Wednesday, September 22, 2004

We previously blogged the Sixth Circuit’s decision holding Ohio’s investment tax credit unconstitutional because it grants preferential tax treatment to companies to expand within the state rather than in other states. Cuno v. Daimler-Chrysler, Inc., No. 00-07247 (6th Cir. Sept. 2, 2004). If followed in other circuits, the decision would invalidate investment tax credits in 40 other states. In a new report, the Tax Foundation argues that the decision “threatens to strike at the root of state tax reform and tax competition, while even leaving a loophole for the complicated system of state tax incentives to continue in another form.”