Ohio House Bill 242, as introduced in the 136th General Assembly for the 2025-2026 regular session, proposes to amend existing sections of the Revised Code concerning income tax (5747.08 and 5747.98) and enact a new section (5747.87). The central theme of this bill is the introduction of new nonrefundable income tax credits for taxpayers who spay or neuter their dogs or complete a dog training course. The bill also includes technical amendments to existing tax code sections to incorporate this new credit and update the order in which various tax credits are claimed.
Main Themes and Important Ideas/Facts:
- Introduction of New Nonrefundable Dog-Related Tax Credits:
- The most significant aspect of HB 242 is the proposed enactment of section 5747.87 of the Revised Code. This new section creates a nonrefundable income tax credit for taxpayers.
- This credit is specifically for the cost of having a dog owned by the taxpayer surgically spayed or neutered or for the cost of one complete dog training course for a dog owned by the taxpayer.
- The qualifying training courses are defined as “obedience training that teaches dogs appropriate social behavior with humans and animals and to respond to commands and cues.” (Lines 277-279).
- Credit Amount and Limitations:
- The amount of the credit is equal to the actual cost of the surgery or training course.
- However, the maximum credit a taxpayer can claim for any taxable year is three hundred fifty dollars (Line 283).
- Taxpayers can claim only one credit under this section per taxable year (Line 287).
- Timing and Claiming the Credit:
- The credit must be claimed for the taxable year in which the taxpayer incurred the cost for the surgery or course (Lines 284-285).
- The bill requires the credit to be claimed “in the order prescribed by section 5747.98 of the Revised Code” (Line 288).
- Verification and Documentation:
- The Tax Commissioner is authorized to request supporting documentation, such as a sales receipt, to verify a claim for this credit.
- “no credit shall be allowed unless the requested information is provided” (Lines 292-293).
- Tax Commissioner’s Role:
- The Tax Commissioner is explicitly prohibited from preparing or keeping a list of taxpayers who have claimed this specific credit (Lines 295-296).
- The Tax Commissioner may adopt rules to administer the new section 5747.87 (Line 298).
- Effective Date:
- The credit is allowable for taxable years ending on or after the effective date of the new section (Lines 299-300).
- Amendments to Existing Tax Code (5747.08 and 5747.98):
- The bill amends section 5747.08, which outlines the requirements for filing annual income tax returns in Ohio. The amendments appear to be primarily technical, incorporating the new credit into the existing framework. Specifically, the new dog-related credit is added to the list of credits that are excluded from the definition of “business credits” for pass-through entities filing single returns (Lines 117-121, 122-123, 124-125, 126-127, 128-129, 130-131, 132-133, 134-135, 136-137, 138-139, 140-141, 142-143, 144-145, 146-147, 148-149). The new credit is listed as item (q) under this exclusion (Line 149).
- The bill also amends section 5747.98, which establishes the uniform order for claiming tax credits against a taxpayer’s aggregate tax liability. This amendment is crucial because it determines where the new dog-related credit falls in the sequence of credit application. The new nonrefundable credit for spaying or neutering or training a dog is inserted into the order after the credit for tuition paid to a nonchartered nonpublic school and before the nonrefundable vocational job credit (Lines 328-331).
- Nonrefundable Nature of the Credit:
- Section 5747.87 explicitly states the credit is nonrefundable (Line 271).
- Section 5747.98 (B) clarifies that, for nonrefundable credits, the amount of the credit “shall not exceed the taxpayer’s aggregate amount of tax due under section 5747.02 of the Revised Code, after allowing for any other credit that precedes it in the order required under this section” (Lines 391-394). This means the credit can reduce the taxpayer’s tax liability to zero, but any excess credit beyond the amount of tax owed will not be refunded to the taxpayer.
- Purpose of Amendments (Implied):
- While not explicitly stated as a purpose in the excerpt, the introduction of the dog-related tax credits likely aims to incentivize responsible pet ownership, potentially reducing the number of unwanted animals and promoting well-behaved dogs within the community.
- The amendments to 5747.08 and 5747.98 are necessary to integrate the new credit seamlessly into the existing Ohio income tax structure and clarify its application.
Key Quotes:
- “To amend sections 5747.08 and 5747.98 and to enact section 5747.87 of the Revised Code to authorize a nonrefundable income tax credit for having a dog spayed or neutered or for completing a dog training course.” (Lines 5-9) – This directly states the bill’s primary objective.
- “A nonrefundable tax credit against a taxpayer’s aggregate tax liability under section 5747.02 of the Revised Code is allowed for the cost of having a dog that is owned by the taxpayer surgically spayed or neutered or for the cost of one complete dog training course for a dog owned by the taxpayer.” (Lines 271-276) – Defines the new credit and its eligible expenses.
- “The amount of the credit shall equal the cost of the surgery or course, but the amount of credit claimed by the taxpayer for any taxable year may not exceed three hundred fifty dollars.” (Lines 281-283) – Specifies the credit amount and maximum limit.
- “The taxpayer may claim only one credit under this section per taxable year.” (Lines 287-288) – Limits the frequency of claiming the credit.
- “The nonrefundable credit for spaying or neutering or training a dog under section 5747.87 of the Revised Code;” (Lines 329-331) – Includes the new credit in the official order for claiming credits.
- “For any credit, except the refundable credits enumerated in this section… the amount of the credit for a taxable year shall not exceed the taxpayer’s aggregate amount of tax due under section 5747.02 of the Revised Code, after allowing for any other credit that precedes it in the order required under this section.” (Lines 389-394) – Explains the nonrefundable nature and how it limits the credit’s impact.
Conclusion:
Ohio House Bill 242, as introduced, proposes a novel approach to potentially encourage responsible dog ownership through the state’s income tax system. By offering a nonrefundable tax credit for spaying/neutering or training a dog, the bill aims to reduce the financial burden of these activities for taxpayers, potentially leading to a decrease in stray animal populations and an increase in well-behaved dogs. The bill’s integration of this new credit into the existing tax code, including its nonrefundable nature and specific placement within the credit claiming order, are key details outlined in the provided excerpts.