(The Center Square) – Many Ohio business groups are throwing support behind an extension to tax incentives for large Ohio companies.
The Ohio Senate Ways and Means Committee is weighing an extension to the state’s current commercial activity tax plan, which currently gives tax breaks for large companies that create jobs and offer high pay to employees.
The current plan offers tax breaks when a company creates what is designated as a “megaproject.” The bill defines a megaproject as any effort that has a unique site, a skilled workforce with workers who make at least three times the state minimum wage, and the company makes either $1 billion in fixed-asset investments or creates at least $75 million in employee payroll. The new bill would extend the tax break limit from 15 to 30 years.
“The competition between states for companies to make a massive multi-million-dollar capital investment in new facilities and create thousands of new jobs is fierce,” Ohio Sens. Bob Peterson, R-Jasper Township, and Stephanie Kunzie, R-Hilliard, said in a joint statement. “This bill’s goal is to make Ohio more competitive for those megaprojects and the thousands of jobs that they bring.”
Multiple business groups voiced support for the bill during its second hearing earlier this week in the Senate. Ohio Chamber of Commerce Director of Tax and Finance Tony Long told the committee the bill “will keep Ohio competitive with other states, and also ensure Ohio receives benefits from the economic incentives awarded.”
He then added that the bill “is both sensible and needed.”
The current plan also provides tax exemptions when a company sells tangible property to any group operating a megaproject. The current senate bill continues this part of the plan, though some groups voiced concern that the plan may be too wide-reaching.
Rob Brundrett, of the Ohio Manufacturers’ Association, told the committee the total cost of tax expenditures since 2010 has grown from $300 million to more $800 million.
“The CAT was created to fix an archaic business taxing system in Ohio that was riddled with exemptions and credits,” Brundrett said. “The old system failed to promote sound tax policy by eroding the tax base and piling disproportionate payments on certain industries.”
The bill will likely get a third hearing next week.