Tax and Finance

IRS Notice 2026-16 gives manufacturers a clearer path to claim up to 100% first-year depreciation on qualifying U.S. production facilities, a major departure from the traditional 39-year schedule for nonresidential real property.

In a new article, Ohio Manufacturers’ Association (OMA) partner HBK says the guidance gives companies a practical framework for determining eligibility, including a 95% safe harbor and important exceptions for many self-rental structures.

“This is the kind of tax clarity that can shape real investment decisions,” said Jacob Sargent, OMA director of public policy services. “Companies planning facility projects should review this guidance now with their tax advisers.” 4/3/2026

House Bill 756, introduced earlier this month and referred to the House Ways and Means Committee, would create a new research and development tax credit that could be applied against a business’s income tax liability. Sponsored by Reps. Jack Daniels and Jim Thomas, the bill mirrors Ohio’s existing R&D credit under the Commercial Activity Tax (CAT) but would create a separate path for businesses outside the CAT structure.

The Ohio Manufacturers’ Association (OMA) generally opposes changes tied to the CAT, but this proposal does not directly amend that tax. Instead, it raises a broader question about whether Ohio should extend a similar incentive to businesses that are not subject to the CAT, while prohibiting taxpayers from claiming both credits for the same activity.

OMA is reviewing the proposal and seeking member feedback. Members who would like to share their perspective can contact Jacob Sargent, director of public policy services for the OMA. 3/25/2026

A bipartisan bill moving through the Ohio House would clear up a quirky sales tax issue that has frustrated vending and micro-market operators for years. House Bill 762 would confirm that food sold through vending machines and self-service micro markets is treated as off-premises food and exempt from sales tax, bringing more consistency to how the law is applied across Ohio.

Backers say the current standard can hinge on something as arbitrary as whether tables and chairs are nearby, even when the operator has no control over the space.

“House Bill 762 is a commonsense fix that brings clarity and consistency to Ohio tax law,” said Jacob Sargent, director of public policy services for the Ohio Manufacturers’ Association.

The bill would preserve taxes on items already taxable, including soft drinks, sweetened beverages and coffee. 3/25/2026

At its Wednesday hearing, the House Public Insurance and Pensions Committee took up House Bill 376, legislation backed by the Ohio Manufacturers’ Association (OMA) as a needed step to keep Ohio’s unemployment compensation system from sliding toward another solvency crisis.

In written testimony, OMA said the state’s fund remains structurally vulnerable during downturns and warned that without reform, Ohio could again deplete the fund, borrow billions from the federal government and force employers to cover the cost through higher payroll taxes and special assessments.

OMA said the bill’s reduction in maximum benefit duration from 26 weeks to 20 weeks is a reasonable step toward long-term stability, especially at a time of low unemployment and persistent workforce shortages.

“Ohio employers should not be forced to bail out a broken system every time the economy turns,” said Jacob Sargent, director of public policy services for OMA. “House Bill 376 is about solvency, accountability and stopping history from hitting employers twice.” 3/18/2026

Gov. Mike DeWine has signed Ohio’s tax conformity fix, preserving the state’s alignment with federal tax law after lawmakers restored an emergency clause following pressure from an OMA-led employer coalition. OMA and allied groups warned that even temporary nonconformity would create unnecessary compliance costs and confusion during filing season. The final action gives employers needed certainty and keeps Ohio aligned with recent federal tax changes.

“Predictability in the tax code matters, and this fix gives employers the confidence they need to plan, comply and compete,” said Jacob Sargent, director of public policy services for the Ohio Manufacturers’ Association. 3/9/2026

The Ohio House has approved House Bill 332, legislation designed to strengthen Ohio’s defense industrial base by expanding access to reduced-rate financing for smaller defense suppliers.

The measure extends the state’s linked deposit loan program to Ohio companies that hold or have held a defense contract or subcontract and have less than $50 million in annual receipts. The program, administered in partnership with the Ohio Treasurer’s Office, allows eligible businesses to secure lower-interest loans through participating lenders.

Supporters say the change will help smaller manufacturers in the defense supply chain invest in equipment, expand production and compete for federal contracts while strengthening Ohio’s role in national security manufacturing.

The legislation now moves to the Ohio Senate for consideration. 3/4/2026

Ohio manufacturers gathered Thursday for the Ohio Manufacturers’ Association’s (OMA) first Tax and Finance Committee meeting of the year to examine state tax policy, economic trends and emerging fiscal issues shaping the operating environment for manufacturers.

Anna Marin Russell, deputy tax commissioner at the Ohio Department of Taxation, outlined developments in business, excise and energy tax administration, while Ohio House Tax Policy Committee Chairman Bill Roemer provided an overview of upcoming House initiatives and recent property tax reforms. Members also heard economic updates from JobsOhio and policy briefings from the OMA public policy team, including discussion of the proposed ballot initiative to abolish property taxes.

