State Rep. Derek Merrin’s (R-Monclova) legislation, House Bill 150, passed in the Ohio House today by a 93-3 vote. The bill provides meaningful tax relief to new banks starting across the state. For the first three years, banks will be exempted from the Financial Institutions Tax and likely receive an annual tax savings ranging from $100,000 to $400,000.
“Banks, especially small community banks, provide market competition, increased consumer choice, and provide a capital life line to many Ohio small businesses,” Merrin said in his House floor speech. “These banks are critical in rural communities, where banking options are less robust. Banks pay a lot in taxes, employee thousands of people, and play a critical role financing Ohio commerce – we should welcome them. Ohioan’s need more banking options, not less.”
Merrin also noted that within the last decade, seventy-eight banks closed through a failure or a merger. And, only one new bank was started during that time frame.
“With this bill, we can say Ohio is one the best states to start a new bank. And, we are open for business,” said Merrin.
Another key component of the legislation is remedying a taxation problem for mortgage lenders, non-depository lenders, that was created with the creation of the Commercial Activity Tax (CAT), mortgage lenders were moved and subjected to the CAT rather than the Dealers Intangible Tax in 2012.
“With the tax change, mortgage lenders had their state tax burden increase by about 200 percent. It was an unfortunate mistake we are correcting with House Bill 150,” said Merrin.
Merrin stated that the legislation will impact about 160 businesses resulting in about $8 million in annual tax savings for lenders and encourage new community banks within Ohio.
House Bill 150 now moves over to the Senate chamber and awaits a hearing.