Ohio Senate passes bill to fix small business tax in budget

COLUMBUS (AP) — Ohio senators have unanimously passed legislation aimed at fixing a budget provision that imposes an unintended tax increase on some small businesses.

At issue is a tax deduction contained in the current two-year state budget.

The budget allows small business owners to deduct up to 75 percent of their first $250,000 of business income this tax year, then 100 percent in 2016. A 3-percent flat tax is then applied on the remaining net business income both years. For some, the rate for this tax year is higher than that paid prior to the budget.

Lawmakers had wanted the flat tax applied on business income over $250,000. They say the bill passed today clarifies their intent.

The measure also would restore some money for schools that Gov. John Kasich vetoed.