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Saturday v. Cleveland Bd. of Review

Supreme Court of Ohio

January 14, 2015, Submitted; April 30, 2015, Decided

No. 2014-0292


 [***47]  [*528] Pfeifer, J.

 [**P1]  In this case, we determine whether a nonresident professional athlete who does not accompany his team to Ohio for a game in Cleveland must pay municipal income tax to Cleveland based on his team's appearance there. We hold that a professional athlete whose team plays a game in Cleveland but who remains in his home city participating in team-mandated activities is not liable for Cleveland municipal income tax.

Factual and Procedural Background

 [**P2]  Jeffrey B. Saturday is a retired professional football player. During [****2]  the taxable year at issue, 2008, Saturday was a center employed by the Indianapolis Colts of the National Football League ("NFL"). During the 2008 season, the Colts played one game in Cleveland against the Browns. Because of an injury, Saturday neither played in nor attended the Cleveland game; instead, he spent the day in Indianapolis engaging in physical rehabilitation activities at the Colts' behest. (More than 72,000 other souls attended the Colts' dismal 10-6 victory over the Browns.) The Colts nevertheless withheld an amount of Cleveland municipal [*529]  income tax from Saturday's 2008 compensation and paid it to the city. Saturday and his wife, Karen, who filed joint income-tax returns, contend that Cleveland had no authority to impose its tax on the income of a nonresident who did not work within Cleveland's city limits during the taxable year.

1. The Saturdays' Refund Claim

 [**P3]  On December 18, 2009, the Saturdays sought from the Central Collection Agency ("CCA"), Cleveland's tax administration authority, a total refund of all income tax withheld and remitted to the city of Cleveland for tax year 2008. (They had previously filed a Cleveland tax return for 2008 showing that all tax had [****3]  been paid through withholding and that they were entitled to a small refund.)

 [**P4]  Out of reported total municipal wages of $3,577,561.11, the Colts attributed $178,878 (approximately 5 percent of Saturday's 2008 income) to Cleveland under CCA Regulation 8:02(E)(6), which sets forth a "games-played" method of computing a nonresident professional athlete's municipal income tax base. Under the games-played method, the city claims the right to tax the amount of a professional athlete's annual income that is proportionate to the share of the team's preseason, regular season, and postseason games that were played in Cleveland. See CCA Regulation 8:02(E)(6). For example, if a team played 20 games in a year and one of those games was in Cleveland, Cleveland would apply its tax to one twentieth, or 5 percent, of each player's annual income. In another case announced today, Hillenmeyer v. Cleveland Bd. of Rev., 144 Ohio St.3d 165, 2015-Ohio-1623, 41 N.E.3d 1164, 2015 Ohio LEXIS 1166, this court declares that method of computing a nonresident professional athlete's income tax base unconstitutional. Although the Saturdays advance some arguments that parallel those presented in Hillenmeyer, we decide this case on other grounds.

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142 Ohio St. 3d 528 *; 2015-Ohio-1625 **; 33 N.E.3d 46 ***; 2015 Ohio LEXIS 1164 ****


Subsequent History: Reconsideration denied by Saturday v. Cleveland Bd. of Rev, 143 Ohio St. 3d 1407, 2015-Ohio-2747, 2015 Ohio LEXIS 1809, 34 N.E.3d 134 (2015)

Judgment entered by, On remand at, Remanded by Saturday v. City of Cleveland Bd. of Income Tax Review, 2015 Ohio Tax LEXIS 3096 (Ohio B.T.A., July 20, 2015)

US Supreme Court certiorari denied by City of Cleveland Bd. of Review v. Hillenmeyer, 136 S. Ct. 491, 193 L. Ed. 2d 352, 2015 U.S. LEXIS 7109 (U.S., 2015)

Prior History:  [****1] APPEAL from the Board of Tax Appeals, No. 2011-4027.

Disposition: Judgment reversed and cause remanded.


athlete, player, ordinance, nonresident, team, municipal, rehabilitation, refund, season, games-played, postseason, preseason, taxation, regular

Governments, Local Governments, Finance, Tax Law, Income Taxes, Individuals, Estates & Trusts, Imposition of Tax, Legislation, Interpretation, State & Local Taxes, Administration & Procedure, Judicial Review