COLUMBUS, Ohio – Someone must actually work in a city before that city can withhold income taxes, according to a seemingly obvious conclusion drawn by the Ohio Supreme Court.
In two ruling handed down Thursday, the court found unconstitutional the method that Cleveland uses for taxing professional athletes who work for short periods of time in the city and that one player should not have been taxed at all during the 2008 season because he was injured and not in the city for the days he was taxed.
The court said Thursday the city unfairly imposed a 2 percent income tax on ex-Chicago Bears linebacker Hunter Hillenmeyer based on games played in the city as a percentage of total games played.
The court says Hillenmeyer is due a partial refund under the method most cities use where athletes are taxed based on games played as a percentage of the season.
According to the court’s ruling, Cleveland’s “games-played” method — in which the number of games played in Cleveland is divided by the total number of games in the NFL season to find the amount of the athlete’s income to tax – violates the constitutional right to due process.
Other cities that tax visiting players use the “duty-days” approach, in which the compensation to be taxed is calculated by dividing the number of days spent in a city by the total days worked during the year, counting as taxable income only that money earned in the city by accounting for all the work a player is paid for, not just games played each year, Justice Judith Lanzinger wrote in the decision.
“This method therefore comports with due process and ensures that the tax collected is not disproportionate to the income received for work in Cleveland,” she wrote.
The court also says retired Indianapolis Colts center Jeff Saturday was entitled to a refund for taxes paid for a 2008 game played while he remained in Indianapolis with an injury.
Justice Paul Pfeifer referred to the Hillenmeyer decision ruling that NFL players are paid for more than just the games they play in his decision, writing that none of Saturday’s work was performed in Cleveland or attributable to the city because he was working in another city on game day.