FIAM USER GUIDE COVER II - Fiscal Impact Analysis Model - OKI

Fiscal Impact Analysis Model
User Guide
• Income or earnings tax and occupational license tax. Many jurisdictions in
the region collect a tax on income or total earnings. Ohio municipal legislative
authorities may levy, without vote of the people, an income tax of up to 1%.
Kentucky cities and counties can levy occupational license taxes on wages,
salaries, commissions, and other compensation received by individuals. In
Indiana, different local income tax rates may be applied to those who live inside
and outside of the jurisdiction. These taxes may or may not include a cap. Each
participating community collecting income tax submitted detail on the
percentages of the total income tax revenue that was made up from withholdings
(employed labor), net profits (corporations) and individuals (self employed labor).
These differences are reflected in the Model.
Some jurisdictions have reciprocity agreements, in which the taxpayer is not
liable to her or his home jurisdiction for the amount of taxes paid to the work
jurisdiction. As a result, the Model’s income and earnings tax calculations
account for three types of individual taxpayers, in addition to corporate tax
liabilities:
• People who work and live in the jurisdiction.
• People who live in the jurisdiction but work elsewhere.
• People who work in the jurisdiction but live elsewhere.
• Sales and Estate Tax. Some jurisdictions in the OKI region levy sales tax and
estate tax. Sales tax is calculated as a percentage of the total cost of a good or
taxable service. This percentage is added to the cost of the purchase. There are
no local sales or use taxes in Kentucky or Indiana. Ohio counties may enact up
to 1% sales and use tax, in 0.25% increments, for use by the county general
fund. Estate taxes are levied on inheritances that exceed a certain statemandated
total amount. Estate taxes are generally due to the jurisdiction where
the decedent lived. Since the amount of estate tax collected per year is entirely
dependent upon the number of residents dying in a specific year with net worth
sufficient to trigger the estate tax, many jurisdictions do not include estate taxes
in their revenue estimates. Where applicable, these revenue types are reflected
in the Model.
• Licenses and Permits. Depending on the jurisdiction, license and permit fees
may be associated with vehicle registration, animal registration, liquor licenses,
building permits or other licenses and permits. License fees are established on a
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