Workshop Q Ohio Legislative Process How You Can Help Shape Tax - - PDF document

Tuesday & Wednesday, January 28‐29, 2020

Hya Regency Columbus, Columbus, Ohio

Workshop Q

Ohio Legislative Process … How You Can Help Shape Tax Policy and Your Future

Tuesday, January 28, 2020 3:00 p.m. to 4:00 p.m.

Biographical Information

Ashley Matthews, Director of Tax, Crane Group Co. 330 W. Spring St, Columbus OH 43215 614-754-3038 amatthews@cranegroup.com Ashley joined Crane Group as Director of Tax in 2017. She is responsible for overall tax strategy for all Crane Group Companies, investments, family and family entities as well as the research, analysis, and structuring of potential business acquisitions from a tax perspective. Ashley is involved the planning and execution of Crane’s various tax positions, ultimately implementing strategies to minimize the overall tax consequences of the company and family. Prior to joining Crane Group, Ashley worked in public accounting. She began her career at Deloitte in 2006 in the real estate tax practice working with commercial real estate development companies and their owners. She then joined Rea & Associates as a Senior Tax Manager in 2015, working with clients across the firm on formation, structure, and transaction planning issues with a focus on partnership taxation. Ashley received her Bachelor of Science from Ohio Dominican University and is a Certified Public Accountant. Debora (Dardinger) McGraw JD, LLM, CPA, Member, Zaino Hall & Farrin LLC 41 South High Street, Suite 3600, Columbus, OH 43215 614-349-4813 Fax: 614-754-6368 dmcgraw@zhftaxlaw.com Deb is a member of the firm's Federal and Multistate Tax Practice Group. Deb has significant experience representing clients in various state and local tax controversies, including settlement

• negotiations. She also assists clients with a variety of federal income tax issues. Deb has

significant experience in conducting refund reviews and in assisting clients with tax planning including implementation by working with various client operational groups. Deb has worked with clients in various industry groups and has developed particular experience in the financial services and utility industries. Prior to joining the firm, Deb was a Director at PricewaterhouseCoopers where she worked for 16

• years. Prior to leaving PwC, Deb led the Columbus large company tax practice and served as

the lead contact for many Columbus based companies. She assisted clients with a variety of federal and state tax considerations including tax planning, corporate restructurings, federal and state controversy, corporate compliance, financial statement audits, etc. In particular, Deb excels at conducting federal and multi-state refund reviews for clients looking to improve cash flow or review their current tax positions. Deb led PwC's Ohio tax efforts nationally including negotiation of multiple Fortune 100 and 400 company audit settlements. She frequently used her refund review experience as offsets in Ohio and other state audits or to argue alternative positions. Deb handled the legislative analysis for the firm and acted as a national resource for other offices. She drafted updates that were circulated internally and to clients. Deb spoke regularly on client webcasts introducing new Ohio legislation, as well as, on federal and multistate tax considerations for internal PwC trainings. Deb served as the chair of PwC's local Women's Networking Circle for two years and the board for two additional years. The group was aimed at mentoring women in public accounting and providing them networking and support opportunities. She was voted coach of the year for the Ohio-Kentucky-Indiana cluster of PwC in 2009, the first year the award was offered. Deb is a frequent speaker and served as an adjunct professor at Capital University Law School.

