Lancaster Eagle Gazette
LANCASTER – The Ohio General Assembly Wednesday passed a bill to block the Ohio Department of Taxation from collecting a 6.75-percent sales tax from residents with natural gas accounts in six municipalities, including Lancaster.
The bill now goes to Gov. John Kasich for his signature or rejection.
Ohio Rep. Tim Schaffer, R-Lancaster, and Ohio Rep. Wes Retherford, R-Hamilton, sponsored House Bill 390 to exempt municipal gas departments from sales tax.
“This is a great day for the citizens of Lancaster,” Schaffer said. “The gas tax bill is huge for Lancaster.”
Schaffer and Lancaster Mayor Brian Kuhn said they expect Kasich to sign the bill into law.
In addition to Lancaster, the other affected municipalities are Hamilton, Verona, Williamsport, McComb and Deshler.
“This is awesome news for us,” Kuhn said. “Rep. Schaffer and Rep. Retherford did a nice job for the people of Lancaster and their constituents.”
Kuhn said the tax could have resulted in homeowners paying an extra $75 to $100 or so per year and cost hundreds of thousands for some business owners. He said the state was also demanding three years in back gas tax payments, which the city estimates to be about $3 million. Kuhn said HB 390 is a big deal, even if most people aren’t familiar with the issue.
Schaffer said the scenario stems from section 5739.02 of the Ohio Revised Code, which exempts sales of natural gas by a commercial company but does not explicitly exempt municipal gas departments from sales tax as it does other municipal services like water, sewer and trash pickup. He said the tax department discovered the section last fall.
HB 390 also included a measure to ease the state’s debt to the federal government for unemployment compensation fund loans and increasing the Ohio’s motion picture tax credit cap from $20 million per fiscal year to $40 million.
The House previously passed HB 390, but had to vote on it again when those additions were included in it. Schaffer said raising the motion picture tax credit will make Ohio more competitive with other states when filmmakers are looking for a place to shoot.
“Movie producers are quite blunt about it,” he said. “They say, ‘We go where the credits are.'”