Individual Income
Municipal Income Taxes
Tax Rates and Amounts collected, by Municipality, Calendar
Year 2005
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 under contract with various
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 2005 ranged from a low of
0.30 percent in the City of Indian Hill Village to a high of
3.00 percent in the City of Parma Heights, Cuyahoga County,
and the Village of Urbancrest, Franklin 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 $3.8 billion. Of this
amount, approximately $3.5 billion was collected by cities
and $0.3 billion by villages. There were fourteen
municipalities that did not submit calendar year 2005 data in
which eleven of these had data submitted by their collection
agency (RITA or CCA). For the remaining three municipalities,
prior year’s collections are shown. Assuming these
municipalities still had the income tax in effect in calendar
year 2005, a total of 558 municipalities (234 cities and 324
villages) levied the tax.
There were three new municipalities added to this publication
this year:
- Village of Minerva Park, Franklin County
- Village of Owensville, Clermont County
- Village of Piketon, Pike County
Finally, there were twenty-seven municipalities that adjusted
tax rates during calendar year 2005, one of which was a
decrease.
Data for Table LG-11 were obtained from surveys conducted by
the Ohio Department of Taxation.