Biographical Information

• M. Anthony Long, Director, Tax & Economic Policy, Ohio Chamber of Commerce

34 South 3rd St., Suite 100, Columbus, OH 43215 614-629-0910 tlong@ohiochamber.com Tony began his tax career at the Ohio Department of Taxation in Columbus, Ohio. Tony worked in the Legal Division under a number of Tax Commissioners and was responsible for administrative hearings, legislative review, and acted as a liaison with the Ohio Attorney General’s Office for review of mediation requests filed with the Board of Tax Appeals. Tony then moved onto Honda of America Mfg., in 2001. Tony worked within the General Counsel office and supported various internal business groups at Honda. As Tony awaits the publication of his 1st children’s book: Tax Policy Analytics for 3rd Graders, he shifted his focus to government relations. Tony now focuses on tax, economic development, transportation, and general economic policy matters for the 9,000 business members of the Ohio Chamber of Commerce. Tony graduated with a B.A. from Mount Union College and received a J.D. from the Toledo College of Law. Gregory M. Saul, Esq., CAE, Director of Tax Policy, The Ohio Society of CPAs 4249 Easton Way, Suite 150, Columbus, OH 43219 614-764-2727 ext 2224 Fax: 614-652-5653 gsaul@ohiocpa.com Greg is a graduate of Capital University Law School (cum laude, 2009) and Knox College (magna cum laude, 2003) with experience in the legal division of the Ohio Auditor of State’s office and at the Ohio Supreme Court. He previously served as Legislative Aide to former state Senate President Pro Tempore Jeff Jacobson from 2003 through 2008. In addition to his attorney license, he holds an Ohio agent’s license for property and casualty insurance, plus life & health insurance, and variable annuities. Prior to joining the Society in 2013, Greg worked at the National Federation of Independent Business (NFIB) as its Member Benefits Program Manager. As OSCPA’s Director of Tax Policy, he is responsible for lobbying state legislators and regulatory officials in the executive branch on tax and general business issues. He is a native of Napoleon who currently resides in Gahanna with his wife, Jennifer. Tim Lynch, Legislative Liaison, Ohio Department of Taxation 30 East Broad Street, Columbus, OH 43215 (614)466-5461 timothy.lynch@tax.state.oh.us Tim Lynch has been a legislative liaison for the Ohio Department of Taxation since February of 2011, and currently serves as the legislative director. Prior to ODT, Mr. Lynch served as a legislative aide in both the Ohio Senate and the Ohio House of Representatives dating back to

• 2005. While serving as a staff member in the Ohio General Assembly he worked intimately on

multiple state transportation and operating budgets. While completing a business degree in Transportation and Logistics at The Ohio State University, he served as an Ohio House of Representatives page.

Biographical Information

Adam L. Garn, JD, CPA, MT, Senior Manager, Plante Moran 250 South High Street, Suite 100, Columbus, OH 43215 Adam.Garn@plantemoran.com Direct: 614-222-9200 Adam is an attorney and a certified public accountant. He advises clients on a wide range of multistate tax issues including income and franchise, sales and use, property, business activity, and municipal income taxes. Additionally, Adam has experience in negotiating and obtaining state and local tax incentives throughout the United States. Adam rejoined Plante Moran in 2019. Prior to rejoining Plante Moran, Adam worked in public accounting and at law firms. During law school, he served in positions at the Supreme Court of Ohio and the Ohio Department of Development (now known as Ohio Development Services Agency). He was also a research assistant for Professor Danshera Cords assisting with several articles and the publication, Practice and Procedure in the U.S. Tax Court. Adam is a frequent speaker on various state and local topics including sales and use, commercial activity tax, municipal income tax, and national multistate taxation policy matters. Adam currently serves on the State and Local Tax Committee and Conference Advisory Committee for the Ohio Society of CPAs. Adam is also chair of the Municipal Income Tax Subcommittee for the Ohio State Bar Association. In addition, Adam serves on the Board of Directors and Finance Committee for the Area Development Foundation of Knox County. Adam has also served as an adjunct professor in federal taxation at Franklin University. Lastly, Adam was named an Ohio Rising Star by Super Lawyers for 2019 and 2020. Adam is a graduate of the University of Findlay with a Bachelor of Science in Accounting and received a Master of Taxation and Juris Doctor from Capital University.

