Ohio society of CPAs wins big on elimination of CAT carveout.

The Ohio Society scored a major legislative victory by securing the removal of a provision contained in Ohio's transportation budget that would have narrowed the commercial activity tax (CAT) base. Sincere thanks go to House and Senate leaders--particularly Senate President Bill Harris and House Speaker Jon Husted--for protecting the integrity of this new tax

Prior to approving the state's comprehensive budget for Ohio transportation and highway purposes (Am. Sub. HB 67), The Ohio Society successfully lobbied the Senate Highways and Transportation Committee to remove a House-passed provision that earmarks nearly S150 million in CAT revenues into a fund for high-way use instead of the general revenue fund. That revenue would not have been included in the "CAT revenue" total used to determine CAT rate adjustment.

A majority of House conferees agreed to the Society-backed Senate CAT changes. In addition, the conference committee approved language removing the ability of the tax commissioner to raise the CAT rate should revenues be more than 10% lower than budgeted.

It is possible the issue of motor fuel taxation may surface again during deliberations of HB 119, the state's operating budget. As originally proposed by Governor Strickland, HB 119 allows a temporary CAT exemption related to motor fuel sales to expire July 1, with revenue going to the general revenue fund.

The Society has consistently opposed any efforts to narrow the tax base of the CAT - including earmarks credits and exemptions - to ensure it remains a low rate.

For more information, contact Amy Mignogna at amignogna@ohio-cpa.com or 800.686.2727, ext. 362.

Ohio tort reform laws challenged in courts

As expected, several provisions in recently enacted Ohio tort reform laws are now being challenged in a variety of Ohio courts. Several different pieces of legislation, strongly backed by The Ohio Society, have been enacted in recent years. Pending cases include:

* Arbino v. Johnson & Johnson

Oral arguments will occur before the Ohio Supreme Court on May 1. This case is challenging the constitutionality of the non-economic damages limitation in ORC 2315.18; the collateral source provision in ORC 2315.20; and the punitive damages limitations included in ORC 2315.21 from SB 80. The Ohio Society participated in an amicus brief filed with the Court supporting defense of the provisions.

* Groch v. General Motors Corp.

Briefs were to be filed with the Ohio Supreme Court by April 17. This case primarily challenges workers' compensation subrogation statutes and the statute of repose for products, though a serious threat rests with the case's claim that SB 80 violates the single subject rule.

* SB 117 veto challenge

The transition between Gov. Taft and Gov. Strickland resulted in a veto of SB 117 by Strickland after Taft had allowed it to become law without his signature. SB 117 would have provided liability reforms for paint manufacturers and others. The House and Senate are suing the Secretary of State, saying she didn't have the authority to retrieve the bill and send it to Strickland for veto. The Ohio Supreme Court recently agreed to hear the case.

The Society has consistently opposed any efforts to narrow the tax base of the CAT to ensure it remains a low rate.

Eight other cases addressing a variety of lawsuit abuse reform issues are working their way through the lower courts.

The Ohio Society of CPAs, as a leader of the Ohio Alliance for Civil Justice, will continue to actively advocate for protection of these and other important lawsuit abuse reforms as they work through the courts. For more information, contact the governmental affairs department at government@ohio-cpa.com or 800.686.2727.

Ohio's new minimum wage and record-keeping requirements legislation in effect as of April 2

House Bill 690 - the legislation passed by the Ohio General Assembly to implement last year's minimum wage constitutional amendment - became effective April 2.

On Nov. 7, 2006, Ohioans approved a new Amendment to Ohio's Constitution that:

1. Raises Ohio's minimum wage from $5.15 per hour to $6.85 per hour

2. Imposes new record-keeping and disclosure requirements for the majority of employers in Ohio.

Signed by former Gov. Taft on Jan 2, HB 690 contains implementing language and clarifies many ambiguous areas of last year's constitutional amendment.

Ohio ranks first in new facilities in 2006

Site Selection Magazine ranked Ohic first in new and expanded facilities in 2006.

We got a lot of positive comments about eliminating the tangible personal property tax and reducing the income tax.

The magazine gave the rankings based on the number of private capital investments for new or expanded facilities that:

* Involved an investment of at least $1 million

* Created a minimum of 50 new jobs

* Added at least 20,000 square feet of new floor area

According to Site Selection's rankings, Ohio had 431 facilities that met these criteria. Texas ranked second with 363 projects and North Carolina third with 316 projects.

The editors credited former Lt. Gov. Bruce Johnson for the state's ranking.

"It starts with hard work and hundreds of people engaged in that hard work in Ohio," Johnson told the magazine. "Right after that is smart work, such as analysis of where your strengths lie and following up with a plan that calls on companies that actually have a reason to be here. And thirdly, there's the fundamental change that we promoted in the previous General Assembly, which was beginning to take hold last year. That eliminated tangible personal property tax and reduced the income tax, and we got a lot of very positive comments about that. It didn't mean that the handful of dollars you save that year was the difference, but over time (businesses) saw the state heading in the right direction. It made a lot of sense to a lot of people."