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Ohio House Passes Taft Tax Plan

Key Highlights of Taft Tax Plan

"As Passed by the House"

• Eliminates 10% tax rollback on Class II (commercial) real property – this elimination will immediately increase your real estate taxes by 10%

• Increases the kilowatt hour tax on electric consumption by 30%

• For C-corps, plan phases out corporate franchise tax 20% per year over five years

• For all structures (C-corps, S-corps, LLCs, etc.), plan phases out all three portions of the tangible personal property tax under the following schedule:

• Business machinery & equipment (50% reduction in tax year ’06 and remaining 50% eliminated in ‘07)

• Inventory (0% reduction in ’06, 2% in ’07, and a 7% reduction in ’08, ’09, and ‘10). Current rate is 23%, so phase-out order would be 23%, 21%, 14%, 7%, and 0

• Furniture and fixtures phased out at 20% reduction over five years

• Replaces corporate franchise tax and the TPP with a commercial activities tax (gross receipts tax) phased in over five years beginning July 1, 2005

• Multiply gross receipts by 0.26%

• First million in sales are basically exempt (flat $100 fee)

• Out-of-state sales are exempt

• Exempts dealer-to-dealer transactions

• Rate adjustment in future years by Tax Commissioner

• Increases taxes on cigarettes and other tobacco products as well as alcohol

• Reduces state sales tax by 0.5% (6% to 5.5%)

• Reduces state income tax rate 4.2% per year over five years

Dealers are encouraged to communicate the impact of this plan to their legislators. Click here to identify legislators and contact info. If you haven't calculated your impact yet, please click here to do so.

Dealers may contact Joe Cannon at OADA at (800) 686-9100 or via e-mail at jcannon@oada.com with any questions.