Out with the Old, in with the New
Posted July 10, 2005 in Press Releases
Tax change expected to aid manufacturers
by Jeffrey Sheban
Who benefits from the most sweeping business-tax changes in Ohio in 40 years?
One likely winner is the state’s beleaguered manufacturing sector, which has shed 200,000 jobs in the past five years, leaving 800,000.
"I don’t think it’s a secret that manufacturing and the great jobs that go with it are leaving Ohio to go to Mexico and China and places like them," said Mark A. Engel, a partner at Columbus law firm Bricker & Eckler.
"This is part of the Taft administration’s effort to stop the jobs drain."
Picking winners and losers under the new plan, enacted this month as part of the latest two-year budget, is difficult. Results will vary based on each company’s circumstances.
In general, supporters said the revisions are long overdue, bringing Ohio tax rates in line with other states and simplifying a system that had grown complicated, inefficient and riddled with loopholes.
The biggest change is the elimination of two business taxes and the creation of a new one.
The tangible-personal-property tax and corporation-franchise tax are being phased out by 2009 and 2010, respectively.
The personal-property tax is levied on the value of equipment, machinery, inventory, furniture and fixtures. As such, it hits manufacturers, construction companies and warehouse operators hard.
The corporation-franchise tax is based on a company’s Ohio profits or the value of its business, whichever is higher. Many large companies dodge this tax through accounting