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Local (city) income tax when working on Federal land?
Old 05-15-2007, 11:37 PM   #1
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Local (city) income tax when working on Federal land?

This is a situation that I wonder if anyone else has faced.

A little background about taxation in Ohio..Cities are allowed to tax the wages of all earners who work within the bounds of the city. Then, if the employee happens to reside in a city with a higher tax rate, he owes the difference to the residence city.

The sitaution I am writing about is this. Wright-Patterson AFB spans two counties. The recently established city in one of the counties is writing letters to contractor companies requesting that they start withholding city tax (1.5%) from those employees who work in the buildings on base that are within the city limits. In fact, in some cases the city line splits buildings right down the middle!

This city has attempted to get the Air Force to apply this tax to the government workers as well as the contractors, without any success so far.

Question...Up till now, we have always thought by working on a Federal installation we were "immune" from such local taxation. However, there was some law passed in the 40's, I believe, which allows this. I was wondering if anybody here has had to pay local income tax while working on Federal land.
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Re: Local (city) income tax when working on Federal land?
Old 05-16-2007, 09:32 AM   #2
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Re: Local (city) income tax when working on Federal land?

Quote:
Originally Posted by gindie
This city has attempted to get the Air Force to apply this tax to the government workers as well as the contractors, without any success so far.
That's a new one on me. The good news is that the city is going to have a heck of a time getting the Air Force to do anything that's outside of their regulations and practices. So I would just let the bureaucracy work in your favor this time.

On the question of local income taxes, I don't see how a city can charge income taxes for work done on federal land. This would be equivalent to their charging city income taxes for work done in a different city. The federal land is just that, land that belongs to the federal government and not to the city. As a precedent, any goods and services bought on a base are exempt from local taxes. Does the city provide any services at WPAFB? No, they are all provided by the Air Force, and if the Air Force did call for a city service, you bet they would be charged for it.

I would just ignore the issue and if they send you a direct bill, I would ask to see the 1940s law they are referring to. I think you should write to your local state and federal legislators about this issue.
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Re: Local (city) income tax when working on Federal land?
Old 05-16-2007, 09:37 AM   #3
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Re: Local (city) income tax when working on Federal land?

I retired from WPAFB, and we were officially exempt from city taxes even when we were working off base and physically in a city with tax (Vandalia Kettering).

I did, of course, pay taxes to my city of residence.
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Re: Local (city) income tax when working on Federal land?
Old 05-16-2007, 01:36 PM   #4
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Re: Local (city) income tax when working on Federal land?

The devil will be in the details. When I lived in PA & worked on a military base there was a local county tax for different professions, like $40 per year in my case. No way to get around that one. It was based on where I worked, not lived, although it was the same county in my case. This structure is a way for local entity to tax workers who live elsewhere, even out of state. I do not know if it applied to active duty military, but all the rest of us were covered in some way. PA did not have the highers taxes but it sure had more varieties than any where else I have lived.
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