Governor’s proposal could be taxing for consumers

DUSTIN ENSINGER

Staff Writer

Gov­er­nor John Kasich’s pro­posal to broaden the state’s sales tax base while low­er­ing rates has led some to fear it would make life more expen­sive in Delaware County.

The pro­posal, which must still make its way through the leg­is­la­ture, would lower the state sales tax rate by 0.5 per­cent and county sales tax rates by vary­ing amounts, while expand­ing the base by tax­ing addi­tional services.

Kasich’s plan would add dozens of pre­vi­ously exempt ser­vices or events to the list of those sub­ject to sales taxes. That list would include funeral ser­vices, account­ing, legal ser­vices and loan bro­ker fees.

“Two guar­an­tees in life are death and taxes,” State Sen. Kris Jor­dan (R-Ostrander) said. “I hope we don’t plan to tax both of those now.”

Ser­vices used by many county res­i­dents also are on the list, includ­ing the cut­ting, col­or­ing or styling of hair, garbage col­lec­tion and cable television.

“I do have con­cerns with dra­mat­i­cally expand­ing the sales tax base to include a lot of new items that nor­mal fam­i­lies use every day,” Jor­dan said.

While Jor­dan expects the pro­posal to be altered by the leg­is­la­ture, local busi­ness lead­ers pos­si­bly affected by the plan are brac­ing them­selves for its impact.

Delaware County Agri­cul­tural Soci­ety Board of Direc­tors Pres­i­dent Al Myers said if the pro­posed 5-percent sales tax on admis­sion to fairs remains intact, ticket prices are likely to increase at the Delaware County Fair.

“It’s going to be an addi­tional cost to the patrons at the fair and cost us addi­tional man hours to keep track of it,” he said. “Both as a busi­ness owner and the pres­i­dent of the fair board, I don’t think its a wise move in today’s economy.”

Pro­posed taxes on sev­eral ser­vices related to real estate trans­ac­tions could have a par­a­lyz­ing effect on a grad­u­ally improv­ing hous­ing mar­ket, fears Stephanie Cash­man, an agent with Delaware Realty Co.

“It’s going to be hard to have our mar­ket turn around if we have a sales tax on top of all the other costs of buy­ing and sell­ing,” she said. “The sell­ers are going to have less equity to work with, so they can’t take that money and pur­chase the next house. If it’s put on the buyer, it is going to give them less buy­ing power.”

As a non­profit orga­ni­za­tion, The Strand The­ater is exempt from tax­a­tion. Man­ager Kara Long hopes that remains the case under the governor’s pro­posal, which would levy a 5-percent charge on the rental of films and tapes by theaters.

“If it is on the ticket price, it would have to be passed along to the con­sumer, unfor­tu­nately,” she said.

Bill Rodgers, a part­ner at the account­ing firm Wolf, Rodgers and Dickey Co., called the idea of adding sales tax to the total cost of tax prepa­ra­tion “bizarre.”

“I do find it a lit­tle odd that the state of Ohio would charge sales tax for indi­vid­u­als that are hir­ing pro­fes­sional help to com­ply with tax­a­tion,” he said. “It’s a lit­tle bit of get­ting you com­ing and going.”

State Rep. Andrew Bren­ner (R-Powell) also expects sig­nif­i­cant changes to the pro­posal before it makes its way back to the governor’s desk.

While he sup­ports the goal behind the plan, he believes the state income tax should be elim­i­nated before expand­ing the sales tax base.

“I like the idea that he is try­ing to change the tax code and lower rates in the long run,” Bren­ner said. “I’m not exactly sure this is the method he should be using.”

As part of the governor’s pro­posal, local sales tax rates also would be reduced to avoid a $700 mil­lion tax increase the governor’s office says would be harm­ful to the econ­omy. Delaware County would see its rate fall from 1.25 per­cent to 0.80 percent.

Despite that reduc­tion, which would be locked in for three years, the governor’s office says coun­ties would see their sales tax rev­enues grow by 10 per­cent annu­ally over that time due to the broad­en­ing of the base.

“What (the gov­er­nor) is try­ing to do is make our state more eco­nom­i­cally com­pet­i­tive and that should be applauded,” Delaware County Com­mis­sioner Gary Mer­rell said.

Posted by Dustin Ensinger on Feb 27 2013. You can follow any responses to this entry through the RSS Feed. Comments can be made below.