OMA Provides Insight to 2020 Tax Policy Study Commission


The General Assembly’s 2020 Tax Study Policy Commission held a hearing this week focused on tax expenditures.  Tax expenditures are revenues that the state forgoes due to tax exclusions, credits and deductions. OMA tax counsel, Mark Engel of Bricker & Eckler, provided a historic review of Ohio business tax policy and OMA’s perspective on tax expenditures. In his testimony Mr. Engel explained how tax carve outs and credits taken against the commercial activity tax (CAT) have more than doubled from $300 million to more than $600 million since the CAT’s enactment in 2005.  He said, “The erosion of the tax reform legislation, in the form of carve-outs, exclusions, and ear-marks, reduces certainty, creates disparity by selecting winners and losers, renders the tax code more complicated, and reduces transparency as it becomes more difficult to determine who is entitled to which exclusions.” His testimony also supported the tax policy and principles of the manufacturing exemption to the sales and use tax:  “The taxation of business inputs should be avoided because doing so leads to multiple levels of taxation and economic disadvantages.”  You can read all of Mr. Engel’s testimony here.