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Senate Committee Bill Would Cap Commercial Activity Tax, Positioning it for Inevitable Decline

May 31, 2005

Senate Committee Bill Would Cap Commercial Activity Tax, Positioning it for Inevitable Decline

May 31, 2005

Ohio s proposed Commercial Activity Tax (CAT) on businesses, which in its House version already did not raise as much revenue as the taxes it is to replace, has been further weakened in the bill now pending before the Senate Finance Committee. This version of the bill permanently caps total revenue collected at a predetermined level after fiscal year 2010, so that it inevitably would decline in relation to the economy and as a share of state revenue. The Senate committee also added more credits and exemptions. These two sources of erosion will undercut CAT revenues significantly and belie the claim that it is a broad tax relatively free of special-interest provisions.

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2005Tax ExpendituresTax PolicyZach Schiller

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