“These meetings work best when manufacturers challenge assumptions and bring real world perspective into the room,” said OMA Director of Public Policy Services Jacob Sargent. “It’s a dialogue, not a lecture, and that exchange helps policymakers understand how tax decisions actually play out on the shop floor.” 2/26/2026

The Ohio Manufacturers’ Association (OMA) organized a coalition of statewide employer groups urging lawmakers to restore tax conformity after Senate Bill 9 initially advanced without an emergency clause. The joint letter warned that even a temporary decoupling from federal tax law would impose avoidable compliance costs, administrative complexity and uncertainty during filing season.

The Ohio House on Wednesday reconsidered its prior action on the emergency clause and approved both the clause and the bill without debate, preserving alignment with federal tax policy. Employer groups emphasized that conformity has long been a bipartisan priority because it provides predictability and simplifies planning, filing and investment decisions.

“OMA brought employers together to make clear that temporary nonconformity would create real costs and confusion,” said Jacob Sargent, OMA director of public policy services. “The House’s decision to reconsider and pass the emergency clause shows policymakers heard that message and acted to preserve tax certainty for Ohio employers.” 2/25/26

Ohio voters could see competing property tax amendments on the November ballot, setting up a consequential debate over how levies are structured and how costs are shared among homeowners and employers across the state. Lawmakers and outside groups are advancing rival proposals, raising questions about long-term tax stability and the potential impact on business investment and local economic growth. Property taxes remain a significant operating cost tied directly to facilities, equipment and long term expansion decisions across Ohio’s manufacturing economy.

“Manufacturers can handle tough policy debates, but constant rule changes create uncertainty that makes it harder to invest, hire and compete in Ohio,” said Jacob Sargent, director of public policy services for the Ohio Manufacturers’ Association. “If constitutional amendments move forward without a clear focus on stability and competitiveness, employers and communities will feel the consequences for years.” 2/16/2026

Rick Kleban testified Wednesday in support of Senate Bill 9, urging lawmakers to align Ohio tax law with recent federal changes affecting research and experimentation expenses. Kleban, founder and president of Sycamore Growth Group, delivered testimony on behalf of the Ohio Manufacturers’ Association (OMA) before the House Ways and Means Committee.

Kleban said conformity with federal tax law provides manufacturers with administrative simplicity, business certainty and greater competitiveness. The bill would allow immediate deduction of domestic research and experimentation costs, reversing federal changes that require many companies to capitalize and amortize those expenses, creating cash-flow challenges.

“Conforming Ohio’s tax code to federal research and development policy gives manufacturers clarity and consistency when they are making long-term investment decisions,” said Jacob Sargent, director of public policy services at the OMA. “Senate Bill 9 helps reduce unnecessary complexity, improves cash flow for innovation and keeps Ohio competitive for high-value manufacturing and R&D jobs.” 2/11/2026

A new memo from the Ohio Office of Budget and Management lays out the sweeping fiscal fallout of a proposed constitutional amendment to abolish property taxes in Ohio, warning of billions of dollars in lost revenue for schools and local governments. The analysis raises sharp questions about how the state would replace funding that supports education, infrastructure and essential public services.

The memo cautions that eliminating property taxes would not make costs disappear, but could instead shift the burden to other taxes or destabilize local budgets, creating uncertainty for employers and communities.

“Property taxes pay for the basics that make communities work and businesses grow,” said Jacob Sargent, director of public policy services at the Ohio Manufacturers’ Association. “Scrapping them without a serious, workable replacement plan risks trading one problem for a much bigger one.” 2/9/2026

U.S. manufacturing activity returned to expansion in January as the Institute for Supply Management’s Purchasing Managers Index (PMI) rose above the 50 mark that separates contraction from growth.

The PMI increased from December’s level, reflecting stronger new orders and higher production after a slowdown late last year. It marked the first expansion reading in several months and suggested factories are seeing steadier demand at the start of 2026.

“An improving PMI signals growing confidence on factory floors,” said Jacob Sargent, director of public policy services at the Ohio Manufacturers’ Association. “Manufacturers respond quickly to changes in demand, and this data points to renewed momentum early in the year.”

Survey respondents said manufacturers boosted orders and rebuilt inventories in part to manage supply risks and cost pressures tied to tariffs and global trade conditions. Economists said the uptick points to improving momentum as companies adjust to shifting market conditions.

While inflation and trade policy remain important factors, the January reading adds to other signs that manufacturing output is stabilizing after a volatile period in 2025. The data suggest producers are entering the new year with firmer footing and a cautiously optimistic outlook for the months ahead. 2/3/2026

Ohio Senate Ways and Means Committee Chair Louis Blessing, R-Colerain Township, told Gongwer that lawmakers are unlikely to pursue major tax policy changes in 2026, pointing instead to a year focused on smaller, procedural measures rather than sweeping reforms. Of the 29 bills before the committee, Blessing said proposals with significant state costs are unlikely to advance, with attention centered on first hearings and limited-impact bills, including measures affecting nonfilers and agricultural land converted to conservation use. He said lawmakers may also revisit a proposal allowing partial property tax deferrals for eligible homeowners, though he noted fatigue after an intense property tax debate in 2025.

