At press time, Ohio lawmakers were expected to make significant revisions to Gov. Kasich’s tax reform plan. Here, we provide the details of the governor’s initial proposal as it will serve as the foundation for the ongoing discussion. You can receive legislative updates by subscribing to the Buckeye Farm eNews.
The key elements of the governor’s proposal include:
- A 20 percent across-the-board income tax reduction over three years.
- A reduction in the state sales tax rate from 5.5 percent to 5 percent, while broadening the base. That would mean subjecting a wide variety of services, unless specifically exempt, to the sales tax that have not previously been taxed.
- Changes to the severance tax, including new taxes on horizontal drilling, that is expected to generate significant revenue in the coming years from new oil and gas exploration in the state.
Explore the Proposal:
Farm Bureau staff has been analyzing the proposal in an effort to determine its potential impact on agriculture. Because of the legislation’s comprehensive nature, it’s important to look at not only specific Farm Bureau policy but to keep the bigger picture in mind. With member input, staff is exploring how the entire package fits together and how it could affect Ohio’s farms and the way our members conduct business.
Review Ohio Farm Bureau Policy:
On the issue of income and sales taxes, Farm Bureau policy states that, if needed, additional revenue should primarily come from the personal income tax and under certain circumstances from increased sale taxes rather than eliminating exemptions. Further, Ohio Farm Bureau opposes an increase in the severance tax solely to pay for an income tax reduction.
Put it All Together:
First and foremost, the proposal does maintain the agricultural use sales tax exemption and does not alter Current Agricultural Use Valuation. Secondly, the income tax reduction and the tax cut for small businesses in the proposal will provide some benefit to many Ohio Farm Bureau members. The sales tax proposal, however, needs further review. For example, horse boarding and training, pet grooming and county fair admissions and games, which are all currently exempt from the sales tax, would be taxed under the proposal. In addition, Farm Bureau members use many of the professional services that would now become subject to the sales tax such as legal, accounting and real estate services, among others.
Connect with your county Farm Bureau. Learn about upcoming policy development meetings and opportunities to engage with lawmakers. Visit www.ofbf.org/counties.
“We need to be engaged in voicing our opinions about what’s going on statewide because it’s going to affect us. The tax structure has to be fair to keep farmers competitive. The decisions will be made by who shows up. And if you’re not engaged, your input will not be heard. That’s why I’m a part of this organization.” ~ Craig Adams is a Highland County farmer who raises grain, hay and cattle with his family. He also serves on Ohio Farm Bureau’s board of trustees.