Ohio Legislative Process… How YOU Can Shape Tax Policy and Your Future

Tuesday, January 28, 2020

Introductions

• Ashley Mathews, Director (Tax), Crane Group Co.
• Tony Long, Director of Tax and Economic Policy, Ohio Chamber of Commerce
• Timothy Lynch, Legislative Director, Ohio Department of Taxation
• Greg Saul, Director of Tax Policy, The Ohio Society of CPAs
• Adam Garn, Senior Manager, Plante Moran
• Debora McGraw, Member, Zaino Hall & Farrin LLC

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Ohio Legislative Process

• Regular meetings with legislators about topics of interest and

potential legislation.

• A Bill proposing a new law, amendment, or repeal of an existing law is

introduced in the Ohio House of Representatives or the Ohio Senate.

• The Legislative Service Commission (“LSC”) typically drafts the language.
• Each bill must be considered on three separate calendar days, unless two‐

thirds majority vote to suspend the requirement.

• Biennial Budget Bill every two years, usually completed by the end of June.

Typically contains a variety of technical corrections and tax changes.

• Assorted tax provisions may end up in a year end bill or technical corrections

bill.

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Ohio Legislative Process

• Rules and Reference Committee of either house assigns the bill to a standing

committee.

• Hearings are held, including testimony provided.
• Purpose and examples of testimony.
• Sometimes separate interested party meetings to discuss specific language or to work

through issues.

• The Committee can report favorably with no changes to the bill, adopt amendments and

report the bill as amended, redraft the bill (a substitute bill), combine bills, defeat the bill, or take no action.

• An affirmative vote is necessary to report the bill favorably or postpone the bill indefinitely.
• The bill goes back to the Rules and Reference Committees for schedule of floor

debate and/or vote of the full Ohio House of Representatives or Ohio Senate.

• Once a bill passes the Ohio House or Ohio Senate, it goes to the other house

following a similar process.

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Ohio Legislative Process

• If there are differences in the version passed by the second house (e.g., the Senate passed

changes in a House bill), the bill is sent back to concurrence (e.g., the House of Representatives would have to concur with the Senate’s changes).

• A conference committee generally consists of three members of the Ohio House of

Representatives and the Ohio Senate.

• If the conference committee resolves the differences between the two versions of the bill, the committee

issues a conference committee report.

• A majority of the members must agree to the conference committee report.
• After passing both houses, the Speaker of the House and the Senate President sign the bill and

the bill becomes an “act.” The act is presented to the Governor for acceptance or rejection.

• If accepted, or if the Governor does not take any action for 10 days, it becomes a “law.”
• If a bill or a line item in a budget bill is vetoed by the Governor, a three‐fifths vote of the members of the

House and Senate is necessary to override the veto.

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Ohio Legislative Process

• Generally 90 Days Effective: The Ohio Constitution requires that 90 days

elapse before a law goes into effect to permit any possible referendum petition to be circulated and filed by the electorate.

• Immediately Effective: Appropriations for the current expenses of state

government, tax levies, and emergency laws necessary for the immediate preservation of the public peace, health, or safety go into immediate effect and are not subject to the referendum.

• Emergency Laws: Emergency laws require a separate section setting for the

nature of the emergency. They must be voted on with a separate roll call. Both the emergency clause and the bill must be voted on by two‐thirds of the member of each house.

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Legislative Publications

• Bill Analysis: The staff of the LSC prepare a detailed description of

each bill throughout the process, which is helpful in understanding the bill.

• Synopses: LSC prepares a synopsis of any substantive amendments

adopted by a committee.

• Fiscal Notes: LSC prepares and contain the bill’s revenue or

expenditures before each vote.

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Industry Examples of Shaping Tax Policy

• Ashley Mathews
• Different experience in industry than when worked in public accounting.
• Efforts and impact around the federal Tax Cut and Jobs Act of 2017.
• Ohio specific tax provisions geared toward company needs.
• Participation and membership in groups and associations to monitor and

manage needs.

