On any given business day 40 to 50 people can be found at the Washington County Recorder's Office, doing research on local shale-bearing properties for the oil and gas industry. Although they're working in the city of Marietta, the researchers are not subject to the 1.7 percent municipal tax assessed on citizens or anyone employed within the city limits.
City Councilman Mike McCauley, D-2nd Ward, asked about the situation during a recent council committee meeting.
"One of my constituents complained that the county courthouse was full of people from outside the city and outside the state researching land and titles for shale companies," McCauley explained on Monday.
"What's the difference between those people and someone who comes in from out of town to lay some brick for me?" he asked.
It's a question city treasurer Valerie Holley said she's heard many times over.
"It has to do with where you are domiciled," she said. "The people doing this research may be domiciled in Pennsylvania, West Virginia, Kentucky, or some other state and they work for companies located outside of the city."
Fact Box
About the tax
Residents and employees of companies located within the city of Marietta are assessed a 1.7 percent city income tax on their gross wages.
The city took in approximately $500,000 more in income tax in 2011 than during the previous year.
For more information, www.mariettatoh.net.
Holley said domiciled doesn't necessarily refer to the place where a person lives most of the time, but is determined by where he or she maintains a drivers license and pays state taxes.
"We consider these (oil and gas) workers like architects who come into town to research a project, then take that information back to Columbus or another city where the work is done as they develop their plans and drawings," she said.
Holley said the city also has a 12-day rule that anyone working within the city for less than 12 days does not have to pay an income tax.
"But those who live in Marietta and work outside of the city and state for nine months do pay a city income tax," she added.
As for contractors based outside the city whose workers do construction or other physical work inside the Marietta city limits, Holley said the employer must withhold income tax and pay an additional tax on any profits made within the city.
"We've been on top of the shale industry researchers issue since they first came into town," she said. "This is a new situation but if they're not domiciled here, by state law we cannot tax them."
The city of Parkersburg has similar regulations governing oil and gas property title researchers at the Wood County Courthouse.
"We charge a flat-rate $2.50 per week user fee on employees of businesses located within the city limits, but we're not able to charge these workers because the companies they work for are not in Parkersburg," said Stacy Wheeler, payroll clerk with the Parkersburg Finance Office.
Ohio Rep. Andy Thompson, R-Marietta, said he hasn't heard any requests from municipalities to change the state code so that workers like those researching titles for the oil and gas industry can be taxed.
"That would probably ensure these companies would go to another place to do business," he said. "In the past Marietta's city income tax has led to some businesses moving out of the city to avoid taxes."
Thompson noted the oil and gas researchers are paying sales taxes on food, gasoline, hotel rooms and other needs while they're in town.
"The main uptick in income taxes will come when these shale industry companies locate in the local area," he said. "We're looking at an opportunity this area hasn't seen in years and we don't want to nudge this goose off the nest even before she lays the golden egg."
Holley noted that the city finished 2011 with approximately $500,000 more in income taxes over the previous year, largely due to employee withholdings from some larger construction jobs that began in 2011.
