Avon to join RITA lawsuit

Avon City Council approved legislation on Nov. 13 to join hundreds of Ohio municipalities in a lawsuit against the state of Ohio over pending changes to municipal tax collection.

Avon joins the Regional Income Tax Authority (RITA) with more than 300 municipalities across the state of Ohio in the suit which challenges the constitutionality of the state government’s decision to centralize tax collection authority for net-profit business taxes in addition to violating home rule provisions which allows municipalities to administer and enforce its own income tax.

The provisions are scheduled to take effect on Jan. 1, 2018. They will affect business owners who will file taxes with the Ohio Department of Taxation which will charge administration fees before deciding when to redistribute funds back to the municipalities after charging an administration fee.

While the state of Ohio stresses the move would save money and increase efficiency, the suit asserts the government is overstepping its authority.

The collection of net profit tax revenue by the state of Ohio

would take away tax collection authority from the RITA who provide tax collection services to hundreds of communities.

On June 12, Council passed a resolution in opposition of House Bill 49, the state’s budget bill. Finance Director Bill Logan

said at the time of the $2 million in net profit taxes collected by Avon, the “throwback language provisions,” which have since been eliminated, would have cost the city $166,000.

Other municipalities in Lorain County may follow Avon. Avon Lake has been highly critical of the state government over the past several months, with Avon Lake Finance Director Steve Presley characterizing centralized tax collection as setting a precedent for the state to collect additional municipal income taxes down the line.

In April 2017, Avon Lake strongly criticized the state government for its lack of guidance and municipal oversight over the time line for when the money would be returned. Avon Lake Mayor Gregory Zilka said at the time that the state government lacked empathy for the concerns of local government based on their actions.

“This is another opportunity for them to say they aren’t taking any more money from us and that they are just going to hold on to it for six months or a year,” Zilka said. “They would have access to those funds to help pay their bills at our expense.”