Tax and Finance Management

Don’t Forget to Pay PCORI Fees

Employers that sponsor certain self-insured health plans, including some health reimbursement arrangements (HRAs) and health flexible spending arrangements (health FSAs), are reminded that they are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees.

Fees for self-insured plans with plan years that ended in 2017 are due July 31, and are required to be paid via IRS Form 720.

Employer-sponsored self-insured plans with plan years that ended between January 1, 2017 and September 30, 2017 must pay a fee of $2.26 multiplied by the average number of lives covered under the plan. Employer-sponsored self-insured plans with plan years that ended between October 1, 2017 and December 31, 2017 must pay a fee of $2.39 multiplied by the average number of lives covered under the plan.

Questions about this may be directed to OMA’s employee health plan partner, One Source Advisors. 7/4/2018

First Hearing for “MegaJobs” Bill

This week Senators Bob Peterson (R-Washington Court House) and Stephanie Kunze (R-Hilliard) gave sponsor testimony on Senate Bill 309 in the Senate Ways and Means Committee. The bill is designed to lure large business projects such as Foxconn or Amazon H2Q to Ohio.

The bill authorizes several special tax incentives for operators and certain suppliers of a “megaproject.” The bill does four things for these “megaprojects”:

1. It increases the number of years an operator or supplier can receive the Job Creation Tax Credit (JCTC);
2. It allows a supplier’s JCTC to be allocated to the megaproject’s operator;
3. Offers a CAT exclusion for a supplier to a megaproject; and
4. Authorizes local governments to grant a 30-year commercial reinvestment area or enterprise zone property tax exemption.

The bill does not take into consideration Ohio companies that have been operating and steadily growing their presence in both capital and jobs over the years. This bill is designed solely to lure “megaprojects.” 6/28/2018

Webcast: What Does the Wayfair Decision Mean to You?

On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, Inc., the highly anticipated challenge to the sales tax physical presence standard adopted through Quill v. North Dakota in 1992. The court overruled the Quill physical presence standard, thereby allowing states to impose economic sales tax nexus standards on remote sellers.

OMA Connections Partner RSM has planned a 60-minute webcast on Tuesday, July 17, at 1 p.m. EDT to take an in-depth look at this decision and how it will affect remote sellers. The webcast will cover:

• A comprehensive overview of the case and what the decision means
• What effect will the verdict have on middle market companies?
• What should you do in light of the decision?

Register here. 6/28/2018

Landmark Decision Overturns 51-Year Physical Presence Standard for State Sales Tax Collection

The U.S. Supreme Court this week ruled in South Dakota v. Wayfair that states can require out-of-state online sellers to collect sales taxes, overturning precedent that held otherwise.

Brick and mortar retailers have sought for years to even the playing field with online merchants. The ramifications of the decision are far reaching. The decision should be mostly good for state governments also which have been shortchanged by online commerce transactions.

The controversial decision is still being reviewed but here is an initial summary by OMA tax counsel, Justin Cook, of Bricker & Eckler. And here’s more analysis about the case from OMA Connections Partner, Schneider Downs.6/21/2018

Join the OMA Tax Committee Meeting Next Week

At its meeting next Wednesday, June 20, the OMA Tax Committee has these highlights on its agenda:

• A presentation from OMA Connections Partner, RSM, on federal tax reform & state conformity and the Wayfair online sales tax case; the impact of both these issues on Ohio’s manufacturers will be discussed.
• Ohio Department of Taxation will share its updated draft manufacturing sales and use tax exemption rule.
• Committee members will discuss and evaluate tax legislation pending at the Ohio General Assembly.

The meeting runs from 10:00 a.m. until 1:00 p.m. at the OMA offices. A nice lunch will be provided by OMA. A call-in option is available. If you haven’t already, please register here or call (800) 662-4463. 6/14/2018

Senate Votes to Make JobsOhio More Transparent

As session days run out, the Senate amended an unrelated bill to require greater transparency and accountability of JobsOhio, Governor Kasich’s privatized economic development agency. The amendment supported by Auditor of State Dave Yost requires performance audits of JobsOhio every four years.

“JobsOhio is a quasi-public agency that exists to serve a public purpose for Ohioans,” Auditor Yost said in a press statement. “The people of Ohio deserve a seat at the table. This amendment ensures that any performance audit of JobsOhio is completely independent.”

The amendment later won unanimous bi-partisan support by the full Senate even though JobsOhio officials oppose the legislative mandate. Both Republican and Democrat gubernatorial candidates have called for improved transparency. 6/7/2018

Update on Uncertainties in New Tax Law

From OMA Connections Partner RSM: “Many taxpayers and their advisors are frustrated by the uncertainties created by a number of new provisions of the Tax Cuts and Jobs Act of 2017. Some uncertainties are unavoidable – such as whether the new 20 percent pass-through deduction and other individual provisions will be made permanent, or whether the 21 percent corporate tax rate, theoretically ‘permanent,’ will be increased by a later Congress.

“Other issues arise from the novelty of many of the new provisions, the existence of apparent gaps or possible errors in the expedited drafting process, and questions as to whether those gaps can or will be filled by technical corrections legislation, regulations or other IRS guidance. Alternatively, taxpayers and their advisors will simply have to deal with the statutory language as is, and make their best determination as to what Congress intended in any particular case.”

Read more. 6/4/2018

Tax Implications of Foreign-Derived Intangible Income

Multinational automakers and suppliers may be able to reduce their tax rate by capitalizing on their foreign-derived income. Read a post from OMA Connections Partner, RSM. 6/4/2018

Complying with the EU General Data Protection Regulation

Here’s an infographic from OMA Connections Partner, RSM, representing seven misconceptions about the General Data Protection Regulation (GDPR), a regulation in European Union (EU) law on data protection and privacy for all individuals within the EU.

Companies that don’t think they have EU data sometimes do. Read more here. 5/24/2018

The Facts about ESOPs

From OMA Connections Partner, GBQ Partners: “A large number of privately-held U.S. companies are owned by members of the “baby boomer” generation, and with these owners approaching retirement age, many are considering an Employee Stock Ownership Plan (“ESOP”) as a way to easily liquidate their ownership while receiving “fair market value.” An ESOP is a qualified retirement plan, similar to a 401(k), which allows the employees of a company to become owners of the stock of their employer.”

See some facts gathered by GBQ about U.S. ESOP companies. 5/15/2018