Tax and Finance

State lawmakers this week in Columbus passed a $6.2 billion spending package in the final session before summer recess, the largest Capital Budget in state history, Gongwer reports.

The package contains $3.5 billion in new capital appropriations, $700 million in one-time funding for a variety of local initiatives, $150 million for community projects, and more than $2 billion in reappropriations to continue previously authorized project spending.

Among the OMA supported projects that received funding was the Butler County Advanced Manufacturing Hub, a collaboration between Miami University, Butler Tech, the Butler County Board of Commissioners, and the City of Hamilton. 6/27/2024

In spite of the deadlock at the Ohio Statehouse, lawmakers continue to advance Ohio’s 2025-2026 Capital Budget with plans to approve the measure next week. The capital budget, known as House Bill 629 and Senate Bill 292, appropriates $4 billion in bond funds to construct improvements at public institutions including universities, hospitals, parks and community projects. The legislation funds hundreds of projects statewide and county-by-county.

The Ohio House and Senate are simultaneously advancing a one-time spending package known at Senate Bill 288 to fund $700 million in community projects. 6/18/2024

The Ohio Senate this week released a blueprint for $700 million in one-time fund distribution to be released alongside the capital appropriations bill later this month, Gongwer reports. The release also included a county-by-county breakdown of the projects. The funds are a combination of the House and Senate proposals for $350 million each from the One-Time Strategic Community Investment Fund, comprised entirely of surplus state money. 6/10/2024

The Ohio Department of Job and Family Services (ODJFS) announced last week that employers can receive federal tax credits for hiring individuals from certain designated groups. Credits of up to $9,600 are available for employers who hire employees who are restored citizens, public assistance recipients, individuals with disabilities and others who may face barriers to employment. Applications can be submitted on the Work Opportunity Tax Credit (WOTC) page on the ODJFS webpage. 5/30/2024

Ohio’s Capital Budget is on track for enactment in late June, according to leadership in both chambers, Gongwer reports. Senate President Matt Huffman (R-Lima) and Finance Chair Sen. Matt Dolan (R-Chagrin Falls) said they plan to bring the Senate’s proposal to the floor for a vote June 26, following a months-long review of 4,400 requests. House Speaker Jason Stephens (R-Kitts Hill) indicated his desire for the chambers to come to a consensus before summer recess. The biennial bill, designed to support local community projects and infrastructure, will contain funding for bond-backed projects, including agency requests, capital reappropriations, $700 million from the One-Time Strategic Community Investment Fund, and at least another $150 million for community projects. 5/25/2024

The Ohio Department of Taxation (DOT) is seeking $25.77 million in funding from this year’s Capital Budget to continue rollout of its new tax collection system. According to the Department, the system, which went live in Sept. 2023, still needs ample work and funding to ensure the rollout is seamless. The request also included $21.4 million for FY27-28 and $675,000 for FY29-30. The tax system is estimated to be completed by Nov. 30, 2027. 5/20/2024

The Biden Administration announced this week tax policy guidance to help increase demand for US-made solar equipment. The measures include an end to the exemption of two-sided solar panels from the Sec. 201 14.25% tariff. The announcement comes after a sweeping range of tariff increases on China, which exports a substantial amount of solar technology worldwide. 5/16/2024

On January 1, 2025, many of the tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017 will disappear. While the TCJA made some permanent tax cuts, a number of previous tax cuts and deduction limitations will return to their prior levels. OMA Connections Partner Roetzel and Andrews breaks down how you can begin to prepare now for these changes. 5/6/2024

State income tax revenues came in lower than projected last month, as tax receipts totaled $224 million less than what was anticipated. Kimberly Murnieks, Director of the Office of Budget and Management, has noted that significant earnings on investments are nearly 170% higher than the year-to-date estimate, and that the state will be ending fiscal year 2024 with a balanced budget. Meanwhile, the state legislature has two bills pending, House Bill 386 and Senate Bill 216, which propose to phase out the state income tax and repeal the commercial activity tax. 5/7/2024

