Tax Data Series

Tangible Personal Property Tax

Tax Replacement Payments, by County

Fiscal Year 2010

The tangible personal property tax was phased out between 2006 and 2010 as part of the tax changes contained in Amended Substitute House Bill 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 not sufficiently large to fund the mandated replacement payments.

The replacement payments are based on levies approved before Sept. 1, 2005 and tangible personal property values that existed as of Aug. 31, 2005. As revenue from taxes on tangible personal property has fallen since tax year 2005, replacement payments to schools and local governments will increase through fiscal year 2011 in order to hold these entities “harmless” on qualifying levies. The replacement payments to local governments will begin to decline in fiscal year 2012. Replacement payments to schools will begin to decline in fiscal year 2014.  However, schools collectively are guaranteed to permanently receive 70 percent of all commercial activity tax revenue, which means that as the replacement payments decline after fiscal year 2014, the schools will nonetheless continue to receive distributions from the commercial activity tax based on a formula to be determined in future legislation.

The table displays the amounts reimbursed in fiscal year 2010 for the elimination of the tangible personal property tax ; it shows the amounts that are sent by the Department of Taxation to the county auditors for distribution to the local governmental entities within their respective counties. The amounts displayed are for the August 2009, October 2009 and May 2010 distributions. The amounts given are for 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).

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