Manufacturers look to benefit from state tax change (CAT)

[buildingcincinnati]

From the Dayton Business Journal, 9/5/05:


Manufacturers look to benefit from tax change
Springfield company could save $150,000 per year
Tracy Kershaw-Staley
DBJ Staff Reporter

The changes to Ohio's tax code have been applauded by many manufacturers as the most sweeping tax reform in the state's history.  Now local manufacturers are figuring out what the changes actually mean for their companies.

For some, it translates into buying a new piece of equipment.  For a few, larger projects such as building expansions are easier to afford. Still others are taking a wait-and-see approach...

Full article at http://www.bizjournals.com/dayton/stories/2005/09/05/story4.html?from_rss=1

[buildingcincinnati]

From the 9/25/05 PD:


Companies tally new tax's cost
Sunday, September 25, 2005
Roger Mezger
Plain Dealer Reporter

Ohio's method of taxing businesses changed July 1. As the first quarter under the new sys tem draws to a close, companies are calculat ing just what the switch means for them.

"There are definitely going to be winners and losers," says David Reape, a member of the Ohio Society of Certi fied Public Accountants' tax policy committee and a CPA with Howard Wershbale & Co. in Beachwood. The winners include certain types of small companies and capital-intensive businesses, especially manufacturers. The Ohio Business Roundtable, made up of big-company chief executives, esti mates that some manufacturers will see their effective tax rates fall as much as 57 percent...


To reach this Plain Dealer reporter:
rmezger@plaind.com, 216-999-4446

http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1127554828276461.xml&coll=2
From the 9/25/05 PD:


New CAT plan gradually shifts school funding
Sunday, September 25, 2005

As Ohio's new commercial activity tax gradually takes effect, an impor tant source of income for school districts and local governments will disappear: the tax on tangible personal property used in busi ness.

Tangible personal property in cludes inventory, manufacturing machinery and equipment, and fur niture and fixtures. The tax on the value of those items brought in around $1.65 billion last year, the Ohio Department of Taxation estimates. About 70 percent went to school districts. Municipalities, townships and counties got the rest...

 

http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1127554308276460.xml&coll=2

[buildingcincinnati]

From the 9/28/05 PD:


New tax includes plenty of loopholes
Wednesday, September 28, 2005
Roger Mezger
Plain Dealer Reporter

Proponents of Ohio's new commercial activity tax on businesses see it as a good way of getting a wider range of companies to pay their fair share of taxes.

But by the time the commercial activity tax became law this summer, lobbyists and legislators proved that there are more ways than one to skin a CAT. They managed to carve out 27 permanent and four temporary exemptions that benefit specific kinds of enterprises...



To reach this Plain Dealer reporter:
rmezger@plaind.com, 216-999-4446

http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1127900085163700.xml&coll=2

[buildingcincinnati]

From the 10/23/05 PD:


Opinion divided over value of new business tax to Ohio
Sunday, October 23, 2005
Roger Mezger
Plain Dealer Reporter

Ohio's new system for taxing businesses is billed as a way to foster economic growth, increase capital investment and add tens of thousands of jobs.

The commercial activity tax, which debuted in July and is being phased in over five years, is levied on a company's gross receipts. The CAT replaces the corporation franchise tax - an income tax on profits - and the tangible personal property tax on inventory, machinery and furniture.

Exactly what the CAT can do for Ohio will become clear over the years. Right now, some of those familiar with the CAT have very different perspectives on what its impact could be...


To reach this Plain Dealer reporter:
rmezger@plaind.com, 216-999-4446

http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/1129973538144530.xml&coll=2

[buildingcincinnati]

From the AP, 11/13/05:


Businesses slow to register for new tax
ANDREW WELSH-HUGGINS
Associated Press

COLUMBUS, Ohio - Fewer than one in four businesses have registered with the state to allow the collection of Ohio's new corporate tax, raising concerns ahead of a February deadline to start levying the tax.

The Department of Taxation originally estimated up to 400,000 businesses would have to register by Tuesday and pay a small fee, which will be returned after their first filings.