The IRS has announced Round 2 of tax credit allocations under the IRC Section 48C Qualifying Advanced Energy Project program. OMA Connections Partner CliftonLarsonAllen has prepared a breakdown of how to be considered for the project, including key dates for submissions. 4/30/2024

This week, the U.S. House Committee on Ways and Means formed tax working groups dedicated to finding legislative solutions to the scheduled expiration of pro-growth tax policies at the end of 2025. The working groups focus on specific areas of the economy affected by sunsetting measures, including American Manufacturing. The National Association of Manufacturers testified before the House Ways and Means Committee earlier last month, highlighting the benefits these measures have for manufacturers and encouraged Congress to preserve these provisions. 4/30/2024

Congress has been slow in attempts to reverse recent adverse changes to IRS Section 174, which is preventing American businesses from fully deducting their R&D costs in a timely fashion. While revisions quickly moved through the House, the U.S. Senate has been slow to take up the changes that cost manufacturers six to seven figure-increases in tax liability. 4/25/2024

This past Monday was tax day, and Ohioans have already begun to see their refunds processed by the Ohio Department of Taxation. Nearly 5.5 million Ohioans filed their taxes this year, with returns already hitting just under the $2 billion mark. The Office of Budget and Management announced that state tax revenues in all categories fell short in March due to the higher than expected income tax refunds. “We’re still in the midst of the tax year 2023 filing season, and we will not see how it lands and how it all fleshes out until all payments and refunds process throughout April and into May,” said OBM Director Kimberly Murnieks. The Ohio House of Representatives is currently deliberating a bill that would phase out the state income tax. The OMA will continue to track and update its members on House Bill 386 and its potential effects on state revenue. 4/15/2024

OMA partners and associate members, The Manufacturing Advocacy and Growth Network (MAGNET) and HBK will host a webinar on Apr. 25 covering tax strategies and programs that all manufacturers should understand and consider. Learn about actions you can take throughout the year to be better prepared for tax season, including understanding proposed legislation that can help manufacturers. Click here to register. 4/09/2024

This week, The Ohio House Ways and Means Committee held its first hearing on House Bill 386, which would phase-out the state income tax on nonbusiness income over six years and repeal the Commercial Activity Tax (CAT) after 2029. Ohio’s CAT and personal income tax represent nearly half of the state’s Fiscal Year 2023 tax revenue. The OMA has urged caution with previous legislative proposals that would repeal the CAT as it could result in shifting the state’s business tax burden to manufacturers during times of economic downturn and state revenue shortfalls. 4/09/2024

The Ohio Department of Taxation recently issued a reminder that that the first quarter 2024 Commercial Activity Tax (CAT) return is due May 10, 2024. The 2023 CAT 12 annual return is also due on May 10, 2024, for all CAT annual taxpayers. Taxpayers are required to file and pay the CAT electronically via the Ohio Business Gateway at gateway.ohio.gov. 4/09/2024

An article in Governing Magazine’s Spring 2024 edition details how clean energy tax credits and investments are driving a nationwide manufacturing boom. More than $100 billion in private investments, spurred by the Inflation Reduction Act, have helped drive manufacturing expansions in states like Ohio, Michigan, and North Carolina. 4/03/2024

Earlier this week, Senate President Matt Huffman told reporters he is ‘optimistic’ that the capital spending bill could be finalized by Memorial Day. This is despite tensions between both chambers, which have each passed separate bond-backed spending bills. 3/21/2024

The Ohio Office of Budget and Management has released data for last month indicating that state tax receipts have returned to better-than-expected levels in February after a few months of shortfalls. OBM’s Director Kimberly Murnieks has attributed the previous sharp decrease to a change in state and federal law that delayed refund requests for the 2022 tax year. Ohio added $2.1 billion in tax revenues last month, exceeding the forecast by more than $38 million. 3/21/2024

OMA Connections Partner CliftonLarsonAllen has put together a guide on Power BI, a program that can help manufacturers allocate overhead costs quickly and analyze data more efficiently than traditional Excel models. 3/7/2024