(The Center Square) – An income tax lawsuit related to COVID-19 filed against the city of Cleveland has new life.
The Buckeye Institute announced Monday morning that the suit, which claims Cleveland failed to return tax money to nonresidents within 90 days of filing, is heading back to a lower court.
After a trial judge dismissed the case, the Buckeye Institute filed an appeal in September on behalf of Kate Wos, of Strongsville, and David Steffes, of North Royalton.
The two are part of the class action lawsuit saying the city failed to pay tax refunds within the 90-day requirement and therefore owed the two and all other nonresidents who filed municipal income tax returns with the city and received their refund more than 90 days after filing their return interest.
The Buckeye Institute filed the initial suit in March.
“While this case is not over, this ruling is good news for The Buckeye Institute’s clients and taxpayers in Cleveland,” said Jay R. Carson, senior litigator at the Institute and attorney representing Wos and Steffes. “Buckeye is pleased that the appeals court agreed with our argument that the trial court erred by relying on evidence outside of the pleadings, in this case, an affidavit from the law director of a neighboring city.”
The 8th District Court of Appeals said it wasn’t necessary for the trial court to consider the city’s affidavit in its ruling for dismissal, but if it did, the city’s claims did not support the ending the case.
Cleveland’s law says when the city owes a tax refund, it is subject to interest at the rate of the federal funds rate of nearly 5% plus another 5% if it’s not paid within 90 days after a return is filed.
Ohio House Bill 110 allowed Ohioans to seek municipal income tax refunds for 2020 and 2021, and Wos filed her 2021 city return March 12, 2023, according to the lawsuit.
She received her refund six months later in September. It did not include any interest.
Steffes filed his return for 2021 for a refund when his employer, Stantec, closed its Cleveland office during the pandemic and was told to work from home.
The lawsuit says Steffes received his refund in late 2023, also without interest. The suit also says the city did not refund Steffes his paid vacation days.
