Eyes on online sales tax surplus

With the state generating more money than ever from online sales tax, Ohioans have a variety of ideas on how those funds could be used, with many constituents and officials hoping to see that money trickle back down into local pockets.

The Associated Press reported that online sales-tax collection hit $45 million in the state for the 2013-2014 fiscal year, which ended June 30. The record high number is a 68 percent increase from five years ago.

Many local governments would like to see some of that increased pot sent their way.

“If the state has a surplus, it’d be good for the township for them to share a portion of that,” said Barlow Township Trustee John Hannan.

Just this year, the townships benefited from a bigger portion of the local permissive sales tax divvied up by the county, said Hannan.

But funding received through the state has dropped significantly in recent years, said Warren Township Trustee Jeff Knowlton.

“Local government money has dropped almost 50 percent in the last couple of years…I think Warren Township was receiving $25,000 and now we’re down to $12,000 or $15,000 now,” he said.

To compound budgetary problems, counties recently lost the funds from the now defunct estate tax.

When unplanned projects crop up, such as a culvert that recently went out on Silver Globe Road, the township finds itself resting heavily on outside funding sources.

The culvert is being almost entirely paid for through Ohio Public Works funding, said Knowlton.

Residents would like to see the online sales tax money go to things close to home as well.

Marie McGraw, of Vincent, said schools should benefit, specifically in a way that could bolster special needs programs.

“We have a granddaughter with Down Syndrome, so I’d say special needs. They can always use more funding,” said McGraw, 70.

And Reno resident Nellie Parent, 78, would like to see the money enable more tax breaks, especially for seniors.

“I think they ought to try to cut the taxes back if they’re getting more. Property tax would be one that would benefit a senior,” she said.

County Commissioner Ron Feathers said he would greatly support sending that online tax revenue back into the county from which it is initially spent.

“Whatever comes from an individual’s particular county, they need to get that sales tax back,” he said.

The state has cut back on a lot of the tax money that funded local government organizations in local years, leaving local governments to fund things for which they were not previously responsible.

For example, Washington County Children Services used to get a vast portion of its funding directly through the state, said Feathers.

“The state has cut back so much money and the county, out of the general fund, has to fund (Children Services),” he said.

The extra expenses are not breaking the county because of successful permissive sales taxes collected here. But Feathers still thinks local governments can be better responsible for the funds they generate.

“Localized government is the best…you can send $45 million to Columbus a year to be squandered in no time,” he said.

Ohio Rep. Andy Thompson, R-Marietta, said the online sales tax money is not reserved for any particular line item. Rather the state can assess its needs and spend the money where it sees fit.

Budgetary concerns have put the state itself behind on several of its planned infrastructure projects, he said.

The Ohio Department of Transportation has been sitting on projects that have been sidelined because of funding issues, added Thompson.

People should realize that an increased tax in a single area does not equate to increased revenue in general, he said.

“How do you address dropping taxes? Gas taxes, because vehicles are more fuel efficient, are one of the taxes that are dropping,” he noted.

Ohio’s online sales tax will likely continue to grow. Part of this year’s revenue increase is credited to a new online sales tax initiative that only began in Ohio halfway through the fiscal year.

Ohio began taxing digital products, such as video streaming services and music downloads, on Jan. 1, according to an email from Howard Wheat, public information officer for the Ohio Department of Taxation.

And Ohio is still missing out on a variety of online taxes that it currently does not have the legal authority to collect. For example, the Associated Press reports that Ohio misses out on taxes from purchases made on Amazon.com because the online mega store does not have a physical location in the state.

As a result, Ohio does not receive approximately $300 million annually from online or remote sales that are subject to tax.