COLUMBUS, Ohio - The Ohio Supreme Court has ruled that state lawmakers did not violate the constitution when they enacted a law allowing cities to temporarily collect income tax from people working from home but who lived outside of city limits during the COVID-19 pandemic.

The justices, in a 5-2 decision announced Wednesday, found the state had an interest in ensuring that municipal revenues remained stable during the pandemic when some employees were ordered to work from home.

Because of the COVID-19, Ohio declared a state of emergency and the Ohio Department of Health directed people to stay home during the pandemic, allowing only those engaged in essential work to leave home.

The General Assembly subsequently enacted a temporary law mandating that, during the period of the stay-at-home order and for 30 days after, each day an employee spent working from home or an offsite location “shall be deemed to be a day performing personal services at the employee’s principal place of work.”

The court’s ruling comes in the case of a man employed by a Cincinnati company who continued to have his income taxed by the city, even though he was working from home outside of the city.

Although the U.S. Constitution governs “interstate” taxation, most of the justices agreed that it does not govern “intrastate” taxation.

According to the ruling, the state law also didn’t violate the Home Rule provision of the Ohio Constitution, which allows cities to enact their own tax laws.  The law expanded the power of cities to tax employees working from home while also limiting the employees’ cities of residence from taxing their income.

Dissenting was Chief Justice Sharon L. Kennedy who rejected the view that the tax law allowed Cincinnati to tax the income of work-at-home employees, arguing that the Home Rule amendment denies municipalities the power to tax those who do not live or work inside the city limits and prohibits the General Assembly from compelling municipalities to impose such taxes.

The other dissenting justice, Patrick Fischer noted that the employee’s rights may have been violated since the U.S. Supreme Court has never ruled whether the federal constitution’s due process protections apply when a municipal tax is extended outside that municipality’s boundaries.

EDITOR'S NOTE: Story is based on information from Court News Ohio reporter Dan Trevas.