A Columbus-based think tank this week filed its legal response in the Ohio Supreme Court in defense of a Blue Ash man who believes the state cannot make him pay Cincinnati income taxes for a period of time he actually worked from home.
The Buckeye Institute argued that a state law passed in March 2020 to allow jurisdictions encompassing an “employee’s principal place of work” to levy taxes on that worker even when he or she works from home is unconstitutional. Specifically, the institute notes that the federal Constitution’s dormant commerce clause in Article I, Section 8 disallows states to enact statutes that “unduly burden interstate commerce.” Buckeye attorneys also believe the Ohio Constitution constrains lawmakers’ ability to broaden cities’ and towns’ tax-collection power.
On those grounds, Josh Schaad, an employee of Great American Insurance, is challenging Cincinnati’s insistence that he pay municipal income taxes for work he performed from his home during the COVID-19 pandemic. Schaad initially sued the city of Cincinnati and the state of Ohio in February 2021 but the Hamilton County Court of Common Pleas dismissed the case that June and Ohio’s First District Court of Appeals would affirm that dismissal this February. The institute filed an appeal with the state supreme court in March.
In a statement made after filing Schaad’s reply brief, Buckeye senior litigator and Schaad legal counsel Jay R. Carson deplored the new state law and what it has cost people like his client.
“Not only has the city of Cincinnati completely ignored Mr. Schaad’s Due Process rights, but it ignored the Ohio Constitution’s provision, which allows the General Assembly to limit, not expand, municipal taxing authority,” Carson said. “And adding insult to injury, Cincinnati argued that when House Bill 197 expanded municipal taxing beyond the city’s jurisdiction, the bill was actually a ‘limitation’ on the city’s authority. I suppose it is appropriate that an Orwellian law — one that deemed work performed outside a city to have been performed within a city’s jurisdiction — is accompanied by an equally Orwellian argument that an expansion of municipal taxing authority is instead a limitation.”
The Schaad case is one of several that Buckeye has handled for individuals forced by the state to pay income taxes to a municipality where their employers are based but to which they did not commute when pandemic-related orders required them to stay home. Last month, the institute won a $12,000 case in Cuyahoga County court on behalf of Athersys biotechnology company executive Manal Morsy, who resides in the southeastern Pennsylvania town of Blue Bell and did not commute to her employer in Cleveland in 2020 after COVID hit. And last year, the think tank won a refund for Westerville resident Eric Denison, who was compelled to pay taxes to the city of Columbus.
Buckeye also hopes another lawsuit it has filed on behalf of Joel and Summer Curcio of Maumee, as well as Chris Ackerman of Walbridge, will secure the plaintiffs’ refunds respectively from the cities of Oregon and Toledo.
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Bradley Vasoli is managing editor of The Ohio Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
