Gesler v. City of Worthington Income Tax Board of Appeals
138 Ohio St. 3d 76
| Ohio | 2013Background
- Geslers appealed a MBOA denial of a refund for municipal income tax paid on Schedule C stock-option income (2005–2007).
- Worthington’s former ordinances defined net profit for individuals as profit excluding Schedule C/E/F income.
- Geslers filed Worthington tax returns and paid tax on Schedule C income; sought refund with interest.
- BTA affirmed the MBOA denial, relying on R.C. 718.01 to define net profit.
- Ohio Supreme Court reversed, holding former ordinances excluded Schedule C income and refund was warranted; ordered refund with interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether former Ordinance 1701.15 excludes Schedule C income from net profit | Gesler: excludes Schedule C income; subject to no tax | Worthington: BTA correctly applied 718.01 | Yes; Schedule C income excluded; refund awarded |
| Whether R.C. 718.01 can override municipal definitions of net profit | Gesler: not required; self-government controls | Worthington: statute governs tax base | Not necessary to decide conflict; home-rule permits municipality to tax if not restricted by statute |
Key Cases Cited
- Bosher v. Euclid Income Tax Bd. of Rev., 99 Ohio St.3d 330 (2003 Ohio 3886) (strictly construes tax ordinances in favor of taxpayer)
- Roxane Laboratories, Inc. v. Tracy, 75 Ohio St.3d 125 (1996) (read statutes in context; tax exemptions resolve against taxation)
- Cincinnati Bell Tel. Co. v. Cincinnati, 81 Ohio St.3d 599 (1998) (municipal tax power; home-rule framework limits by general laws)
- Ohioans for Concealed Carry, Inc. v. Clyde, 120 Ohio St.3d 96 (2008) (home-rule analysis when power to tax involved)
- In re Estate of Roberts, 94 Ohio St.3d 311 (2002) (exemption provisions construed against taxation)