Individual Income
Municipal Income Taxes
Tax Rates and Amounts collected, by Municipality, Calendar
Year 2004
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 2004 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. Although the Ohio legislature
revoked this authority for all other communities beginning in
2001, it has since reenacted this authority under the
condition that only residents would be subject to the
municipal income tax.
Total municipal income tax revenue was $3.5 billion. Of this
amount, approximately $3.3 billion was collected by cities
and $0.2 billion by villages. There were nine villages that
did not submit calendar year 2004 data so prior year’s
collections are shown. Assuming these municipalities still
had the income tax in effect in calendar year 2004, a total
of 556 municipalities (234 cities and 322 villages) levied
the tax.
There were three new municipalities added to this publication
this year:
- Village of Cecil, Paulding County
- Village of Clayton, Montgomery County
- Village of Cridersville, Auglaize County
- Village of New Waterford, Columbiana County
- Village of Sherwood, Defiance County
Finally, there were twenty municipalities that adjusted tax
rates during calendar year 2004, four of which were
decreases.
Data for Table LG-11 were obtained from surveys conducted by
the Ohio Department of Taxation.