To amend sections 718.01 and 5747.01 and to repeal section 5747.79 of the Revised Code to exempt capital gains from state and municipal income taxation and to name this act the Ohio Capital Gains Tax Repeal Act.
HB617 would exempt capital gains from both Ohio state income tax and municipal income tax. To do that, the bill amends the municipal income tax definitions in section 718.01 and the state income tax definitions in section 5747.01, and it repeals section 5747.79, which currently provides a deduction framework related to qualifying net capital gains and deductible payroll. The bill also names the measure the Ohio Capital Gains Tax Repeal Act.
In practical terms, the bill would remove capital gains from taxable income for state and municipal income tax purposes, affecting individual taxpayers, trusts, estates, and other entities to the extent capital gains flow through to them. It also includes a reporting requirement directing the Director of Budget and Management to prepare a fiscal impact report by June 30, 2027, addressing revenue effects and taxpayer behavior. The amendments apply to taxable years ending on or after the effective date.
The bill’s overall sentiment, based on the available record, appears neutral to positive in the sense that it was introduced as a tax-cut proposal and there is no recorded committee opposition, vote, or transcript in the provided materials. Because it is still at the introduction stage and has not yet been debated in the supplied context, there is no documented public committee sentiment to measure beyond the bill’s pro-tax-reduction purpose.
The main point of contention likely centers on the fiscal impact of eliminating capital gains taxation, including potential reductions in state and municipal revenue and the extent to which the change would benefit higher-income taxpayers and investors. The required fiscal report suggests lawmakers may want more information on revenue loss and behavioral effects before advancing the proposal. No specific objections or amendments are recorded in the provided materials, but the revenue consequences and distributional effects are the most likely areas of debate.
HB617 would materially change Ohio’s tax code by excluding capital gains from state and municipal income taxation, requiring conforming changes to Chapters 718 and 5747 of the Revised Code and repealing the existing capital-gains-related deduction statute in section 5747.79. The bill would affect taxpayers with capital gains income, including individuals, pass-through owners, trusts, estates, and entities whose income is reported through Ohio’s income tax system, and it would reduce the tax base for both state and local governments. It also requires a post-enactment fiscal report on revenue and taxpayer behavior.
The available record shows no committee testimony, recorded votes, or other discussion, so there is no documented opposition or support beyond the bill’s text. The measure is clearly framed as a tax repeal/reduction proposal, which suggests a pro-taxpayer, pro-investment policy orientation. Because it remains introduced and has not advanced in the provided history, sentiment cannot be measured from debate, but the bill itself reflects a favorable view toward eliminating capital gains taxation.
The likely contention is fiscal: repealing capital gains taxation could significantly reduce state and municipal revenue, and opponents may question whether the benefits would disproportionately accrue to higher-income households and investors. Another likely issue is whether the bill would create tax-preference disparities between wage income and investment income, and whether eliminating the tax would affect local government budgets. The mandated fiscal-impact report indicates lawmakers may be concerned about both revenue loss and behavioral responses, but no specific objections are documented in the provided materials.