But only 69,442 businesses had completed the form as of last week despite months of publicity, seminars and mailings of 400,000 letters each in July and October...



ON THE NET
Taxation Department: http://tax.ohio.gov/
Ohio Manufacturers' Association: http://www.ohiomfg.com/

http://www.ohio.com/mld/beaconjournal/13158793.htm
From same:


Highlights of state's new tax plan
Associated Press

Highlights of the state's new tax code, which replaced much of the former tax system beginning July 1:



Source: AP Research

http://www.ohio.com/mld/beaconjournal/13158811.htm

[buildingcincinnati]

From the 11/21/05 Akron Beacon Journal:


Companies slow to adopt new tax
Fewer than half of expected firms meet first deadline for commercial activity tax
By Dave Scott
Beacon Journal business writer

There's a tax revolution taking place in Ohio, with the goal of creating a more business-friendly environment.

But fewer than half the number of companies expected to sign up were on board by last week's deadline.

Coming in is the CAT -- the commercial activity tax on gross receipts. On the way out are the franchise and tangible personal-property taxes.

Companies in Ohio were to register by Wednesday, and the first returns are to be filed by Feb. 10.

However, thousands of companies remain unregistered....



Dave Scott can be reached at 330-996-3577 or davescott@thebeaconjournal.com.

http://www.ohio.com/mld/ohio/13199874.htm

[buildingcincinnati]

From Business First of Columbus, 12/12/05:


Grocers promise a CAT fight
Trade group preparing constitutional challenge to new tax
Kathy Showalter
Business First

Not a penny of Ohio's controversial commercial activity tax has been collected, yet the new levy appears headed for a court challenge.

A trade group representing 560 Ohio grocers, wholesalers and suppliers said its members are so irate over the tax that the group plans to challenge the tax on grounds it may be an unconstitutional levy on food.

The Ohio Grocers Association expects to file a lawsuit in January, said Jason Wetzel, vice president of the Columbus group's government relations. He declined to disclose details of the expected challenge, including what law firm the trade group will use in the suit...

 

© 2005 American City Business Journals Inc.

http://www.bizjournals.com/columbus/stories/2005/12/12/story5.html?from_rss=1

[buildingcincinnati]

From the 2/13/06 Akron Beacon Journal:


Ohio not purring yet for CAT tax
Deadline for some firms to pay is up, but state expected to be lenient
By Jim Mackinnon
Beacon Journal business writer

The CAT's out of the tax bag for real.

Ohio's new Commercial Activity Tax on gross receipts is a key part of last year's tax reform package aimed at helping businesses.

A good portion of 175,000 or so Ohio businesses registered for the CAT were due to pony up their first payments last Friday....


Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com

http://www.ohio.com/mld/ohio/business/13847262.htm?source=rss&channel=ohio_business

[buildingcincinnati]

From Business First of Columbus, 6/21/06:


Think tanks take aim at Ohio's tax reform
Business First of Columbus - 2:23 PM EDT Tuesday
by Saleha N. Ghani
Business First

The Buckeye Institute and a national anti-tax group are challenging last year's reform of Ohio's tax code, saying the changes are covering up continuing problems in the state's tax system.

The Buckeye Institute and the Washington, D.C.-based Tax Foundation, in a report on the state's economy, said lawmakers are using a 21 percent cut in personal income taxes over five years to cover up the state's continuing uncompetitive taxes on businesses compared to the rest of the country.

The reform package included a phasing out of the state's corporate franchise and inventory taxes in favor of a commercial activity tax on gross receipts. The report said that might actually hurt the state's competitiveness, however, because it could tax goods and services at several stages in the production process and because companies may owe taxes even when they're not profitable....


