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Weekly News 1/14/13

Posted By John Dorka, Tuesday, January 15, 2013
Ohio Forestry Association

Weekly News 1.14.13

In this issue:

  • BWC Releases 2012 Annual Accomplishments -Here you can find a summary statement from BWC Director Steve Buehrer and a one-page list of accomplishments for 2012. Of note, BWC says it has saved Ohio businesses $130 million and public agencies $40 million in premiums in the last 2 years, stating that the "collectible rate” for private employers is the lowest level in 24 years. There is more information on specific programs and accomplishments from the last year.

o Individual Provisions:

1.In general, The ATRA law provides permanent extensions of 2001 and 2003 tax provisions for individuals with less than $400,000 income (joint filers, $450,000). It also provides for permanent indexing of individual alternative minimum tax exemption levels for 2012 and beyond.

2.There are retroactive extensions through 2013 of certain expired business. The renewed business tax provisions include a research credit, controlled foreign corporation (CFC) look-through rule, the exception for foreign active financing income, and certain other provisions that expired at the end of 2011. The new law also extends through 2013 certain energy tax provisions, and modifies the expiration date for the renewable electricity production tax credit to permit projects and improvements under construction before the end of 2013 to qualify for the credit or the elective investment tax credit.

3.For those making over $400,000 per year, the top tax rate goes to 39.6% (up from 35%), and the capital gains and qualified dividend top rate goes to 20%r.

4.Under the 2010 health care law, a separate 3.8% Medicare net investment income tax is effective January 1, 2013 for single incomes above $200,000 (joint $250,000)

5.The individual AMT exemption amount goes to $50,600 for single filers ($78,750 for joint filers) for 2012 and annually adjusts the AMT exemption amount for inflation beginning in 2013.

6. A personal exemption phase-out (PEP) and overall limitation on itemized deductions (Pease) will be reinstated beginning after December 31, 2012 for single filers with adjustable gross incomes above $250,000 ($300,000 for joint filers).

7. The new law includes a permanent 40-percent estate tax rate that will apply beginning after December 31, 2012 on estates above a $5.12 million exemption amount (annually adjusted for inflation). The exemption amount continues current policy, but the new 40-percent rate mirrors the decision to restore the top income tax rate of 39.6 percent. The 40-percent rate and $5.12 million apply for gift tax purposes as well.

8.The legislation delays for two months automatic across-the-board "sequestration" spending cuts that are a consequence of the Budget Control Act of 2011. This delay in scheduled spending cuts is offset in part by a provision allowing for conversions to a Roth retirement account from 401(k) plans and certain other employee retirement accounts. The amount converted would be subject to regular income tax.

9.The legislation did not extend the 2% reduction in FICA payroll taxes that was enacted as part of stimulus measures for 2011 and 2012.

o Business Tax Provisions:

1. The new law extends most business tax extenders retroactively through 2013, consistent with the tax extenders package approved on August 2, 2012, by the Senate Finance Committee. An additional item that was not in the Senate Finance Committee package, but also was extended through 2013, is the 50-percent bonus depreciation provision.

2. The following business tax provisions are extended through 2013:

1. the research credit;
50-percent bonus depreciation;
15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements;
increase in the maximum amount and phase-out threshold under Section 179;
CFC look-through rule for certain foreign income;
active financing exemption for foreign income;
employer wage credit for activated military reservists;
work opportunity tax credit; and
9.empowerment zone tax incentives.

3.The legislation does not extend several business tax provisions, consistent with the Senate Finance Committee tax extender package. For example, the new law does not include extension provisions related to the 100-percent-of-net-income limitation on percentage depletion for oil and gas from marginal wells, brownfields environmental remediation expensing, and augmented charitable deductions for corporate donations of computer and book inventory.

o Energy Tax Provisions

1. The new law includes the energy tax extender package approved last year by the Senate Finance Committee. Among other items, the following provisions are extended through 2013:

1. the cellulosic biofuels producer credit (renamed "second generation" biofuels), expanded to include algae-based fuels;
the renewable electricity production tax credit (section 45) is modified to:

1. extend wind through 2013 (like other renewable resources),
revise the expiration date for all facilities and improvements (not just wind) to "begin construction" by the end of 2013 (instead of placed in service by the end of 2013), and
clarify that commonly recycled paper does not qualify as biomass under the credit;

3. the election of the investment credit in lieu of the production tax credit is modified to apply to facilities and improvements that meet the new "begin construction" by the end of 2013 deadline;

4. biodiesel and renewable diesel credits; and

5.alternative fuel and alternative fuel mixture credits, but fuel sold or used after 2011 will not be refundable

2.The new law did not include a limitation on unused cellulosic biofuels producer credit carryforwards. Instead, the one-year extension of the credit has the effect of extending the credit carryforward period through 2016 for unused credits from previous years.

