The Buckeye Institute Wins Municipal Income Tax Case

Sep 27, 2022

Columbus, OH – On Monday, the Cuyahoga County Common Pleas Court ruled in favor of The Buckeye Institute’s client Dr. Manal Morsy in Morsy v. Dumas. The court denied Cleveland’s motion to dismiss the case and ordered Cleveland to refund all withholdings or payments collected on income Dr. Morsy earned during the pandemic shutdown. The court further ordered the city to pay Dr. Morsy’s court costs.

“The Buckeye Institute argued that Dr. Morsy—who doesn’t even live in Ohio—could not be forced to pay municipal income tax on her earnings from working at home in Pennsylvania during the pandemic,” said Robert Alt, president and chief executive officer of The Buckeye Institute and one of the attorneys representing Dr. Morsy. “In ordering a refund to Dr. Morsy, the court reaffirmed the fundamental right of due process and reminded local governments that they cannot tax nonresidents for work that was performed outside of the State of Ohio.”

Morsy v. Dumas is one of five similar cases Buckeye has brought challenging Ohio’s municipal income tax system since the pandemic. The other four cases are:

Dr. Manal Morsy lives in Blue Bell, Pennsylvania, outside of Philadelphia—more than 400 miles southeast of Cleveland. Prior to the pandemic, she commuted to her workplace in Cleveland, spent the week there and returned home to Pennsylvania on weekends. During the pandemic shutdown, she worked exclusively from her home in Blue Bell, Pennsylvania, as ordered, and paid local income tax to her municipality in Pennsylvania accordingly. Nonetheless, the city of Cleveland continued to tax Dr. Morsy under Ohio’s pandemic nonsensical tax law—House Bill 197—which absurdly “deemed” all work performed in 2020 at her home—in Pennsylvania—to have been performed instead at her higher-taxed office location even though she never set foot there and was actually prohibited from working there during that time frame.

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