News and Analysis
Today is the deadline for Ohio House members to submit their amendment priorities to leadership for the state budget. One of the amendments the OMA was able to secure for submission is the elimination of sales tax on temporary manufacturing employees.
This has been a long-time pain for Ohio’s manufacturers. Effective January 1993, in order to fill a hole in the state budget, employment services were added as a taxable service by a legislative conference committee facing a midnight deadline to reach agreement on a new budget. Since then Ohio has been one of the minority of states to burden employers with this additional tax.
OMA continues to seek a solution for manufacturers through the manufacturing sales and use tax exemption, which should include temporary labor. To learn more about this issue and how you can be involved, contact OMA’s Rob Brundrett. 4/11/2018
This week Ohio Department of Tax Commissioner Jeff McClain provided budget testimony on behalf of his department. Unlike the past several state budgets, House Bill 166 does not include a substantive shift in Ohio’s taxing schemes, much to the relief of manufacturers.
Commissioner McClain will be visiting with the OMA Tax Committee next Tuesday, April 9, at the OMA offices. Members will be discussing the budget in detail and also visiting with House Finance Committee Vice Chairman Gary Scherer (R-Circleville). Register today! 4/4/2019
From OMA Connections Partner Clark Schaefer Hackett: “A surprising number of Ohio taxpayers are missing a golden opportunity to reduce their tax liability using a relatively straightforward deduction.
“The Ohio Business Income Deduction allows taxpayers to deduct from their federal adjusted gross income the first $250,000 of business income earned by single taxpayers or married taxpayers who file jointly. For married taxpayers who file separately, the deduction applies to the first $125,000 of business income.”
Read more about this opportunity. 4/1/2019
From OMA Connections Partner: “The RSM US Middle Market Business Index tumbled in the first quarter to 124.1 from 132. The decline in both current conditions and the expected outlook for the economy and capital expenditures should be interpreted by policymakers as a signal that the “uncertainty tax” generated by the direction of U.S. trade policy and recent volatility in financial markets has spilled over into the real economy.
“While we are not suggesting that an end to the current business cycle—which is approaching the longest-running economic expansion in post-World War II U.S. history—is imminent, but the probability of one has increased due to the uncertainty that lingers in the economy.
“Despite the souring economic outlook and modest deterioration in revenues and profits during the current quarter, middle market businesses expect improvement in the next six months with 62 percent expecting revenues to increase and 60 percent anticipating a rise in net earnings.”
Read more and download the report here. 4/1/2019
From OMA Connections Partner, GBQ Partners: “Shakespeare’s words don’t apply just to Julius Caesar; they also apply to calendar-year partnerships, S corporations and limited liability companies (LLCs) treated as partnerships or S corporations for tax purposes. Why? The Ides of March, more commonly known as March 15, is the federal income tax filing deadline for these “pass-through” entities.”
Read more from GBQ. 3/5/2019
From OMA Connections Partner GBQ: “While we all have been distracted discussing the implementation of the new accounting standards for leases and revenue recognition, there is another Accounting Standards Update (ASU) sneaking in that is effective for fiscal years beginning after December 15, 2018. The update impacts private companies including not-for-profits and employee benefit plans that hold financial assets or owe financial liabilities.”
Read more from GBQ here. 2/20/2019
From OMA Connections Partner Clark Schaefer Hackett: “In February 2016, the Financial Accounting Standards Board (FASB) issued new lease accounting standards. These standards change the way leased real estate and equipment are reported by both public and private companies.
“It’s estimated that the total impact of this change will result in more than $2 trillion of operating lease commitments reflected as a liability on corporate balance sheets.”
Learn more here. 2/12/2019
Here is a recent one-hour recorded webinar from OMA Connections Partner RSM that explains the potential tax challenges and opportunities in 2019, articulates key tax and business issues facing businesses today, and discusses the latest updates to federal, state and local tax. 2/4/2019
This week the 10th District Court of Appeals ruled 2-1 that the municipal tax reform provisions of House Bill 49 and House Bill 5 are constitutional. The provisions had been challenged by more than 100 municipalities.
The legislation streamlined municipal income tax reporting and collections for businesses across the state. The OMA participated in a coalition that supported the changes.
It has yet to be determined if the municipalities will appeal the ruling to the Supreme Court of Ohio. 1/31/2019
From OMA Connections Partner Clark Schaefer Hackett: “When President Trump signed into law the Tax Cuts and Jobs Act (TCJA) in December 2017, much was made of the dramatic cut in corporate tax rates. But the TCJA also includes a generous deduction for smaller businesses that operate as pass-through entities, with income that is “passed-through” to owners and taxed as individual income.
“The IRS issued proposed regulations for the qualified business income (QBI), or Section 199A, deduction in August 2018. Now, it has released final regulations and additional guidance, just before the first tax season in which taxpayers can claim the deduction. Among other things, the guidance provides clarity on who qualifies for the QBI deduction and how to calculate the deduction amount.”
Read more here. 1/30/2019