CABOR Announces Opposition to Sales Tax Expansion
Today, the Cleveland Area Board of REALTORS® (CABOR) announced its opposition to the expansion of the Ohio sales tax to services.
Last month, Ohio Governor John Kasich released a $63.3 billion dollar, two-year budget proposal, which included a 20% reduction in the state income tax; a reduction in small business tax for LLC, S corporations, partnerships or sole proprietors; as well as a 0.5% decrease in the state sales tax. To offset the cuts, under the budget proposal, the sales tax would be expanded to services – including real estate services – in Ohio, with the exception of a few areas (education, medical, funeral services, home construction, residential rents, and some insurance).
The Ohio Association of REALTORS® (OAR) allocated significant resources to reviewing the proposal and the impact it would have on a variety of real estate professionals. Today, the OAR announced its opposition to expansion of the sales tax base to services, including those involved in a real estate transaction.
CABOR Chairwoman Joanne Zettl said, “CABOR joins OAR in its opposition to expansion of the sales tax base. At a time when the real estate recovery in Northeast Ohio is still in its infant stages, additional costs to real estate transactions would add financial burdens that could be devastating.”
CABOR believes that the recent market turnaround could be derailed by the imposition of a sales tax on every aspect of a housing purchase, including home inspections, appraisals, mortgages, warranties, radon inspections, title searches, commissions and more.
“This is not something that will only affect residential real estate professionals,” Zettl said. “A sales tax on commercial rent leases poses a threat to future economic development by adding to the cost of business operations in Ohio.”
Zettl noted, “In Ohio, a State Budget must be in place by July 1. As such, this will be a fast moving process over the next few months, and we encourage our members and consumers to contact their State Senator and Representative, and to stay informed as this legislation progresses.”