Ohio Tax Whats on the Horizon Priceless Insights on Tax Department - - PDF document
26th Annual Tuesday & Wednesday, January 2425, 2017 Hya Regency Columbus, Columbus, Ohio Ohio Tax Whats on the Horizon Priceless Insights on Tax Department Initiatives, Tax Reform, Ohio Budget, and Business Taxes Joseph W .
26th Annual
Tuesday & Wednesday, January 24‐25, 2017
Hya Regency Columbus, Columbus, Ohio
What’s on the Horizon
Priceless Insights on Tax Department Initiatives, Tax Reform, Ohio Budget, and Business Taxes
Joseph W . Testa Ohio Tax Commissioner, Ohio Department of Taxation Columbus
Tuesday, January 24, 2017 12:45 p.m. to 1:20 p.m.
Biographical Information
Ohio Tax Commissioner Joseph W. Testa
Joe W. Testa was appointed Ohio Tax Commissioner by Governor John Kasich in January
Testa leads an agency of about 1,100 employees and is successfully pursuing a mission to reduce staff and department expenditures while improving service to taxpayers by leveraging
the department’s general revenue fund spending by more than 14 percent. Technologies including an automated call distribution system, webinars for tax professionals, telecommuting for audit and enforcement staff and expanding electronic communications with taxpayers have all contributed to better service, greater efficiencies and lower costs. The Tax Commissioner is responsible for administering and enforcing most state and many local government taxes, including the state income tax, state and local sales taxes, and several business and excise taxes. All told, these taxes provide approximately $30 billion in revenues to support funding of Ohio’s schools and colleges, Medicaid, law enforcement, transportation and a myriad of other public services. Testa joined the department with nearly 30 years of public service, including a 25 year record of accomplishment as an elected official. He was first elected Franklin County (OH) Recorder in 1985, and held that office until 1992. As Recorder he was responsible for the recording of all real estate transactions, liens and various other documents as prescribed by Ohio law. Testa was then elected to the office of Franklin County Auditor, a position he held for 17 years until stepping away from office in 2009. As Auditor, he was responsible for managing an office with approximately 185 employees and entrusted with the appraisal of all real estate in the county, various fiscal services, involvement with personal property and estate taxes, and providing for Information Technology services for county government. Testa received numerous awards in office including the Outstanding Auditor Award by the Auditor of State (OH) twice, and he is the only two-time recipient of the Richard J. Makowski Outstanding County Auditor Award by the County Auditor’s Association of Ohio (CAAO), and is a past president of the CAAO. During and after his tenure as an elected official, Testa taught undergraduate courses in management, business analysis and technique, ethics, and organizational systems. Before entering public service, Testa worked in the private sector in management with a food products company. Testa earned a Master of Human Resources degree from The Ohio State University, Fisher College of Business. He also holds a Bachelor of Arts degree in Public Administration from the University of Central Florida. Testa is a veteran having served in the U.S. Navy (1968-72) from which he received a Vietnam Service Medal. He is married, the father of two sons, and has three granddaughters. Commissioner Testa’s keynote slides are available at www.MECseminars.com under Taxation tab and Presentations.
Joe e Testa ta Ohio io Tax x Commiss mmissioner ioner
Ohio io Tax x Conf nfere rence nce Janua nuary y 24, 2017
dget t surpl rplus us exceedi ding ng $2.0 .0 bi billion. n.
x cuts ts total
ing $5.0 .0 bi billion
nce e Gover vernor nor Kasich took offic fice.
ployme yment nt 4.9% 9% (U.S. avg vg. . 4.7% 7% )
36,20 ,200 0 new pri w private sector r jobs bs since ce Januar nuary y 2011 11.
rowt wth h in number er of middle le-mar market t fi firms s (revenues enues of $10M - $1B) since e 2011 (Natio tional nal Center er for the Middle le Mark rket et, , OSU Fishe her r Colleg lege of Business) ess)
iness ess climat ate e in the country; ; up fro rom #7 n nation
ally in 2015 (Site e Selection tion Magazin azine) e)
th Best tax climat
ate e for small ll business ness (Small ll Business ess Entrepr pren eneur eurship ship Council, ncil, 2016)
x Reven venue ues: s: St Still l Gro rowt wth bu but Short of Estimat mates es.
d w/ w/appr pprox.
rowth wth.
ERNOR: : Expe pect ct Low w – No No G GROWTH TH BUDG DGET ET.
x Reven venues s ─ all taxes ─ 2.7% 7% be below estimat mates s thru ru Decemb mber.
1,368 1,347 1,178 1,111 1,066 999 987 $23.70 $25.30 $26.40 $28.08 $28.09 $29.45 $29.82 $23 $24 $25 $26 $27 $28 $29 $30 $31 $32 950 1000 1050 1100 1150 1200 1250 1300 1350 1400 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
ODT T Pro roduc ductivity tivity Increase ase
Staff size Tax revenues (billions)
Staff size
Revenue ues +26%
$5 bil illi lion n bre reak akdo down wn
11 – Estat ate Tax: : $1.0B .0B
3 – Inco come e Tax x (10%) 10%): : $2.7B .7B
14 – Earne rned d Inc ncom
Business iness Dedu ducti ctions:
$481M 1M
15 – Income me Tax (6.3% 3%): : $90 900M 0M
6: 100% 100% Dedu ducti ction... n...NO NO TAX X on fi first st $250K 50K.
