The bill, introduced by Representative Lorenz, seeks to amend sections 718.01, 5747.01, and 5748.01 of the Revised Code to exempt tips from state, municipal, and school district income taxes. This amendment explicitly includes "tips" in the definition of "exempt income," ensuring that income derived from tips will not be subject to taxation at any level. The bill aims to provide financial relief to service industry workers who rely on tips as a significant part of their income, acknowledging the variable nature of this compensation.

In addition to the exemption for tips, the bill introduces various definitions and clarifications related to municipal income tax, including terms like "net operating loss," "business income," and "pass-through entity." It outlines the treatment of net operating losses, allowing deductions to reduce municipal taxable income and establishing criteria for taxpayers' rights and responsibilities. The bill also proposes changes to the treatment of depreciation expenses and introduces new deductions for specific situations, such as military pay and disaster-related work compensation. Overall, the bill aims to streamline tax processes, clarify taxpayer obligations, and provide additional benefits to taxpayers in Ohio.

Statutes affected:
As Introduced: 718.01, 5747.01, 5748.01