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Pointed remarks aimed at tax refund bid

By Thomas Gnau

HAMILTON — A judge had pointed remarks Wednesday for an attorney arguing that AK Steel Corp.’s chief executive officer should not pay Middletown income tax for time spent working outside the city.

“They work through their office in Middletown,” Butler County Common Pleas Judge Matthew Crehan said of AK CEO Richard Wardrop and AK Chief Financial Officer James Wainscott. “That’s where things happen.”

Wednesday’s hearing featured the first open court arguments in the case. Neither Wardrop nor Wainscott was in court.

Wardrop, a resident of unincorporated Clearcreek Township, wants a $42,630 refund for 123 days working outside Middletown in 2000; Wainscott, of Loveland, wants $2,527 for 51 days spent outside the city that year.

Wardrop, also AK’s chairman and president, filed a complaint in December 2001 in common pleas court against Middletown Income Tax Review Board after it denied his bid for a refund.

Crehan told Middletown Law Director Les Landen and Cincinnati attorney Samuel Scoggins, who represents Wardrop and Wainscott, that he would make a ruling, but he did not say when.

Scoggins contended that one concern was whether Middletown “exceeded (its) territorial limitations” by taxing non-residents for work outside the city.

“The days the taxpayers (Wardrop and Wainscott) were outside the city of Middletown, they were completely outside,” he said.

Landen called that argument “a smokescreen, a mirage.”

“Mr. Wardrop and Mr. Wainscott have business cards that show their business address as 703 Curtis St., Middletown, Ohio,” Landen said.

It has been Middletown’s contention that what the two executives earn is “a result” of their employment in Middletown. Landen and other city officials have said that a decision against Middletown may have implications for how the city collects revenue.

At one point, Crehan likened a CEO’s corporate headquarters to a “workshop” with which “constant contact” is necessary, even while away.

“Whether he be there (at the corporate base), whether he be at his residence, whether he be in China,” Crehan said.

In an apparent effort to illustrate his point, Crehan even asked Scoggins where his law office was before he backed off, instead talking about what he called a “hypothetical” lawyer. Scoggins works for the firm of Frost, Brown, Todd in Cincinnati.

Scoggins declined to comment after the hearing. Landen sounded pleased with Crehan’s remarks.

“I think what the judge is focused on is exactly the issue here,” he said. “The issue is the base of employment.”

AK, the Middletown-area’s largest employer, has more than 11,000 employees in several Ohio cities, in Kentucky, Indiana, Pennsylvania and other states. About 4,000 AK employees work in Middletown.



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