Tax and Finance Management

State Income Tax Lower Than Projected

State income tax revenues came in lower than projected last month, as tax receipts totaled $224 million less than what was anticipated. Kimberly Murnieks, Director of the Office of Budget and Management, has noted that significant earnings on investments are nearly 170% higher than the year-to-date estimate, and that the state will be ending fiscal year 2024 with a balanced budget.

Meanwhile, the state legislature has two bills pending, House Bill 386 and Senate Bill 216, which propose to phase out the state income tax and repeal the commercial activity tax. 5/7/2024

Start Planning Now for the end of TJSC

On January 1, 2025, many of the tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017 will disappear. While the TCJA made some permanent tax cuts, a number of previous tax cuts and deduction limitations will return to their prior levels. OMA Connections Partner Roetzel and Andrews breaks down how you can begin to prepare now for these changes. 5/6/2024

U.S. House Forms Manufacturing Tax Working Group

This week, the U.S. House Committee on Ways and Means formed tax working groups dedicated to finding legislative solutions to the scheduled expiration of pro-growth tax policies at the end of 2025.

The working groups focus on specific areas of the economy affected by sunsetting measures, including American Manufacturing.

The National Association of Manufacturers testified before the House Ways and Means Committee earlier last month, highlighting the benefits these measures have for manufacturers and encouraged Congress to preserve these provisions. 4/30/2024

IRS Announces Round 2 of Section 48C Tax Credit Allocations

The IRS has announced Round 2 of tax credit allocations under the IRC Section 48C Qualifying Advanced Energy Project program.

OMA Connections Partner CliftonLarsonAllen has prepared a breakdown of how to be considered for the project, including key dates for submissions. 4/30/2024

Congress Slow to Revise Adverse Changes to R&D Tax Incentives That Hurt Manufacturers

Congress has been slow in attempts to reverse recent adverse changes to IRS Section 174, which is preventing American businesses from fully deducting their R&D costs in a timely fashion.

While revisions quickly moved through the House, the U.S. Senate has been slow to take up the changes that cost manufacturers six to seven figure-increases in tax liability. 4/25/2024

Ohioans to Receive Nearly $2 Billion in State Tax Refunds; Blamed for State Revenue Miss

This past Monday was tax day, and Ohioans have already begun to see their refunds processed by the Ohio Department of Taxation. Nearly 5.5 million Ohioans filed their taxes this year, with returns already hitting just under the $2 billion mark.

The Office of Budget and Management announced that state tax revenues in all categories fell short in March due to the higher than expected income tax refunds.

“We’re still in the midst of the tax year 2023 filing season, and we will not see how it lands and how it all fleshes out until all payments and refunds process throughout April and into May,” said OBM Director Kimberly Murnieks.

The Ohio House of Representatives is currently deliberating a bill that would phase out the state income tax. The OMA will continue to track and update its members on House Bill 386 and its potential effects on state revenue. 4/15/2024

Commercial Activity Tax Filing Deadline Approaching

The Ohio Department of Taxation recently issued a reminder that that the first quarter 2024 Commercial Activity Tax (CAT) return is due May 10, 2024. The 2023 CAT 12 annual return is also due on May 10, 2024, for all CAT annual taxpayers.

Taxpayers are required to file and pay the CAT electronically via the Ohio Business Gateway at gateway.ohio.gov. 4/09/2024

Ohio House Holds First Hearing on Bill That Would Phase Out State Income Tax

This week, The Ohio House Ways and Means Committee held its first hearing on House Bill 386, which would phase-out the state income tax on nonbusiness income over six years and repeal the Commercial Activity Tax (CAT) after 2029.

Ohio’s CAT and personal income tax represent nearly half of the state’s Fiscal Year 2023 tax revenue. The OMA has urged caution with previous legislative proposals that would repeal the CAT as it could result in shifting the state’s business tax burden to manufacturers during times of economic downturn and state revenue shortfalls. 4/09/2024

MAGNET, HBK to Host Webinar on Tax Considerations for Manufacturers

OMA partners and associate members, The Manufacturing Advocacy and Growth Network (MAGNET) and HBK will host a webinar on Apr. 25 covering tax strategies and programs that all manufacturers should understand and consider.

Learn about actions you can take throughout the year to be better prepared for tax season, including understanding proposed legislation that can help manufacturers. Click here to register. 4/09/2024

Manufacturing Boom Spearheaded by Clean Energy Credits

An article in Governing Magazine’s Spring 2024 edition details how clean energy tax credits and investments are driving a nationwide manufacturing boom.

More than $100 billion in private investments, spurred by the Inflation Reduction Act, have helped drive manufacturing expansions in states like Ohio, Michigan, and North Carolina. 4/03/2024