Tax and Finance

More changes are coming to the Fair Labor Standards Act (FLSA) overtime regulations. Effective July 1, 2024, the U.S. Department of Labor has increased the minimum salary threshold for executive, administrative, and professional (EAP) employees to $844 per week.

Further changes are set for Jan. 1, 2025, which will impact how employers manage payroll and compliance. OMA Connections Partner CliftonLarsonAllen has prepared a guide for how employers can continue to prepare for the new changes, including adjustments to payroll systems, and communicate changes to their employees to ensure compliance and minimize disruptions. 10/15/2024

The OMA’s Tax and Finance Committee met this week in Columbus. Discussion included a comparison of the Trump and Harris tax plans, OMA tax priorities for next year’s budget, and the potential elimination of the Commercial Activities Tax.

Guests included Commissioner Patricia Harris from the Ohio Department of Taxation, who outlined the department’s priorities and initiatives heading into the next year. State Senator George Lang (R-West Chester), Chair of the Business First Caucus also joined the committee and detailed his plan to make Ohio the most business-friendly state in the nation. 10/9/2024

Presidential candidates Kamala Harris and Donald Trump this week outlined their plans for the U.S. manufacturing industry, featuring expanded R&D credits, tax credits, and a “manufacturing ambassador.”

The current Vice President’s 82-page policy blueprint includes tax incentives for domestic manufacturing, workforce development initiatives, and support for industries that prioritize environmental responsibility.

Trump’s manufacturing strategy, announced at his rally in Georgia, included a first-year tax write-off for all R&D expenses, allowing businesses to “write off 100% of the cost of heavy machinery and other equipment in the first year.” The former president also proposed creating a “manufacturing ambassador” to streamline initiatives and enhance American competitiveness in global markets. 9/26/2024

After months of declining tax revenues, the Ohio Office of Budget and Management reports that revenues are expected to continue to trend downwards through Fiscal Year 2025 and that “slower economic growth in the second half of the year” can be expected.

This report comes as state agencies are preparing their initial operating budget requests ahead of the state budget that will be completed by June of 2025. Lawmakers and budget officials have previously reported that the next state budget will be “a little tighter.” 9/4/2024

Site Selection Magazine this week ranked Ohio first of all states in its “Global Groundwork Index” based on an analysis of job creation, capital spending, and infrastructure development from 2020 through July 2024.

Public officials say the state’s private and public development teams generated more than 94,310 new job commitments and $65.2 billion in capital investments based on JobsOhio data from 2020 through 2024. 9/4/2024

A request by the Office of Budget & Management and the Department of Commerce to extend the franchise transfer agreement with JobsOhio has been delayed by the state Controlling Board.

The Ohio Controlling Board is a panel made up of mostly state legislators who make state spending adjustments.

The OMA has partnered with JobsOhio, its network partners, and other organizations committed to economic development to advocate for Ohio’s unique private-sector model and the results it is producing for our state. 8/26/2024

The National Association of Manufacturers (NAM) last week outlined several key tax provisions that Congress should prioritize once back in session.

These provisions include interest deductibility, the research-and-development tax deduction, and preserving the 21% corporate tax rate. These priorities can be found on NAM’s Manufacturing Wins webpage. 8/13/2024

Ohio’s 2025 fiscal year is off to a “modest start”, according to Office of Budget Management (OBM) Director Kim Murnieks, with a “solid start” in tax receipts.

The monthly financial report for July 2024 notes a slight decline in economic activity in recent weeks but projects a solid outlook for Ohio’s future. 8/13/2024

Last week, two bipartisan lawmakers at the Ohio Statehouse introduced a bill that would offer a tax credit for homeowners and renters whose property taxes or rent exceed a certain threshold in relation to income.

House Bill 435 is targeted at helping lower-income renters and owners, offering a $1,000 credit for households with resources of $60,000 or less. This then steps down $200 for every additional $10,000 a household makes and phases out at $100,000 of household income. 7/29/2024

This week, Governor Mike DeWine announced the first location for future economic development with support from the new All Ohio Future Fund.

The 1,000 acre site in Defiance County will be the location that receives more than $14.6 million to install critical infrastructure at the Baltimore Avenue Industrial Corridor in Defiance, with the goal of attracting major corporations that are looking for project-ready property.

