Taxpayers to Gov Kasich: Close The Loopholes

COLUMBUS, OHIO – Earlier this month, Governor John Kasich issued a challenge to the taxpayers of Ohio by saying, “You got any more loopholes you want closed, bring ‘em to us.” In response, over 100 taxpayer activists representing One Ohio Now and Fight for a Fair Economy Ohio rallied Thursday afternoon to call on Gov. Kasich to close the loopholes.

“It is time that Governor Kasich put his money where his mouth is and close wasteful loopholes,” said Becky Williams, President of SEIU District 1199. “There are too many special-interest giveaways, costing us hundreds of millions of wasted tax dollars, failing to create jobs, and benefiting only the rich and big corporations. It is up to us as hard-working, taxpayers to pressure the Governor to thoroughly and regularly review the $7 billion in annual exemptions, credits and deductions that riddle our tax code.”

The One Ohio Now “Top 10″ Tax Loopholes are listed below:

#1: PRIVATE JET LOOPHOLE – The sales tax on private jet time shares in capped at $800. If we removed this loophole, revenue could increase by as much as $1,000,000 annually. (ORC § 5739.025(G), orig. enacted 2003)
#2: MEGA-RETAILERS LOOPHOLE – Big retailers receive the same discount for collecting the sales tax as mom-and-pops, while most other states with sales taxes either limit the discount or don’t have one at all. If we removed this loophole, revenue could increase by $49.4 million in 2012 and $51.6 million in 2013. (ORC § 5739.12, 5741.12; originally enacted 1981)
#3: TAVERN TAX LOOPHOLE – Beer and Malt Beverage permit holders receive a tax break for paying their taxes early – 3% credit on advance payments, which if eliminated could generate $1.4 million each fiscal year. (ORC § 4303.33, orig. enacted 1963)
#4: CAMPAIGN CASH LOOPHOLE – Campaign contributors can claim up to $50 ($100 for married joint returns) tax credit for contributions to statewide candidates or candidates for the Ohio House or Senate. Closing this loophole could increase revenue by $4.7 Million in 2012 and $5.1 Million in 2013. (ORC § 5747.29, orig. enacted 1995)
#5: WATERCRAFT LOOPHOLE – The value of a trade-in watercraft on a new or used watercraft or outboard motor is exempt from sales and use tax. Bringing an end to this loophole could generate $1.5 Million in 2012 and $1.6 Million in 2013. (ORC § 5739.01(H)(3), orig. enacted 1990)
#6: RACECAR LOOPHOLE – Parts and equipment for professional motor racing teams are exempt from sales and use tax. Ending this loophole would generate unknown revenue. (ORC § 5739.02(B)(40), orig. enacted 1997)
#7: RV LOOPHOLE – Sales tax on transfer of ownership interest of a pass-through entity’s interest in a recreational vehicle is exempt. For example, a person can set up a shell LLC in Montana and pay no sales tax on that purchase. Closing this loophole would end the ability to transfer the ownership stake in the recreational vehicle tax free. (ORC § 5739.01(B)(6))
#8: SNOWBIRD LOOPHOLE –Unlike most other states, Ohio now uses “contact periods” instead of “contact days” to determine residency. It allows high income individuals to spend part of the year in a state with no income tax (i.e. Florida) and avoid paying Ohio’s income tax even though they spend most of the year in Ohio. Policy Matters estimates Ohio loses $25-30 Million per fiscal year because of this loophole. (Sub HB 73, 126th General Assembly, ORC § 5747.24, orig. enacted 2006)
#9: LOBBYIST LOOPHOLE –In 2003, the Taft administration broadened the sales tax by covering a variety of services (dry cleaning, taxi service, etc.,), but a provision including lobbying services was never passed. Seven states (CT, DE, HI, NM, PA, SD, & WA) currently collect taxes on lobbying services and in West Virginia, lobbying services are considered a taxable service under the state’s consumer sales and service tax and use tax.
#10: DEBT COLLECTION LOOPHOLE – Debt Collection is currently exempt from our tax code. In 2003, then-Governor Taft proposed collecting sales taxes on debt collection services. Eight states (DE, HI, NM, PA, SD, TX, WA, & WV) collect taxes on check and debt collection services.

Sign Our Petition to join our Fight for a Fair Economy and demand that Governor Kasich close the loopholes.

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