Buckeye Institute asks Ohio Supreme Court to hear Akron municipal income tax case

The Buckeye Institute is asking the Ohio Supreme Court to hear a case challenging Akron’s taxation of a settlement payment received by a former worker who does not live in the city.

The Columbus-based think tank filed a brief Monday asking the court to accept Kresevic v. Kimmel and reverse lower court rulings that prevented Karen Kresevic from recovering municipal income taxes withheld from a settlement she received from her former employer.

Kresevic, a Chagrin Falls resident, worked as a physician assistant at Akron City Hospital before her employment was terminated in July 2020. She challenged the termination as wrongful and reached a settlement with her former employer in June 2021.

Her employer classified the payment as W-2 wage losses and withheld 2.5% in Akron municipal income tax.

Kresevic later sought a refund, arguing that the settlement was not payment for work performed in Akron and therefore was not subject to the city’s municipal income tax. Akron denied her refund request in July 2022.

A Columbus-based think tank wants an appeals court to rein in what it says is local governments’ illegal taxation of Ohioans.

At issue is a June 2021 settlement package that Karen Kresevic, a Chagrin Falls physician assistant who worked at Akron City Hospital in 2020 during the… pic.twitter.com/52lifKVxDN

— Ohio.news (@RealOhioNews) October 18, 2025

The Buckeye Institute argues that Kresevic’s lawsuit was timely because she could not challenge the city’s refusal to issue a refund until the city denied her request.

“Under the lower court interpretation of Ohio law, Ohioans must challenge a city’s refusal to provide a municipal income tax refund before the city has determined how much tax is owed and before the city has refused to issue the refund,” Jay R. Carson, a senior litigator at The Buckeye Institute and one of Kresevic’s attorneys, said in a release. “This ‘sentence first—verdict afterwards’ logic defies common sense.”

The Ohio Ninth District Court of Appeals rejected Kresevic’s arguments in August and upheld a Summit County court ruling in favor of Akron.

The appeals court determined that the one-year statute of limitations began when Akron received the taxes withheld from Kresevic’s settlement in July 2021, rather than when the city later denied her refund request.

Kresevic filed her lawsuit in January 2023.

The appeals court also found that Kresevic did not file a written protest and notice of her intent to sue when the tax was withheld, as required under the state law governing her claim.

The court did not decide whether Kresevic’s settlement was taxable income under Akron’s municipal code. It determined that those arguments were moot after ruling that her lawsuit was barred by the statute of limitations and that she had not satisfied the protest requirements.

Buckeye argues the lower courts’ interpretation would require taxpayers to challenge a municipal tax before a city has denied their request for a refund.

The think tank also maintains that the settlement was not taxable by Akron because the payment was not for work Kresevic performed in the city.

As Ohio.News previously reported, the case was originally filed in Summit County Court of Common Pleas in January 2023. The trial court ruled in Akron’s favor in July 2025, prompting Kresevic to appeal to the Ninth District Court of Appeals.

The appeals court affirmed the lower court’s ruling Aug. 12. The Ohio Supreme Court has not yet decided whether to accept the case.