Editor note: To all, attached is the legal opinion that clears any ambiguous issues that need clarification on the applied refund for the .25%.
Dear Mayor:
You have requested my opinion regarding correspondence from a Macedonia resident to Finance Director Hall concerning the applied tax refund program (“Program”) referenced in City of Macedonia Ordinance 11-2017, which was passed by Council on January 26, 2017. That correspondence raises a question of whether a clarifying amendment is need to confirm that residents will not be prohibited from applying for and qualifying under the Program should they receive a credit under local tax Code section 182.06 for taxes paid to an outside community in which they work. In short, and as set forth below, no such clarification is needed since Ordinance 11-2017 clearly allows residents to apply for a refund for any income taxes owed over 2% and up to 2.25%.
First, when interpreting a particular statute, I note that a basic tenant of statutory construction is that legislation must be read as a whole and in context; particular portions of legislation should not be singled out so as to be taken out of context. Indeed, courts are not permitted to look at a single sentence and disassociate it from the context of an entire section of legislation, or the legislation as a whole. As a result, we must construe the legislation as a whole and give effect to every part and sentence thereof.
It appears the question has arisen through an isolated reading of a single sentence and disregard for the remaining provisions of Ordinance 11-2017. That sentence provides that a resident is not “eligible for the refund set forth in this section where the resident also qualifies for the credit set forth in Section 182.06 of this Chapter.”
However, a reading of the entire section, as well as the legislative history behind the Ordinance, makes clear that the sentence in question is only meant to prevent a taxpayer from “double dipping” – receiving money when they have already been fully credited for income taxes paid in another community and therefore owe no income tax to the City. In other words, under the Program, where a taxpayer already receives a credit under 182.06 such that no taxes are owed by the resident, they cannot also then receive a “refund” since there is no basis for the refund since they do not owe any taxes and there is nothing to refund. However, where the taxpayer does owe some income tax beyond a 2% income tax rate, they are eligible for a refund for any amount paid up to 2.5%. That is made explicitly clear by the first sentence of that paragraph. More specifically, the second paragraph of the statute provides as follows:
A resident of the City of Macedonia may receive a refund against the City on income imposed by the City equal to the amount of income tax owed under this chapter/ordinance from any income tax rate in excess of two percent (2%) for a particular year, for a maximum of .25%, upon the resident’s filing of an application for exemption with, and approval by, the City’s Director of Finance. …
As such, and while I certainly understand that statutes in general, and tax codes in particular, are not the most accessible, it is clear that residents are eligible for a refund under the Program for any amount owed over the rate of 2% and up to 2.25%. As mentioned, this is wholly consistent with the discussion at Council, as well as the information provided to residents by the Administration.
Please do not hesitate to contact me with any questions you may have regarding the foregoing.
Sincerely,
Mark V. Guidetti
Director of Law, City of Macedonia
