To amend sections 5747.98 and 5751.51 and to enact section 5747.88 of the Revised Code to expand a research and development tax credit to apply to the income tax.
Summary
HB756 would create a new nonrefundable Ohio income tax credit for qualified research expenses, modeled on the state’s existing commercial activity tax (CAT) research and development credit. The new credit would equal 7% of the amount by which a taxpayer’s current-year qualified research expenses in Ohio exceed the average of those expenses over the prior three taxable years. Taxpayers could carry forward unused credit amounts for up to seven years, and the bill requires recordkeeping and authorizes the tax commissioner to audit a representative sample of claimed expenses.
The bill also amends the state’s credit-ordering statute so this new income tax credit is placed in the sequence of credits applied against a taxpayer’s aggregate income tax liability. In addition, it preserves the existing CAT research credit structure by making conforming changes to the CAT credit statute and clarifying that a taxpayer generally cannot claim the same research credit against both taxes, except to the extent the credit was not used against the other tax.
Impact
HB756 would expand Ohio’s research and development tax incentive framework by extending a comparable credit to the personal income tax under Chapter 5747 of the Revised Code. It would affect taxpayers with qualifying research spending in Ohio, especially businesses and pass-through entities whose owners pay income tax, while also altering the ordering rules for income tax credits in section 5747.98. The bill would not repeal the existing CAT research credit, but it would coordinate the two systems to prevent double use of the same credit against both taxes.
Sentiment
The bill appears to have a generally pro-business, pro-innovation policy orientation, with no recorded opposition or committee debate in the materials provided. Because it was only introduced and had not yet advanced beyond the House Ways and Means Committee, there is no voting record or transcript evidence of broader support or criticism. The overall framing suggests the bill is intended to encourage research investment in Ohio by making the tax incentive more broadly usable.
Contention
The main policy issue likely to draw attention is the fiscal cost of expanding a research credit to the income tax, since that would reduce income tax revenue for qualifying taxpayers. Another possible point of contention is whether the credit should be available to a wider set of taxpayers, including owners of pass-through entities, and whether the 7% rate and seven-year carryforward are sufficient or too generous. Administrative concerns may also arise around substantiating qualified research expenses and the commissioner’s audit authority, but no specific objections were recorded in the provided materials.
To amend sections 3517.12, 3517.13, and 3517.155 of the Revised Code to modify the Campaign Finance Law regarding foreign nationals and statewide initiatives and referenda and to declare an emergency.
To amend sections 3505.01 and 3505.10 of the Revised Code to modify the deadline for a political party to certify its nominees for President and Vice-President to the Secretary of State.
To amend sections 3517.12, 3517.13, and 3517.155 of the Revised Code to modify the Campaign Finance Law regarding foreign nationals and statewide initiatives and referenda and to declare an emergency.
To delay the deadline for a major political party to certify its presidential and vice presidential candidates to the Secretary of State for the 2024 general election.