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Industry Examples of Shaping Tax Policy

• Tony Long
• Creation of CAT/Repeal of the personal property tax in 2005.
• Participation in local associations and committees.
• Saving the Business Investment Income Deduction.
• Participation in national groups and associations.
• COST Policy Committee to formulate policy positions and pass federal legislation on

casual entrants into a jurisdiction.

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Industry Examples of Shaping Tax Policy

• Company specific
• Clarification of Law or Significant Dispute (e.g., audit or case law)
• Unintended impact (donation of solar power)
• Economic development changes:
• Job Creation Tax Credits/Retention Credits – Language changes every year
• Data center sales tax exemption
• Qualified distribution center
• Industry specific
• Various association groups
• Petroleum Activity Tax
• Public Utility Reform

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Industry Examples of Shaping Tax Policy

• Coalitions
• Anti‐Tax on Services
• JCTC Fix
• Employment Services
• Across the board reform or change
• Enactment of the CAT/Repeal of the Personal Property Tax
• Direct appeal to the Ohio Supreme Court for Tax Commissioner cases
• No sales tax on expanded services

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Industry Examples of Shaping Tax Policy

• Joint Economic Development Zone (“JEDZ”):
• Economic tool designed to allow townships to partner with a city and impose an income tax

to fund green space development. Voted on by residents, although not subject to the tax.

• Townships started imposing involuntarily over existing businesses.
• Started as a grass root effort in each township in which the local businesses had discussions

individually and collectively with the township, local Chamber of Commerce, and each other.

• Significant business response during public hearings with significant efforts by local Chamber
• f Commerce to stop JEDZ but many townships proceeded.
• Litigation regarding compliance with sunshine laws during JEDZ process.
• Pursued Ohio legislation by partnering with sponsor of JEDZ provisions and participation in

interested party meetings with municipal league on statutory changes.

• Attendance at legislative meetings with the Ohio Chamber of Commerce. Sought assistance
• f other business associations.
• Legislation enacted to repeal JEDZ included emergency procedures (two thirds of the

members of both houses approved).

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Industry Examples of Shaping Tax Policy

• Job Creation Tax Credit Fix:
• Measured based on employee withholding. Reduction in personal income tax

rates resulted in unintended reduction in companies’ JCTC, even though the businesses had met their job requirements.

• Coalition of interested taxpayers met with Ohio Development Services Agency

(“DSA”).

• Contacted by other interested taxpayers and the taxpayers and their lobbyists

agreed to meet Ohio legislators together.

• Coalition worked collaboratively with DSA on proposed language and

provided feedback on unintended issues with proposed language.

• Enacted Withholding Adjustment Factor, which eliminates any reduction in

the PIT rates for purposes of the JCTC, so long as the taxpayer satisfied its

• ther obligations.

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Ohio Department of Taxation Input

• Often leader of initiatives:
• Municipal net profit tax reform
• Tax Rate reduction/Business Income Deduction
• Even if not leader of legislation, the first thing legislators will say is

“Where does ODT stand?” on the proposed legislation.

• Best practices on approaching ODT on legislation?

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Common Resources for Shaping Tax Policy

• Ohio Chamber of Commerce and local Chambers of Commerce
• Ohio Society of CPAs, National Federation of Independent Businesses,

Ohio Business Roundtable, Ohio Realtors

• Often part of a larger national organization that may be helpful (e.g.,

Realtors example).

• Independent national organizations, such as COST.
• Local associations such as the Manufacturing Policy Alliance (“MPA”)

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Common Resources for Shaping Tax Policy

• The groups do much more than just lobbying or tracking, provide

assistance on local issues, feedback on rule review, etc.

• May sponsor Amicus Curiae briefs in cases with a broad application pending

before the Ohio Supreme Court (e.g., the current municipal litigation).

