We recently reported that one of the state’s top tax law firms analyzed the Kasich plan to expand Ohio’s sales tax to most services, declaring it to be a “nightmare.” Our reporting may have gotten folks at Vorys in hot water with the Kasich administration, as the analysis now carries the following note:
Funny, we never realized that “nightmare” was a technical term, but our apologies to whomever at Vorys we got in trouble.
The fact is, Vorys is not alone. To date, none of the state’s major business groups — typically first to jump on board when Kasich wants to sell a big new “pro-business” idea — has endorsed his plan to tax everything from legal services to commercial rents to sponsorship of baseball stadiums.
The Ohio Chamber of Commerce loved Governor Kasich’s first budget so much they endorsed it the day after it was released and launched a fake “grassroots” effort called the “Campaign for Jobs” to promote it on his behalf. This time around, the Campaign for Jobs has gone radio silent and the Chamber says it’s still on the fence:
Dan Navin, assistant vice president of tax and economic policy for the Ohio Chamber of Commerce, said his group was still analyzing the plan.
“We are looking at the package as a comprehensive whole – not trying to identify specific components and take a position on those components,” he said.
The chamber’s leadership will meet to determine whether or not the proposal taken in its entirety is a net benefit to businesses, he said. “But each company has to do that on its own,” he added.
The Chamber of Commerce isn’t sure if Kasich’s tax plan, as a whole, is good for business. That’s definitely not the cheerleading we’ve come to expect from them.
NFIB is the Chamber’s counterpart for smaller enterprises, reliably conservative and always in Kasich’s corner. In 2011, they were a founding member of the Campaign for Jobs effort to support the Kasich budget. This time? Not so much:
Roger Geiger, executive director of the National Federation of Independent Businesses/Ohio, said a recent survey of his membership revealed a roughly even split in support or opposition to the overall proposal.
“You either are focused exclusively on the income tax reduction, which is bold and significant, or you’re focused in on what’s it going to cost me as a business owner in terms of compliance and additional business expenses … Many small businesses don’t have their own legal and accounting departments and would pay significantly more to contract out those services under the sales tax proposal, he said. In addition, compliance costs will weigh heavily on some small businesses, like barbers who don’t have the experience or equipment to collect and remit taxes for the state.”
NFIB is officially neutral on the overall tax plan and will continue to assess the measure as it evolves in the legislature, Mr. Geiger said.
For the record, “officially neutral” is not quite the same as launching a paid campaign to pass a budget. Just sayin’
The Ohio State Bar Association, a trade group representing lawyers — who wasn’t shy about backing Republicans in opposition to 2012’s redistricting ballot measure — says in an email to members:
Prior to taking a position on this new proposal, the OSBA is reviewing the language of the budget bill to begin determining how such a tax could be implemented and its effect on both the consumers of legal services and the legal profession.
The Ohio Society of CPAs, always in Kasich’s camp, say that they, too, want to hear from members, but promise to play a role:
Scott Wiley, CAE, president and CEO, said OSCPA has long opposed a sales tax on accounting and other services.
“Rest assured, we will proactively engage in discussions with the administration on this proposal as the budget process proceeds, and our members input will be vital in framing those discussions effectively,” Wiley said.
Your input will be vital in framing those discussions effectively.
That’s a polite way of saying the CPAs plan to lobby against Kasich on this.
When four of the most reliably conservative statewide business organizations are sitting on the sidelines when you’re trying to sell promote your “pro-business” agenda, your agenda is in serious trouble.
And before anyone tells us that this is just one part of Kasich’s sweeping tax reform package, keep this in mind: without the proposed $3 billion expansion of Ohio’s sales tax, his $4 billion income tax cut is impossible.
Grab your popcorn. This should get interesting.