Ohio Rules Out Local Income Tax for Transportation Companies – March 27, 2014 by Marc Mazzella

On March 19, 2014, the Ohio Supreme Court ruled in Panther II Transportation, Inc. v. Village of Seville Board of Income Tax Review that municipalities cannot impose income tax on certain transportation companies. The decision was based on the Court’s interpretation of a state law that if a company is regulated by the Public Utilities Commission of Ohio (PUCO) and therefore pays the annual state tax to hold a certificate of public convenience, as was the case with Panther II Transportation, that state tax preempts any municipal tax (except for the general property tax).

Since most motor vehicle transportation companies, including trucking, transportation-for-hire and towing, in Ohio are regulated by the PUCO, this decision could mean refunds for those in the transportation industry who have paid city tax. Taxpayers regulated by the PUCO should consider filing refund claims for any open years.

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