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It ‘s Time to Tell Your Legislators Why That’s a Bad Idea! 

Governor Kasich’s proposed Budget Bill (HB 59) would extend the sales tax to most services, including architectural services. Legislators have begun hearings on this bill and ne ed to know how this new tax would affect architecture.  

AIA Ohio surveyed a select group of AIA leaders who expressed these concerns: 

Competitive Disadvantage: To remain in business during a construction recession Ohio’s design professionals have relied upon out-of-state projects for which they’ve competed with firms from around the country. Only three states – none of them east of the Mississippi – impose a sales tax on an architect’s service, so, depending upon how it’s implemented, extending Ohio’s sales tax to architectural services could put Ohio architects at a 6.5 to 7% disadvantage (5% state tax plus up to another 1.5%-2% county piggyback tax) when competing for future projects. The administration says that the tax would only apply when the design project is to be “enjoyed” within Ohio and that out-of-state architects would have to pay the same tax as Ohio architects. Inasmuch as our state can’t seem to collect sales tax from out-of-state Internet retailers, it’s hard to believe Ohio would be able to collect the tax from a California firm, a firm in Calcutta… or one in Beijing!  

Pyramiding: The actual disadvantage could be even greater than 7% since architects would be paying an additional 7% for each subcontract– to engineers, surveyors, soil testers, interior designers, lawyers, accountants etc. 

Border City Firms: Especially hard hit might be architectural firms close to Ohio’s borders. 

Ohio’s Multi-State Firms Could Move Business: Ohio’s large multi-state firms understandably could look for ways to do their work through their out-of-state affiliates–driving Ohio jobs to other states. 

Costly Tax Collection: Most Ohio firms are small (under 10 person) offices for which administering a complex sales tax would be a daunting task. (Billing, receiving, reporting, record-keeping.) 

Ohio Design Community Still in Recession: Ohio’s fragile architecture community has yet to emerge from recession. Unemployment is as high as 35%. Recently one of Ohio’s leading firms, Karlsberger, closed its doors (150 jobs reportedly lost). Architectural firms need more time to recover from this recession. 

Other States Experiences:Florida and Connecticut imposed a sales tax on professional services in the 1980s only to end up repealing them because “they were an administrative nightmare.” Just a few years ago, Michigan passed a sales tax on these services and repealed it less than 24 hours later due to a huge outcry from the business community. 

Now is the time to speak up: If you’re concerned about the effects of taxing architectural services, now’s the time to communicate that concern to your state representative and state senator.  

Find your State Representative here
Find your State Senator here

Recently Governor Kasich proposed a budget bill (HB59), which includes a new sales tax o n Architectural services. Clearly, this would create many obstacles and disadvantages for our profession just as the “Great Recession” is slowly beginning to turn to more positive futures for our members.

While we understand that our State must remain a competitive place for attracting new businesses, and we acknowledge that change in our corporate tax structure will facilitate progress, we also feel that requiring architects to charge and pay sales tax is neither in our best interest… or the state’s.

AIA-Ohio officers received their first briefing on the Governor’s sales tax proposal the afternoon that he announced it. We notified all members of the proposal via an AIA Ohio Legislative Alert and we surveyed members finding them unanimously opposed. Finally we researched the history of such proposals nationwide.

Following this internal and external investigation, we initiated discussions with the Ohio component of the American Council of Engineering Companies (ACEC Ohio) and last Friday we delivered a joint letter to Governor Kasich respectfully requesting that architectural and engineering services be omitted from the sales tax provisions of House Bill 59.

Please feel free to contact me or our Executive Vice President, David Field, CAE, Hon. AIA with any questions or comments you may have. We will report our progress as it unfolds.

Thank you for all you do for our great profession!

Mike Schuster, FAIA
AIA Ohio President

AIA Ohio sees two members elevated to the College of Fellows

Earlier this year, The AIA announced the advancement of 122 members to the College of Fellows, including two from Ohio. 

