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When the Ohio General Assembly exercises its right under the Ohio Constitution to limit municipal taxing authority, it must do so explicitly.  The language of a statute prohibiting municipal taxation need not be specific as to the type of tax limited, if the language of the statute explicitly prohibits a broad range of taxes. The case dealt with former ORC 4921.25, which said that motor transport companies are exempt from “all fees, license fees, annual payments, license taxes, or taxes or other money exactions, except the general property tax, assessed, charged, fixed, or exacted by local authorities such as municipal corporations, townships, counties, or other local boards, or the officers of such subdivisions are illegal and, are superseded by [State statutes].” The Ohio Supreme Court found that ORC 4921.25 was a valid limitation on municipal taxing authority under the Ohio Constitution, as applied to municipal income tax of a motor transport company, even though the statute did not explicitly prohibit income tax, and even though income tax did not exist when the statute was passed.

Interpreting:  Ohio Constitution, Article XIII, Section 6 (general assembly may limit municipal taxing power); Article XVIII, Section 13 (laws limiting municipal taxing power); Article XVIII, Section 3 (municipal powers)

Another recent case, Gesler v. Worthington Income Tax Bd. of Appeals,138 Ohio St.3d 76, 2013-Ohio-4986, determined that the statute did not explicitly impose a restriction upon municipal taxation, so no restriction was imposed.  R.C. 718.01 defines net profits to include Schedule C income, but did not explicitly restrict a municipality from exempting Schedule C income.

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