LIMA — Local county commissioners, auditors and accountants offered a relatively positive reaction Tuesday to tax reforms proposed in Gov. John Kasich's budget.
Some local officials at the meeting were concerned the new tax reforms would further complicate the current tax structure. Leading the session, State Tax Commissioner Joe Testa explained this plan was a step in the right direction for Ohio.
“Ohio is probably the worst in the country when it comes to tax complexity,” Testa said. “In the long term, it’ll help. In the short term, there is an adjustment period.”
The “adjustment period” comes in the form of taxation changes that would focus state tax revenue away from income tax towards sales tax. According to the governor’s plan, state income tax revenues would be cut by 20 percent over the next three years.
Although the state sales tax rate would decrease from 5.5 percent to 5 percent, some services not previously taxed would begin including a sales tax. Such industries affected would be legal and accounting services, marketing, transportation and administrative and support services.
This new tax plan could significantly affect Allen County, which sees 60 percent of its revenue from sales tax.
“For Allen County government, I think it’s a very good thing because it’s going to make us more stable,” said Allen County Auditor Rhonda Eddy-Steinecker. “Individually, everyone wants to see their income tax go down.”
If enacted, the proposed budget would take effect July 1.