A Cuyahoga County judge has ruled the city of Cleveland must refund a Pennsylvania woman for 2020 income tax money it collected while she worked remotely during the COVID-19 pandemic.
Following a statewide emergency order in March 2020, Dr. Manal Morsy adjusted her weekly commute to Cleveland from a suburb near Philadelphia, and began working from home in Pennsylvania. She did not return to Ohio through the remainder of the year.
“The important thing is where the non-resident is when they’re performing those services,” Carson said. “So our position is, traditionally, the law for 70 years in Ohio has been that a municipality can’t tax a non-resident, except for work done within the city.” Cleveland and other municipalities rely on revenue from municipal income taxes. In 2021, Cleveland reported collecting $429.1 million from municipal income tax. The majority of the figure was generated by people who live outside of the city.
According to an October 2021 report from the Ohio Mayors Alliance, 1 in 3 Ohioans may continue working from home for at least part of the week for the foreseeable future.The report estimated a city like Strongsville could see a loss in income tax revenue anywhere from $1 - 2.2 million, while Akron could see anywhere from $7.8 - 20 million in lost income tax revenue.
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