On April 30, 2015, the Ohio Supreme Court issued important decisions in favor of two professional football players, finding that the games-played formula the City of Cleveland used to attribute their salaries for income taxation by the city violated constitutional due process. Hillenmeyer v. Cleveland Bd. of Rev., Slip Opinion No. 2015-Ohio-1623, andSaturday v. Cleveland Bd. of Rev., Slip Opinion No. 2015-Ohio-1625. The football players suing Cleveland for tax refunds were Hunter Hillenmeyer, a former Chicago Bears linebacker, and Jeff Saturday, a center for the Indianapolis Colts. Both cases were remanded, with instructions for the players to receive tax refunds plus interest, and the decisions offer important new legal authority supporting the position that formulas used to attribute income taxable by a state or local jurisdiction must bear some reasonable and rational relationship to how the income is earned.

Games-Played Wage Attribution Methodology at Issue

The City of Cleveland imposes an income tax at the rate of two percent on income allocable to Cleveland. The ordinance expressly imposes tax on “all qualifying wages, earned and/or received … by nonresident of the City for work done or services performed or rendered within the City or attributable to the City.” The ordinance confers authority on the Cleveland tax administrator to adopt the legal standard for attributing nonresident wages to the state. The Cleveland tax administrator adopted a methodology that attributed wages paid nonresident professional athletes based on a formula in which the numerator equaled the number of games played in Cleveland and the denominator equaled the total number of games played by the athlete. In contrast, most other taxing jurisdictions adopt a formula which attribute wages of nonresident athletes to the state based on duty days in the state versus their total number of duty days.

Games Played Versus Workday Wage Attribution

The players’ teams withheld Cleveland income taxes on their wages, based on Cleveland’s games-played formula. The players’ teams played one game in Cleveland during the years in issue out of a total of 20 games played, and accordingly approximately five percent (1 Cleveland game/20 total games) of the players’ wages were attributed to and taxed by Cleveland for each of the years at issue.

The players argued that Cleveland’s attribution methodology drastically overstated their taxable income during the years at issue. They introduced evidence that their wages were received, not just for the games in which they played, but for the total services they performed for their teams during the course of the year. These services included participation in minicamps, preseason training camp, and the regular season, and all attendant meetings, film review sessions, and practices during the course of their camps and regular season. Hillenmeyer, for example, introduced evidence that his total workdays were as follows: 2004 – 157 work days; 2005 – 165 work days; and 2006 – 168 work days.  He asserted two work days were spent in Cleveland for the one game he played there each year, and that under a workday formula, slightly more than one percent of his wages would be attributed to Cleveland for the years at issue, rather than five percent attributed under Cleveland’s games-played methodology.

Taxpayer Refund Claims

Hillenmeyer, sued the city, arguing that Cleveland’s games-played formula violated constitutional due process in attributing wages to Cleveland paid to him for services performed outside the State of Ohio. Using a work-day formula, rather than Cleveland’s  games-played formula to attribute his wages to Cleveland, Hillenmeyer sought a refund of about $6,000, the difference between the two methods. Saturday, a former Indianapolis Colt, was forced to pay Cleveland municipal taxes for a game he did not even play because he was injured and did not travel to Ohio on the day of that contest. Thus, Saturday sought a refund of $3,500.

The City of Cleveland denied both refund claims, asserting that case law supported the City’s position that it had great latitude in adopting a formula to attribute players’ wages to the City for income tax purposes.  

Court’s Ruling

The Ohio Supreme Court agreed with the taxpayers and ruled that Cleveland’s formula for attributing their wages to Cleveland violated constitutional due process. The Court found that the cases the City relied on to support its position that it had great latitude in adopting an income attribution methodology were inapposite, because those cases involved the difficulties associated with apportionment of multistate business income. By contrast, the Court held that individual compensation requires a simpler rule: compensation must be allocated to the place where the employee performed the work. And, according to the Court, Cleveland’s case citations did not support the use of the games-played method to attribute this compensation to Cleveland. The Court therefore ruled in both cases that, although Cleveland has the right to tax the compensation earned by a nonresident professional athlete for work performed in Cleveland, the City’s application of its games-played method of allocating income violated constitutional due process by taxing income earned by the players for services performed outside the jurisdiction.  Accordingly, the Court remanded the refund claims for payment of partial refunds based on allocating compensation to Cleveland by the duty-days formula proposed by the players.


State court decisions finding that a state income attribution or apportionment methodology violates constitutional due process are few and far between. Consequently, this case provides legal authority for other taxpayers challenging similarly unreasonable state income attribution methodologies.