Tax and Finance

This week, House Bill 203, also called the “Prompt Pay Act”, failed to clear the Senate prior to the closing bell of the General Assembly. Garnering strong support from labor, the bill enjoyed a strong last-minute push at the end of the post-election session. The OMA’s coalition-building efforts with members of the business community and advocacy in the general assembly were instrumental in deterring its passage.

The bill aimed to set the payment terms in construction contracts and eliminate the owner’s right to negotiate by requiring all contracts be paid within 30 days while enforcing an 18% penalty fee and providing attorneys fees for contractors at the owner’s expense. 12/18/2024

The OMA led a coalition of business groups to oppose House Bill 203, the prompt pay act. The labor-supported bill would set the payment terms in construction contracts and eliminate the owner’s right to negotiate by requiring all contracts be paid within 30 days. HB 203 would impose an 18% rate on payments not made within the state-mandated “prompt pay” period.

With just a few weeks remaining in the general assembly, the OMA will continue its efforts to oppose the bill and prevent its passage. 12/10/2024

In the final weeks of the legislative session, Ohio lawmakers are debating a proposal to increase annual pay raises for elected officials from 1.75% to 5% over the next four years.

After that, raises would align with inflation or be capped at 3% annually. While legislators like Rep. Bill Seitz (R-Cincinnati) argue that the increase addresses inflation’s impact, critics question the timing and effectiveness of lawmakers in addressing broader issues such as housing and utility costs. Discussions are ongoing, with no bill introduced yet. 12/10/2024

Ohioans are paying more for auto insurance rates, with the 10 largest auto insurers in the state raising their rates an average of 19.3 percent in 2023.

The industry is blaming the increase on more accidents and more severe accidents since the pandemic, as well as rising medical costs, an increase in stolen cars, more distracted driving, and higher legal costs, according to the Columbus Dispatch. 11/27/2024

This week, the Ohio Senate’s Ways & Means Committee began hearings on Senate Bill 216, a proposal to phase out state income tax on nonbusiness income over six years and repeal the Commercial Activity Tax (CAT) by 2030.

The bill’s sponsor, Sen. Steve Huffman, acknowledged the state would need to replace approximately $8 billion in annual revenue, potentially through spending reductions or revised sales tax policies, while protecting essential items like food and rent from sales tax. Advocates argue the measure will spur economic growth and attract residents to Ohio, but critics, like Sen. Kent Smith, raised concerns about impacts on property taxes and overall revenue sustainability. 11/20/2024

President-elect Donald Trump campaigned heavily on bringing back U.S. manufacturing, extend the Tax Cuts and Jobs Act, curtail federal funding for clean energy, and use tariffs to boost the manufacturing sector.

UtilityDive recently broke down the top four issues to keep an eye on as Trump rolls out his presidential transition plan. 11/14/2024

Markets rallied dramatically Wednesday following Donald Trump’s victory in the 2024 presidential election.

The Dow Jones Industrial Average surged 1,434 points to a record high, or around 3.4%. The S&P 500 also hit an all-time high, popping 2.3%, with the Nasdaq Composite climbing 2.6% to a record of its own.

The dollar also had its highest jump since 2020, most likely a reaction to Trump’s proposals around tariffs, international trade, and taxation. 11/6/2024

The IRS has released the final regulations regarding qualifications and stipulations for the Section 45X advanced manufacturing production tax credit.

The regulations include allowing qualified parts to be made from recycled materials, clarification on certain material and extraction cost qualifications, and inclusion of domestic solar wafer production.

These final regulations take effect Dec. 27, 2024 10/30/2024

The U.S. Treasury Department this week rolled out the final rules for tax breaks for manufacturers making “clean” energy parts and mineral products used in climate-friendly tech.

The “45X” credit covers equipment like solar inverters, battery cells, wind blades, and more in the latest move from Washington to merge climate and industrial policy. The credits also apply to processing project extraction costs when sourcing domestic minerals. 10/24/2024

More changes are coming to the Fair Labor Standards Act (FLSA) overtime regulations. Effective July 1, 2024, the U.S. Department of Labor has increased the minimum salary threshold for executive, administrative, and professional (EAP) employees to $844 per week.

Further changes are set for Jan. 1, 2025, which will impact how employers manage payroll and compliance. OMA Connections Partner CliftonLarsonAllen has prepared a guide for how employers can continue to prepare for the new changes, including adjustments to payroll systems, and communicate changes to their employees to ensure compliance and minimize disruptions. 10/15/2024

The OMA’s Tax and Finance Committee met this week in Columbus. Discussion included a comparison of the Trump and Harris tax plans, OMA tax priorities for next year’s budget, and the potential elimination of the Commercial Activities Tax.

