Economic Development and Tax Policy

Ohio must improve the competitive tax environment for businesses compared to other Midwestern states if it is to continue the economic success of recent years. Ohio communities often use tax incentive programs to attract and retain businesses. This strategy indicates a problem with the current tax structure in Ohio and points to a need for revision. As Ohio competes with other states in attracting employers, we should keep in mind that these companies look to the bottom line when choosing a new site. Ohio's current tax structure is cumbersome and penalizes the very types of industry that create the high value-added jobs we wish to attract for our state's residents. Also, it penalizes those businesses, large and small alike, which continue to operate in Ohio without seeking state assistance.

The Chamber will urge the legislature to look at what changes should be made to Ohio's taxation structure to provide for the needs of the state's residents while maintaining our state's competitive posture as we attempt to create new jobs and retain current employers. We firmly believe that the state must act in partnership with local communities to attract and retain employers.

The Chamber will also seek creative approaches for economic development, ensuring that unnecessary obstacles do not impede the efforts of economic development professionals. The Chamber will focus its efforts on the following areas:

· Discourage reliance on asset-based taxes.
· Promote tax and incentive policies that provide a competitive tax structure for both small and large business development.
· Promote policies that focus on increasing the tax base rather than revenue-neutral tax shifting policies based on a static economic model.
· Promote legislative initiatives to encourage business location and growth in urban core areas.
· Support efforts to clarify annexation procedures and oppose measures that would obstruct reasonable annexation efforts.
· Support legislative efforts to normalize municipal income tax collection procedures, so that employers can follow a consistent policy throughout the state.

Plante Moran is sponsoring a free tax update on changes in Ohio and Michigan tax law on August 2nd.  Get the details.