Tax and Finance Management

Nov. 12 Webinar to Focus on Year-End Tax Planning

The end of the year is approaching — it’s time to take stock of the current tax year and begin planning for the future. On Nov. 12 at 12 p.m. (EST), OMA Connections Partner Clark Schaefer Hackett will offer a one-hour webinar to discuss year-end tax planning for businesses, as well as strategies for 2020 and beyond. 10/31/2019

Sales Tax Exemption for All Food Manufacturers Now in Effect

Good news for all food manufacturers! During last summer’s debate on the state budget (House Bill 166), the OMA led tax changes for food manufacturers as lawmakers approved an expanded sales-and-use tax exemption for equipment and supplies used to clean equipment that produces or processes food for human consumption. (Previously, the exemption applied only to dairy food processors. Now it applies to all Ohio food manufacturers.)

The expanded exemption went into effect Oct. 1, 2019. Make sure you are tracking the necessary information. 10/23/2019

Tax Foundation: Ohio is a Top 10 State for Business Property Taxes, Unemployment Insurance

The Washington, D.C.-based Tax Foundation has released its 2020 State Business Tax Climate Index, with the Buckeye State in the study’s top 10 for business property taxes (No. 9) and unemployment insurance taxes (No. 7).

Overall, the index ranked Ohio 38^th out of 50 — due in large part to the foundation’s philosophical opposition to the state’s Commercial Activity Tax (CAT). As reported earlier, the foundation has criticized the CAT even as analysis from other organizations indicates that Ohio is one of the top states in which to do business.

Ohio’s broad-based 0.26% flat CAT on business gross receipts in excess of $1 million was created by a 2005 law with strong support from the OMA. Prior to its enactment, Ohio was at a major disadvantage in attracting new manufacturing due to the machinery and inventory tax. 10/22/2019

State Government Ends Q1 with $71M Surplus

In its September report, the Ohio Office of Budget and Management said state revenue for the first quarter of the fiscal year mostly tracked agency estimates, ending Q1 with a $71 million surplus. However, September spending from the general revenue fund (GRF) exceeded estimates by about 1% due in large part to property tax reimbursements.

Personal income tax receipts for September totaled $930.9 million, which was $33.1 million (3.7%) above estimates. September non-auto sales and use tax collections were $729.0 million, which was $6.9 million (0.9%) below the forecast. Year-to-date, non-auto sales tax revenue has exceeded estimates by $12.1 million (0.5%). 10/11/2019

Oct. 23 Webinar Will Explore State, Local Tax Changes

On Wednesday, Oct. 23, OMA Connections Partner RSM will host a complimentary webinar to highlight the major state and local tax changes stemming from this year’s legislative sessions held across the U.S. Several issues impacting manufacturers will be covered, including the continued implications from the U.S. Supreme Court’s Wayfair decision. RSM’s state and local tax professionals will help you assess the key issues and the impact on your business. 10/15/2019

Four Ways to Reduce the Unemployment Tax Burden

The Federal Unemployment Tax (FUTA) is not only a financial burden for employers, it can also be difficult to understand. OMA Connections Partner Clark Schaefer Hackett has published this handy guide to better understand the FUTA tax, as well as help control your unemployment tax costs. 10/10/2019

Bill Advanced to Restore Business Income Tax Deduction for Legal Professionals

In a surprise reversal, the Ohio House this week amended and approved an unrelated tax bill (Senate Bill 26) to undo an inequity in Ohio’s tax code by restoring the business income tax deduction for lawyers and lobbyists. The amended bill passed on a 91-0 vote.

Last spring, the House-passed budget bill included a provision that would have raised business taxes by reducing the deduction for all pass-through entities from $250,000 to $100,000. The OMA lobbied successfully to maintain the current deduction for manufacturers. However, the final budget completely excluded lawyers and lobbyists from the deduction. The Ohio Senate must approve SB 26 before it can take effect. 10/10/2019

Time to Think About 2019 Tax Planning

Just like that, Q4 is here. OMA Connections Partner Clark Schaefer Hackett reports that now is the time to think about 2019 tax planning — before you find yourself in a year-end scramble. Key areas of focus include: Section 199A business income deduction for pass-through businesses; Section 163(j) limits on interest deductions; and Section 179 depreciation incentives for qualifying property. Learn more here. 10/1/2019

A Visual Guide to Cost Segregation

If your manufacturing company is planning to build, purchase, or renovate a building — or has done so in the past several years — a cost segregation study is a powerful tool that may help boost your cash flow, reduce your tax burden, and save your company significant money. A new infographic by OMA Connections Partner Clark Schaefer Hackett sheds light on cost segregation and whether it can benefit your manufacturing business. 9/18/2019

Summary: Key Changes in Ohio’s Income Tax for 2019

OMA Connections Partner Roetzel & Andress has summarized changes made to Ohio’s income tax system for tax year 2019. Key changes include:

• The top personal income tax rate is now 4.797%, down from 4.997% previously.
• There is a newly enacted non-refundable credit for investing in Ohio Opportunity Zones. To claim it, you must complete an approved application and obtain credit certificate.
• For business income deductions, Ohio now uses the concept of “modified adjusted gross income” (which is the Ohio adjusted gross income, plus the business income deduction claimed on your Ohio income tax return). If you do not claim the business income deduction, the Ohio modified AGI change will not impact your Ohio income tax.

See the full summary here. 9/9/2019