The question to be decided is whether Columbus may levy an income tax on compensation earned by a nonresident of the city for services paid for by Ohio State University and performed for it within that portion of the property of Ohio State University located within the boundaries of the city.
At оne time, it was considered that any tax by one government on income received from another government would represent such an undue interference with the governmental activities of the latter government as to constitute a tax upon that latter government or its activities.
However, since the decision in Graves et al., Commrs., v. New York, ex rel. O’Keefe (1939),
In our opinion, the aрplication of the Columbus income tax to tax compensation paid by Ohio State University for services performed for that university, which is an instrumentality of
“3. A municipal income tax does not become a tax on real property by reason of the fact that the income on which the tax is levied consists of rentals from such real property.
“4. Where a municipal income tax is levied on rentals from real property, the tax is not levied on the property from which the income is derived, there is no invasion of an area of taxation occupied by the state [i. e., taxation of real estate], and the doctrine of pre-emption is without application.” But, cf. Ohio Finance Co. v. City of Toledo (1955),
Plaintiff contends that the jurisdiction of Columbus to levy an income tax against a nonresident cannot, as it can with a resident, be based upon the presence of the taxpayer in Columbus, but must be based upon the power of Columbus over the income earned by the taxpayer in Columbus. If we assume that that contention is sound, the question then arises whether Cоlumbus has power to tax income earned by a nonresident taxpayer in that part of Columbus which is in the area under control of the trustees of Ohio State University.
There are no statutory or constitutional provisions tending to indicate that ownership and use of an area within the boundaries of a municipal corporation by Ohio State University should have the effect of detaching or withdrawing that area from the confines of the municipal corporation. In our opinion, they do not have that effect.
It is reasonably arguable that, as the trial judge concluded in his opinion, the “authority tо exercise all powers of local self-government” conferred upon Columbus by Sections 3 and 7 of Article XVIII of the Ohio Constitution, including, as this
However, in the opinion in Angell v. Toledo, supra, at 185 (
“ * * * the city of Toledo does afford to plaintiff not only a place to work but a place to work protected by the municipal government of Toledo.”
In deciding this case, we will therefore assume, as the courts apparently did in Kiker v. Philadelphia (1943),
Obviously, the “place to work” at which plaintiff and his class earn their income is within Columbus. This is true even though the state owns that “place to work” and, as an owner, controls the operation of the university on that land, and even though there are no municipal streets or grounds within that “рlace to work.”
Possibly because the General Assembly may have recognized that exemption of university property from taxation
In our opinion therefore, since Columbus affords plaintiff and his class not only a place to work within its boundaries but also a place to work protected by the Columbus municipal governmеnt, there is an ample fiscal relationship between the Columbus income tax on such income and the protections, opportunities and benefits made available by Columbus with respect to that area (assuming such fiscal relationship is necessary) to justify Columbus in imposing that tax on such income.
This conclusion necessarily disposes of plaintiff’s contention that imposition of the Columbus tax on income earned by plaintiff and his class in the area in Columbus owned and operated by Ohio State University discriminates against plaintiff’s class in favor of nonresidents who come to Columbus but earn no incomе in Columbus and therefore are not taxed under, the Columbus income tax. In our opinion, the fact, that they
In its conclusions of law, the Common Pleas Court found that the basis of the Columbus income tax is “jurisdiction or power over the income-earning process,” that “the income-earning procеss * * * is within the exclusive control of the university” but that the “tax is valid because the city has power over the income-earning process — the subject matter of the tax,”
In order to decide the instant ease, it is not necessary for us to rely upon those conclusions of law. For example, what is referred to therein as “the income-earning process” has at least two facets, that of the employer and that of the employee. A tax on the former of those two facets might be invalid as a tax on the university, but the Columbus tax on income earned in Columbus by nonresidents imposes a tax on only thе latter of those two facets, i. e., the income of the employee. As indicated by authorities hereinbefore cited, such a tax on that income of the employee no longer represents a legally recognizable interference with the activities of the employer or a tax upon the employer or upon his activities.
As stated in plaintiff’s brief, plaintiff does not “separаte out any one conclusion of the court and assign it specifically as error” but plaintiff’s “assignment is * * * limited to the trial court’s general conclusion that the tax was applicable to plaintiff * * * аnd valid as so applied.” Because of our conclusion that, on the facts found, the tax is so applicable and valid, the judgment of the Court of Appeals affirming the judgment of the Common Pleas Court must be affirmed.
Judgment affirmed.