The state of Ohio will ask the full 6th US Circuit Court of Appeals to reconsider a ruling by a three-judge panel that declared Ohio’s investment tax credit unconstitutional, officials told the Associated Press (AP).
Go deeper with GlobalData
The panel struck down the tax last Thursday, saying it gives preferential treatment to companies [such as the DaimlerChrysler Jeep plant in Toledo] that expand within the state, rather than in other states. The judges said the breaks hinder interstate commerce.
Companies that have gotten the tax credits have invested nearly $32 billion in Ohio since the program started in 1995, state officials told AP.
“From the governor’s standpoint, these tax breaks are a very important tool for Ohio’s competitiveness and Ohio’s economic development,” governor Bob Taft’s spokeswoman Ann Husted told the news agency.
The lawsuit challenging the tax breaks reportedly was filed by a dozen taxpayers and three small businesses in Toledo over the $US280 million credit Ohio gave DaimlerChrysler to build the Jeep plant opened in 2001 that employs about 3,800 workers.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataTerry Lodge, a lawyer who argued against Ohio’s programme, told AP the appeals court ruling could be used to challenge similar programs used by up to 40 other states to promote economic development.
A 1996 report by the state of New York found that 35 of the 45 states with a corporate income tax had some type of investment tax credits, the Associated Press said, citing the National Taxpayers Union.
