Ohio’s tax code one of worst in country, according to new report

The Tax Foundation said Ohio uses an “antiquated” model to tax businesses

tax generic
Credit: Nexstar

COLUMBUS, Ohio (NEXSTAR) – As tax reform takes center stage in Washington, a new report out Tuesday says Ohio has one of the nation’s worst tax codes for business.

The Tax Foundation, a think tank in D.C., put the list together. It ranks the tax codes of all 50 states and Ohio did not do well, coming in at number 45.

The list looks at which tax codes are simple, transparent, and have the potential to attract business and create jobs.The Tax Foundation ranking each state's tax codes

While Ohio is not a state with extremely high taxes, it ranks near the bottom because its tax system is so complex.

Full report: 2018 State Business Tax Climate Index

Jared Walczak, with the Tax Foundation, said Ohio uses an “antiquated” model to tax businesses.

“Whether you’re profitable or not, you’re paying a significant tax burden.”

The Tax Foundation said states with complicated tax codes did poorly on the ranking, while states with transparent, neutral, and fair tax codes did well.

Walczak said Ohio’s system could discourage companies from moving to the state.

“Businesses look at that and say, ‘That makes us less competitive, operating in a state like Ohio.'”

The Tax Foundation said they’ve seen states hold back on major changes to their tax codes this year as Congress works on a federal tax reform plan.

“A lot of states took a wait-and-see approach,” Walczak said.

President Trump wants to pass tax reform by the end of the year. His plan would cut the corporate rate to 20 percent, he said, to spur economic growth.

“We’re fighting for lower taxes, big tax cuts — the biggest tax cuts,” Trump said.

But Democratic lawmakers say the Republican plan only benefits big business and the wealthy.

“It hurts the middle class,” said Sen. Chuck Schumer (D-NY).

No matter what federal tax reform looks like, Walczak said this is an opportunity for states to reevaluate their own codes and see how they can make them better.

According to the Tax Foundation’s ranking, Wyoming came in first and New Jersey came in last.

Ohio has been stuck toward the bottom of this list for a while. The last time it was any higher than number 45 was in 2015, when the state came in 44th place.


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