Coal Grove tax goes into effect next year

Published 12:00 am Tuesday, April 8, 2008

COAL GROVE — Next year some Coal Grove residents who work outside the village will see a little bit more coming out of their paychecks.

In December 2007, the village council voted in a tax for all residents of .025 percent. That tax is in addition to the occupation tax of 1.5 percent.

Coal Grove Income Tax Administrator Brenda Self said before residents who worked out of the city limits didn’t have to pay an income tax to the village since they were being taxed somewhere else. That changed in 2007.

Email newsletter signup

“Now, they have changed it so they have to pay us one-quarter of one percent,” she said. “Before if you worked in Boyd County or Ashland or Ironton, you didn’t have to pay us.”

The additional tax doesn’t take effect until 2009 since it is based on the 2008 tax year.

According to Kentucky law, “residents of Ohio shall be exempt from Kentucky income tax on salaries and wages.”

Ashland and Boyd County have occupation taxes to pay for services such as roads and police protection.

“The Kentucky Supreme Court decided they could not have a city or county income tax, so they call it an occupational fee,” Self said.

Coal Grove has a 1 percent income tax fee, so if a person lives and works in the village, they don’t have to pay the .025 percent tax.

Self said she didn’t have any numbers on how many people work in Kentucky and live in Coal Grove. She didn’t have an estimate of how much this would raise for the village coffers.

“This was enacted because we were losing so much money,” Self said. “Before we didn’t get anything. So this will help some.”

Ironton has a 1 percent income tax, the highest allowable without being increased by a vote of the people. According to Ohio law, employees pay an income tax where they work, but if there is no income tax there, individuals pay an income tax where they live. Ironton has a 1 percent income tax in place for those who live and work within the city.

The city had a long-standing reciprocity agreement that meant that Ironton residents working in municipalities such as Ashland, Ky., who also have an income tax didn’t have to pay Ironton’s 1 percent since they were paying elsewhere.

In 2004, the city council reduced the plan to 50 percent reciprocity meaning that people who work in another city and pay a municipal income tax there also have to pay a half-percent income tax in Ironton. This is in addition to the $8 per month municipal fee all residents have to pay.