Monday, September 27, 2004

Chambers of commerce join fight for tax break

By Jim Siegel
Enquirer Columbus Bureau

COLUMBUS - Several chambers of commerce, including those from Cincinnati and Louisville, have joined Ohio officials in a legal fight to save a key tax credit for manufacturers.

A three-judge panel of the 6th Circuit Court of Appeals ruled in early September that Ohio's manufacturing investment tax credit program was unconstitutional because it discriminates against interstate economic activity.

The case was based on a challenge to tax breaks awarded to DaimlerChrysler in 1998 to build a Jeep vehicle assembly plant in Toledo.

Ohio officials are now asking the entire 6th Circuit, which sits in Cincinnati, to review the case. The chambers of commerce filed a brief to support that request.

Although the ruling was based on an Ohio case, it impacts the four states covered by the 6th Circuit - Ohio, Kentucky, Michigan and Tennessee.

Doug Moormann, vice president of governmental affairs for the Greater Cincinnati Chamber, said the tax credit helps level the playing field for Ohio, which, he said, is generally considered a high-tax state.

"Upholding this ruling would be terrible for business expansion and attraction in Ohio and throughout the 6th District," Moormann said.

Not only does it become more difficult to bring in new businesses, but many current companies are counting on that tax credit down the road, he said. The credit is spread out over seven years.

According to the Ohio Department of Development, companies in Hamilton, Butler, Warren and Clermont counties filed notices for nearly $260 million worth of machinery tax credits since the program started in 1995.

A department official noted, however, that because the tax credit is non-refundable, companies claimed less than that amount on their tax returns.



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