Ohio Supreme Court to Hear Municipal Income Tax Case | Ohio
(The Center Square) – The Ohio Supreme Court will hear a case challenging the state’s municipal income tax code that allowed cities to levy taxes on workers who weren’t living or working in these communities during the COVID-19 pandemic.
The court agreed to hear Schaad v. Adler of the Buckeye Institute, one of five cases filed by the Columbus-based political group regarding municipal income tax collection.
“For more than 70 years, the Supreme Court of Ohio has recognized that the Constitution prohibits local governments from taxing the income of people who do not live or work in the taxed city – and, yes, the Constitution applies even during a global pandemic,” said Robert Alt, president and CEO of The Buckeye Institute and one of the attorneys representing Schaad. “The Supreme Court of Ohio finally has the chance to fix this Orwellian system in which the state forced people to work from home under threat of criminal penalties, but then absurdly considered that the same work had been done there. where it was not – often in the highest tax office locations.
Even before the pandemic, Josh Schaad of Blue Ash, Ohio, worked offsite several days a week for his employer and, in years past, received proportional reimbursements for work performed outside of Cincinnati.
When the Ohio General Assembly passed House Bill 197 in 2020 – which deemed any work performed elsewhere due to the health emergency to be performed at the employee’s primary place of employment income tax purposes – Schaad’s municipal income tax bill in Cincinnati rose even though he spent less time at his main office in Cincinnati than the year before.
The lawsuit is one of five similar cases filed by the Buckeye Institute. Two others are on appeal, one has not yet been tried and the other has been settled in favor of the group’s client.
The Ohio General Assembly passed a law early in the pandemic that allowed cities to continue collecting taxes from workers even if they were working remotely in another city rather than working in the city where they were. the employer. This was an effort to stabilize the revenues of the municipalities and, in particular, of the large communities, where the large employers are located.
The House passed a bill in June 2021 that required employees to pay income taxes in the city where they work. If work is done from home, the community benefits, rather than where the traditional workplace is located.