In 2005, Ohio passed what may have been the most sweeping tax reform in its history. Now, in the second year of a five-year rollout, state officials say the net payoff is that Ohio now offers companies the lowest new capital investment tax structure in the Midwest. One provision in the overhaul means companies are no longer taxed for investing in capital improvements, meaning projects that update manufacturing and invest in machinery and equipment can move more quickly from the drawing board to reality.
The net effect of the new tax code is to shift the burden away from taxing investment and toward taxing consumption, officials say. "We can now say that Ohio also has one of the most business friendly tax codes in the country," says John Barrett, chairman and CEO of Cincinnati-based Western & Southern Financial Group. Economic models built for the Ohio Business Roundtable by Ernst & Young project that by 2010 the reforms will increase gross state product by $5.6 billion and pump $6.3 billion more in new capital investment into the state's economy. There are lots more details in a 32-page report on the plan's second full year, available at wwww.ohiomeansbusiness.com.
Writer: David Holthaus
Source: Ohio Business Roundtable