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Everything you need to know about BMD and the industry.

State of Ohio & Cities Extend Tax Filing Deadline

On March 27, Governor DeWine signed a bill passed by the legislature to provide tax relief to Ohio taxpayers. 

Filing Relief

The law provides that taxpayers will have until July 15, 2020 (as opposed to April 15), to file and pay both any balance due on their 2019 income and school district taxes as well as the first and second estimated payments (April 15 and June 15) that is due. This extension is automatic and neither penalties nor interest will be assessed on these amounts.  However, if you are a net profits filer for city tax purposes and your federal return was filed by March 16, 2020, the extension IS NOT automatic, and you must file an extension to receive additional time. Because city tax filing deadlines are tied to the State filing deadline, cities should not have to take any further action. Many cities in Ohio have already posted the extended filing date on their websites. 

Withholding Changes for City Income Taxes

Also, part of the law is a change in the way employers calculate city income tax withholding. Employers are normally required to withhold city income taxes from wages for any municipality in which an employee spent 20 or more days working during a calendar year. This change provides that employees who are working from “a temporary location” (most notably their home) shall be treated as if they are working at their normal principal place of work. Thus, employers are able to withhold city taxes as if the employee were actually working in their normal location(s).

Commercial Activity Tax

Finally, the Tax Commissioner has been granted the authority to extend the due date for the filing of the Commercial Activity Tax (CAT) due on May 11, 2020. At the time of this release, no new extended date has been announced.

What It Is Not

There is no extension to file and/or pay sales tax. Of course, businesses that are closed due to any of the Orders issued by the State would, except for the month of March, only have a filing requirement as they would have made no taxable sales.

Other States

Some other states have released guidance as to relief that they are granting taxpayers. The most up-to-date information for this is available on the American Institute of Certified Public Accountants website.

For more information or questions, please contact Priscilla A. Grant, BMD Business, Corporate and Tax Member at pag@bmdllc.com or 330.253.5934.

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.

Property Owner Protection from Tax Valuation Challenges

New legislation provides significant new protections for commercial property owners against challenges to valuation primarily by local school boards and prohibiting side agreements to avoid tax valuation changes. The Ohio Legislature has approved House Bill 126 which will go into effect July 2022 but will effectively apply to the 2023 tax valuation year.