Ohio Governor Proposes Sales Tax Increase
- Feb 4, 2015 | Gail Cole
Ohio Governor John Kasich (R) has revealed his 2016-2017 Budget proposal. It includes a state sales tax increase and a broadening of the sales tax.
The Ohio sales tax rate increased to 5.75% on September 1, 2013. If the governor’s budget is approved as written, the rate would jump to 6.25% for general sales beginning in fiscal year 2016.
Sales tax would also be expanded to the following services:
- Cable TV subscriptions
- Debt collection
- Management and consulting
- Public relations
- Travel services
Additional proposed changes include the following:
- Raising the cigarette tax from $1.25 per pack to $2.25 per pack
- Imposing a tax on electronic cigarettes
- Reducing tax breaks on motor vehicle and watercraft trade-ins
- Capping the vendor timely filing discount to $1,000 per month
According to the budget proposal, raising the rate would “increase collections by $689.4 million in fiscal year 2016 and $949.2 million in fiscal year 2017” (when the new rate would be in place for the full year). Expanding the sales tax base “would provide $757.3 million in tax receipts over the biennium.” Additional changes would bring additional revenue.
Governor Kasich spoke of the need to “innovate” and “grow” to create opportunities and “help lift every single Ohioan.” He says that his “proposal to move from taxing income to taxing consumption” would allow people to choose “how they spend their money ” (Ohio Dispatch).
Not everyone agrees. “Critics denounced Kasich’s proposal as a shift in taxation from the wealthier to the poorer.”
Read the Executive Budget for FYs 2016 and 2017.
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