181.01 Purpose.
181.02 Definitions.
181.03 Imposition of tax.
181.04 Effective date.
181.05 Return and payment of tax.
181.06 Collection at source.
181.07 Declarations.
181.08 Duties of the Administrator.
181.09 Investigative powers of the Administrator; penalty for divulging confidential information.
181.10 Interest and penalties.
181.11 Collection of unpaid taxes and refunds of overpayments.
181.12 Board of Review.
181.13 Allocation of funds.
181.14 Credit for tax paid to another municipality.
181.15 Saving clause.
181.16 Collection of tax after termination of chapter.
181.17 Registration of contractor and subcontractor.
181.99 Penalty.
CROSS REFERENCES
Payroll deductions - see Ohio R.C. 9.42
Municipal income taxes - see Ohio R.C. Ch. 718
State income tax - see Ohio R.C. Ch. 5747
To provide funds for the purposes of general municipal operations, including police, fire and other Safety Department responsibilities, maintenance, new equipment and capital improvements of the City, there is hereby levied a tax on salaries, wages, commissions and other compensation, and on net profits as hereinafter provided.
(Ord. 04-07. Passed 5-21-07.)
As used in this chapter, the following words shall have the meaning ascribed to them in this section, except as and if the context clearly indicates or requires a different meaning.
The singular includes the plural, and the masculine includes the feminine and the neuter.
(a) "Administrator" means the individual designated by the chapter, whether appointed or elected, to administer and enforce the provisions of this chapter.
(b) "Association" means a partnership, limited partnership, Chapter S corporation as defined in Federal Tax Code, 26 U.S.C. 1361, or unincorporated enterprise, owned by two or more persons.
(c) "Board of Review" means the Board created by and constituted as provided in Section 181.12.
(d) "Business" means an enterprise, activity, profession, public utility, public service or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association, corporation or any other entity, including but not limited to the renting or leasing of property, real, personal or mixed.
(e) "Business deductions" means the ordinary and necessary expenses actually incurred in the operation of the business.
(f) "City" means the City of Alliance.
(g) "Corporation" means a corporation or joint stock association organized under the laws of the United States, the State of Ohio or any other state, territory or foreign country or dependency, but not including Chapter S corporations.
(h) "Domicile" means a place where a person has his true and permanent home to which, whenever absent from he intends to return.
(i) "Employee" means one who works for wages, salary, commission or other type of compensation in the service of an employer. Any person upon whom an employer is required to withhold for either federal income tax or social security or on whose account payments are made under the Workers' Compensation law shall prima facie be an employee.
(j) "Employer" means an individual, partnership, association, corporation, governmental body, unit or agency, or any other entity, whether or not organized for profit, having a place of business or doing business within the City and who employs one or more persons on a salary, wage, commission or other compensation basis. See Section 181.03.
(k) "Fiscal year" means an accounting period of twelve months or less ending on any day other than December 31.
(l) "Gross receipts" means the total income from any source whatsoever required to be included in the tax return.
(m) "Income" includes all moneys derived from any source whatsoever less any excludable income, which excludable income includes dividends, interest, social security, old age pension, poor relief or any other income excluded in accordance with state law.
(n) "Municipality" means the City of Alliance.
(o) "Net profits" means the net gain from the operation of a business, profession, enterprise or other activity excluding capital gains and losses after provision for all ordinary and necessary expenses paid or accrued in accordance with the accounting system used by the taxpayer for federal income tax purposes, without deduction of taxes imposed by this chapter, federal, state and other taxes based on income; and in the case of an association, without deduction of salaries paid to partners, and other owners; and otherwise adjusted to the requirements of this chapter, and the rules and regulations promulgated by the Tax Administrator pursuant to Section 181.08, excluding dividends and excluding income received from affiliated or subsidiary companies which own no property and do no business within the United States.
(p) "Nonresident" means an individual, association, corporation or other entity, domiciled outside the City of Alliance.
(q) "Nonresident unincorporated business entity" means an unincorporated body not previously named or defined and includes inter alia fiduciaries.
