate earning or receiving winnings on
casino or sports gaming, and on every individual, trust, and
estate otherwise having nexus with or in this state under the
Constitution of the United States, an annual tax measured as
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18 S. B. No. 3 Page 2
As Introduced
prescribed in divisions (A)(1) to (4) of this section.
(1) In the case of trusts, the tax imposed by this section
shall be measured by modified Ohio taxable income under division
(D) of this section and levied in the same amount as the tax is
imposed on estates as prescribed in division (A)(2) of this
section.
(2) In the case of estates, the tax imposed by this
section shall be measured by Ohio taxable income. The tax shall
be levied at the rate of 1.38462% for the first twenty-six
thousand fifty dollars of such income and, for taxable years
beginning in 2024, twenty-six thousand seven hundred dollars of
such income for taxable years beginning in 2025, and twenty-
seven thousand three hundred fifty dollars of such income for
taxable years beginning in 2026 and thereafter. For income in
excess of that amount, the tax shall be levied at the same rates
prescribed in division (A)(3) of this section for individuals.
(3) In the case of individuals, the tax imposed by this
section on income other than taxable business income shall be
measured by Ohio adjusted gross income, less taxable business
income and less an exemption for the taxpayer, the taxpayer's
spouse, and each dependent as provided in section 5747.025 of
the Revised Code. If the balance thus obtained is equal to or
less not more than twenty-six thousand fifty dollars the
applicable dollar amount described in division (A)(2) of this
section, no tax shall be imposed on that balance. If the balance
thus obtained is greater than twenty-six thousand fifty
dollarsthat amount, the tax is hereby levied as follows:
(a) For taxable years beginning in 2023:
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47 S. B. No. 3 Page 3
As Introduced
1 2
AOHIO ADJUSTED GROSS INCOME LESS
TAXABLE BUSINESS INCOME AND EXEMPTIONS
(INDIVIDUALS) OR MODIFIED OHIO TAXABLE
INCOME (TRUSTS) OR OHIO TAXABLE INCOME
(ESTATES)
TAX
BMore than $26,050 but not more than
$100,000
$360.69 plus 2.75% of the
amount in excess of $26,050
CMore than $100,000 but not more than
$115,300
$2,394.32 plus 3.688% of the
amount in excess of $100,000
DMore than $115,300 $2,958.58 plus 3.75% of the
amount in excess of $115,300
(b) For taxable years beginning in 2024 and thereafter:
1 2
A OHIO ADJUSTED GROSS INCOME LESS TAXABLE
BUSINESS INCOME AND EXEMPTIONS
(INDIVIDUALS) OR MODIFIED OHIO TAXABLE
INCOME (TRUSTS) OR OHIO TAXABLE INCOME
(ESTATES)
TAX
B More than $26,050 but not more than
$100,000
$360.69 plus 2.75% of the
amount in excess of
$26,050
C More than $100,000 $2,394.32 plus 3.5% of
48
49
50 S. B. No. 3 Page 4
As Introduced
the amount in excess of
$100,000
(b) For taxable years beginning in 2025:
1 2
AOHIO ADJUSTED GROSS INCOME LESS
TAXABLE BUSINESS INCOME AND EXEMPTIONS
(INDIVIDUALS) OR MODIFIED OHIO TAXABLE
INCOME (TRUSTS) OR OHIO TAXABLE INCOME
(ESTATES)
TAX
BMore than $26,700 but not more than
$102,400
$369.69 plus 2.75% of the
amount in excess of $26,700
CMore than $102,400 $2,451.44 plus 3.125% of the
amount in excess of $102,400
(c) For taxable years beginning in 2026 and thereafter,
$378.69 plus 2.75% of the amount in excess of $27,350.
(4)(a) In the case of individuals, the tax imposed by this
section on taxable business income shall equal three per cent of
the result obtained by subtracting any amount allowed under
division (A)(4)(b) of this section from the individual's taxable
business income.
(b) If the exemptions allowed to an individual under
division (A)(3) of this section exceed the taxpayer's Ohio
adjusted gross income less taxable business income, the excess
shall be deducted from taxable business income before computing
the tax under division (A)(4)(a) of this section.
