Ohio Code 718.37 – Actions against tax administrator or municipal corporation
(A) A taxpayer aggrieved by an action or omission of a tax administrator, a tax administrator’s employee, or an employee of the municipal corporation may bring an action against the municipal corporation for damages in the court of common pleas of the county in which the municipal corporation is located, if all of the following apply:
Terms Used In Ohio Code 718.37
- Assessment: means a written finding by the tax administrator that a person has underpaid municipal income tax, or owes penalty and interest, or any combination of tax, penalty, or interest, to the municipal corporation that commences the person's time limitation for making an appeal to the local board of tax review pursuant to section 718. See Ohio Code 718.01
- Audit: means the examination of a person or the inspection of the books, records, memoranda, or accounts of a person for the purpose of determining liability for a municipal income tax. See Ohio Code 718.01
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Employee: means an individual who is an employee for federal income tax purposes. See Ohio Code 718.01
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Municipal corporation: includes a joint economic development district or joint economic development zone that levies an income tax under section 715. See Ohio Code 718.01
- Rule: includes regulation. See Ohio Code 1.59
- Tax administrator: means , subject to division (U)(2) of this section, the individual charged with direct responsibility for administration of an income tax levied by a municipal corporation in accordance with this chapter, and also includes the following:
(a) A municipal corporation acting as the agent of another municipal corporation;
(b) A person retained by a municipal corporation to administer a tax levied by the municipal corporation, but only if the municipal corporation does not compensate the person in whole or in part on a contingency basis;
(c) The central collection agency or the regional income tax agency or their successors in interest, or another entity organized to perform functions similar to those performed by the central collection agency and the regional income tax agency. See Ohio Code 718.01
- Taxpayer: means a person subject to a tax levied on income by a municipal corporation in accordance with this chapter. See Ohio Code 718.01
(1) In the action or omission the tax administrator, the tax administrator’s employee, or the employee of the municipal corporation frivolously disregards a provision of this chapter or a rule or instruction of the tax administrator;
(2) The action or omission occurred with respect to an audit or an assessment and the review and collection proceedings connected with the audit or assessment;
(3) The tax administrator, the tax administrator’s employee, or the employee of the municipal corporation did not act manifestly outside the scope of employment and did not act with malicious purpose, in bad faith, or in a wanton or reckless manner.
(B) In any action brought under division (A) of this section, upon a finding of liability on the part of the municipal corporation, the municipal corporation shall be liable to the taxpayer in an amount equal to the sum of the following:
(1) Compensatory damages sustained by the taxpayer as a result of the action or omission by the tax administrator, the tax administrator’s employee, or the employee of the municipal corporation;
(2) Reasonable costs of litigation and attorneys’ fees sustained by the taxpayer.
(C) In the awarding of damages under division (B) of this section, the court shall take into account the negligent actions or omissions, if any, on the part of the taxpayer that contributed to the damages, but shall not be bound by the provisions of sections 2315.32 to 2315.36 of the Revised Code.
(D) Whenever it appears to the court that a taxpayer’s conduct in the proceedings brought under division (A) of this section is frivolous, the court may impose a penalty against the taxpayer in an amount not to exceed ten thousand dollars which shall be paid to the general fund of the municipal corporation.
(E) Division (A) of this section does not apply to opinions of the tax administrator or other information functions of the tax administrator.
(F) As used in this section, “frivolous” means that the conduct of the tax administrator, an employee of the municipal corporation or the tax administrator, the taxpayer, or the taxpayer’s counsel of record satisfies either of the following:
(1) It obviously serves merely to harass or maliciously injure the tax administrator, the municipal corporation, or employees thereof if referring to the conduct of a taxpayer or the taxpayer’s counsel of record, or to harass or maliciously injure the taxpayer if referring to the conduct of the tax administrator, the municipal corporation, or employees thereof;
(2) It is not warranted under existing law and cannot be supported by a good faith argument for an extension, modification, or reversal of existing law.