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The Bottom Line

Bolster your productivity. Eliminate tax on machinery, equipment, furniture and fixtures.

Ohio's revised tax code eliminates tax on capital for new machinery and equipment, so you can invest in greater productivity with zero tax burden. Taxes on machinery and equipment placed in Ohio before January 1, 2005 will be reduced each year until the tax is eliminated in 2009. The tax on furniture and fixtures will also be reduced each year through 2008. Machinery and equipment placed in service after January 1, 2005 is exempt.

Maximize your profits. Eliminate corporate income and franchise taxes.
Taxing profits hurts your company and hampers growth opportunities. These taxes will be eliminated completely in Ohio by tax year 2010.

Boost your ROI. Eliminate tax on sales of goods and services to customers outside of Ohio.
Only sales within the state are taxed at a flat rate of 0.0026, which translates to $2.60 per $1,000 of Ohio sales. You get a greater return on your investment dollar. Sales to or benefitting non-Ohio customers are completely exempt from the CAT.

Reward your entrepreneurial ventures. No tax on first $1 million in annual gross receipts.*
This provides attractive relief for small businesses, especially those that transact most or all of their business in Ohio. Helps new businesses get established and show a profit sooner.
*Gross receipts between $0 and $150,000 pay nothing, between $150,001 and $1,000,000 pay a $150 fee.

Slash your operating costs. Eliminate tax on inventory.
Carrying inventory costs can be a heavy burden for your company, especially warehousing and distribution operations. Tax on inventory held in Ohio will be fully eliminated for inventory held after January 1, 2008.

Attract the best talent; shrink labor costs. Reduce personal income tax by 21%.
High personal income tax adversely affects your company's ability to attract and retain top-level managers and high-skilled workers. Lowering the state personal income tax makes Ohio a more attractive location for corporate executives to live and work.

Enjoy a level playing field. All businesses are taxed at the same low rate.
No unfair advantages. No favored competitors.

Real world impact of tax reform on capital investor's decisions

In August 2006, the Ohio Business Development Coalition sponsored a telephone survey among executives that chose Ohio for capital investment. The purpose of the study was to better understand the role Ohio's new tax structure played in their capital investment decision. A total of 62 interviews were completed.

Demographics of Responders

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Ohio Capital Investment Survey Demographics

Conclusion

C-level executives (CEO, CFO, COO, etc.) view Ohio's new tax structure as an important consideration in the capital investment decision.

  • Among C-level executives, 60% indicated it was a "somewhat to very important" consideration in selecting Ohio for capital investment.
  • 83.9% of total respondents rated elimination of property tax on investments in machinery and equipment as appealing.
  • 82.3% of total respondents rated no business tax on products sold to customers outside Ohio as appealing.
  • 56% felt positive enough about the tax reform that they indicated they'd be willing to provide positive endorsements of Ohio's business climate.