Venue changed in centralized filing lawsuit

Written on Jan 26, 2018

OSCPA staff report

The Lorain County Court of Common Pleas on Jan. 24 granted the State of Ohio’s motion to move to Franklin County a lawsuit pending over the centralized filing program.

The suit, filed Dec. 12 by a group of 22 RITA municipalities in Lorain County, requests three causes of action to obstruct the improved system of centralized collection of municipal net profit taxes administered by the Ohio Department of Taxation.

The court agreed to move the case, referring to a previous district court ruling that determined proper venue criteria. Those included the county in which the defendant resides, has his or her principal place of business, or the county in which the defendant engaged in the activity that gave rise to a claim for relief.

“This court is not persuaded that because the State of Ohio is by its very nature ‘situated in’ every county in the state that the state maintains a residence in each county,” the ruling reads. “Further, (the) plaintiffs provide no support for their argument that being ‘situated in’ a county equates to holding a residence in that county” as determined by previous case law.”

The municipalities in the case had filed a motion in opposition to the move.

Cities on Nov. 16 filed their first challenge to the law in Franklin County. That case, which is still pending, is broader, seeking 11 claims for relief to challenge the constitutionality of key municipal income tax reforms, not only in House Bill 49 passed in the summer, but also House Bill 5 passed in 2014.

With both cases now pending in Franklin County, there’s no other hearings scheduled until February 12-13.  Therefore, businesses should continue to register now on ODT’s website to opt in for centralized filing and payment.

Related: Centralized collection of the Ohio municipal net profit tax is here

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