• Provide guidance on a whole host of issues (not just tax)
• From a recent OSCPA update presentation: Government transparency,

regulatory reform, breach of contract, employment law reform, licensing reform, all tax types (CAT, PIT, SUT, Municipal net profit, municipal withholding, etc.), profession issues, federal mobile workforce, National Popular Vote Interstate Compact

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Notable Resources Available

• Monthly magazines, newsletters, etc.
• Surveying of membership to determine legislative support and to

seek guidance on proposed statutory language.

• Initiatives such as the OSCPA Ohio Tax Reform Task Force
• 19 OSCPA tax experts from around Ohio. Year long process. Issued a report

with recommendations in 2016 on how to improve the Ohio tax system.

• Feedback and assistance on statewide municipal tax administration

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Notable Resources Available

• Tax Committees
• Tony Long (Chamber)
• Greg Saul (OSCPA)
• Continuing education seminars online and in person
• Ohio Virtual Tax Academy
• ODT offers free tax updates, which provide continuing education.
• Old presentations are also archived so that taxpayers and practitioners may access them at any

time: https://www.tax.ohio.gov/Researcher/VTA.aspx

• Supreme Court website for updates and video of oral arguments
• Ohio Board of Tax Appeals website for updates
• Ohio Department of Taxation website for updates (Virtual Tax Academy CPEs)
• Gongwer/Hannah legislative services
• Firm updates (public accounting, ZHF SALT Buzzes) and continuing education
• Social media references

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Tips on Getting Involved for the Future

• Check to see what memberships and associations the business

already keeps

• Ask about tax or other committees that may be of interest.
• Once a member, attend an Ohio Chamber of Commerce business tax

committee meeting – they are a great way to meet people and get updates on current events.

• Reach out to OSCPA regarding the tax committee or other
• pportunities to participate.

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Tips on Getting Involved for the Future

• Participation in legislative “meet and greet” meetings (e.g., Chamber
• r OSCPA legislative meetings).
• Call or send an email introducing yourself as an industry or firm

resource.

• Reach out to providers to set up meetings to meet and greet

legislators, ODT or DSA personnel.

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Legislative Events for your Participation

• ODT 5 Year Rule Reviews
• Tax Expenditure Review Committee

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Current Tax Expenditures

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01.

Defined as credits, deductions, exemptions to the sales, income, CAT,

• ther taxes

02.

In the 2019 report there were 134 tax expenditures, up from 129 in

• 2017. Fiscal

impact over $9 billion.

03.

OSCPA position: each should be evaluated periodically to ensure it is meeting established goals

Slide borrowed from OSCPA

Tax Expenditure Review Committee

• HB 9 (131st GA): Effective March 21, 2017
• Review once every 8 years
• Recommendations to keep, change, modify
• New ones must have statement of intent/objectives
• Committee: legislators and ODT Commissioner
• Hearings held Spring 2018
• Sales/use tax: expenditures 1.01 to 1.15
• Report released on November 13, 2018
• http://www.ohiosenate.gov/Assets/Global/TERCReportNovember.pdf

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Slide borrowed from OSCPA

Tax Expenditure Review Committee

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Slide borrowed from OSCPA

State Budget Revenue

25

Slide borrowed from OSCPA

State Budget Spending

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Slide borrowed from OSCPA

Questions?

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Contact Information

Ashley Mathews

Director (Tax) | Crane Group Co. amatthews@cranegroup.com (614) 754‐3038

Tony Long

Director of Tax and Economic Policy | Ohio Chamber of Commerce tlong@ohiochamber.com (614) 629‐0910

Timothy Lynch

Legislative Director | Ohio Department of Taxation timothy.lynch@tax.state.oh.us (614) 466‐5461

Greg Saul Esq., CAE

Director of Tax Policy | The Ohio Society of CPAs gsaul@ohiocpa.com (614) 764‐2727 x2224

Adam Garn

Senior Manager | Plante Moran adam.garn@plantemoran.com (614) 222‐9200

Debora McGraw

Member | Zaino Hall & Farrin LLC dmcgraw@zhftaxlaw.com (614) 349‐4813

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