|Report: Ohio tax breaks worth $7.7 billion a year|
|Written by Associated Press|
|Monday, 22 April 2013 05:33|
COLUMBUS, Ohio (AP) — The state government budget debate in Ohio has focused fresh attention on tax breaks and loopholes granted to residents and businesses over the years.
The Columbus Dispatch (bit.ly/11rHuko) said some 130 tax deductions, credits and exemptions will be worth $7.7 billion next year. Projections put it at about $8 billion for 2015.
Some tax breaks have been in place for decades and could be scrutinized as lawmakers consider income tax cuts proposed by Gov. John Kasich.
The newspaper reported Sunday that closing tax exemptions could be difficult, given the efforts made to enact and keep them.
Each year, Ohio's single biggest tax break, around since 1935, is on the sale of manufacturing equipment. It will be worth about $1.8 billion next year.
"There's a number of different ways to get to where we want to go," said state Tax Commissioner Joe Testa, referring to Kasich goals of lowering the income tax and driving down taxes for businesses.
"We've considered a lot of different options, but for long-term viability, we think those two paths we chose (the sales tax and drilling tax) provide us with greater stability over time. Other people could choose other paths."
The paper cited as a tax break example the 2012 exemption granted to Ohio's Commercial Activity Tax at the request of a businessman in southeastern Ohio to open a copper-recycling business.
Without it, the owner said he might be forced to close the Ohio Precious Metals operation in Jackson — the largest of its kind in North America — and relocate to Texas.
Within weeks, legislators amended an existing Ohio exemption for distribution warehouses to include metal refineries in the state's Appalachia region.
The Department of Taxation calculated the cost of the exemption for Ohio Precious Metals to be $1.3 million in 2014
"The bottom line came down to losing OPM," said Rep. Ryan Smith, a Republican from Bidwell.
"I wanted to make sure we could salvage the company's presence in Jackson and salvage those jobs."
The state also granted $6.4 million in sales-tax exemptions for corporate jets. Among the beneficiaries is NetJets, a subsidiary of billionaire Warren Buffett's Berkshire Hathaway company located in Columbus.
Also benefiting are hundreds of companies that provide service or maintenance for the planes, the newspaper reported.
When word circulated last year that Kasich wanted to change Ohio's tax system, the Ohio Regional Business Aviation Association told him and legislators that taking away that tax exemption could affect more than 4,000 industry-related jobs in the state.
Information from: The Columbus Dispatch, http://www.dispatch.com
Copyright 2013 The Associated Press.
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