While major legislative action appears unlikely this year, attention is already shifting to a potential ballot initiative that would abolish property taxes entirely. A new legal analysis warns that eliminating property taxes would trigger defaults on local government debt, eliminate key economic development tools such as tax increment financing, and put school funding, public safety and infrastructure at risk without a replacement revenue source. 1/27/2026

Proposals to overhaul Ohio’s property tax system are raising alarms among school officials who warn the changes could destabilize local education funding if not paired with a clear, reliable replacement. With more than half of Ohio school funding tied to property taxes, district leaders say sweeping reforms without additional state support could force difficult budget decisions and create uncertainty for communities across the state.

That uncertainty matters for manufacturers, who rely on strong local schools to sustain workforce pipelines and community stability. “Manufacturers need tax reforms that deliver predictability without destabilizing the systems that support workforce development,” said James Lee, managing director of public policy services for the Ohio Manufacturers’ Association. “Strong schools and a competitive tax climate are not competing priorities. Ohio needs solutions that advance both.”

As lawmakers debate tax caps, rollbacks and broader restructuring, manufacturers are watching closely to ensure reforms improve affordability while preserving the foundational services that support long-term investment and economic competitiveness. 1/21/2026

U.S. Small Business Administration (SBA) lending to manufacturers increased 16.7% last year, according to new federal data, a notable jump at a time when higher interest rates and tighter credit conditions have made borrowing more difficult for many businesses.

The growth reflects expanded use of the SBA’s 7(a) and 504 loan programs by small and mid-sized manufacturers to finance equipment purchases, facility improvements and working capital. The data also point to early adoption of newer SBA tools designed to improve access to revolving credit for capital-intensive operations.

Access to predictable financing is especially important for smaller manufacturers in states such as Ohio, where firms often weigh modernization plans against energy costs, permitting timelines and workforce investments. As economic uncertainty persists, reliable capital programs continue to play an important role in supporting manufacturing growth and job creation. 1/22/2026

The Ohio Department of Taxation has issued new guidance for Tax Year 2026 that manufacturers should factor into payroll, compliance and investment planning. Effective Jan. 1, the withholding rate on bonus and supplemental compensation drops to 2.75%, aligning with Ohio’s flat income tax rate and simplifying payroll administration while modestly increasing employee take-home pay. The guidance also confirms a $750 monthly cap on the vendor timely filing discount, a change that will affect manufacturers with high-volume sales tax filings. Updated school district income tax rates will require payroll adjustments, and newly effective capital gains deductions for business and venture sales could influence long-term investment and succession planning. Manufacturers should review systems now to ensure accurate implementation and identify opportunities to improve cash flow. 1/14/2026

A recent change by the U.S. Postal Service (USPS) could create new risks for manufacturers that rely on mailed tax filings, payments or regulatory documents. Under a USPS rule that took effect Dec. 24, 2025, most machine-applied postmarks now reflect the date mail is processed at a postal facility, not when it is dropped off. As a result, documents mailed before a deadline could receive a later postmark and be considered late. Manufacturers with time-sensitive tax, payroll or compliance filings should review mailing practices, consider requesting manual postmarks, using certified mail or shifting to electronic filing where available. 1/7/2026

Ohio manufacturers and other employers could see significant property tax relief under a package of reforms approved this year by state lawmakers, Ohio House Speaker Matt Huffman, R-Lima, wrote in a guest column published in The Columbus Dispatch. The legislation is designed to slow rapid tax growth by capping annual increases at the rate of inflation and allowing local governments to roll back previously approved levies. Huffman said the changes are expected to save Ohio taxpayers more than $2 billion over the next three years. For manufacturers, the reforms could bring greater predictability for long-term investments in facilities, equipment and workforce expansion. Huffman also pointed to Ohio’s complex network of local taxing authorities as a driver of rising and unpredictable tax burdens, arguing the measures add discipline and accountability while maintaining funding for schools and local services. The legislation now awaits action by Gov. Mike DeWine. 12/15/2025

The U.S. House has unanimously approved the Made in America Manufacturing Finance Act, which would raise the Small Business Administration’s (SBA) loan cap for manufacturers operating entirely in the United States from $5 million to $10 million.

The measure, aimed at expanding access to capital for machinery purchases, facility upgrades and production scaling, now heads to the Senate. It aligns with the SBA’s broader push to bolster domestic manufacturing through reduced fees, onshoring support and industry-specific financing programs.

Lawmakers also advanced several related small-business bills, including proposals to boost investment in manufacturing, strengthen rural support and improve SBA cybersecurity and oversight. 12/11/2025

Ohio leaders are exploring a proposal to pay cities, villages and townships that voluntarily merge, aiming to streamline local government, reduce overhead and modernize long-standing taxing boundaries. The Ohio Manufacturers’ Association (OMA) supports the concept of consolidating taxing districts, noting that fewer overlapping jurisdictions can improve efficiency and create a more predictable environment for manufacturers.

The plan also includes a cash-payment mandate tied to mergers. Manufacturers that operate retail locations should pay close attention, since the structure of these payments could influence local tax administration and compliance requirements.

If your company could be affected or you want to engage on this issue, contact James Lee, OMA managing director of public policy services, to share your interest and perspective. 12/1/2025