Hollington Co-Sponsors Bill to Reduce Unearned Income Tax Rate for Seniors

State Rep. Richard Hollington, R-98, was one of 12 co-sponsors of legislation to reduce the state tax rate on unearned income of seniors who are 70 1/2 or older.

House Bill 98 would lower the income tax rate to 1 percent – Ohio has a 6.3 percent income tax on all retirement income. The bill's intent is to keep wealthy residents from moving out of Ohio.

"This would benefit all retirees who pay federal income tax and would do so at a time when the interest or yield on their savings and investments are at an all-time low," Hollington said.

Ohio has been losing wealthy seniors to states like Florida and Tennessee, according to Hollington. In addition to paying taxes on capital gains and dividends at 6.3 percent, residents in Ohio and other high tax states face a federal tax of 28 percent on the amount retirees pay for state and local income taxes and for real estate taxes.

"In our judgment, the tax impact on Ohio would not be significant and in all likelihood would be offset by the increase in sales taxes, estate taxes and other multiplier revenues generated by retaining our wealthy senior citizens as residents of Ohio," Hollington said. "However, to avoid any immediate tax impact, the reduction will become effective for the calendar year 2013 and thereafter. Thus, Ohio seniors will know that tax relief is on the way."

The 98th District includes Mayfield Village, Gates Mills, Highland Heights and part of Mayfield Heights.