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Companies doing business on the island of Put-in-Bay are not eligible for reimbursement of a “resort area tax” which was enacted in 1995 and then not re-enacted until 2016, Ohio Supreme Court ruled on Thursday 7 April.
The court unanimously upheld the Ohio Board of Tax Appeals’ denial of a $264,000 refund for Colonial Inc., which does business as Island Beverage & Beer Barrel Saloon. The company claimed the refund was due for an invalid excise tax on gross receipts.
In 1995, Ohio lawmakers passed a 0.5% resort area tax on the gross receipts of Put-in-Bay businesses with revenue from sales in or by transporting people or property to and from the village. The village then increased this tax in 1999 to 1% and then to 1.5% in 2001.
The law allows Put-in-Bay to impose the resort tax if, “as of the last ten-year census”, at least 62% of the total dwellings in the resort area are classified as “for seasonal, recreational or occasional use” . “
The 1990 census was used to enact the tax in 1995.
Companies seeking a tax refund argued that because the tax was based on census results, Put-in-Bay had to prove after the 2010 census that it still met the definition of the law of a resort area. And because the municipality only passed an ordinance renewing the tax in July 2016, no resort tax was due from 2011 to 2016.
The court ruling said nothing in state law indicated that resort area status had to be renewed after each census or at 10-year intervals.
The Saloon owners have been joined by at least nine other Put-in-Bay businesses seeking to challenge the resort tax paid between 2011 and 2016. Those decisions have been put on hold until the Supreme Court decides the Saloon case. .