John W. Rogers FAIA was elevated to Fellowship for his service and longtime leadership of the Institute.  John is a past president of AIA Ohio as well as treasurer of the AIA National Board of Directors.  John has demonstrated though his service, a commitment to the Institute and continues his efforts as both the President of the AIA Ohio Foundation and as the Chair of the AIA National Convention that will be held in June in Denver, Colarado.

Robert Maschke, FAIA was elevated as a Fellow for his contributions and advancement of excellence in design. As president of Robert Maschke Architects, Inc., Robert has demonstrated a commitment to high level design.  In 2011, Robert was a recipient of the Cleveland Art Award and in 2012, his firm was awarded the 2012 AIA Ohio Gold Medal Firm Award.  Roberts commitment to elevate the profession is not limited to design only.  He has served as past president of AIA Ohio, and has served on many juries and committees of the Institute.

We congratulate John and Robert on this achievement and celebrate this recongition.  Both will be officially honored at the Investiture Ceremony at the AIA National Convention in June.

While Extending Ohio Sales Tax to Architectural Services

 If adopted by the Ohio General Assembly, the budget Governor Kasich unveiled February 4 would reduce every architect’s income taxes and most firm taxes, but would subject most services, including architectural services, to a reduced state sales tax.  It would also increase the funding of the Ohio Architects Board by 1% over its original request (due to an increase in IDP fee reimbursements resulting from Kent State’s mandatory IDP enrollment policy).

 The Kasich proposal would implement a permanent personal income tax cut to 20 percent over three years and reduce the state sales tax rate from 5.5 percent to 5 percent, while at the same time extending the sales tax base to all services except for those that can be broadly categorized as related to health care, education and housing.

 In addition, the budget proposes a deduction of 50 percent of the business income for small businesses that are categorized as “pass through entities” such as S corporation owners, partners in partnerships, owners of limited liability companies (LLCs) and sole proprietorships earning up to $750,000. Thus the deduction is capped at $375,000 annually. The plan would cut income taxes paid by small businesses by 50%.

 The tax reductions are designed to make the state more attractive to business development and will be funded in part by a $2 million surplus, which the state expects to achieve by next July, as well as a proposed 4% Ohio severance tax on horizontal wells.

 The governor says he wants to move Ohio away from what he perceives as an overreliance on the income tax and a sales tax system that has fundamental inequities to a restructured tax system “that … relies less on income and more on consumption and resource extraction.”

 The Ohio House of Representatives and Senate will now vet Kasich’s tax proposals–along with his recommendations on health care and education. Historically, multi-faceted tax proposals have been controversial and generally not concluded until the General Assembly recesses for the summer, if then.

 Within legislative halls, immediate reactions to the multi-faceted proposals were mixed. Democrats favored some parts of the package, but questioned others.  Republicans noticeably were silent.

Deb Kunce, FAIA, has declared her candidacy for AIA National First Vice President/President-elect. Deb has consistently centered her AIA service on strategically planning an AIA future that nurtures emerging professionals, advances our legislative agenda, and promotes the AIA brand which leads to a better world. She is currently serving as a National Vice President, leading a nation-wide initiative to reposition AIA for the future.

Deb leads CORE Planning Strategies, LLC, a facility planning and project implementation firm located in Indianapolis, Indiana, focused on helping building owners THINK ahead, PLAN for efficiency, and REALIZE their vision when executing design and construction projects.

The election will occur at the AIA National Convention in Denver, Colorado, June 20-22, 2013.

We need your help in reaching AIA Leaders across the nation to ensure they know Deb Kunce, FAIA. Join our region in reaching AIA leaders via social media.

@debkunce
/debkunce (or like her page: Debra S. Kunce, FAIA)
/debkunce

COLUMBUS – State Senator Chris Widener, FAIA (R- Springfield) was officially sworn in as Senate President Pro Tempore – the number two leadership post in the Ohio Senate – during today’s opening ceremonies for the 130^th General Assembly. Widener is only the third Senator from Clark County to serve in one of the top two Senate leadership posts since 1834, when Charles Anthony served as Ohio’s Senate leader.
 
