02/18/2015

ONA Member Survey: Gov. John Kasich's Tax Reform Proposal

Note: Survey is located at bottom of page.

To: ONA Trustees, Publishers and General Managers
From: Dennis Hetzel

We need member feedback on Gov. Kasich’s tax reform proposals that are part of the 2015-16 budget the Legislature will consider between now and late June.

You may recall that in 2013 our media coalition successfully fought a vast expansion of the sales tax to include advertising and marketing services. This would have been devastating to both our members and our advertising partners.

That was a no-brainer. This year, it’s not as clear. The Kasich Administration estimates an overall tax cut of $500 million while extensively shifting the “mix” from the income tax to increases or new taxes in other areas.

We need to know more about how this not only could affect you, but also how it might impact your customers in terms of their available dollars for advertising and other services you provide.

Here is a summary of the most impactful proposals to newspapers, their employees and customers:

1. There would be an average 23% cut in personal income tax for all Ohio residents.
2. Small businesses that are “pass-through” entities such as personally owned businesses, Chapter S corps or LLC-type structures, would pay no tax on the first $2 million of gross receipts.
3. All sales taxes would rise by .5 percent, and there would be a $1 per pack increase in tobacco taxes.
4. The sales tax would expand to certain services that newspapers either provide or pay for, such as management consulting, lobbying, parking services and market research/opinion polling. The ONA also has concerns that the sales tax definition for “lobbying” and “public relations” could be interpreted so broadly that advertising could be included.
5. There would be an increase in the CAT (Commercial Activity Tax) rate to .32 percent of gross receipts after the first $2 million in sales from the current .26 percent of receipts from the first $1 million in sales. The Administration estimates that this 23 percent increase in the rate will translate to an extra $600 per year in tax expense for every $1 million in sales over $2 million.

We ask you to take a few moments to answer and return the following survey. Neither your identifying information nor your responses will be quoted by name without your permission.