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Ohio Supreme Court Will Hear Local Vehicle Tax Case

Posted on June 4, 2019

The Ohio Supreme Court has agreed to review an appellate court ruling upholding a municipality's "tax" on vehicles for hire.

The high court on May 22 granted a challenge to the Ohio Court of Appeal's decision in State of Ohio/Village of Put-in-Bay v. Mark Mathys, which found that Put-in-Bay Village's ordinance imposing an annual license fee on vehicles for hire is "a valid exercise of the village’s taxing power.” 

According to the village's website, guests at the village generally arrive by ferry and then rent golf carts — the most popular mode of transportation — mopeds, bicycles, or, less frequently, cars. Under a village ordinance, section 858.01, owners of vehicles used for "the transportation of persons or property, for hire and for use in the Village" are subject to an annual license use fee that varies per vehicle type, according to the appellate court's ruling. 

In 2015 the village issued a criminal complaint for Mark Mathys and the Islander Inn, a hotel operated by Mathys, for allegedly not paying the $50 annual fee for the golf carts the hotel rents to guests.

After a trial court ruled in favor of Mathys and the hotel, finding that section 858.01 is similar to a general Ohio law that levies an annual license tax on the operation of motor vehicles, the village appealed. The appellate court reversed the trial court's decision, holding that although the ordinance and state law seem similar, the state statute makes no mention of such a tax and does not limit a municipality’s authority to impose a special tax on vehicles for hire.

In their March 2019 appeal to the state supreme court, the taxpayers said the case is of public interest and could "ripple far beyond Put-in-Bay."

"If localities may engrave limitations on statewide motor-vehicle licenses, then any other type of state license disfavored by those in municipal power may be targeted for taxation," the taxpayers said.

A request for comment from the village mayor's office was not returned by press time.

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