Tax Data Series

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.