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Ohio’s New CAT Rules Take Effect January 1

December 28, 2023

As a reminder, major changes are coming to Ohio’s Commercial Activity Tax (CAT) beginning Jan. 1, 2024, and again on Jan. 1, 2025.

This one-pager from the Ohio Department of Taxation provides details, as does the agency’s CAT page. Also, OMA Connections Partner Calfee has published this summary.

While the changes bring welcome relief to smaller firms early on, the OMA has cautioned that the new rules will add more uncertainty for Ohio manufacturers of all sizes in future years, especially during the next recession. 12/27/2023

At a Glance: Manufactured Goods and the Trade Deficit

December 28, 2023

This infographic published by Visual Capitalist illustrates how manufactured goods have fueled the U.S. trade deficit since the early 1990s.

In 2022, the U.S. trade deficit for goods reached $1.31 trillion, with more than $3 trillion in imports offset by $2 trillion in exports. Three decades earlier, the trade deficit for goods was $106 billion. 12/27/2023

State Tax Revenue Continues to Outpace Forecast

December 21, 2023

According to the latest monthly report from Ohio’s Office of Budget and Management, year-to-date tax collections for the state’s General Revenue Fund were $244.7 million (2.1%) above estimates, as of the end of November.

Personal income tax revenues have fueled the surplus, accounting for two-thirds of the total tax revenue variance. See this infographic.

Meanwhile, Ohio recently landed “AAA” ratings from all three major rating services: S&P Global, Moody’s, and Fitch Ratings. 12/19/2023

Survey: One-Third of Northeast Ohio Manufacturers Open to Selling Business

December 21, 2023

According to a recent survey of more than 200 Northeast Ohio manufacturing business owners, about one-third are considering or open to selling their business in the next year.

Crain’s Cleveland Business reports the survey was conducted by OMA Connections Partner MAGNET, the region’s Manufacturing Extension Partnership. Ethan Karp, MAGNET’s president and CEO, said many smaller manufacturing companies “can benefit from merging and have a better economy of scale.” 12/20/2023

RSM: Interest Rate Cuts Could Begin in June

December 15, 2023

Federal data indicate that inflation continued to abate in November. Year over year, the Consumer Price Index showed an increase of 3.1%. The Producer Price Index, which measures the average price changes that businesses pay to suppliers, rose at a slower pace of 0.9%, and was unchanged in November.

OMA Connections Partner RSM reports that the Federal Reserve has signaled it is poised to reduce its policy rate by 75 basis points next year, with more cuts after that. The firm expects rate cuts to start around June. 12/14/2023

New CTA Reporting Deadline Is Approaching

December 15, 2023

New federal requirements associated with the Corporate Transparency Act will require an estimated 32.6 million companies to disclose their “beneficial owners” beginning Jan. 1. This update from OMA Connections Partner Clark Schaefer Hackett notes that non-compliance may lead to civil or criminal penalties. 12/12/2023

RSM to Host Year-End Tax Webinar

December 15, 2023

On Tuesday, Dec. 19, OMA Connections Partner RSM will host a 60-minute webcast to address key tax topics. Issues to be discussed include the potential for a year-end tax measure, which could address certain business provisions in the 2017 federal tax law, such the R&D credit. Register here. 12/13/2023

House Advances Construction Contract Mandate

December 8, 2023

The Ohio House this week passed HB 203, OMA-opposed legislation that mandates payment terms in construction contracts and eliminates the owner’s right to negotiate by requiring payment within 30 days (or face an exorbitant 18% interest penalty).

Ignoring opposition from the business community, the House passed the bill on a 76-12 vote, which included significant support from Republicans. The bill now goes to the Senate. Senators need to hear from businesses; contact your senator and ask them to oppose HB 203. 12/7/2023

Ohio Receives Credit Upgrade From Moody’s

December 8, 2023

Moody’s Investor Service has bumped Ohio’s issuer rating to Aaa from Aa1. Aaa obligations are considered to be of the highest quality and subject to the lowest level of credit risk. Read Gov. DeWine’s press release. 12/4/2023

Committee to Examine Ohio’s Property Tax Burden

December 8, 2023

While Ohio lawmakers scramble to make temporary changes to Ohio’s property tax rules before year’s end, a new joint committee of the legislature will spend 2024 searching for long-term solutions to rising property taxes.

Established by the state operating budget (House Bill 33), the Committee on Property Tax Review and Reform will be able to hold hearings on pending legislation related to property taxation, according to Gongwer News Service.

Meanwhile, the conservative Buckeye Institute has written that rising property taxes “require local action” that addresses “local governments’ inefficiencies.” 12/4/2023