June 23rd, 2011 by Judd Ballard
Ohio Governor John Kasich recently proposed Invest Ohio to the Ohio House and Senate Conference committee, which is currently charged with reconciling the two versions of the 2012 & 2013 Ohio budget. As reported by The Columbus Dispatch, the “Invest Ohio” proposal would permit state tax incentives related to any gain attributable to an investment in an Ohio company if the taxpayer holds the Ohio investment for at least two years.
Governor Kasich commented on his proposal during a recent speech, reported by The Dispatch, at the Ohio Society of Certified Public Accountants‘ Member Summit. The Governor remarked his proposal would give “a mother and father a reason to invest in their children’s business.” Republican Senator Keith Faber hopes to include Governor Kasich’s proposal in the pending state budget and believes it will “incentivize people to put capital to work on job-creation activities inside Ohio.”
However, not everybody is on board with the Governor Kasich’s proposal. The Dispatch reported, House minority whip Tracy Maxwell Heard said the Governor’s proposal, “sounds lame” and that, “we can’t keep making these extensions to businesses without seeing a return.” James Newton, chief economic adviser at Commerce National Bank, told the Dispatch that the proposal is a “nice symbolic gesture.”
Other opponents of Invest Ohio claim this is just another tax break for the wealthy, and left some wondering why we’re not doing more to support small businesses owned by Ohioans, located in Ohio, employing Ohio residents. If enacted, we can probably expect to see clearer definitions on what types of businesses will qualify, the sizes of these businesses, how an Ohio business will be determined, and income limitations on eligible investors.
As the June 30th state budget deadline rapidly approaches, it will be interesting to see if “Invest Ohio” will make the cut. In the meantime, it’s obvious many gray areas still require finishing touches. So as the Governor’s proposal continues to progress, investors across the state will continue to wait patiently for the formal language of the completed proposal.
Who will really be able to take advantage of this tax incentive? At the end of the day, does it create more jobs?