Ohio Legislative Service Commission
Through the end of April 2017, total FY 2017 GRF revenue from the
PIT was $6.26 billion and $183.8 million (2.9%) below PIT revenue in the
corresponding period in FY 2016. PIT revenue is comprised of gross
collections, minus refunds and distributions to the Local Government
Fund (LGF). Gross collections consist of employer withholdings, quarterly
estimated payments, trust payments, payments associated with annual
returns, and other miscellaneous payments.
The performance of the tax is typically driven by employer
withholdings. However in February, March, and April during the tax filing
season, tax refunds and taxes due with annual returns are also significant
components of net collections (though this year, refunds have been below
estimate all year, except in December). In April, tax refunds were
$82.0 million (20.4%) higher than projected and taxes due with annual
returns were $28.3 million (5.7%) below estimate. Also, employer
withholding experienced a shortfall of $6.8 million (1.0%). The negative
variances were partially offset by surpluses of $5.0 million (6.4%) in
quarterly estimated payments and $3.0 million (14.2%) in revenue from
For FY 2017 through April, the PIT revenue shortfall was also driven
by refunds that were $353.5 million (24.3%) higher than expected; and employer
employer withholding revenue was $199.0 million (2.8%) short of
anticipated receipts. In addition to that negative variance, annual return
payments, miscellaneous payments, and revenue from trusts were lower
than expected by $14.4 million (2.2%), $9.9 million (11.4%), and $2.7 million
5.4%), respectively. Partly offsetting those shortfalls and the only in FY 2017
component above projections, quarterly estimated payments were above
estimate by $13.1 million (2.2%). For the fiscal year, the negative variance
for gross collections as a whole was $212.9 million (2.5%).
Chart 4 below illustrates how a three-month moving average of
monthly employer withholdings has grown relative to one year earlier.
The pace of growth increased during early FY 2017, despite the effects of
policy changes (which led to reduced withholding rates in August 2015),
but fell in the second fiscal quarter. Employer withholding began growing
4 Quarterly estimated payments are made by taxpayers who expect to be
underwithheld by more than $500. Payments are due in April, June, and
September of an individual's tax year and January of the following year. Most
estimated payments are made by high-income taxpayers.
5 H.B. 64, the budget act for the current biennium, reduced income tax
rates for all brackets by 6.3% for taxable years beginning in 2015, and the
withholding rate reduction was implemented in August 2015.