51
52
53
54
55
56
57
58
59
60
61
62
63
64 S. B. No. 3 Page 5
As Introduced
(5) Except as otherwise provided in this division, in
August of each year, the tax commissioner shall make a new
adjustment to the income amounts prescribed in divisions (A)(2)
and (3) of this section by multiplying the percentage increase
in the gross domestic product deflator computed that year under
section 5747.025 of the Revised Code by each of the income
amounts resulting from the adjustment under this division in the
preceding year, adding the resulting product to the
corresponding income amount resulting from the adjustment in the
preceding year, and rounding the resulting sum to the nearest
multiple of fifty dollars. The tax commissioner also shall
recompute each of the tax dollar amounts to the extent necessary
to reflect the new adjustment of the income amounts. To
recompute the tax dollar amount corresponding to the lowest tax
rate in division (A)(3) of this section, the commissioner shall
multiply the tax rate prescribed in division (A)(2) of this
section by the income amount specified in that division and as
adjusted according to this paragraph. The rates of taxation
shall not be adjusted.
The adjusted amounts apply to taxable years beginning in
the calendar year in which the adjustments are made and to
taxable years beginning in each ensuing calendar year until a
calendar year in which a new adjustment is made pursuant to this
division. The tax commissioner shall not make a new adjustment
in any year in which the amount resulting from the adjustment
would be less than the amount resulting from the adjustment in
the preceding year.
(B) If the director of budget and management makes a
certification to the tax commissioner under division (B) of
section 131.44 of the Revised Code, the amount of tax as
determined under divisions (A)(1) to (3) of this section shall
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95 S. B. No. 3 Page 6
As Introduced
be reduced by the percentage prescribed in that certification
for taxable years beginning in the calendar year in which that
certification is made.
(C)(1) The tax imposed by this section on a trust shall be
computed by multiplying the Ohio modified taxable income of the
trust by the rates prescribed by division (A) of this section.
(2) A resident trust may claim a credit against the tax
computed under division (C) of this section equal to the lesser
of (a) the tax paid to another state or the District of Columbia
on the resident trust's modified nonbusiness income, other than
the portion of the resident trust's nonbusiness income that is
qualifying investment income as defined in section 5747.012 of
the Revised Code, or (b) the effective tax rate, based on
modified Ohio taxable income, multiplied by the resident trust's
modified nonbusiness income other than the portion of the
resident trust's nonbusiness income that is qualifying
investment income. The credit applies before any other
applicable credits.
(3) Any credit authorized against the tax imposed by this
section applies to a trust subject to division (C) of this
section only if the trust otherwise qualifies for the credit. To
the extent that the trust distributes income for the taxable
year for which a credit is available to the trust, the credit
shall be shared by the trust and its beneficiaries. The tax
commissioner and the trust shall be guided by applicable
regulations of the United States treasury regarding the sharing
of credits.
(D) For the purposes of this section, "trust" means any
trust described in Subchapter J of Chapter 1 of the Internal
Revenue Code, excluding trusts that are not irrevocable as
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125 S. B. No. 3 Page 7
As Introduced
defined in division (I)(3)(b) of section 5747.01 of the Revised
Code and that have no modified Ohio taxable income for the
taxable year, charitable remainder trusts, qualified funeral
trusts and preneed funeral contract trusts established pursuant
to sections 4717.31 to 4717.38 of the Revised Code that are not
qualified funeral trusts, endowment and perpetual care trusts,
qualified settlement trusts and funds, designated settlement
trusts and funds, and trusts exempted from taxation under
section 501(a) of the Internal Revenue Code.
(E) Nothing in division (A)(3) of this section shall
prohibit an individual with an Ohio adjusted gross income, less
taxable business income and exemptions, of twenty-six thousand
fifty dollars or less not more than the applicable amount
described in division (A)(2) of this section from filing a
return under this chapter to receive a refund of taxes withheld
or to claim any refundable credit allowed under this chapter.
Section 2. That existing section 5747.02 of the Revised
Code is hereby repealed.
Section 3. The Tax Commissioner shall not make adjustments
in 2025 or 2026 to the income amounts in divisions (A)(2) and
(3) of section 5747.02 of the Revised Code, as otherwise
required by division (A)(5) of that section.
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147