The Ohio Capital Gains Tax Repeal Act seeks to amend sections 718.01 and 5747.01 of the Revised Code and repeals section 5747.79, with the primary goal of exempting capital gains from state and municipal income taxation. The bill introduces new legal language that clarifies the treatment of net capital gains, specifying that they will be included in the calculation of municipal taxable income for individuals, while also defining "municipal taxable income" and "exempt income" to ensure that net capital gains are not classified as exempt income. This change is intended to simplify Ohio's tax structure and promote investment and economic growth by eliminating capital gains taxation.

In addition to the capital gains provisions, the bill makes several amendments regarding net operating losses, the taxation of various entities, and definitions related to municipal income tax. It allows for the deduction of net operating losses to reduce municipal taxable income to zero, with limitations on the amount that can be deducted for certain years. The bill also clarifies the tax treatment of disregarded entities and publicly traded partnerships, introduces definitions for terms relevant to tax administration, and includes various deductions for taxpayers. Overall, the legislation aims to enhance clarity in tax regulations and streamline the tax reporting process for trusts while assessing the fiscal impact of these changes by requiring a report by June 30, 2027.

Statutes affected:
As Introduced: 718.01, 5747.01, 5747.79