The new Tax Expenditure Review Committee, created to give ongoing scrutiny to foregone state revenue in the form of exemptions, deductions and other special exceptions in the tax code, has announced its first meeting and the first set of tax expenditures to go under the microscope. Historic preservation tax credits are included among many “tax expenditures.”
After years of discussion among legislators and advocacy from outside groups across the political spectrum about the need for such reviews, lawmakers finally created the committee at the close of the previous General Assembly.
Under the law, the committee consists of six legislators and the tax commissioner, and it must review every tax expenditure listed in the Ohio Department of Taxation’s (ODT) biennial tax expenditure report at least once every eight years.
Sen. Scott Oelslager (R-North Canton), chair of the new committee and of the Senate Finance Committee, set an initial meeting for 10 a.m. Wednesday, April 11 in the Senate Finance Hearing Room, with the following five tax expenditures on the agenda:
- Sales to churches and certain other nonprofit organizations, ORC 5739.02(B)(12), Department of Tax Code 1.01
- Sales to the state, any of its political subdivisions and certain other states, ORC 5739.02(B)(1), Department of Tax Code 1.02
- Sales by churches and certain types of nonprofit organizations, ORC 5739.02(B)(9), Department of Tax Code 1.03
- Tangible personal property used primarily in manufacturing tangible personal property, ORC 5739.02(B)(42)(g), Department of Tax Code 1.04
- Packaging and packaging equipment, ORC 5739.02(B)(15), Department of Tax Code 1.05
Other members of the committee include Sens. John Eklund (R-Chardon) and Vernon Sykes (D-Akron) and Reps. Tim Schaffer (R-Lancaster), Gary Scherer (R-Circleville) and John Rogers (D-Mentor-on-the-Lake.)
Additional meetings will take place at 10 a.m. on Wednesday, April 25 and Wednesday, May 9, according to Oelslager’s office, which said it will announce the tax expenditures to be reviewed ahead of those meetings.
The law calls for the committee to consider several criteria in reviewing tax expenditures, such as the number and types of people who benefit, the public policy objectives and how successfully it meets them, and whether it has turned out to be more expansive than intended, among others.
The committee is required to issue a report by July 1 of every even-numbered year.