Columbus, OH – On Tuesday, The Buckeye Institute appealed Kresevic v. Kimmel (was Kresevic v. Chittok) to Ohio’s Ninth District Court of Appeals on behalf of Karen Kresevic of Chagrin Falls, Ohio, urging the court to rein in local governments that continue to take income taxes from Ohioans illegally. The city of Akron taxed Ms. Kresevic on a settlement package she received, even though the settlement did not represent wages and was not for any work performed.

“The city of Akron stretched the law to take a cut of Ms. Kresevic’s settlement in breach of its own tax ordinances and forms,” said Jay R. Carson, senior litigator at The Buckeye Institute and an attorney representing Ms. Kresevic. “This case allows the court of appeals to correct the trial court’s errors and rein in local governments’ illegal taxation.”

In its appeal brief, The Buckeye Institute argues that the trial court erred in determining that Ms. Kresevic filed her claim outside the one-year statute of limitations. Akron contends that the statute of limitations clock began to run on June 14, 2022, the date Ms. Kresevic received her settlement payment. In fact, according to the city’s own tax ordinances and forms, the clock began to tick when Ms. Kresevic filed her return. The trial court further erred when it determined that Ms. Kresevic “voluntarily” paid the tax because she requested a refund on Tax Day 2022, rather than on the day her employer withheld the tax from her settlement. Ms. Kresevic agreed that her employer would classify the payments as W2 “wages” for convenience. The settlement payment was not income “for work done, services performed or rendered, or activities conducted in the Municipality” as outlined in Akron’s Municipal Code.

Ms. Kresevic was a physician assistant working at Akron City Hospital in 2020 during the pandemic. After filing a wrongful termination claim, she and her employer reached a settlement agreement, which the city of Akron taxed as if it were income and as if Ms. Kresevic were still working in Akron. In April 2022, Ms. Kresevic requested a refund on the municipal taxes withheld from the settlement payment, explaining that those payments were not for wages—let alone wages earned for work performed within the city of Akron. On July 11, 2022, the city of Akron—citing the Ohio General Assembly’s enactment of House Bill 197—denied her request for a refund, stating that Akron deemed that those payments were for work she performed within the city of Akron.

Kresevic v. Kimmel was originally filed in the Summit County Court of Common Pleas. Stay up to date on the case at: BuckeyeInstitute.org/KresevicvKimmel.

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