Ohio House Democrats jammed up a tax bill Wednesday after Republicans rejected a suite of changes – most pointedly, a provision benefitting investors who make millions of dollars investing in startups.
Senate Bill 9, the state legislation, would direct Ohio Department of Taxation officials to conform to federal tax cuts enacted by President Donald Trump via the One Big Beautiful Bill Act.
Democrats in the state House targeted one provision in particular – the expansion of the “qualified small business stock gain exclusion,” a tax cut for early investors into companies that succeed and grow in value up to $75 million.
The change will affect fewer than 1,000 taxpayers, according to Legislative Budget Office estimates shared with Signal Ohio. Of all such payers nationally, 94% of them report household income of more than $1 million per year, according to the Institute on Taxation and Economic Policy, a progressive think tank.
By the back-of-the-napkin math from Rep. Chris Glassburn, a Cleveland-area Democrat, those 1,000 payers (mostly millionaires) comprise .008% of the 11.88 million Ohioans.
“This is not just a perfunctory measure, this is a large, policy-changing bill that removes money available for the state government to do other business,” he said in a floor speech. “This is a deduction of the 1% of the 1%.”
Republicans control 65 of 99 House seats, meaning they rarely need Democratic buy-in to effectuate their agenda. But legislation can’t take effect within 90 days without what’s known as an “emergency clause,” which requires a two-thirds vote. The emergency clause failed by three votes. The House passed the bill regardless, but its fate is less certain as Tax Day approaches.
“We can bring it up for another vote in a future session, perhaps next Wednesday,” House Speaker Matt Huffman, an Allen County Republican, said, according to Gongwer News Service. “Or if Democrats aren’t going to agree to the emergency clause, then folks will just have a harder time filing their income tax returns this year.”
House Finance Chair Brian Stewart, a central Ohio Republican, said on X that the Democrats’ “temper tantrum is going to cost Ohioans millions of dollars in needless tax-filing & preparation charges.” So much for “affordability,” he added.
Rep. Dan Troy, a Lake County Democrat, called the measure an “egregious” giveaway to the ultrawealthy. He noted that some conservative states like Alabama and Mississippi, and mixed political states like Wisconsin, have rejected the tax break. He said Ohio should do so, as the state did in the 1980s in rebuffing certain Ronald Reagan-era tax changes.
The state isn’t required to adopt the federal changes. But they support big and small businesses and residents, according to GOP House Ways and Means Chair Bill Roemer. And the conformity makes tax season easier for people, businesses and the tax department, which means less expensive as well.
The bill as a whole is estimated to cost Ohio $63.3 million in revenue in 2026 and $29.5 million in 2027, according to the Legislative Service Commission.
Democrats, citing Tax Department estimates, say the qualified small business stock gain exclusion alone will cost Ohio $22 million over a decade. And that might be a lowball, given Wisconsin, as it adopted the tax change, pegged the 10-year cost estimate around $86 million.
Republicans said they didn’t reject the Democrats’ amendment on the merits. Rather, according to a ruling from Huffman, later backed up by a party-line vote of the House, ruled the Democrats’ amendment contained other changes that were not germane to the bill. Their full amendment would have redirected some of the $22 million to support military families of dead soldiers, food assistance and others.