Hillenmeyer v. Cleveland Board of Review
144 Ohio St. 3d 165
| Ohio | 2015Background
- Hunter T. Hillenmeyer, a Chicago Bears linebacker and nonresident of Cleveland, was present in Cleveland two days each season (one away game) in 2004–2006; Cleveland withheld municipal income tax using a "games-played" allocation that treats one game of ~20 as 5% of income.
- Hillenmeyer sought refunds arguing the games-played method overstates Cleveland income because player compensation covers preseason, training, practices, and other duties performed largely outside Cleveland.
- Administrative appeals (CCA, Cleveland Board of Review, BTA) upheld Cleveland’s rule; BTA declined to decide constitutional claims. Hillenmeyer appealed to the Ohio Supreme Court.
- Cleveland’s ordinance authorized the tax on nonresidents for "work done or services performed" within the city and delegated rulemaking to the tax administrator, who adopted the games-played method; most other municipalities use a duty-days method (days worked in city ÷ total duty days).
- The court found the games-played method was permissible under municipal authority and state statutes but held its application to NFL players violated the Due Process Clause because it taxes compensation earned for work performed outside Cleveland.
- Remedy: reversal of the BTA and remand for refunds calculated using the duty-days method (plus appropriate interest).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cleveland’s games-played allocation conflicts with city ordinance or R.C. Chapter 718 (statutory preemption) | Hillenmeyer: games-played treats wages as earned only for games, contrary to statutes and ordinance that tie wages to all services performed | Cleveland: ordinance and delegated regulations permit the administrator to adopt games-played; statutes don’t clearly prohibit allocation method | Held: games-played not prohibited by ordinance or R.C. Chapter 718 (no clear-statement preemption) |
| Whether exclusion of athletes from the 12‑day "occasional entrants" exemption violates Equal Protection | Hillenmeyer: athletes should get 12‑day exemption like other occasional entrants | Cleveland: legislature rationally excluded entertainers/athletes due to high pay and public burdens (crowd control), and reliance interests | Held: No equal-protection violation; exclusion is rationally related to legitimate interests |
| Whether games-played allocation violates Due Process (extraterritorial taxation) | Hillenmeyer: games-played taxes income earned outside Cleveland; compensation should be apportioned by duty-days (days worked in city ÷ total duty days) | Cleveland: games-played reasonably apportions salary because contracts tie pay to games | Held: games-played, as applied to NFL players, violates Due Process; duty-days method reasonably relates taxed income to work performed in city |
| Whether games-played violates Commerce Clause (fair apportionment) | Hillenmeyer: games-played not fairly apportioned under Complete Auto test | Cleveland: allocation is permissible | Held: Court did not reach Commerce Clause because Due Process ruling was dispositive and fair-apportionment claim sought the same relief |
Key Cases Cited
- Hume v. Limbach, 61 Ohio St.3d 387 (1991) (state tax case allocating athlete compensation to work performed, supporting duty-days approach)
- Cleveland Gear Co. v. Limbach, 35 Ohio St.3d 229 (1988) (administrative forum can develop record for later judicial resolution of constitutional claims)
- MCI Telecommunications Corp. v. Limbach, 68 Ohio St.3d 195 (1994) (limitations on BTA’s ability to decide constitutional questions)
- Moorman Mfg. Co. v. Bair, 437 U.S. 267 (1978) (Due Process limits require minimum connection and rational relation of income to taxing jurisdiction)
- Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (minimum connection/definite link requirement for state taxing jurisdiction)
- Miller Bros. Co. v. Maryland, 347 U.S. 340 (1954) (state tax power requires definite link to person/property/transaction)
- Norfolk & W. Ry. Co. v. Missouri State Tax Comm., 390 U.S. 317 (1968) (income attributed must be rationally related to values connected with taxing state)
- Shaffer v. Carter, 252 U.S. 37 (1920) (distinction between in personam taxation of residents and in rem taxation of income arising within jurisdiction)
- Nordlinger v. Hahn, 505 U.S. 1 (1992) (legislative line-drawing in taxation reviewed under rational-basis deferential standard)
- Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977) (four-prong Commerce Clause test for state tax validity)