OH HB328

Authorizes an income tax deduction for equity owners of eligible small businesses equal to their distributive share of undistributed profits, capped at 5% of the business's total income.

Defines eligible small businesses as sole proprietorships or pass-through entities with total income not exceeding $1 million that report net profit exceeding 3% of total income and distribute less than the full amount of net profit above that 3% threshold.

Requires a corresponding add-back in the following tax year equal to the extent undistributed profits were not reinvested in qualifying expenditures (employee training, research and development, or capital property purchases).

Applies to both individuals claiming the deduction under section 5747.01(A)(28) and estates/trusts claiming under section 5747.01(S)(15) of the Revised Code.

Effective for taxpayer taxable years beginning on or after the bill's effective date.