NILES Law director rules on disclosing tax tally
By DENISE DICK
VINDICATOR TRUMBULL STAFF
NILES -- The city's income-tax department can divulge the amount collected from MCI WorldCom for official purposes.
In a letter to tax office director Janet Rizer, law director J. Terrence Dull said the city's and Howland School District's request for the amount collected from the company falls into the category of an "official purpose" and may be revealed.
That allowed the board of control to approve on Thursday paying the school district $172,216 from income-tax proceeds.
"As you know, our city income-tax ordinance restricts your ability to release information derived from income-tax returns," Dull wrote. "The ordinance does, however, make an exception for disclosure of such information for 'official purposes.' "
"Without this information, the city will be in violation of state law," he wrote.
City council approved a 10-year property tax abatement for the company in 1999. The agreement called for the abatement to be 100 percent in the first three years, 75 percent the next four years and 50 percent the final three years.
Requirement: Under Ohio law, when a company with an annual payroll of $1 million or more receives a property tax abatement, the municipality and the affected school district must work out an income-tax sharing agreement. If this is not done within six months, the income tax is split 50-50 between the two entities.
MCI is on U.S. Route 422 in Niles but in the Howland School District. The school district sent a letter to the city requesting its portion of the income-tax proceeds.
Mayor Ralph A. Infante Jr. has said he wanted to negotiate a graduated income-tax sharing agreement with Howland schools, but he and the school district couldn't reach an agreement.
The city planned to send the school district its 50 percent, but Infante wanted to wait until all of the income tax had been collected from the company so interest could accumulate.
City council passed legislation last week to give $200,000 to Howland schools, but that was an estimate. City officials didn't know the exact amount of income tax collected from the company.
Rizer had told council last week that confidentiality rules dictated by the city's income-tax ordinance prohibited her from divulging the amount.