This document summarizes a tax study comparing Ohio's tax climate for logistics companies to other Midwest cities. It describes the methodology used, including basing comparisons on a hypothetical $34.1 million logistics project. The study found that Ohio ranks second in terms of most favorable state and local tax climate for logistics projects. Real property taxes accounted for most taxes across locations. Ohio offers economic development incentives including potential 15-year, 100% real property tax abatements.

1. CRLC Tax Case Study A Comparison of Ohio’s Tax Climate to Select Midwest Cities Relative to the Logistics Industry

2. Mark Rossetti, CMI Schneider Downs & Co., Inc. Mark has more than eight years experience in State and Local Taxation (SALT). Mark focuses on advising companies on state and local tax compliance and filings and performing sales and use tax and income tax reviews for middle-market businesses. In addition, Mark has significant experience in the area of audit defense and possesses extensive knowledge of the Ohio Commercial Activity Tax (CAT). 2

3. Scott J. Ziance, PartnerVorys, Sater, Seymour and Pease LLP Scott is a partner in the Columbus office of Vorys, Sater, Seymour and Pease LLP, where he is a member of the State and Local Tax Subgroup. His practice is focused on the utilization of economic development incentives, tax incentives, economic development financing mechanisms, public-private partnerships and special economic development entities to assist developers, operating businesses and political subdivisions in developing and redeveloping property and creating jobs and economic growth. 3

4. What is the purpose of the tax study? With all the negative press over the past few years concerning Ohio’s tax climate, the CRLC wanted to utilize an accurate, but hypothetical, business model for a logistics company project to determine Ohio’s true ranking among other logistics hubs in the Midwest. 4

5. Collaboration among ODOD, CRLC, Columbus Chamber and Local Business Leaders With the help of the CRLC, Columbus Chamber and local business leaders, accurate data on the average business size/structure was obtained. The Ohio Department of Development (ODOD) used this information to perform a comprehensive comparison of the taxing jurisdictions selected. 5

6. Comparison Cities Ohio (City of Columbus, Rickenbacker Airfield) Illinois (City of Naperville, Dupage County; City of Orland Park, Cook County) Indiana (City of Indianapolis, Marion County) Kentucky (City of Louisville, Jefferson County) Pennsylvania (Pennsbury Village Boro, Allegheny County; City of Pittsburgh, Allegheny County) Tennessee (City of Memphis, Shelby County) 6

7. Hypothetical Company Data Used in the Case Study Capital Investment: Total Investment of $34.1 million, of which: Real property of $8.16 million General business personal property of $25.94 million Total Annual Sales: $6.05 million in total taxable sales An estimated 4.0-percent profit margin and a 5.0-percent in-state sales factor Total full-time equivalent workforce: Retained FTE of 12, with an average hourly wage of $15.00 New FTE of 39, with an average hourly wage of $12.50 Total payroll: $1.3 million, excluding benefits and other compensation 7

8. Summary, State and Local Tax Assessment with Workforce Wage and Sales-Use Taxes (Before Application of Abatements, Grants, and Other Tax Incentives) 8

9. Net Effective Tax Rate on New Capital Investment (Before Application of Abatements, Grants, and Other Tax Incentives) 9

10. What does it all mean? By using an accurate logistics project model and not modifying the input data to skew the results, ODOD was able to accurately rank the locations in the tax study and determine the true tax climates for the logistics industry in the various jurisdictions. Ohio ranks second in terms of optimal state and local tax climate for logistics projects. This ranking is due in large part to the comprehensive tax changes instituted with House Bill 95 (effective July 1, 2005), which phased out the corporate income/franchise and general business personal property taxes. Real property taxes account for the bulk of all taxes paid in each of the jurisdictions. Ohio has economic development incentives that could provide up to 15 year, 100% real property tax abatements, depending upon the willingness of local authorities to provide such abatements. 10

11. Questions? 11