Municipal Income Taxes
Tax Rates and Amounts collected, by Municipality, Calendar
Municipal income taxes are generally imposed on wages,
salaries, and other compensation earned by residents and
nonresidents who work in the municipality. The income tax is
also applied to business net profits that are attributable to
activities in the municipality. Most municipalities allow a
partial or full credit to residents for municipal income
taxes paid to another municipality where they are employed.
Administration of the municipal income tax is strictly local,
either by the cities and villages themselves or by central
collection agencies representing several municipalities.
State law requires that the rate must be uniform within a
municipality and cannot exceed one percent without a vote of
the people. Rates of taxation in 2002 ranged from a low of
0.50 percent in eighteen municipalities to a high of 2.85
percent in the City of Euclid, Cuyahoga County. The City of
Euclid is the only municipality to levy and collect municipal
income taxes for its corresponding school district. The
city’s income tax is 2.38% while the Euclid City School
District has a 0.47% tax. The Ohio legislature has since
revoked this authority for all other communities effective
December 21, 2000.
Total municipal income tax revenue was $3.4 billion. Of this
amount, $3.1 billion was collected by cities and $0.2 billion
by villages. There are fifteen villages that did not submit
calendar year 2002 data so their prior year’s collections are
shown. Assuming these municipalities still had the income tax
in effect in calendar year 2002, a total of 548
municipalities (234 cities and 314 villages) levied the tax.
One municipality, the Village of Hunting Valley, Cuyahoga
County, reported the tax repealed January 01, 2003.
There were five new municipalities added to this publication
- Village of West Union, Adams County
- City of Martins Ferry, Belmont County
- Village of Wakeman, Huron County
- Village of New Bloomington, Marion County
- Village of Fort Jennings, Putnam County
Finally, there were fifteen municipalities that adjusted tax
rates during calendar year 2002, two of which were decreases.
Data for Table LG-11 were obtained from surveys conducted by
the Ohio Department of Taxation.