7,000 00 Taxpa xpayers s took Busi sines ness s Inco come e Dedu ducti ction
(TY 2015). 15).
Flat Tax on Busines ness s Income me
ver $250K 50K. .
Oh Ohio io Inc ncom
e Tax ax Chan anges ges
Filing ng ope pened d Jan. . 23/close /closes Apr pril l 18. 8.
dexing ng of in inco come me tax br brackets ts and d pe personal al exempt ptions ns re resumes s in 2016. 6.
New de w dedu duction: tion: STAB ABLE LE Ac Acco count/ unt/$2,00 $2,000 0 pe per r di disabl bled d be benefic ficiar ary pe per y r year.
ding data-dr driv iven en audit pro rogram am in 2017. Last year, , sales es tax only; ; now w CA CAT – EWH – Busin iness ess Income e Deductio tion. n.
fits: s: Gr Greater er objectivit tivity; ; More focus/ef /effic icienc iency.
Explor
ing tr trend nds: s:
CS
parativ ative e / Successiv ssive e Filings ings
d more than a $1/2 billion lion in attempt pted ed theft of inc ncome me ta tax re refunds nds sinc nce e Ju June ne 2014. 14.
ity and preven entio tion n measur sures es appear ar to det eter / Attempts pts and amount nt of $$ sough ght t down wn signif nific icant ntly ly.
roved d system em analytics ytics to bet etter identify tify true fraud and reduce impact on legitimate taxpayers / adding ‘learning model’.
firmation tion Quiz z – 99.5 9.5% % pa passed d (in 2016). 6).
z takers do down wn signif nificantly icantly:
15 = 1.8M 8M took quiz. z.
6 = 712,00 2,000 0 too
quiz.
tions abo bout the quiz z do down wn 50%. %.
RS, stat ates es, , an and industr dustry y shar arin ing g information.
with h neighborin ighboring g stat ates es (PA – KY – WV V – IN – MI).
io: on-line line fi filer ers s (I-File): Driver’s license / stat ate-iss issued ed ID & email ail ad addre ress ss.
tware are vendor dors: s: email ail ad addre ress ss.
ARS Proj roject ect: : Lat atest est rele leas ases es – Oct ct. . (P (PAT, , FIT, , Resor sort t Area, a, 9-1-1); Jan. ’17 Public Utility Excise.
22 tax axes es no now w in in produc roducti tion
ince ce 2012 2 rela launc nch.
inal al Rele lease: ase: Pas ass-Thr Through
ntit ity y Tax ax (J (June ne). ).
roject ect Com
plete – June ne 30, , 2017.
nic Informat matio ion n Services ices (i.e.
net access ss fees paid by business nesses) es): : Taxability xability sunset sets s on Ju June 30, 2020 (est stimat imated ed rev revenu nue impact act: : $75M/st stat ate e & l & local.) l.)
s tax on Medica caid id Health th Insur uring ing Corp rpor
ations ends Ju June 30, 2017:
FISCAL AL IMPACT CT (FY Y 18-19) 9)
State e govt: $1.1 .1B B
l govts ts: $397M. 7M.
lin County nty receip ipts ts tot
ed $22.4M in CY 2016/ 7.4% of county’s total sales & use tax revenue.
siness ss Gat ateway y (OBG) 3.0 / Syst stem em moderniz rnization ation.
al: : expan and sy syst stem cap apab abilitie ilities, s, improve e cust stomer er experience. rience.
nhanced d se searc arch h function ction to l locat ate se service ices s / info.
asier er au authent entica ication ion pro roce cess ss / pas asswo sword rd reset set
e cohesiv esive, , coord rdin inat ated d relat ationship ionship with h st stat ate (TAX AX, , BWC, C, JF JFS).
re than an 6,900 0 at attende endees es since ce OVTA A began gan free ee quar arter erly ly seminar minars s in Marc arch h 2014 14.
e contin ntinuin uing g educa ucation tion credits edits / 1 16,735 735 credits edits ear arned ned / 90 90% CPEs Es.
xt session: sion: Feb.
7 / Topics: ics: Ex Executiv cutive e budge dget, t, Tax ax Ex Expen penditu ditures res & the e Tax ax Ex Expenditur enditure e Repor
t, CA CAT news ws (Crut utchfie hfield) ld) & CA CAT Audits its.
gist ster r @ tax ax.oh .ohio.go io.gov (ope pens ns this s we week). ek).
Execu cutiv ive e bud udge get / Releasi leasing ng Ja Jan. . 30, , 2017.
udge get t & r & revenu enues es tig ight. t.
rela lated ed in init itia iativ ives. s.
For more information, email: contactthecommissioner@tax.state.oh.us