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Tuesday, May 05, 2015

Court Overturns Ohio's 'Jock Tax'

Cleveland's unusual method of taxing professional athletes is illegal, the Ohio Supreme Court ruled unanimously in a pair of opinions released this morning.

Former Chicago Bears linebacker Hunter Hillenmeyer and ex-Indianapolis Colts center Jeff Saturday contended they were improperly and excessively taxed for games played in Ohio -- even when one never set foot in Cleveland.

The justices agreed, saying Cleveland's scheme improperly served to tax income that the players earned outside the city and deprived them of due process.

Cleveland's method, which asserts that pro athletes are paid only for games, illegally taxes visiting athletes for income earned out of state for practices, meetings and other activities, the players' lawyers argued.

"By using the games-played method, Cleveland has reached extraterritorially, beyond its power to tax," Justice Judith Ann Lanzinger wrote about Hillenmeyer's case.

"Cleveland's power to tax reaches only that portion of a nonresident's compensation that was earned by work performed in Cleveland," she wrote.

The court's rulings overturned decisions by the state Board of Tax Appeals.


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