Sales tax change may hurt county

Published 4:03 pm Saturday, August 6, 2016

A mandate by the federal government to change certain sales tax regulations could cost Lawrence County close to $1.5 million in revenue in the general fund.

That is because the law that allowed sales tax charged on Medicaid transactions has been changed and such tax has been eliminated.

In 2015 the Medicaid sales tax brought into the county $1,421,824. That is 15.9 of total sales tax revenue and 10 percent of the general fund. Statewide that adds up to a half-billion dollar loss.

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“That tax is going away in 2017,” Lawrence County Auditor Jason Stephens said.

Ohio doesn’t manage its own Medicaid program, but turns it over to outside companies. Every time one of these companies performs a service, it is charged sales tax.

‘The state is aware of the situation but they don’t know what the answer is,” Stephens said. “It will have to be the legislature that addresses it during the state budget process. The good news is they are aware of the issue with local counties. But it is a legislature that doesn’t exist, but will be elected in the fall.”

Lawrence County Commissioner Bill Pratt doesn’t see a quick fix for the situation.

“We can’t make that up for revenue,” he said. “Our sales tax isn’t going to increase that much. It is going to be a problem if it comes to fruition. The hope is that the legislature might re-enact the Local Government Fund. That might cut the loss in half.”