Tax Data Series

Tangible Personal Property Tax:

Tax Replacement Payments, Fiscal Year 2014

Ohio’s tangible personal property (TPP) tax was phased out between 2006 and 2010 as part of the tax changes contained in Am. Sub. HB 66, the two-year state budget bill for Fiscal Years 2006-2007.  The phase-out was accomplished by lowering the assessment percentage for all tangible personal property, including inventories.

Schools and local governments are reimbursed for the loss of tax revenue due to the elimination of the tax. The commercial activity tax is the primary revenue source for the tax replacement payments although the state General Revenue Fund is used as a funding source if commercial activity tax revenues are insufficient to make the mandated replacement payments. For more details on the phase-out and replacement payments see http://www.tax.ohio.gov/personal_property/phaseout.aspx.

In 2006, reimbursements were calculated based on each local government’s TPP revenue. In 2011, the reimbursement formula was altered, so that now, reimbursements, for the majority of political units and levies, depend on each local government’s reliance on the reimbursement.

In calendar years 2013 and 2014, replacement payments for the fixed-rate levies of counties, townships, and special districts as well as municipal operating levies were equal to the sum of 2010 reimbursement less 6 percent of the local government’s calculated 2010 total resources.

Additionally, in calendar years 2013 and 2014, reimbursements for municipal non-operating levies, including pension and capital improvement levies, were equal to 25 percent of the levy’s 2010 reimbursement.

In fiscal years 2013 and 2014, replacement payments to schools and joint vocational districts for fixed-rate operating levies were equal to fiscal year 2011 reimbursement less 4 percent of the district’s total resources. Reimbursement for non-operating fixed-rate levies, including permanent improvement and classroom facilities levies, was equal to 50 percent of the fiscal year 2011 reimbursement.

The amounts displayed in the PD-18 table provide the November 2013 and May 2014 distribution amounts. The data reflect the Local Government Property Tax Replacement Fund distributions (Fund 7081) and the School District Property Tax Replacement Fund (Fund 7047).  Fund 7081 is administered by the Ohio Department of Taxation and monies are sent by Taxation to the respective county auditors for the crediting of county, municipal, township, and special district levies only. The Ohio Department of Education administers the School District Property Tax Replacement Fund (Fund 7047). For fiscal year 2014, a total of $648.4 million was distributed.

The figures shown have been compiled from records of Ohio Department of Taxation.