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'Simple human error': Rittman informs residents that it overtaxed them for 15 years

Rittman has been collecting municipal income taxes at the rate of 1.5% when the correct, authorized rate for the last 15 years was 1%.

RITTMAN, Ohio — Rittman is known as "A Small Town with a Big Heart." Unfortunately, the community that sits on the border of Medina and Wayne counties is dealing with a huge problem. 

In a letter sent to residents last week, Rittman city officials announced that they had discovered "an issue" with its municipal income tax. Specifically, Rittman has been collecting municipal income taxes at the rate of 1.5% when the correct, authorized rate for the last 15 years was 1%. 

"Our research has revealed that the cause of the incorrect income tax rate was simple human error that occurred years ago," the letter stated. 

For context, the extra 0.5% in tax collected in 2022 equated to over $850,000.

So what does this mean for residents?

First and foremost, don't count on a refund. Rittman city leaders say that under Ohio law there is a one-year statute of limitations for recovering the payment of an unauthorized income tax. They note that there are "significant procedural requirements that taxpayers must satisfy to obtain such a refund."

Even if there wasn't a law, officials say that refunding 15 years worth of the taxes "would bankrupt the City."

Residents would like to see that money returned to their bank accounts.

"It's very important because I always live paycheck to paycheck and you know that was money that was taken out of my family's budget for you know food, groceries, bills, whatever, clothes for the kids, so it's very upsetting," says resident Malissa Bise.

For this year, when residents file their city tax return, the Rittman income tax rate will automatically be calculated at 1%, not 1.5%. However, if you have already paid your municipal income taxes for 2022 at the 1.5% rate, or your employer withheld the tax at the 1.5% rate, you can request a refund by filing a Short Form 10A being developed by RITA for Rittman taxpayers. Click here for more. 

So how did this happen?

Under Ohio law, municipal income tax rates that exceed 1% must be approved by voters. In 1977, Rittman voters approved a 1.5% tax rate for 30 years by authorizing an additional 0.5% tax that was set to expire at the end of 2007. However, in 1996 voters approved changes to the city’s tax code, which led to an update of the city’s codified ordinances. The end date of the additional 0.5% income tax, December 31, 2007, was inadvertently omitted, causing the 1.5% rate to continue to be collected. The mistake was discovered last year.

Rittman leaders say the money from the city taxes has gone towards paying for city services provided by police, Fire/EMS, public health, parks, recreation and more. With the 0.5% less in income tax to be collected, officials warn that some cutbacks may be necessary. A "community-wide" discussion about returning the rate to 1.5% is being encouraged.

In the meantime, Rittman City Council will have a special meeting on Monday, January 30 for a second reading on legislation to correct the tax rate and direct RITA to utilize a 1.0% rate to calculate income taxes beginning January 1, 2022. City taxpayers are invited to attend the 7 p.m. meeting at the Rittman Recreation Center at 200 Saurer Street.

You can read the letter to Rittman taxpayers below: 

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