The city of Gahanna must repay residents $13.2 million for income taxes it overcollected from 2009 to 2014, a Franklin County Common Pleas Court judge ruled Oct. 31.
Gahanna isn’t disputing the calculated figure but plans to appeal to Ohio’s 10th Circuit Court of Appeals the initial ruling by Judge Kimberly Cocroft in 2014 that the city and its collection agency, the Regional Income Tax Authority, are responsible for repayment, said city spokeswoman Niel Jurist.
The judgement Wednesday is the latest development in a contentious saga that entered court in 2012, when Gahanna couple Karla and Douglas LaBorde filed the class-action lawsuit against the city and RITA.
The lawsuit hinges on language in Gahanna’s tax code. The plaintiffs argue that the city’s tax code, as written, entitled residents who paid income taxes elsewhere to a 100 percent credit. Gahanna had been granting an 83.3 percent credit.
Cocroft first ruled in favor of the plaintiffs — now about 17,600 residents — in 2014. Soon after, Gahanna officials updated language in the city tax ordinance to match the amount of taxes it collects.
But the city, which argues that Cocroft misinterpreted the city’s 1989 tax law, has filed numerous appeals. The county’s Court of Appeals upheld Cocroft’s decision in 2015, and the Ohio Supreme Court rejected an appeal later that year.
“We’re happy we’ve got the decision now. That allows the decision to move forward,” said Todd Neuman, an attorney representing the plaintiffs. “We’ve been fighting this for six years, and we want to give the citizens the refunds they’re owed.”