House Hears Testimony on (Another) CAT Carve Out


This week the House Ways and Means Committee heard proponent testimony on House Bill 491.  The bill establishes a five-year pilot program whereby taxpayers with Ohio facilities in an active foreign trade zone (FTZ) may claim a nonrefundable commercial activity tax (CAT) credit equal to the amount invested by the taxpayer in job creation and a number of other specified activities.  Two consultants providing proponent testimony for the bill were questioned heavily by skeptical lawmakers. The Legislative Service Commission fiscal analysis which is used to determine the cost impact of such legislation wrote, “Though the revenue reduction is undetermined, it could be sizable depending on the level of qualifying expenditures incurred by firms in the FTZs and their current CAT payments, none of which can be ascertained by LSC.” Legislators questioned whether it was a good idea to pass legislation when the cost impact is not able to be estimated.