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 2003 ranged from a low of
0.30 percent in the City of Indian Hill Village 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, approximately $3.2 billion was collected by cities
and $0.3 billion by villages. There are six villages that did
not submit calendar year 2003 data so prior year’s
collections are shown. Assuming these municipalities still
had the income tax in effect in calendar year 2003, a total
of 551 municipalities (234 cities and 317 villages) levied
There were three new municipalities added to this publication
- Village of Ridgeway, Hardin County
- Village of Pleasant Hill, Miami County
- Village of Maineville, Warren County
Finally, there were fourteen municipalities that adjusted tax
rates during calendar year 2003, two of which were decreases.
Data for Table LG-11 were obtained from surveys conducted by
the Ohio Department of Taxation.