Policy Matters calls on Ohio to trim, tighten or trash costly tax breaks
Posted March 27, 2019 in Press Releases
In just a few weeks most Ohioans will have filed their taxes. Few of them, however, will be able to avoid paying sales tax for a timeshare on a private jet. That’s just one of the unnecessary and unproductive state tax breaks Policy Matters Ohio says should be reined in or repealed.
The state of Ohio relinquishes $9.1 billion in revenue to 134 tax breaks. Some – like the sales tax break for prescription drugs – help many Ohioans. However, many of the state’s tax breaks benefit private companies, siphoning resources that could fund public schools, child care or treatment for people struggling with addiction.
Between 2012 and 2021, the value of state revenue forgone to tax breaks will grow by an estimated 17.7 percent, adjusted for inflation. Meanwhile, state spending on education, local governments and many human services has fallen. Today Ohio ranks near the bottom of states on key measures of quality of life like health of the population, investment in early education and affordability of college.
“Governor DeWine’s budget has some encouraging plans, especially when it comes to investing in Ohio’s children,” said Policy Matters Senior Project Director Wendy Patton. “Closing some of these loopholes could help raise the revenue we need to do that.”
Policy Matters’ recommendations include:
- Tightening and trimming the vendor discount which costs the state $58.7 million a year and mostly benefits large retailers by giving them a tax break for collecting sales tax.
- Reining in the tax break for drug distributors that costs Ohio $169 million a year and gives qualified distribution centers a break on their Commercial Activity Taxes when they ship products out of state.
- Repealing a $13.8 million a year sales tax break for people who buy timeshares in jet planes that helps wealthy buyers.
- Eliminating a tax break for investing in precious metals and coins that costs $5 million a year and was championed by a lawmaker who directly benefitted from it.
“The tax breaks we’ve identified are not only draining Ohio’s coffers, but do very little for the larger public good,” Patton said. “As lawmakers look for ways to fund their priorities, these tax breaks offer low-hanging fruit.”