Professional Report

board, which must then file a resolution with the county board of

elections no later than 90 days before the primary, general, or special

election.

The first type of income that can be taxed includes the Ohio adjusted

gross income and taxable income from an estate. The second option is

taxing only wages, salaries, tips, and other employee compensation.

In any case, the tax is paid by residents of the district, regardless of

where they may work.

School district income tax issues can only appear on the ballot twice in

any given calendar year. If presented twice to voters in a year, one of

the elections on the question must be held on the date of the general

election.

Appendix J

is the most recent copy of the Guide to Ohio’s School District

Income Tax, prepared by the Ohio Department of Taxation. It provides

answers to the most frequently asked questions by taxpayers about the

school district income tax.

INDEBTEDNESS, NET

Net indebtedness refers to the principal amount of outstanding securities

of a school district less the amount held in a debt service (bond

retirement) fund.

Boards may not incur net indebtedness in excess of 1/10 of one percent

of the total value of all property in the district as listed and assessed for

taxation, without a vote of the people.

Boards may also incur indebtedness without a vote of the people not to

exceed 9/10 of one percent of the total value of all property in the school

district for installations, or modifications, or remodeling for energy

conservation projects certified by an architect or engineer and approved

by the Ohio Construction Facilities Commission (OCFC). The total net

indebtedness under Sections 133.04 and 133.042 cannot exceed one

percent of the total value of all property.

However, securities issued under ORC 3318.052 are not included in the

calculation of net indebtedness. These securities are issued with a

covenant approved by the board to appropriate annually from lawfully

available proceeds of a property tax or school district income tax the

amounts necessary to pay the debt charges and financing costs related

to the securities.

Boards may not submit bond issues which will make the net

indebtedness higher than 4 percent of the assessed valuation without

securing the consent of the tax commissioner and the superintendent of

public instruction acting under the policies adopted by the State Board of

Education. If the voters do not approve the bond issue, the district need

not submit a new application to the superintendent of public instruction

and tax commissioner for permission to exceed the 4% of its taxable

valuation if the issue is submitted at the next possible special election

(which is defined in ORC 3501.01.

Generally, the upper limit for net indebtedness is 9%, but there are a few

exceptions.

Exceptions are provided for special needs districts (which are

experiencing rapid enrollment growth) and districts whose facilities have

been destroyed or condemned.

133.04

133.06(A)

133.06(G)

3318.052

133.06(C)

133.06(B)

133.06€, (F)