The bill, introduced by Senator Schaffer, amends section 5751.01 of the Revised Code to create a commercial activity tax exclusion for contractor payments made to subcontractors. This amendment aims to clarify the tax obligations for contractors and their subcontractors, potentially alleviating the tax burden on contractors who utilize subcontractors for their services. The new legal language defines the parameters of this exclusion, allowing contractors to exclude payments to subcontractors from their gross receipts when calculating their commercial activity tax, thereby streamlining tax processes and promoting the use of subcontractors in various projects.

Additionally, the bill introduces new definitions and clarifications regarding gross receipts and taxable gross receipts for various entities, including mortgage lenders and sports gaming proprietors. It includes provisions for receipts related to the sale of capital equipment over one hundred million dollars at megaproject sites and receipts from grants aimed at expanding broadband access. The bill also specifies that receipts compensating for business losses due to the train derailment in East Palestine on February 3, 2023, are included. Furthermore, it establishes an "exclusion amount" of three million dollars starting in 2024 and six million dollars beginning in 2025, while repealing the existing section 5751.01. The amendments will apply to tax periods ending on or after the bill's effective date.

Statutes affected:
As Introduced: 5751.01