News and Analysis
At its meeting next Wednesday, June 20, the OMA Tax Committee has these highlights on its agenda:
- A presentation from OMA Connections Partner, RSM, on federal tax reform & state conformity and the Wayfair online sales tax case; the impact of both these issues on Ohio’s manufacturers will be discussed.
- Ohio Department of Taxation will share its updated draft manufacturing sales and use tax exemption rule.
- Committee members will discuss and evaluate tax legislation pending at the Ohio General Assembly.
The meeting runs from 10:00 a.m. until 1:00 p.m. at the OMA offices. A nice lunch will be provided by OMA. A call-in option is available. If you haven’t already, please register here or call (800) 662-4463. 6/14/2018
As session days run out, the Senate amended an unrelated bill to require greater transparency and accountability of JobsOhio, Governor Kasich’s privatized economic development agency. The amendment supported by Auditor of State Dave Yost requires performance audits of JobsOhio every four years.
“JobsOhio is a quasi-public agency that exists to serve a public purpose for Ohioans,” Auditor Yost said in a press statement. “The people of Ohio deserve a seat at the table. This amendment ensures that any performance audit of JobsOhio is completely independent.”
The amendment later won unanimous bi-partisan support by the full Senate even though JobsOhio officials oppose the legislative mandate. Both Republican and Democrat gubernatorial candidates have called for improved transparency. 6/7/2018
From OMA Connections Partner RSM: “Many taxpayers and their advisors are frustrated by the uncertainties created by a number of new provisions of the Tax Cuts and Jobs Act of 2017. Some uncertainties are unavoidable – such as whether the new 20 percent pass-through deduction and other individual provisions will be made permanent, or whether the 21 percent corporate tax rate, theoretically ‘permanent,’ will be increased by a later Congress.
“Other issues arise from the novelty of many of the new provisions, the existence of apparent gaps or possible errors in the expedited drafting process, and questions as to whether those gaps can or will be filled by technical corrections legislation, regulations or other IRS guidance. Alternatively, taxpayers and their advisors will simply have to deal with the statutory language as is, and make their best determination as to what Congress intended in any particular case.”
Read more. 6/4/2018
Multinational automakers and suppliers may be able to reduce their tax rate by capitalizing on their foreign-derived income. Read a post from OMA Connections Partner, RSM. 6/4/2018
Here’s an infographic from OMA Connections Partner, RSM, representing seven misconceptions about the General Data Protection Regulation (GDPR), a regulation in European Union (EU) law on data protection and privacy for all individuals within the EU.
Companies that don’t think they have EU data sometimes do. Read more here. 5/24/2018
From OMA Connections Partner, GBQ Partners: “A large number of privately-held U.S. companies are owned by members of the “baby boomer” generation, and with these owners approaching retirement age, many are considering an Employee Stock Ownership Plan (“ESOP”) as a way to easily liquidate their ownership while receiving “fair market value.” An ESOP is a qualified retirement plan, similar to a 401(k), which allows the employees of a company to become owners of the stock of their employer.”
See some facts gathered by GBQ about U.S. ESOP companies. 5/15/2018
Here’s a recent post from OMA Connections Partner, Clark, Schaefer, Hackett: “The Tax Cuts and Jobs Act (TCJA) imposes a limit on deductions for business interest for taxable years beginning in 2018. The limit, like other aspects of the law, has raised some questions for taxpayers. In response, the IRS has issued temporary guidance in Notice 2018-28 that taxpayers can rely on until it releases regulations. While the guidance provides some valuable information, it also leaves some questions unanswered.”
Read more from CSH here. 4/30/2018
OMA Connections Partner, Clark, Schaefer, Hackett (CSH), posts: “On April 17th, the U.S. Supreme Court revisited Quill Corp. v. North Dakota, which held that in order for a state to impose sales tax on an out-of-state seller, the seller must have physical presence in the state. The case is being reviewed again because the recent South Dakota v. Wayfair, Inc. suit is asking that the Quill decision be repealed.
“… The Quill standard has enabled online sellers to forego collecting and remitting sales tax in states where the seller has no physical presence. The potential revenue loss for the states in uncollected sales tax is enormous – in the billions of dollars. …
“It is difficult to predict which way the Court will decide this case. But no matter their decision, it will be binding precedent across the country. Either the physical presence standard will continue to be the law and Quill will be upheld, or the Court will overturn Quill and set forth new nexus standards. A decision is expected sometime in June …”
Read more from CSH about the case here. 4/24/2018
All businesses that are located and/or operate in the state of Ohio are required to file an Annual Report of Unclaimed Funds with the division per Ohio Administrative Code Section 169.01.
A few points about businesses’ reporting requirements:
- There are no minimum reportable dollar amounts, except for unclaimed wages less than $50.00.
- Businesses must file a report annually. Businesses not holding any unclaimed funds must still file a Negative (NONE) Report.
Learn more here. 4/25/2018
OMA Connections Partner, RSM, posted this Tax Alert: “The 21 percent federal corporate tax rate now in effect applies to tax years beginning after Dec. 31, 2017. Previously, the maximum federal corporate tax rate was 35 percent. For a corporation’s fiscal year or companies with tax years that begin before Dec. 31, 2017, but end after that date (an Affected Fiscal Year) – for example, a year beginning Oct. 1, 2017 and ending Sept. 30, 2018, – a blended rate applies.
“The IRS has released Notice 2018-38, explaining how to apply the blended rate under section 15 of the Tax Code, as well as news release IR-2018-99, conveying the basic message that for Affected Fiscal Years, the blended rate applies in lieu of either the new 21 percent rate or the tax rate applicable under old law.”
Read more from RSM here. 4/19/2018