Ohio’s squirrel tax of 1807 relevant to today’s property tax debate

• Governments often use taxes to discourage certain activities and tax exemptions to encourage others.
• Ohio once implemented a squirrel tax in 1807 to control the population, rewarding residents with tax breaks for squirrel skins.
• Modern examples include “sin taxes” on items like alcohol and tobacco, and tax exemptions for agriculture and manufacturing.

Ohio once had a squirrel tax. No kidding.

The legislature made a quota for every property owner. To reduce the out of control squirrel population in 1807, Ohio would exempt your property tax bill for every squirrel skin one provided as proof of squirrel population reduction.

Ohio has an agricultural value reduction program to reduce property tax on land used for agriculture. Manufacturing equipment is automatically exempt from sales and use tax.

Thus, the pattern has been clear for 220 years: Tax what you don’t want. Exempt what you do.

Taxes can be both counterproductive and counter intuitive.

ONE THOUGHT: Tax what you don’t want

Taxes on alcohol, tobacco, and cannabis are “sin” taxes designed to generate revenue on things that government wishes to discourage.

Ohio’s 1807 squirrel tax is a shining example. Bring us your squirrel skins or pay more tax.

Arguably, some local places in Ohio have purposely taxed themselves more in order to keep certain real estate investments out.

SECOND THOUGHT: Exempt what you do want

Exemptions for job-creating globally-competitive capital investment just makes sense.

Ohio automatically reduces property taxes on agriculture land and has for decades. It’s called CAUV. Tax farmland more? You’ll get less farmland.

Trade this year’s revenue for a longer-term future of more revenue is the biggest point with local property tax exemption authority.

Trade incremental property tax one year for greater income tax now and in the future.

THIRD THOUGHT: Watching the great tax debate in Ohio

Though action has been taken from the Ohio General Assembly, there could be more to come in the debate sparked by rising property taxes. And it’s not just property taxes in play. Talk about redirecting local income taxes, removing sales tax exemptions, and curbing real estate tax diversions are among the items open for debate. Should an over $20 billion hole emerge in Ohio’s collective state and local tax portfolio from a possible statewide referendum, there’s nothing off the table.

That’s why the principle from 1807 is key to remember.

Tax what you don’t want. Exempt what you do.

By the way, that Ohio squirrel tax had to be repealed in 1808, because it worked. The squirrel population was decimated and taxpayers were afraid they couldn’t gather enough squirrel skins to avoid the tax.

Rick Platt is President and CEO of the Heath-Newark-Licking County Port Authority with over three decades of experience in Ohio industrial development. He is a board member of JobsOhio.