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 clarifies that such payments will not be included in the taxable gross receipts of contractors, thereby reducing their overall tax burden. The bill also maintains existing definitions and provisions related to taxpayers and gross receipts, ensuring that the framework for understanding tax obligations remains consistent while supporting contractors in managing their tax responsibilities.

Additionally, the bill introduces new definitions and clarifications regarding gross receipts for various entities, including mortgage lenders and sports gaming proprietors, and specifies that receipts under construction contracts are only included to the extent that the taxpayer is obligated to pay those amounts to subcontractors. It establishes criteria for determining "substantial nexus" and "bright-line presence" in the state, defines key terms, and sets an "exclusion amount" that will increase in subsequent years. The existing section 5751.01 is repealed, and the amendments will apply to tax periods ending on or after the bill's effective date.

Statutes affected:
As Introduced: 5751.01