From The Toledo Blade
Gov. John Kasich today walked into the midst of one of those “special interests” he expects to fight his sales tax expansion plan as he explained his decision to tax newspapers — to newspapers.
“You know we already tax a bunch of services already…,” he told a convention of the Ohio Newspaper Association. “You know why the legislature taxed them? To fill a budget hole… All of these services are going to get taxed. It’s just a matter of whether they’re going to be taxed by somebody pushing for a tax increase in Ohio or somebody who’s trying to figure out how to lower the taxes that lead the most to our economic growth,”
Mr. Kasich’s $63.3 billion, two-year budget proposal now before lawmakers proposes a broad expansion of the sales tax base and higher taxes on shale oil and gas drilling to help underwrite income tax cuts for individuals and small businesses.
After factoring in a half-penny cut in the state sales tax rate to 5 cents on the dollar, the expanded base expansion is still expected to clear about $3.1 billion more for the state over the next two years. Mr. Kasich, however, promises that the net effect of his entire tax reform will be a $1.4 billion tax cut over three years.
Sales of advertising in print, on billboards, and on radio and television would now be taxed while national broadcast ads would remain exempt. The plan would tax magazine subscriptions but not newspapers, and the base would now include advertising agency fees.
“This is really a nightmare for the industry and for a lot of local merchants,” said Dennis Hetzel, the association’s executive director. “An advertising tax is a bad idea. It’s been tried in larger states…The way they are proposing it, it would give tremendously unfair advantages. It would tax TV and radio advertising but when it comes to Internet advertising, it would be a voluntary tax when people do their income tax returns.”
Few states tax newspaper advertising. Florida tried it in the mid-1980s. The tax was gone after about six months after national advertising organizations canceled conventions in the tourism-dependent state.