COAL State group opposes tax credit extension

The credit should be allowed to expire, the tax administrator says.
By JEFF ORTEGA
VINDICATOR CORRESPONDENT
COLUMBUS -- The Ohio Department of Taxation has come out against a proposal to extend the state's coal tax credit.
Christopher Hall, a tax department administrator, says the department opposes the bill to extend the tax credit through January 2012 because of the potential cost to the state at a time when the state has faced budget problems.
Hall told state lawmakers recently that state tax officials are also concerned that an extension could lead to a potential lawsuit. The tax credit is set to expire at year's end.
Under the bill, the $3-per-ton tax credit against a utility company's corporate franchise tax would be extended to encourage the use of Ohio's high-sulfur coal by providing incentives for utilities to buy coal-cleaning technology.
If the credit is extended, the state could lose revenue totaling $13.1 million in fiscal year 2006 and $33.8 million in fiscal year 2007, Hall recently told the Senate Ways and Means and Economic Development Committee.
He encouraged the committee to let the credit expire at the end of this year.
Officials say state government continues to face a tightening budget.
Lawsuit filed
Also, Hall said a Pennsylvania mining company has filed a lawsuit challenging the constitutionality of the tax credit, alleging that it violates the interstate commerce and equal protection clauses of the U.S. Constitution by discriminating against non-Ohio coal producers who sell to Ohio users.
The jurisdiction and venue of the court hearing the lawsuit weren't immediately available.
The bill's proponents have said that eliminating the state's coal tax credit would devastate Ohio's coal industry and the state's Appalachian counties that are the center of that industry.
Ways and means committee leaders said the panel will continue to study the bill.
If approved by the committee, the bill would still have to be approved by the full Ohio Senate and Ohio House.