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 under contract with various
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 2006 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.
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 $4.0 billion. Of this
amount, approximately $3.7 billion was collected by cities
and $0.3 billion by villages. There were twenty
municipalities that did not submit calendar year 2006 data in
which seventeen of these had data submitted by their
collection agency (RITA or CCA). For the remaining thirteen
municipalities, prior year’s collections are shown. Assuming
these municipalities still had the income tax in effect in
calendar year 2006, a total of 566 municipalities (235 cities
and 331 villages) levied the tax.
There were eight new municipalities
added to this publication this year:
- City of New Franklin, Summit County
- Village of Antwerp, Paulding County
- Village of Cairo, Allen County
- Village of Elida, Allen County
- Village of Owensville, Clermont County
- Village of West Elkton, Preble County
- Village of Willshire, Van Wert County
- Village of Woodstock, Champaign County
Finally, there were fourteen municipalities that increased
tax rates during calendar year 2006.
Data for Table LG-11 were obtained from surveys conducted
by the Ohio Department of Taxation.