Gesler v. City of Worthington Income Tax Bd. of Appeals

Appellants requested a tax refund from the City of Worthington in connection with municipal income tax they paid on stock-option income earned from 2005 through 2007, as reported on Form 1040, Schedule C of their federal income tax return. The Board of Tax Appeals (BTA) affirmed the denial of Appellants' refund based on its view that Ohio Rev. Code 718.01 governed the case because the City's definition of net profits in former Worthington Codified Ordinance 1701.15, which defined net profit for purposes of the City's income tax for an individual taxpayer "as the individual's profit, other than amounts required to be reported on schedule C," contravened the statutory definition of net profits set forth in section 718.01(A)(7). The Supreme Court reversed and ordered the City to refund the municipal taxes paid by Appellants on Schedule C during the tax years at issue, holding that the decision of the BTA was unreasonable and unlawful because the General Assembly did not exercise its power to limit or restrict the municipal power of taxation through section 718.01, and therefore, the statutory provisions at issue did not preclude the refund. View "Gesler v. City of Worthington Income Tax Bd. of Appeals" on Justia Law