3.The section 1603 grant program was not extended. However, since the "begin construction" deadline that is now incorporated in the production tax credit and the elective investment tax credit is not defined, the Treasury Department's interpretation of this language under the section 1603 program may be helpful in interpreting the new law.

  • Oil and Gas Development on ODNR Lands - The issue of oil and gas exploration on ODNR lands is rearing up as a result of the shale gas boom in Ohio and the legislature’s actions last year to open up most ODNR lands for exploration. Recently, ODNR asked OFA for our thoughts on oil and gas development on state forests, particularly with the use of "fracking.” OFA responded that we support both development and use of fracking to explore state forest minerals, but we included the caveat that our primary interest remains the maintenance of the "working forest” base and DOF should do all it can to maintain its productive capacity. In addition, it should maintain its typically high standard of environmental oversight. Recently, there was an article in the Mansfield Journal which discusses possible exploration at Mohican. The article raises concerns from local environmental interests about the impact of drilling. Many OFA members recall the issue that was raised in the 1990s concerning harvesting at Mohican-Memorial State Forest. Following a lengthy review of forest practices and repeated attempts to outlaw harvesting by legislation which failed, ODNR made a policy decision to discontinue commercial harvesting on the forest.
  • US Supreme Court Action on Logging Road Case - There has been some legal maneuvering taking place on the Logging Road Case pending before the US Supreme Court, Decker v. NEDC. The Council of Western State Foresters is reporting that the US Supreme Court accepted a supplemental brief filed by the State of Oregon addressing the impact of the US EPA rule filed just prior to the Court hearing that said NPDES permits would not be required for logging roads. In addition to that action, NEDC filed a Petition for Review of the US EPA rule in the US Court of Appeals for the Ninth Circuit Court. It is believed that this action by NEDC was intended to influence the Supreme Court to send the matter back to the 9thCircuit for further proceedings. With all that has happened, it is now believed that the earliest the Court would make a decision is February. Some wonder also if the Supreme Court is struggling to figure out how to deal with the case.

  • Two Sides Publishes Open Letter to Google About its "Go Paperless in 2013" Campaign - Two Sides is an independent, non-profit created to promote the responsible use of paper and print. It recently responded to Google in a letter arguing that its effort to promote the Go Paperless in 2013 campaign is one-sided and done only to promote its own services. In addition, the environmental footprint of products used to make use of "paperless” technologies may in fact be much larger than that for print and paper communication.Here is a link to the letter written by Two Sides. It is worth taking a moment to read. It raises some good questions and concerns about the proliferation of "e-waste” in our society which is now the fastest growing component of municipal waste streams. The article states that electronic waste now makes up 5% of worldwide municipal waste.
  • Ohio Maple Days on Tap, January 24, 25, 26 - Here is a flyer and press release for day-long seminars of maple syrup production for both commercial producers and hobbyists. The January 24 session is in Morrow County at the Lutheran Memorial Camp in Fulton. The January 25 session is for Wayne and Holmes Counties at the Mennonite Christian Assembly Church near Fredericksburg. The January 25 session is in Geauga County at Joe J. S. Miller Window Shop in Burton. The sessions have a $30 pre-registration fee which includes lunch. Registration at the door is $35. Call 330-263-3799 to register.
  • NEOFA and ECOFA Newsletters - Here are the most recent monthly newsletters from the Northeast Ohio Forestry Association and the East Central Ohio Forestry Association.oThe NEOFA issue contains comments from President Mike Lanave, plans for the next general meeting on January 17 with a presentation from the FFA forestry team from the Edison Local School District in Richmond, Ohio who attended the national FFA Forestry competition, some general forestry information, and a list of upcoming events.
o The ECOFA issue contains information on the most recent general meeting with featured speaker Dale Arnold, Ohio Farm Bureau talking about oil and gas easements, general forestry information, and upcoming events.

Ohio Forestry Association is managed by Offinger Management Company, a member of the International Association of Exhibitions and Events (IAEE), "Charter-Accredited" Association Management Company member of the American Society of Association Executives (ASAE) and a member of the Association Management Company Institute (AMC Institute).

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