Published: Saturday, November 4, 2006
Official: Tax billing brings in $1 million
Business personal property taxes totaled nearly $19 million this year.
YOUNGSTOWN Mahoning County real estate owners with past-due taxes have paid more than $1 million this month after receiving a third real estate tax bill, according to Treasurer John B. Reardon.
Real estate taxes are billed twice per year and are due in March and August. Ohio law does not require a third real estate billing, but it's an option Reardon often uses to collect unpaid taxes and reduce tax delinquency in Mahoning County.
Money collected in the third billing will be distributed among local school districts, township and municipal governments and voter-approved countywide levies.
Remaining properties with unpaid 2005 taxes will be subject to additional penalty and interest charges, certification as delinquent property and inclusion in an upcoming tax lien certificate sale.
State law permits Reardon to sell a bundle of the county's liens against delinquent properties to a private investor. If real estate owners don't repay the investor with interest within a year, the lien holder may foreclose on their properties to recoup their investments.
Letters to go out soon
Owners of delinquent properties will soon receive certified letters to inform them of the date of the tax lien certificate sale. These owners also may have their names published in the local newspaper.
Reardon said Mahoning County manufacturing and service-based companies have paid nearly $19 million this year in personal property taxes, a tax charged on inventories, machinery, equipment, furniture and fixtures of about 3,500 business operators in the county.
The state Legislature approved a tax reform plan in June 2005 that eliminates the personal property tax in an effort to increase capital investment, business productivity and job creation. A phase-out of the personal property tax began this year with businesses taxed on 18.75 percent of the value of their personal property, compared with 2005 rates of 23 percent on inventory and 25 percent on machinery, equipment, furniture and fixtures. Rates will continue to decrease 6.25 percent in each of the next two years.
By the time the personal property tax is phased out in 2009, a new Commercial Activity Tax will be fully implemented as an annual tax on net gross receipts of businesses' activities within Ohio, including sales, performance of services and rentals or leases. Businesses will pay one-fifth of the full rate this year, two-fifths next year and so on until the full tax is being paid.
Unlike personal property and real estate taxes, which are collected by and distributed within each county, the CAT tax will go directly to the state government, Reardon said.