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Feeling Gouged Yet? Franklin County Sales Tax Rate Increase Coming in January

by Judd Ballard

Franklin County commissioners voted Tuesday morning to increase the county sales tax rate one-half cent per dollar effective January 1, 2014.  If a sales tax rate increase sounds familiar that’s because the recent biennial budget bill, House Bill 59, just increased the state portion of the sales tax rate in July from 5.5% to 5.75% effective as of September 1st.  Now, Franklin County is adding another 0.5% on top of that, ranking second to only Cuyahoga County (now 8%, as of September 1st) in the state for the highest sales tax rate.  A state already complicated enough for having to deal with various local rates, these separate rate increases just add to the complexity.

So what’s going on here? Local government budget and spending issues, obviously. All we’ve heard about this year is the replenishment of the state rainy day fund. Franklin County is not benefitting from the same increase in commerce? And if it is entirely county driven, then it must be completely unrelated to Governor Kasich’s focus of increased tax on consumption and not earnings, right? Was the state legislature aware of this possibility back in June? I would assume so, but would it have mattered?
Just to provide perspective on what the new rate in January means in relation to the rest of the country:

  • 5 states that do not have a state sales tax – Oregon, Delaware, Alaska, Montana, and New Hampshire.
  • State rates across the U.S. range from 3%-8%.
  • With additional local add-ons and various treatments of specific purchases, you could pay as high as 15% in Chicago, IL.
  • States with no personal income tax have a tendency to keep higher sales tax rates – Texas and Tennessee, but not necessarily Florida.
  • Neighboring state rates:

- Indiana – 7% (additional local tax on food in Marion County)
- Kentucky – 6%
- Michigan – 6%
- Pennsylvania – 6% (additional local tax in Allegheny County and Philadelphia)
- West Virginia – 6%

The most you’d pay on a purchase in Ohio is 8%, clearly above what a consumer would pay in neighboring states, but not as bad as it can get in other parts of the country.

In the grand scheme of things, there’s no real rhyme or reason why some states have higher rates than others. Obviously, in Ohio, the change at the state level had more to do with where to generate tax revenues while being competitive with neighboring states. Franklin County’s argument for needed funds to build jails, fix roads, etc., who’s to really say? But is it here to stay? A 2018 rollback of 0.25% has already been discussed.

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