Republican state lawmakers say they’ve crafted a tax plan that will mean almost all Ohioans will pay less in taxes during the next three years. But the plan calls for raising the state sales tax and adding the tax to new items.
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Highlights of the tax plan
* $2.6 billion net tax cut over three years: Nearly $4.9 billion in tax relief and $2.7 billion in new revenues.
* Gradual 10 percent cut in personal income tax rates: 8.5 percent this year, 9 percent in 2014 and 10 percent in 2015.
* Increases sales tax from 5.5 percent to 5.75 percent and apply it to electronically downloaded books, music and other items.
* Reduces the exemption for businesses paying the Commercial Activity Tax. Businesses with gross receipts of $500,000 or more would pay .26 percent tax on that amount. Currently, CAT applies after $1 million in gross receipts.
* Returns homestead exemption to previous graduated rate system based on income. Seniors currently receiving the exemption are not affected.
* Rolls back state property tax relief on local government levies, leaving property owners to pay their entire tax bill for new or replacement levies. Existing levies are not affected.
* Eliminates gambling loss deduction.
* Taxes tobacco products known as cigarillos at the same rate as cigarettes and magazine subscriptions at the same rate as newsstand sales.