“I am truly grateful for the trust that the people of the 10^th Senate District have placed in me to represent them at the Statehouse, and for the support of my colleagues in selecting me as President Pro Tempore,” Widener said. “This legislative session promises to be an active one as we continue our efforts to get Ohioans working again.  I look forward to working with my fellow legislators as we pursue policies that will put our state back on the path to prosperity.”
 
Widener previously served as Chairman of the Senate Finance Committee where he led the state effort to close an $8.5 billion budget gap without raising taxes.  He also served three terms in the Ohio House of Representatives. Throughout his tenure in the Legislature, Senator Widener has championed policies promoting limited government, lower taxes, strong schools and job creation in our local communities.
 
Widener led the economic development efforts that saw companies create more than 2,000 jobs in Clark, Greene, and Madison Counties in his first term as 10^th District Senator.

Senator Widener (center) takes the oath of office for the 10th Ohio Senate District, surrounded by family and friends. The oath was administered by Ohio Supreme Court Justice Sharon Kennedy (right).

From: State Senator Chris Widener 

Ohio 10^th Senate District 

Date: 12/19/12

As a state legislator, I’ve been around government and politics long enough to know that no matter what you do, someone will find a way to disagree. Recently, legislative action I took to bring jobs to people in my district drew criticism from some in the media. But I won’t apologize for fighting for people in Clark, Greene and Madison counties.

Here’s the issue. I’ve been a professional architect for 23 years. It’s how I support my family and I work hard at it. My role as a public official is in addition to this career.

My architecture firm has designed several livestock expo facilities in five states, due to my personal experience with managing some of the largest equine shows in US. We know how to design, build, and operate these types of facilities and often are sought out on these kinds of projects nationwide.

Because of that experience, I was approached in 1995 to help transform the Clark County fairgrounds into something that could attract more tourists and offer better amenities to the youth showing at our county fair. This was 7 years prior to being elected to the general assembly.

read more…

Ohio Senate Republicans have elected AIA-Ohio Past President,Senator Chris Widener, FAIA, from Springfield, to the Senate’s number two (2) position, President Pro Tempore for the 130^thOhio General Assembly, which starts in January. Sen. Keith Faber (R-Celina) was elected president, Sen. Tom Patton (R-Strongsville) was re-elected as majority floor leader, and Sen. Larry Obhof (R-Medina) moved into the majority whip spot. 

Governor John Kasich has filled one of the two vacant architect seats on the Board of Building Standards with Jeff Samuelson, AIA, NCARB from Kettering. 

Congratulations to both Chris and Jeff!

Candidate Mixer at AIA Eastern Ohio 2012-10-25

On Thursday, October 25, AIA Eastern Ohio  jointly sponsored a Candidates Mixer in association with the Builders Association of Eastern Ohio and Western Pennsylvania.  The event, which focused on the issues of the design and construction industries,  provided candidates an opportunity to address members during the open forum and to meet members during the two hour social event.   Funded jointly by AIA Eastern Ohio along with an Advocacy Grant from AIA Ohio, this grassroots candidate event was developed to promote member involvement in the political process.

The event attracted six candidates from state, local and national offices, who had the an opportunity to present their positions on the economy, employment and labor.  State Senators Shiavone and Cafaro, along with Representatives O’Brien and Letson from the Ohio House provided members with an overview of the current concerns of the Ohio General Assembly.  Focusing on concerns at the national level, Congressional candidate Dr. Marisha Agana focused on the economy and abilities of the federal government to meet citizens needs.  At the local level, incumbent Dan Polivka, a Trumbull County Commissioner, reported on progress made county wide by the current Board of Commissioners.

The casual open forum provided an opportunity for both candidates and members to discuss important issues on a one-on-one basis. For the nearly 70 members in attendance, this event provided members with an unique opportunity to both learn and become involved in the political process.