tax.ohio.gov
80
Taxes Administered
Individual Income Tax-School District
I
n 1981, the Ohio General Assembly granted school districts the
authority to levy an income tax. Certain provisions of that law were
repealed in 1983 so that no additional school districts could levy the tax.
Any school district enacting the tax before August 3, 1983 could
continue to levy the tax. Prior to the repeal, voters approved the tax in
six school districts, one of which repealed the tax through voter
referendum in 1986. In 1989, the General Assembly reinstated
provisions of the original law allowing additional school districts to levy
the tax.
The school district income tax is imposed on the incomes of residents
and estates of persons who at the time of their death were residents of the
school district. The Department of Taxation administers the tax.
Collections are made through employer withholding, individual quarterly
estimated payments, and annual returns. During Fiscal Year 2005, total net
collections for all districts were approximately $182 million, after
deductions for administrative costs and refunds, as shown in the table in
this chapter. In FY 2005, there were 145 school districts (out of
614 in the state) that levied the tax.
Taxpayer (Ohio Revised Code 5748.01):
Every individual residing in and every estate of persons who at the
time of their death were residing in a school district which imposes the
school district income tax.
Tax Base (R.C. 5748.01):
For individuals, Ohio adjusted gross income for state income tax
purposes less $1,350 for each exemption in 2005. For estates, Ohio
taxable income for state income tax purposes.
Amended Substitute House Bill 66, 126
th
General Assembly, the FY 2006-
2007 biennium budget bill, allows voters in a school district to approve a
school district income tax which will apply only to individuals – but not to
estates – and which will apply only to “earned income” and which does
not provide for any deductions. This “earned income” base includes wages,
salaries, tips and other employee compensation, but does not include
retirement income, lottery winnings, nor interest or dividend income (see
Recent Legislation).
Rates (R.C. 5748.02):
Rates must be multiples of a quarter of one percent. The rate must be
approved by a vote of the school district residents before implementation.
The tax rates currently range from 0.5 percent to 2.0 percent.
Senior Citizen Credit: A taxpayer 65 years of age or older during the
taxable year receives a $50 credit against the amount of school district
income tax due. Only one credit is allowed for each return.
Filing and Payment Dates
(R.C. 5747.06 – 5747.09):
Individuals and Estates:
1. Calendar year taxpayers file an annual return between January 1 and
April 15.
2. Fiscal year taxpayers file by the 15
th
day of the fourth month after
the end of the fiscal year.
3. The taxpayer must file a quarterly estimated return if the taxpayer
expects to be under-withheld by more than $500 for the combined
school district and Ohio individual income taxes. For calendar year
taxpayers, quarterly payments of the tax must be made on or before
April 15, June 15, and September 15 of the current year and January
15 of the next year. For fiscal year taxpayers, quarterly payments of
tax must be made on the 15
th
day of the fourth, sixth, and ninth months
of the fiscal year and on the 15
th
day following the end of the fiscal
year.
Employers:
1. If the employer remits on a quarterly basis for state income tax
purposes, payment is due for both taxes by the last day of the month
following March, June, September, and December.
2. If the employer remits on a monthly or electronic funds transfer
(EFT) basis for state income tax purposes, remittances of school
district income taxes withheld are made within 15 days after the end
of each month.
Disposition of Revenue (R.C. 5747.03):
Collections are deposited into the School District Income Tax Fund to be
distributed to the school districts less 1.5 percent retained for state
administrative purposes. Distributions are made to school districts
on the last day of April, July, October, and January. Payments are for the
net amount in each school district’s account, after refunds and
administrative fees, as of the end of the prior calendar quarter.
Administration:
The Department of Taxation collects and administers the tax for school
districts and makes quarterly distributions of revenue.
Ohio Revised Code Citations:
Chapters 5747 and 5748.