The All Ohio Future Fund, which was a key priority for the OMA in the state budget, was first announced at DeWine’s 2023 State of the State Address, is designed to ensure that every region of the state prospers from Ohio’s current economic revival. 7/29/2024

Ohio recently ranked seventh in CNBC’s ‘Top States for Business’ report, beating out states like Michigan, Tennessee, Indiana, and Illinois.

The Buckeye State jumped five spots from the 2023 rankings, due in part to strong economic momentum and large strategic investments in innovation, infrastructure, and workforce development.

Based on an evaluation of ten categories, Ohio notably showed strength in infrastructure (#13), cost of doing business (#2), cost of living (#4), and jumped nearly half of all states in business friendliness from #40 to #24. 7/25/2024

Although state officials say the state is in a “solid” financial position despite state tax revenues coming in $485 million less than expected in FY24, lawmakers and budget officials tell Cleveland.com that the next state budget will be “a little tighter.”

Budget Director Kim Murnieks told the newspaper that she expects a return to a “normal budget” after the spending and revenue impacts of the COVID-19 pandemic have “run their course.” 7/15/2024

State lawmakers this week in Columbus passed a $6.2 billion spending package in the final session before summer recess, the largest Capital Budget in state history, Gongwer reports.

The package contains $3.5 billion in new capital appropriations, $700 million in one-time funding for a variety of local initiatives, $150 million for community projects, and more than $2 billion in reappropriations to continue previously authorized project spending.

Among the OMA supported projects that received funding was the Butler County Advanced Manufacturing Hub, a collaboration between Miami University, Butler Tech, the Butler County Board of Commissioners, and the City of Hamilton. 6/27/2024

In spite of the deadlock at the Ohio Statehouse, lawmakers continue to advance Ohio’s 2025-2026 Capital Budget with plans to approve the measure next week. The capital budget, known as House Bill 629 and Senate Bill 292, appropriates $4 billion in bond funds to construct improvements at public institutions including universities, hospitals, parks and community projects. The legislation funds hundreds of projects statewide and county-by-county.

The Ohio House and Senate are simultaneously advancing a one-time spending package known at Senate Bill 288 to fund $700 million in community projects. 6/18/2024

The Ohio Senate this week released a blueprint for $700 million in one-time fund distribution to be released alongside the capital appropriations bill later this month, Gongwer reports. The release also included a county-by-county breakdown of the projects. The funds are a combination of the House and Senate proposals for $350 million each from the One-Time Strategic Community Investment Fund, comprised entirely of surplus state money. 6/10/2024

The Ohio Department of Job and Family Services (ODJFS) announced last week that employers can receive federal tax credits for hiring individuals from certain designated groups. Credits of up to $9,600 are available for employers who hire employees who are restored citizens, public assistance recipients, individuals with disabilities and others who may face barriers to employment. Applications can be submitted on the Work Opportunity Tax Credit (WOTC) page on the ODJFS webpage. 5/30/2024

Ohio’s Capital Budget is on track for enactment in late June, according to leadership in both chambers, Gongwer reports. Senate President Matt Huffman (R-Lima) and Finance Chair Sen. Matt Dolan (R-Chagrin Falls) said they plan to bring the Senate’s proposal to the floor for a vote June 26, following a months-long review of 4,400 requests. House Speaker Jason Stephens (R-Kitts Hill) indicated his desire for the chambers to come to a consensus before summer recess. The biennial bill, designed to support local community projects and infrastructure, will contain funding for bond-backed projects, including agency requests, capital reappropriations, $700 million from the One-Time Strategic Community Investment Fund, and at least another $150 million for community projects. 5/25/2024

The Ohio Department of Taxation (DOT) is seeking $25.77 million in funding from this year’s Capital Budget to continue rollout of its new tax collection system. According to the Department, the system, which went live in Sept. 2023, still needs ample work and funding to ensure the rollout is seamless. The request also included $21.4 million for FY27-28 and $675,000 for FY29-30. The tax system is estimated to be completed by Nov. 30, 2027. 5/20/2024

The Biden Administration announced this week tax policy guidance to help increase demand for US-made solar equipment. The measures include an end to the exemption of two-sided solar panels from the Sec. 201 14.25% tariff. The announcement comes after a sweeping range of tariff increases on China, which exports a substantial amount of solar technology worldwide. 5/16/2024

On January 1, 2025, many of the tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017 will disappear. While the TCJA made some permanent tax cuts, a number of previous tax cuts and deduction limitations will return to their prior levels. OMA Connections Partner Roetzel and Andrews breaks down how you can begin to prepare now for these changes. 5/6/2024