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Hagan Seeks to Tighten State Auditing Procedures
COLUMBUS, Ohio -- State Sen. Robert Hagan is urging Gov. Bob Taft to require stricter auditing and enforcement of corporate tax laws within the Department of Taxation. The request comes as House and Senate majority leaders plan to unveil a tax reform proposal in the General Assembly. In correspondence sent to the Governor's office last Thursday, Hagan cited the dwindling state revenue brought in from the Ohio Corporate Franchise Tax, the state's tax on corporate profits as a primary reason for Ohio's current budget deficits. In the mid-1970s, the corporate franchise tax represented nearly 17% of the state's tax receipts. In 2002, this same tax accounted for a mere 4.6% of the state's annual revenue, Hagan says. "If the Governor would like to know why our state's tax receipts are so low, he needs to look no further than the always declining corporate franchise tax," Hagan says. "In the end, working men and women in Ohio are asked to saddle a horribly unfair burden in order for the state to continue to provide its necessary services." Even more compelling, he says, are figures gleaned from tax-year 2001 in which four out of five companies in Ohio paid $2,000 or less in tax liability. Half of Ohio's companies, many of them Fortune 500 members, paid only $50 in state taxes, Hagan notes. Last Friday, Hagan says House Republicans said they want to develop a tax system that more fairly reflect the business activity that takes place in Ohio. "I applaud them for this, but we must also insure that Ohio's current and future corporate tax codes are vigorously enforced by the Department of Taxation," Hagan says."When rank and file taxpayers profit from their ingenuity and hard work they are taxed for it. Corporate profits should be treated no differently." "