The full report is available online at www.taxfoundation.org/publications/show/1672.html.

http://www.bizjournals.com/columbus/stories/2006/06/19/daily12.html?from_rss=1

[buildingcincinnati]

From the 7/6/06 Enquirer:


PHOTO: Robert Murdock, owner of Murdock Inc. in Sedamsville, says its too early to tell whether Ohio's new commercial activity tax will help his water-fountain manufacturing business.  The Enquirer/ Carrie Cochran

PHOTO: Bill Fellhauer drills mouth guards for water fountains at Murdock Inc.  THE ENQUIRER/CARRIE COCHRAN

PHOTO: Rob Adams grinds the top of water fountains at Murdock Inc.  THE ENQUIRER/CARRIE COCHRAN

Businesses await tax's impact
BY ALEXANDER COOLIDGE | ENQUIRER STAFF WRITER

A year after taking effect, Ohio's commercial activity tax remains a hotly debated topic among interest groups, even as some businesses say it's too early to tell whether the tax overhaul is making it easier to compete.

The tax was implemented on July 1, 2005, and is being phased in through 2009 as it replaces other levies, including the corporate franchise tax and tangible personal property taxes on inventory, fixtures and equipment.

The changes were hailed as a way to eliminate some business taxes, close tax loopholes and place a broader but less onerous tax on more of the state's businesses. They also were designed to nurture ailing manufacturers, whose capital-intensive industries were especially hurt by inventory and equipment taxes....



E-mail acoolidge@enquirer.com

About the tax
Ohio's commercial activity tax, sometimes referred to by the acronym CAT, is based not on profits but on revenues generated in the state by business. When fully phased in 2009, its rate will be 0.0026 (or $26 on every $10,000 worth of revenue over $1 million).
 
http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060706/BIZ01/607060327/1076/rss01

[buildingcincinnati]

From the 7/30/06 DDN:


Taxes tailored to business helping economy, officials say
Ohio has taken some some blows recently when it lost two high-profile projects, but the state's poised to recover.
By John Nolan
Staff Writer

Ohio put itself in better position to compete for new employers or spur current employers' expansion when it started business-friendly tax changes last year, development officials said.

"It puts us on a path for development," said Evan Scott of the Dayton Development Coalition, a supporter of the tax revisions.

Gov. Bob Taft and Lt. Gov. Bruce Johnson said the tax changes helped encourage Honda Motor Co. to build a new parts distribution center in Troy and Whirlpool Corp. to consolidate manufacturing jobs in northern Ohio. Lyle Dunbar, chief executive officer of DR Technologies Inc., said it was a factor in his California company's decision to begin making aerospace industry parts next year in part of what is now a vacant industrial building in Dayton...


Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.

http://www.daytondailynews.com/business/content/business/daily/ddn073006ohiolossfront.html

[buildingcincinnati]

From the 9/20/06 Dispatch:


GRAPHIC: Growing, but slowly

GOP links 36,000 new jobs to tax cuts
But experts say it’s too soon to credit ’05 overhaul
Wednesday, September 20, 2006
Jim Siegel
THE COLUMBUS DISPATCH

Some Republican lawmakers are highlighting the 36,000 jobs created in Ohio during the past year, and they’re giving healthy credit to the state tax overhaul passed in 2005.

"These efforts have proven to be effective recently with more than 36,000 jobs created," read an August GOP "guest column." (Such essays are often written by legislative staffers and sent to local newspapers in lawmakers’ names.)

But experts say Ohio’s tax overhaul is so young that it’s difficult to say recent job numbers reflect the changes....



jsiegel@dispatch.com

http://www.dispatch.com/news-story.php?story=dispatch/2006/09/20/20060920-B1-01.html

[buildingcincinnati]

From the 11/27/06 ABJ:


Ohio tax reaps more than expected
Businesses believe reduction may be appropriate. Local governments, schools beg to differ
By Dennis J. Willard
Beacon Journal Columbus Bureau

COLUMBUS - The new state tax on gross receipts, known as the Commercial Activity Tax, is bringing in about 20 percent more money than expected, and those unanticipated millions will automatically prompt a review by lawmakers and the governor's tax commissioner next year.

Competing interests are following the developments.

Businesses that pay the tax are suggesting that if the trend continues, then a reduction may be appropriate....



Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.

http://www.ohio.com/mld/ohio/news/state/16106239.htm?source=rss&channel=ohio_news

[buildingcincinnati]

All from the 2/25/07 Dispatch:


GRAPHIC: Trimming taxes

GRAPHIC: Tracking tax collections

GRAPHIC: More than expected

OHIO TAX OVERHAUL
Benefits tangible; so is lost revenue
Some firms investing, but early results mixed
Sunday, February 25, 2007
Mark Niquette
THE COLUMBUS DISPATCH
 
Gary W. James doesn?t hedge when asked whether the sweeping tax cuts and other changes the state made to its tax code in 2005 are working.

Without them, nearly $4 million in equipment and more than 50 new workers at his Dynalab plant in Reynoldsburg would have gone to a nearby state or the South instead, he says.

"It?s working for us, there?s no question about it," James, Dynalab?s president, said last week while standing in what had been an empty warehouse....


Dispatch reporter Jim Siegel contributed to this story.

mniquette@dispatch.com

http://www.dispatch.com/dispatch/contentbe/dispatch/2007/02/25/20070225-A1-01.html
New business-tax revenue beating estimates
Commercial Activity Tax gaining support
Sunday, February 25, 2007
Mark Niquette and Jim Siegel
THE COLUMBUS DISPATCH
 
The hissing began almost immediately after the state proposed creating a new business tax in 2005, called the Commercial Activity Tax, as part of an overhaul of its tax code.

Retailers and other businesses with high sales but low profit margins hated it, saying it unfairly taxed their receipts even if they made no money.

Many candidates running for governor last year also talked of scrapping the CAT or changing it dramatically....


mniquette@dispatch.com
jsiegel@dispatch.com

http://www.dispatch.com/dispatch/contentbe/dispatch/2007/02/25/20070225-A4-02.html

[buildingcincinnati]

From the 3/20/07 Dispatch:


State's new business tax on track to be cut in 2010
Tuesday, March 20, 2007
Mark Niquette
THE COLUMBUS DISPATCH
 
Ohio businesses will see a reduction in the Commercial Activity Tax rate they pay in three years, according to Gov. Ted Strickland?s budget calculations.

That?s because collections of the tax are expected to exceed estimates and trigger an automatic lowering of the tax rate, saving businesses a combined $103 million in the fiscal year that starts July 1, 2010.

Business groups, especially those that opposed the creation of the new tax in 2005, hailed the news....


mniquette@dispatch.com

http://www.dispatch.com/dispatch/contentbe/dispatch/2007/03/20/20070320-A6-01.html

[buildingcincinnati]

From the 4/23/07 Cincinnati Business Courier:


Group wants assurances for local funding
Cincinnati Business Courier - April 20, 2007
by Jeff Bell
Courier Contributor
 
A new coalition of school and local government groups wants state legislators to take care of some unfinished business from the sweeping tax reform package they approved two years ago.

At stake is $1.6 billion in tax revenue that goes to Ohio's school districts, cities, counties, townships and other local government entities each year, said Larry Long, co-chairman of the recently formed Coalition of Local Governments & Services.

Without that money, he said, local governments will have to ask voters to raise local property taxes to make up the difference....


http://cincinnati.bizjournals.com/cincinnati/stories/2007/04/23/story10.html

[buildingcincinnati]

From the 5/2/07 ABJ:


Bill could help Goodyear
Company calls proposed extension of tax credit 'equitable solution' to problem created in '05 change
By Dennis J. Willard
Beacon Journal Columbus Bureau

COLUMBUS - A provision in the $52 billion two-year state budget passed Tuesday by the Ohio House could provide a financial incentive to help keep Goodyear in Akron.

In the next 90 days, the Ohio General Assembly will look at a tax credit extended to about 50 large companies in Ohio that reduces their Commercial Activities Tax (CAT) based on net operating losses beginning in 2010.

Goodyear Tire & Rubber Co. did not make the list in 2005, and now lawmakers will consider extending the credit to the company....



Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.

http://www.ohio.com/mld/ohio/news/17166223.htm?source=rss&channel=ohio_news