COLUMBUS, Ohio (1/25/13)--Tax reform proposals in Ohio are earning the close examination of the state's league--not because a tax on credit unions is imminent, but because local credit unions are already subject to sales and use taxes. And the league wants to make sure that burden doesn't grow.
"The governor wants to re-examine some of the taxes such as the sales tax, because there are some 140 loopholes and exemptions, and he wants to close some of those--especially with sales and use taxes," John Kozlowski, Ohio Credit Union League general counsel, told News Now. "He also is looking at reducing taxes for small businesses.
"We will be watching to see what effect it will have on state-chartered credit unions,' he added, noting that the league is "not concerned at this time, but always watchful when it comes to taxes' effects on credit unions."
The Ohio league is monitoring the progress of bills related to sales tax reform and revenue in the state's General Assembly and their impact on Ohio credit unions.
Unlike their federal counterparts, Ohio's state-chartered credit unions are not exempt from paying Ohio's sales and use taxes, the league explained. If many of the deductions and exemptions are eliminated, Ohio's citizens and businesses-- including credit unions--would pay more sales and use taxes for goods and services purchased (eLumination Newsletter Jan. 23).
Ohio Gov. John Kasich has said he will submit a comprehensive tax reform proposal this year, the league said.
The reforms likely will target more than 140 tax credits, deductions and exemptions--which total more than $7 billion--Ohio permits annually. A sales tax reform could be a factor in reducing or eliminating the state's personal income tax, along with increasing the severance taxes on oil and gas, the league said.
The Ohio league said it will track developments and provide updates as they arise to credit unions.