News and Analysis
Ohio Ranks High in Tax Competitiveness
March 09, 2012In Location Matters, A Comparative Analysis of State Tax Costs on Business, produced by the Tax Foundation in collaboration with KPMG, Ohio is reported to be more competitive than most states. In fact, Ohio ranks fifth with respect to state tax costs on mature firms and third for costs on new firms. Ohio outpaces it’s five bordering neighbor states in business tax competitiveness, which are, in order of tax attractiveness: Kentucky, Michigan, Indiana, West Virginia and Pennsylvania.
The study set out to develop and publish a landmark, apples-to-apples comparison of corporate tax costs in the 50 states. Tax Foundation economists designed seven model firms, and KPMG modeling experts calculated each firm’s tax bill in each state. The study accounts for all business taxes: corporate income taxes, property taxes, sales taxes, unemployment insurance taxes, capital stock taxes, inventory taxes, and gross receipts taxes. Additionally, each firm was modeled twice in each state: once as a new firm eligible for tax incentives, and once as a mature firm not eligible for such incentives.
“The appropriate conclusion is that Ohio’s brave tax reforms of the last decade are paying big dividends,” said OMA president, Eric Burkland.
House Democrats Call for Taxes on Shale
March 02, 2012Two Ohio House members, Mike Foley (D-Cleveland) and Bob Hagan (D-Youngstown), are pushing to have the state increase its severance tax on natural gas. They suggest the state modify its severance tax from a per-unit tax (3 cents per thousand cubic feet) to percentage of the market value of the gas (7-percent of the market value).
The representatives also suggest dedicating 1.5% of the tax to the Local Impact Protection Fund and .5 percent to the Advanced Energy Fund. More can be found here. No legislation has yet been introduced.
Governor Kasich noted earlier this year that he would propose an “impact fee” to cover the cost of infrastructure damage caused by oil and gas extraction and an expansion of the state’s severance tax so that it includes natural-gas liquids, such as propane.
Economic Development: Manufacturing Site Certifications
March 02, 2012Proposed as an additional tool in the state’s economic development toolbox, HB 436 would create a state program that “certifies” industrial sites as ready-for-development. The certification process is intended to shorten the search for suitable sites for firms looking to land operations in Ohio.
The measure is sponsored by Representatives Cheryl Grossman (R – Grove City) and Marlene Anielski (R – Walton Hills).
This week a Columbus area economic development organization testified in support of the measure, likening it to a similar program in the Carolinas that has improved state competitiveness. OMA member feedback is invited.
Ohio Molder's Lien Holders Do Not Violate Bankruptcy Code's Automatic Stay by Retaining the Debtors' Tools, Dies and More
February 29, 2012The key to enforcing an Ohio Molder's Lien is to retain possession of the customer's tooling, dies, and/or molds until payment is received. Surrender possession and both the lien and the right to payment priority it provides evaporates. When a customer files for bankruptcy, however, the customer – now a "debtor" – usually demands the immediate turnover of its property. Read More. From OMA Connections Partner, Walter & Haverfield, LLP
Ohio Jobs Creation Tax Credit Reporting Deadline Delayed
February 24, 2012OMA Connections Partner, GBQ Partners, reports that the Ohio Jobs Creation Tax Credit (JCTC) 2011 annual report filing deadline has been extended. Historically, the Ohio Department of Development (ODOD) has sent program participants information in order to complete their annual reporting requirements.
However, as reported here in recent weeks, the Ohio Attorney General undertook an inspection of incentive awards compliance; this activity has delayed the ODOD’s issuance of annual progress report instructions to employers.
The state reportedly has sent two email communications stating the current deadline will be extended and all late fees will be waived. To date, the extended filing deadline has yet to be determined, and the company-specific instruction letters have yet to be sent.
According to the ODOD, companies awarded incentives have an 80 percent error rate in incentive reporting compliance. Compliance errors mean incentives may be jeopardized or underutilized and potentially lead to "claw backs."
GBQ Partners offers a complimentary on-site preliminary review of your incentive compliance filings. To schedule your review or if you have reporting questions, call (614) 221-1120.
OMA Tax Committee Meeting Materials - 02-16-2012
February 22, 2012Here are the OMA Tax Committee meeting materials from February 16, 2012.
Ohio Ranks 27th in State and Local Sales Tax Rates
February 17, 2012The D.C.-based Tax Foundation released its annual state rankings of combined state and local sales tax rates. Ohio ranked 27th with an average combined rate of 6.75%.
The five highest combined rates are Tennessee (9.45 %), Arizona (9.12 %), Louisiana (8.85 %), Washington (8.80 %), and Oklahoma (8.66 %).
Five states do not have a statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Of these, Alaska and Montana allow localities to charge local sales taxes.
IRS Announces New Taxes on Medical Devices
February 10, 2012On February 8, 2012, the IRS issued new regulations to implement a 2.3% excise tax on medical devices. This new tax was created by the Patient Protection and Affordable Care Act to raise revenues to pay for health benefits established by the law.
U.S. medical device manufacturers are the world market leaders; the imposition of this new tax will impede U.S. industry's capital capacity to invest in research and development, new technologies and new employees.
The OMA is asking Ohio members of Congress to pass HR 436 (Paulsen, R – MN). The bill would repeal the new tax. For more, read this Advanced Medical Technology Association (AdvaMed) press release.
New Economic Development Details Announced
January 27, 2012..The Kasich administration this week released a series of fact sheets about how JobsOhio will operate its economic development functions.
Earlier this year, the governor won support to use state liquor sales revenue to create a dedicated economic development investment fund. About $100 million will be available each year for job creation and retention.
Citing figures by the U.S. International Economic Development Council, Bloomberg News Reports this amount “would be larger than similar arrangements in Michigan, Kentucky and California and would be one of the biggest such dedicated funding sources in the United States”.
