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Buckeye Institute sues Cleveland over late municipal income tax refunds

Mar 06, 2024

This article was published by Cleveland.com.

CLEVELAND, Ohio – The Buckeye Institute sued the city of Cleveland on Wednesday on behalf of suburbanites who failed to get their income tax refunds within a 90-day period.

At issue are city laws that require Cleveland to pay interest if refunds aren’t issued within 90 days of a taxpayer filing their return, according to a news release from conservative-leaning Buckeye Institute.

“Citizens should not be forced to go to court to get the city to follow its own laws,” said senior litigator for the institute, Jay R. Carson, in the release. “Cleveland city ordinances are clear: refunds not issued within 90 days are subject to interest. Cleveland officials know this, and the city owes The Buckeye Institute’s clients—and countless other taxpayers—for delayed tax refunds.”

A City Hall spokeswoman declined to comment.

The institute seeks class-action status for the lawsuit that was filed in Cuyahoga County Common Pleas Court, involving tax refunds for Strongsville resident Kate Wos, and North Royalton resident David Steffes. It wants Cleveland to pay Wos and Steffes -- and anyone else who failed to get a timely refund -- for interest payments they believe are due to them.

It took the city’s tax collector, the Central Collection Agency, more than six months to return Wos’ money after she filed her tax return, the release said.

Wos filed it in March 2023, after state lawmakers passed a bill allowing Ohioans to seek refunds for 2021 and 2022, when many were working from home and no longer reporting to offices in Cleveland.

It wasn’t until Sept. 21 that Wos received her money back. But that refund did not include interest for the delay, and it didn’t include a refund of her paid vacation days, the news release states.

Steffes didn’t receive interest or a refund for his paid vacation days either, but he also faced a different hurdle, the institute said. The city initially declined to issue his refund, and “their obstruction became so ridiculous as to demand that Mr. Steffes provide some form of verified statement from someone who was actually working in his employer’s Cleveland office,” the release said.

But that verification was impossible, the news release said, because no one was working at Steffes’ office during that time, due to the pandemic.

This lawsuit isn’t the first from The Buckeye Institute, involving pandemic-era municipal income tax payments.

The organization already sued Cleveland and other Ohio cities for taxing former commuters as if they had continued reporting to the offices where they worked prior to pandemic shutdowns.

But the Ohio Supreme Court last month rejected arguments in one case involving a Cincinnati-area man, who had raised due process concerns after his 2021 refund request was denied. After the ruling, the Buckeye Institute said it was considering next steps. It had filed similar cases in Cuyahoga and Summit counties.