Tax and Finance

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

Ohio lawmakers approved a package of bills aimed at easing rising property taxes by expanding homeowner credits and capping future tax increases. The legislation boosts the rollback for owner-occupied homes, phases out the nonbusiness credit that also benefits rental properties, and ties major drivers of tax growth, such as inside millage and school district levies at the 20-mill floor, to inflation.

Lawmakers also granted county budget commissions limited authority to reduce excess levies and broadened the calculation of the 20-mill floor to slow revenue growth and temper tax spikes. Altogether, the changes are projected to deliver more than $2 billion in homeowner relief while shifting some costs to the state and limiting local revenue growth. Lawmakers say the relief could also reduce pressure for a 2026 ballot initiative that would eliminate income taxes and leave schools and local governments without funding. 11/20/2025

Under growing public pressure, the Ohio House this fall approved five property tax reform bills, including House Bills 186 and 335, that together could save taxpayers more than $2.4 billion. The package targets flaws in the decades-old House Bill 920, which was meant to limit local revenue growth but has failed to stop steep valuation spikes.

The Ohio Senate is now weighing the measures, with President Rob McColley, R-Napoleon, saying he expects passage “before we’re done this month.” One proposal would give county auditors greater control over triennial updates, while another seeks a constitutional amendment to move toward land value taxation.

The Ohio Manufacturers’ Association continues to monitor the reforms and assess their potential impact on manufacturers and local tax policy. 10/13/2025

Ohio lawmakers advanced two property tax measures that would deliver $2.4 billion in relief over three years by capping annual increases at inflation. House Speaker Matt Huffman, R-Lima, called the package “significant,” projecting a 10% overall reduction for property owners.

Citizens for Property Tax Reform, which is collecting signatures for a 2026 constitutional amendment to eliminate property taxes, dismissed the bills as a “stopgap” that ignores valuation spikes of 50% or more in some counties.

In the Senate, a proposal to cover up to 50% of taxes for seniors 65 and older faces steep fiscal hurdles. Leaders warn abolishing property taxes would gut $23.9 billion in annual local revenue.

The Ohio Manufacturers’ Association is tracking all proposals and will update members as legislation and ballot initiatives progress. 11/4/25

CliftonLarsonAllen outlines five steps manufacturers can take to make audits more efficient — and more valuable. The firm advises keeping financials organized, reconciling accounts early, and tightening internal controls around inventory and asset management. Using Enterprise Resource Planning or cloud-based tools can simplify document sharing and reduce audit stress. Just as importantly, proactive communication with auditors can reveal opportunities for process and performance improvements. With the right preparation, manufacturers can transform audits from a compliance obligation into a strategic advantage. Read more here. 10/29/25

The Ohio House on Wednesday overwhelmingly approved two property tax reform bills aimed at curbing rising property taxes and providing relief to homeowners. House Bill 186 caps “outside millage” taxes, which require voter approval, at the rate of inflation, while House Bill 335 applies similar limits to “inside millage” taxes that do not need voter consent. Together, the measures are projected to save Ohio taxpayers more than $2.4 billion — about 10% of the state’s total property tax revenue.

To address concerns from school districts, the legislation establishes a $360 million fund to offset potential revenue losses and ensure schools remain adequately supported. The reforms also give counties the power to reduce inside millage and replace it with local sales or income taxes, with safeguards to prevent reverting to higher property tax rates. 10/23/25

CliftonLarsonAllen recently shared exciting news for manufacturers: the newly enacted One Big Beautiful Bill Act introduces a transformative tax incentive — the Qualified Production Property deduction — offering significant opportunities for immediate savings on manufacturing-related property investments. This provision allows manufacturers to fully deduct the cost of eligible real property — such as structural components, HVAC systems and lighting — used directly in production facilities, bypassing decades-long depreciation schedules. To take advantage, projects must start after Jan. 19, 2025, and be operational before Jan. 1, 2031.

Only property directly supporting manufacturing — such as production-area equipment and systems — qualifies, while offices and warehouses are excluded. Conducting a cost-segregation study can help identify eligible components and maximize your available tax deductions.

Don’t miss out on this opportunity to boost your bottom line. Consult your tax advisor today to plan new construction or facility upgrades and unlock the full potential of this tax break. 10/20/2025