|
Governor Bob Taft just signed the
biennial budget on June 26, 2003. This law changes many of the taxes
that Ohio taxpayers encounter daily.
Sales Tax
Effective July 1, 2003, the Sales Tax
has been increased by 1%. This means that taxpayers in Cuyahoga
County will be paying 8%, Portage County will be paying 7.25%, Lake,
Lorain, and Summit Counties will be paying 6.75%, and Geauga and Medina
Counties will be paying 6.5% This increase is supposed to be
eliminated on July 1, 2005. Would you care to bet it will be
eliminated at that time?
Many new types of transactions will be
subject to Sale Tax effectively August 1, 2003. Laundry and Dry
Cleaning Services are now subject to Sales Tax (this does not include
self-service facilities such as Laundromats.) Satellite Broadcasting
Services including all services and charges are now subject to Sales Tax.
Personal Care Services including skin care, application of cosmetics,
manicuring, pedicuring, hair removal, tattooing, body piercing, tanning,
massage, and other similar services, (but not cutting, coloring, or
styling of and individual's hair) are now subject to Sales Tax. The
transportation of persons by motor vehicles or aircraft, when the trip
begins and ends in Ohio is now subject to Sales Tax. This does not
include ambulances or public transit busses. Motor Vehicle Towing
Services including the towing of wrecked, disabled, or illegally parked
motor vehicles are now subject to Sales Tax. Snow Removal Services
by mechanized means and now subject to Sales Tax. The Storage of
Tangible Personal Property (except the storage of inventory held for sale
by businesses) is now subject to Sales Tax.
Effective January 1, 2004,
Telecommunications services that is billed to persons by telephone
companies will be subject to Sales Tax.
Vendors will now receive a 1.1% discount
for timely filing Sale Tax returns until July 1, 2005.
Vendors who have a bad debt that has
been uncollectible for at least six months may deduct this debt from the
taxable sales and reduce the Sales Tax due.
Municipal Income Tax
This law establishes April 15th, the due
date for federal returns, as a uniform deadline for filing municipal tax
returns. This law prohibits municipalities from establishing any
other due date after 2003.
Municipalities must grant an extension
of time to file at least as long as the federal extension if, a copy of
the federal extension was filed with the administrator of the municipal
income tax by April 15th.
Personal Property Tax
Currently, businesses pay Personal
Property Tax on 23% of the value of their inventory. Beginning in
2005, the assessment rate will be reduced by 2% each year if the total
statewide collection of tangible personal property for the second
preceding year exceeds the total statewide collection for the third
preceding year.
New manufacturing equipment currently is
taxed on 25% of its true value. True value for new equipment ranges
from 90% to 95% of cost. Under the new law, true value will be
calculated at 15% to 20%. This is to be phased in over ten years.
For 2004 and later, businesses with
tangible personal property with a taxable value of less than $10,000 will
no longer be required to file Personal Property tax returns.
Franchise Tax
Currently, every corporation subject to
the corporate franchise tax must pay a minimum tax of $50. This law
change the minimum amount of $1,000 for corporations having $5 million or
more in sales or has more than 300 employees worldwide. This applies
to the tax year 2004 and later.
Income Tax
Members of the National Guard or
Reserves called to duty for Operation Iraqi Freedom may apply to the Tax
Commissioner for an extension of time for filing income tax returns and
paying income taxes for the period of the applicant's duty service under
Operation Iraq Freedom and may enter into a contract to pay any taxes due
in installments beginning on the 61st day after the taxpayer's duty ends.
The Tax Commissioner may not require any penalties or interest on these
deferred taxes.
These changes will affect most
taxpayers. Be sure to contact us if you have any questions how they
will affect you.
Financial Truth #4
"THE BEST TIME TO BEGIN SAVING IS NOW."
A person who save $1,000 per year at 8% will see their investment grow to
$113,283 in 30 years. If that person waited one year to begin
saving, the investment would only grow to $103,965. The secret to
growth is consistent, regular savings. The sooner you begin, the
more your investments will grow. Let the miracle of compounding work
for you. This method is not quick, but it is sure.
|
