In recent weeks, The Ohio Society of CPAs has been keeping a close watch on the developing details of the tax proposals contained in Ohio’s biennial budget bill – HB 59.
Of chief concern is the plan to expand the Ohio sales tax base to potentially thousands of other services – including accounting, legal and consulting – that we believe will significantly impact Ohio taxpayers and the state’s economic viability.
During a recent OSCPA survey on this issue, over 80% of Ohio CPAs opposed an expanded sales tax on most services. This is consistent with The Society’s longstanding position. In addition, two thirds of members who responded believe the reductions in personal income tax and tax on pass-through entity owners are not enough to counter the negative impact of the sales tax expansion proposal.
As a result, your Executive Board met today and voted to officially oppose the sales tax expansion to most services as contained in HB 59.
While The Ohio Society of CPAs applauds Gov. John Kasich for innovative thinking aimed at creating jobs and making Ohio more business and family friendly, we strongly believe HB 59’s proposed sales tax expansion will not achieve the intended results. In fact, we believe it could have the opposite effect. Further, the Board is committed to offering our elected officials any assistance we can provide to help expand Ohio jobs and move our state forward.
Specifically, the Board opposes HB 59’s tax proposal for the following reasons:
- There are thousands of service-industry classifications that will lead to widespread, additional taxation throughout Ohio.
- A broad sales tax on services would disproportionately impact small businesses who will bear a higher proportion of the cost. This will restrict their ability to grow their businesses and create jobs in Ohio.
- The plan will lead to the purchase of more services across state lines, which will hurt Ohio’s competitive advantage.
- Ohio may actually lose existing businesses and jobs as companies with cross-border operations evaluate the impact to their bottom line of charging sales tax on their services. Many could simply move significant portions of their business to out-of-state offices.
- The impact to individual Ohioans will be significant, with many paying higher taxes for necessary, every day services. For many, this will add up to more than the savings from a phased in 20% cut in personal income taxes.
This week, The Ohio Society of CPAs will be among the first groups to testify against the sales tax provision in HB 59. We are also actively discussing our concerns with legislators and other associations who share our vision of a stronger Ohio. OSCPA stands poised to help create a stronger Ohio that is a beacon for job creation and retention.
We look forward to working with Ohio lawmakers as the budget bill progresses, and to representing your interests in achieving more effective tax policies for Ohio’s future.
If you have any questions on this or other legislative matters, please contact me or OSCPA’s governmental affairs team.
If you have any questions on this or other legislative matters, please contact me
or OSCPA’s governmental affairs
team. You can find the latest updates on this issue on the Ohio Budget Reform page
Scott D. Wiley, CAE
President & CEO