Ohio farmers get tax relief in state reforms; agribusiness may feel pinch

SALEM, Ohio – Last year was the best sales year western Ohio John Deere dealer Ray Koenig ever had. This year isn’t looking bad, either.
But Koenig isn’t a happy camper.
He’s got to search his six-dealership network to find an extra $130,000 to pay state taxes, thanks to the new commercial activity tax (CAT).
Ohio farmers and agribusinesses are supposed to see tax relief from the state’s sweeping tax reform package signed into law by Ohio Gov. Bob Taft, but that may not be the case.
Reform. The fee is part of the $51.25 billion biennial state budget bill that took effect July 1.
The budget is the lowest-growth budget in the state in the past 40 years, Taft says.
The historic tax reform plan is aimed to create a new business climate that will generate jobs and grow the state’s tax base.
Reform. Ohio Tax Commissioner Bill Wilkins said the reform modernizes state tax laws and provides significant tax relief through cuts to the state income and sales taxes.
The budget bill also phases out of two major business taxes – the corporation franchise and tangible personal property taxes – and phases in the new commercial activity tax, or CAT tax.
Commercial tax. Ohio’s new in-state commercial activity tax captures revenue from service businesses: think lawyers, accountants, custom farmers.
Previously, the state had no way of collecting a tax –