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Put-in-Bay tax case could affect every Ohio city

By Michael Harrington • May 27, 2019 at 4:00 PM

PUT-IN-BAY — Ohio’s highest court agreed to hear a case that could decide if a municipality can place an additional tax on vehicles driving on its roads.

The Ohio Supreme Court agreed to hear a case on whether a village of Put-in-Bay ordinance violates the state law by taxing certain vehicles, in this case, two businesses using golf carts. The case could set a precedent if other municipalities in the state can impose similar taxes on drivers.

“It’s an important case for motorists and taxpayers,” attorney Andy Mayle said. “The issue is whether each municipality in Ohio can require vehicle owners to pay a special local tax before using local roads and require they display an additional license plate.”

Mayle is representing Mark Mathys and Islander Inn owner Timothy Neise Sr., accused by the village in 2015 of violating an ordinance requiring payment an annual license fee for business vehicles.

The ordinance

The village ordinance requires owners of vehicles “used for transportation of persons or property, for hire and for use within the village” pay a fee to be used for transportation or rented out to visitors. The fee varies on the type of vehicle with golf carts and cars costing $50.

Once the fee is paid, a sticker needs to be displayed on each vehicle, in addition to a state license plate, to be able to drive on the village’s roads. People who don’t pay the fee can be charged with a fourth-degree misdemeanor punishable by 30 days in jail and/or a $250 fine.

In 2015, the village brought criminal charges in the mayor’s court against Mathys and the Islander Inn for allegedly not paying the fine on golf carts they rent out.

“Let’s say Mr. Niese owned 200 golf carts,” Mayle said. “Put-in-Bay was asking him to pay a $10,000 every year for vehicles he was already licensed to have on the road through the state.”

The case was transferred to the Ottawa County Common Pleas Court, and in 2018, Judge Bruce Winters granted a motion to dismiss the charges.

Winters found the fee was “improper and impermissible” because it levied a tax for the same purpose as the state tax on license plates. He cited a 1925 court case, which found a municipality couldn’t impose a tax for a similar purpose as a state tax.

The village, through its former counsel George Wilbur, appealed the decision to the Sixth District Court of Appeals. Three visiting judges were appointed since Mayle’s wife is the presiding judge in the court.

The judges overturned the dismissal arguing the court case cited by Judge Winters didn’t “contain an accurate recitation of current law.” They based their decision on a 1998 decision which found a municipality’s taxing authority can only be prohibited by the general assembly.

The Ohio Supreme Court

Mayle appealed to the Ohio Supreme Court arguing the ordinance violated the Ohio Constitution and the appellate judge’s decision could set a dangerous precedence for motorists across the state.

He said once a person has a state licenses plate it entitles them to drive on any road in Ohio without additional fees or taxes with the exception of the Ohio Turnpike.

“They are essentially trying to create their own toll road in the village,” Mayle said. “Put-in-Bay is trying to say this is isolated since its an island, but they’re not different than any other town legally and if it is decided they can do this, then so can Sandusky, Fremont, Cleveland, Toledo or any other town.”

The Ohio Supreme Court agreed to hear the case Wednesday, but Mayle said a decision most likely won’t be reached for at least a year.

“I’m glad they decided to take the case. We have a strong legal position and I believe it will go in our favor,” Mayle said. “It’s kind of a no brainer that this is unconstitutional.”

The village is now represented by Susan Anderson, an attorney at Walter Haverfield law firm in Cleveland. She couldn’t immediately be reached for comment.