Daily Court Reporter - News Sales Tax Law of 1935 changed how Ohio funds its schools
Sales Tax Law of 1935 changed how Ohio funds its schools
ELISSA COLLOPY, Daily Reporter Staff Writer
During the Great Depression, public schools in Ohio faced a financial crisis. Most schools received their funding through property taxes, according to Ohio History Connection.
Many Ohioans failed to pay their taxes because of the difficult economic times and, as a result of people's failure to pay their taxes, schools had less money to pay educational expenses.
To prevent the financial collapse of the public school system in Ohio, the state legislature implemented the Ohio Retail Sales Tax Law of 1935, according to the Ohio Department of Taxation.
Before 1935, sale taxes in Ohio were rare. Under the Ohio Retail Sales Tax Law of 1935, the Ohio legislature taxed cigarettes and gasoline, and most items sold in stores faced taxation.
The sales tax dramatically increased money to schools. Enacted on Jan. 1, 1935, in its first year the law provided more than $16.8 million to public schools.
The sales tax actually brought in more than $47.8 million in 1935. The law marked a dramatic shift in funding for public schools.
According to the Ohio Department of Taxation, the General Assembly enacted a 3 percent sales tax in 1935, and in 1967 adopted a 4 percent state rate and, for the first time, authorized county governments to levy piggyback taxes of their own.
The current sales tax in Ohio, according to the department, is 5.5 percent, which was established in 2005 and is state government's second-largest source of revenue.
According to Ohio Revised Code 5739.01, 5739.03, 5739.031, 5739.17, 5741.01, "any person, retailer, business, organization, or provider of taxable services making retail sales or making taxable purchases on which the tax has not been paid is required to file a return and remit the tax due."
In July 2009, all 88 Ohio county governments levied permissive sales and use taxes ranging from 0.50 percent to 1.5 percent, collecting roughly $1.3 billion that year, according to the department.
For Franklin County, the combined sales tax rate sits at 7.5 percent for state and county taxes. Breaking it down, the state sales tax rate is currently 5.75 percent and the county rate is 1.25 percent.
Date Published: May 23, 2019