Guests included Commissioner Patricia Harris from the Ohio Department of Taxation, who outlined the department’s priorities and initiatives heading into the next year. State Senator George Lang (R-West Chester), Chair of the Business First Caucus also joined the committee and detailed his plan to make Ohio the most business-friendly state in the nation. 10/9/2024

Presidential candidates Kamala Harris and Donald Trump this week outlined their plans for the U.S. manufacturing industry, featuring expanded R&D credits, tax credits, and a “manufacturing ambassador.”

The current Vice President’s 82-page policy blueprint includes tax incentives for domestic manufacturing, workforce development initiatives, and support for industries that prioritize environmental responsibility.

Trump’s manufacturing strategy, announced at his rally in Georgia, included a first-year tax write-off for all R&D expenses, allowing businesses to “write off 100% of the cost of heavy machinery and other equipment in the first year.” The former president also proposed creating a “manufacturing ambassador” to streamline initiatives and enhance American competitiveness in global markets. 9/26/2024

After months of declining tax revenues, the Ohio Office of Budget and Management reports that revenues are expected to continue to trend downwards through Fiscal Year 2025 and that “slower economic growth in the second half of the year” can be expected.

This report comes as state agencies are preparing their initial operating budget requests ahead of the state budget that will be completed by June of 2025. Lawmakers and budget officials have previously reported that the next state budget will be “a little tighter.” 9/4/2024

Site Selection Magazine this week ranked Ohio first of all states in its “Global Groundwork Index” based on an analysis of job creation, capital spending, and infrastructure development from 2020 through July 2024.

Public officials say the state’s private and public development teams generated more than 94,310 new job commitments and $65.2 billion in capital investments based on JobsOhio data from 2020 through 2024. 9/4/2024

A request by the Office of Budget & Management and the Department of Commerce to extend the franchise transfer agreement with JobsOhio has been delayed by the state Controlling Board.

The Ohio Controlling Board is a panel made up of mostly state legislators who make state spending adjustments.

The OMA has partnered with JobsOhio, its network partners, and other organizations committed to economic development to advocate for Ohio’s unique private-sector model and the results it is producing for our state. 8/26/2024

The National Association of Manufacturers (NAM) last week outlined several key tax provisions that Congress should prioritize once back in session.

These provisions include interest deductibility, the research-and-development tax deduction, and preserving the 21% corporate tax rate. These priorities can be found on NAM’s Manufacturing Wins webpage. 8/13/2024

Ohio’s 2025 fiscal year is off to a “modest start”, according to Office of Budget Management (OBM) Director Kim Murnieks, with a “solid start” in tax receipts.

The monthly financial report for July 2024 notes a slight decline in economic activity in recent weeks but projects a solid outlook for Ohio’s future. 8/13/2024

Last week, two bipartisan lawmakers at the Ohio Statehouse introduced a bill that would offer a tax credit for homeowners and renters whose property taxes or rent exceed a certain threshold in relation to income.

House Bill 435 is targeted at helping lower-income renters and owners, offering a $1,000 credit for households with resources of $60,000 or less. This then steps down $200 for every additional $10,000 a household makes and phases out at $100,000 of household income. 7/29/2024

This week, Governor Mike DeWine announced the first location for future economic development with support from the new All Ohio Future Fund.

The 1,000 acre site in Defiance County will be the location that receives more than $14.6 million to install critical infrastructure at the Baltimore Avenue Industrial Corridor in Defiance, with the goal of attracting major corporations that are looking for project-ready property.

The All Ohio Future Fund, which was a key priority for the OMA in the state budget, was first announced at DeWine’s 2023 State of the State Address, is designed to ensure that every region of the state prospers from Ohio’s current economic revival. 7/29/2024

Ohio recently ranked seventh in CNBC’s ‘Top States for Business’ report, beating out states like Michigan, Tennessee, Indiana, and Illinois.

The Buckeye State jumped five spots from the 2023 rankings, due in part to strong economic momentum and large strategic investments in innovation, infrastructure, and workforce development.

Based on an evaluation of ten categories, Ohio notably showed strength in infrastructure (#13), cost of doing business (#2), cost of living (#4), and jumped nearly half of all states in business friendliness from #40 to #24. 7/25/2024