Northeast Ohio's Steris to Reform as British Company
Steris is a medical supply company based in Mentor. Among other things, it's known for making foam hand sanitizer found in many hospitals and doctor's offices.
The company announced this week it will acquire U.K.-based Synergy for $1.9 billion. As part of the deal, Steris will re-incorporate in the United Kingdom - and pay the UK's corporate tax rate of 25 percent. It's several notches lower than the U.S. rate.
This move is called a tax inversion, and Steris isn't the first Northeast Ohio firm to try it. In 2012, Eaton incorporated in Ireland. Craig Boise, the dean of the Cleveland Marshall College of Law, says more companies are doing it.
"Clearly, a lot of this is driven by the desire to increase earnings and reduce costs," Boise said. "So the tax cost is one that can be planned around creatively."
It's prompted some politicians to call for cuts to the U.S. corporate tax rate. Boise says it's not quite so simple. But he says the U.S. should find ways to keep companies onshore, while also getting them to pay for the educated American workforce and society they benefit from.
"All those are benefits of being a U.S. corporation," Boise said. "And that's worth something."
Despite big moves on paper, Steris says top executives will still live and work in Northeast Ohio.