Friday, April 13, 2012

Chairman's Report from Ohio's Tax Structure Committee

Press Release:

Rep. John Adams Releases Tax Structure Chairman’s Report

COLUMBUS—After hosting regional hearings throughout Ohio and conducting months of analysis, State Representative John Adams (R-Sidney) today announced that the Tax Structure Study Committee—a bipartisan committee charged with soliciting feedback from Ohioans to ensure the best tax environment for Ohio’s citizens and businesses—has released a comprehensive chairman’s report detailing the committee’s findings, which may serve as a springboard for legislative initiatives.

“During this General Assembly, we have focused on creating an economy where businesses can thrive and Ohioans can compete for jobs right here within our borders,” said Representative Adams, who served as chairman of the Tax Structure Study Committee. “Creating economic prosperity starts with a tax structure that is conducive to business growth and job creation. The people of Ohio made their voices heard when we came to their areas of the state and helped us to put together this report of recommendations, which may serve as the genesis of future legislation.”

The Tax Structure Committee met six times during August and September and heard testimony from more than 80 witnesses across the state. The committee was specifically commissioned to identify and review the sales and use taxes and their purpose, review the commercial activities tax for impact on businesses, and review current tax expenditures.

Based on these hearings, Chairman Adams made the following recommendations in the committee report:

1.  Tax expenditures should be reviewed for validity every two years on a rotating basis during off-budget years, so that the results may be available during budget negotiations. The House Ways and Means Committee should establish a standing subcommittee to review tax expenditures and issue a report to the House.

2.  There should be further discussions on the purpose of the use tax in Ohio’s tax code. The sales tax should apply to all economic activity, including services and goods.

3.  The commercial activities tax should be modified to establish a tax liability of the lesser of two calculations: a tax on gross receipts, as established by the current CAT law, or a tax on net income. This would reduce the discrepancy in effect that arises from the pyramiding of CAT liability according to industry type.

4.  There should be a continuing, open dialogue on tax issues, as Ohio’s tax code is expansive and complicated. The study committee, while helpful, could not cover all aspects of the code.

“This has been a productive process and I look forward to further discussing these findings with the Legislature,” Chairman Adams said.


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