Tax Data Series

SCHOOL DISTRICT INCOME TAX: School District Income Tax Distributions Quarterly Report, Fiscal Year 2018

Table SD-2-Q4 shows four quarterly distributions of school district income taxes to school districts during fiscal year 2018. Payments are made by the Ohio Department of Taxation at the end of the month following the end of a calendar quarter.  For the fourth quarterly payment in fiscal year 2018, a total of $111.2 million was distributed to 190 school districts with taxes in effect. The largest fourth quarter distribution went to Pickerington Local School District (LSD) in Fairfield County at $4,151,764 while Crestline Exempted Village School District (EVSD) in Crawford County received the lowest distribution of $58,851 for districts with an existing tax for the entire fiscal year.

The total distribution during fiscal year 2018 was $444.1 million. Again, Pickerington LSD received the largest amount for districts that received four payments ($17,401,337) while Crestline EVSD ($206,495) received the lowest distribution for districts with an existing tax for the entire fiscal year.

In 1989, the legislature enacted Senate Bill 28, reauthorizing the use of local income taxes for school districts. Voter approval is required for a school district tax to go into effect.  The tax is paid by residents of the district, regardless of where they work. Non-residents working in the district and corporations are not taxed. Under the “traditional base”, the school district income tax is closely tied to the state income tax, having an identical tax base. However, with the passage of House Bill 66 (Executive Budget for fiscal years 2006 – 2007) in the 126th General Assembly, school districts are now authorized to levy the tax (subject to voter approval) against an alternate tax base that includes only earned income and self-employment income (including income from partnerships) of the residents of the school district.

The taxes are collected by the state in the same manner as the state income tax: through quarterly estimated payments, annual returns or withholding.  Employers remit withholding tax either monthly or quarterly.  Employers who pay on a partial weekly schedule for state purposes pay monthly for school district purposes.  The state retains 1.50 percent of collections to cover administrative expenses.