\u201cThis is an enormous amount of revenue,\u201d Policy Matters Ohio research director Zach Schiller said. \u201cNo one is saying it should all be eliminated. We\u2019re saying some of it is special interest breaks that are not necessary.\u201d<\/p>\n
And on that point, Republican leaders in the legislature agree.<\/p>\n
Big ticket breaks<\/p>\n
While Ohio\u2019s tax breaks are estimated at more than $12 billion this year, the report projected they would cost $16.4 billion in the 2026\u201327 budget period. <\/p>\n
The vast majority of that \u2014 about 95% \u2014 comes from the top 10 breaks.<\/p>\n
![\"tax](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/09\/HRZPDXTFLNGF7IKEUAY4V6WMPY.jpg\")
These are the top ten largest tax breaks in Ohio\u2019s 2026-27 budget. Figures come from the Ohio Department of Taxation\u2019s fiscal year 2026-27 Tax Expenditure Report.Anna Staver<\/p>\n
The top three tax breaks make up about half the total, and all of them go to businesses.<\/p>\n
The largest is a tax exemption for property used in manufacturing, worth nearly $5 billion over the next two years. <\/p>\n
Before 2005, local governments could tax businesses on the value of the physical stuff inside their buildings \u2014 things like machinery, furniture, and supplies. Those levies, known as tangible personal property taxes, had long been a funding source for public schools.<\/p>\n
Lawmakers scrapped the tax and replaced it with the Commercial Activity Tax, or CAT. The idea was to create a more business-friendly system while still keeping schools whole.<\/p>\n
\u201cIt never brought in anywhere close to as much as the tax it replaced,\u201d Schiller said. <\/p>\n
Now, it\u2019s worse. <\/p>\n
In the 2023 budget, lawmakers raised the threshold so only companies with more than $6 million in annual Ohio sales owe the tax, up from $1 million, and scrapped the minimum payments smaller businesses once made.<\/p>\n
Those changes turned the CAT exclusion into Ohio\u2019s third-largest tax break, costing more than $1.5 billion.<\/p>\n
A 56% increase from $960 million, Ohio chose not to collect during the last budget cycle.<\/p>\n
\u201cBusiness,\u201d Schiller said, \u201cis paying a much lower share of the overall freight than it did decades ago.\u201d<\/p>\n
The quirky carve-outs<\/p>\n
Not every tax break runs into the billions. Some are smaller, more unusual, and have caught the eye of lawmakers in both parties.<\/p>\n
One is the so-called \u201cBambi exemption.\u201d Originally created to cover building materials for certain facilities, it was broadened in 2011 to include captive deer, horse barns and even fish farms.<\/p>\n
A 2018 analysis by the National Conference of State Legislatures noted that Ohio was the only state in the region with this kind of carve-out.<\/p>\n
There\u2019s also the \u201cLes Wexner credit<\/a>.\u201d<\/p>\n It was created in 1994 when the clothing retail magnate and founder of L Brands operated massive warehouses with extensive conveyor systems.<\/p>\n Companies that shipped part of their products outside Ohio didn\u2019t have to pay sales tax on that equipment, a carve-out that Schiller said directly benefited Wexner\u2019s operations.<\/p>\n The legislature also did something similar for Avon Products in 2008. According to a report from Policy Matters Ohio<\/a>, the company got a \u201csales-tax break on machinery, equipment and software purchased for the warehouse, saving the company at least $3.47 million.\u201d<\/p>\n Other breaks are more familiar. <\/p>\n Ohio\u2019s back-to-school sales tax holiday, once a three-day event for school supplies, is now two weeks and covers most goods people buy. <\/p>\n The state exempted children\u2019s diapers from sales tax in October 2023. That decision costs Ohio about $19 million per year.<\/p>\n It\u2019s not that all tax breaks are bad. But every tax break granted by the state is a choice that confers a benefit to groups or individuals while forgoing incoming revenue that could benefit all. <\/p>\n Ohio forgoes more than $1 billion by not taxing prescription drugs and selected medical supplies. We also give up hundreds of millions by exempting Social Security benefits and by allowing couples to file their taxes jointly.<\/p>\n But whether a tax break is a public good or a special-interest perk often depends on who you ask.<\/p>\n Sen. Jerry Cirino, a Lake County Republican and chair of the Senate Finance Committee, tried to eliminate the sales tax exemption for newspapers in the latest budget. <\/p>\n Gov. Mike DeWine vetoed it.<\/p>\n Budgetary changes<\/p>\n In the latest budget, lawmakers limited or repealed nine tax breaks worth $325.5 million. <\/p>\n That included capping the \u201cvendor discount,\u201d which had let big retailers pocket millions just for sending sales taxes they are required to collect to the state on time, and ending smaller carve-outs like exemptions on refrigerated vending machines and call center services.<\/p>\n They also tried to scrap the sales tax exemption for data centers, one of the state\u2019s fastest-growing breaks. <\/p>\n Policy Matters estimated it will cost nearly $290 million or more if new projects move forward during the next biennium. <\/p>\n \u201cIn many cases, the exemption amounts to as much as $1 million for each data-center job created,\u201d according to the report.<\/p>\n Cirino said the industry doesn\u2019t need the help. <\/p>\n \u201cI was very much in favor of eliminating that,\u201d he said. \u201cData centers have a lot of great reasons to come to Ohio. This tax exemption shouldn\u2019t be one of them. I don\u2019t think we need this to be competitive.\u201d<\/p>\n DeWine vetoed the measure. <\/p>\n House Speaker Matt Huffman, a Lima Republican, told reporters he\u2019s considering overriding that veto and that many of these companies already benefit from generous property tax abatements. <\/p>\n Who is watching the store? <\/p>\n Cirino and Schiller don\u2019t agree on much when it comes to taxes, but both say Ohio needs a more public, permanent way to review which tax breaks make sense \u2014 and which don\u2019t.<\/p>\n Until four years ago, Ohio was among the majority of states with a formal review process. <\/p>\n We created the Tax Expenditure Review Committee in 2016, which was supposed to regularly evaluate costs, benefits, efficiency, and whether they changed business behavior.<\/p>\n But the promise of oversight quickly fizzled. <\/p>\n The committee reviewed just 15 sales-tax breaks, and in eight cases, no one showed up to testify in support. <\/p>\n \u201cThey should have been truncated or eliminated,\u201d Schiller said. \u201cThey certainly shouldn\u2019t have been continued without any changes.\u201d<\/p>\n But they were. <\/p>\n Lawmakers eliminated the committee in the 2022-2023 budget. <\/p>\n Cirino said every tax break should come with an expiration date. <\/p>\n \u201cIf they are worth continuing, they need to be re-justified,\u201d he said. \u201cI think it would take the heat off lawmakers locally.\u201d<\/p>\n In the end, both men are calling for the same thing: treating lost revenue with the same scrutiny as state spending.<\/p>\n If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement<\/a> and agree that your clicks, interactions, and personal information may be collected, recorded, and\/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"COLUMBUS, Ohio — Ohio gives away more than $12 billion a year in tax breaks \u2014 revenue the…\n","protected":false},"author":2,"featured_media":156680,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[97,252,253],"class_list":["post-156679","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-health","tag-health-care","tag-healthcare"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/156679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=156679"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/156679\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/156680"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=156679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=156679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=156679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}