BRECKSVILLE, Ohio--(BUSINESS WIRE)--Twenty-two Ohio cities and villages filed suit on Tuesday in Lorain County Common Pleas Court against the State of Ohio and Ohio Tax Commissioner Joe Testa. These municipalities are standing together to challenge newly enacted state laws that interfere with the authority of Ohio municipalities to administer, collect, audit and receive critical municipal tax dollars.
| The 22 Plaintiffs include: | ||||||
| City of Avon |
Village of Moreland Hills |
City of Sheffield Lake |
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| City of Avon Lake |
City of North Ridgeville |
City of Strongsville |
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| City of Beachwood |
City of North Royalton |
City of Vermillion |
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City of Brecksville |
City of Oberlin |
City of Westlake |
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| City of Elyria |
Village of Orange |
City of Willoughby |
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| Village of Glenwillow |
City of Pepper Pike |
City of Youngstown |
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| City of Hudson |
City of Richmond Heights |
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| City of Lyndhurst |
City of Shaker Heights |
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The controversial provisions were adopted as part of Ohio House Bill 49 (H.B. 49) and will allow the Ohio Tax Commissioner to administer and collect municipal net profit tax from businesses operating in Ohio municipalities. The municipalities are asking the Court to declare these provisions of H.B. 49 to be unconstitutional and to prevent these provisions from being implemented.
According to the lawsuit, Ohio’s long-standing principles of local self-government authority are directly violated by the State’s imposition of new regulations, administrative fees and compliance requirements – compromising the ability of municipalities to maintain funding for essential services like police and fire protection, as well as control over those funds. The challenged provisions of H.B. 49 would effectively amount to the State seizing control of municipal net profit tax administration and imposing fees on municipalities to do so, while subjecting municipal net profit taxpayers to new regulations and compliance requirements.
The municipalities’ lawsuit, filed by Walter Haverfield LLP and with the full support of the Regional Income Tax Agency, comes on the heels of a similar suit filed in Franklin County in November by a number of other Ohio municipalities. Both suits are seeking temporary and permanent injunctions to block the State and Ohio Tax Commissioner from implementing the municipal net profit tax provisions of H.B. 49.
The filing of this latest lawsuit adds to the growing uncertainty looming over the State’s efforts to centralize municipal net profit tax collection and administration. As these and other rapidly evolving Ohio municipal tax policy and compliance issues unfold, regularly updated news, insight and analysis from industry and government resources will be made available at RITAperspectives.com.