(r) "Person" means every natural person, co-partnership, fiduciary, association, corporation or other entity. Whenever used in any clause prescribing and imposing a penalty, "person", as applied to any unincorporated entity, means the partners or members thereof, and as applied to corporations, the officers thereof.
(s) "Place of business" means any bona fide office (other than a mere statutory office), factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his regular employees regularly in attendance.
(t) "Resident" means an individual, association, corporation or other entity, domiciled in the City of Alliance, or any person who maintains a place of abode within the City of Alliance for a total of 183 days or more within any twelve-month period, and shall be deemed a resident.
(u) "Resident unincorporated business entity" means an unincorporated business entity having an office or place of business within the City of Alliance.
(v) "Rules and regulations" means an explanatory text, in printed form, amplifying and interpreting certain articles and subsections thereof of this chapter. Copies of these are on file in the City Income Tax Office, Alliance, Ohio, and available to the public.
(w) "Taxable income" means wages, salaries and other compensation paid by an employer or employers before any deductions and/or the net profits from the operation of a business, profession or other enterprise or activity adjusted in accordance with the provisions of this chapter.
(x) "Taxable year" means the calendar year, or the fiscal year upon the basis of which the net profits are to be computed under this chapter and, in the case of a return for a fractional part of the year, the period for which such return is required to be made. Unless approved by the Administrator, the taxable year of a wage earner shall be a calendar year.
(y) "Taxpayer" means a person, whether an individual, co-partnership, association or any corporation or other entity, required by this chapter hereunder to file a return or pay a tax on earnings or net profits.
(z) “Construction” means any construction, reconstruction, rehabilitation, remodeling, improvement, enlargement, alteration, repair, painting, decorating or landscaping.
(aa) “Other payer” means any person that pays an individual any item included in the taxable income of the individual, other than the individual’s employer or that employer’s agent. (Ord. 04-07. Passed 5-21-07.)
(a) Subject to the provisions of Section 181.15 et seq., an annual tax for the purposes specified in Section 181.01 shall be imposed on and after January 1, 1982 at the rate of one and three quarters percent (1.75%) per Ordinance 79-81, passed November 3, 1981; and at a rate of two percent (2.0%) effective July 1, 2007, and continuing thereafter until repealed, pursuant to Ordinance 04-07, passed May 21, 2007, upon the following taxable income:
(1) On all salaries, wages, commissions, tips, gratuities, sub pay, and other compensation, such as early retirement incentive plans, earned during the effective period of the ordinance by residents for work done or services performed or rendered. The tax shall not be levied upon expenses reported on Federal Form 2106, subject to audit and approval by the Department of Taxation.
(2) On all salaries, wages, commissions, tips, gratuities, sub pay, and other compensation, such as early retirement incentive plans, earned during the effective period of the ordinance by non-residents for work done or services performed or rendered in the City of Alliance. The tax shall not be levied upon expenses reported on Federal Form 2106, subject to audit and approval by the Department of Taxation.
(3) On any programs to include, but not limited to, deferred compensation plans, cafeteria plans and similar plans offered that would reflect a reduction from salaries, wages, commissions and other compensation as reported on W-2 and/or similar wage reporting form.
(4) On any programs to include, but not limited to IRA's, KEOUGH's and similar plans offered that qualify for reductions in salaries, wages, commissions and other compensation under federal and state tax regulations unless specifically exempted in this ordinance and/or under state statutes.
(5) A. On the portion attributable to the City of the net profits earned and accrued or received of all resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City.
B. On the portion of the distributive share of the net profits earned and accrued or received of a resident partner or owner of a resident unincorporated business entity or association not attributable to the City and not levied against such unincorporated business entity.
(6) A. On the portion attributable to the City of the net profits earned and accrued or received of all non-resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in the City, whether or not such association or other unincorporated business, profession or association has an office or place of business in the City.
B. On the portion of the distributive share of the net profits earned and accrued or received of a resident partner, or owner of a non-resident association or other unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.
(7) On the portion attributable to the City of the net profits earned and accrued or received of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the City, whether or not such corporations have an office or place of business in the City.
(8) On all income derived from gambling, wagering, lotteries, including the Ohio State Lottery and Multi-state lotteries and games or schemes of chance earned or received by the residents of the City.
(b) Determination of Income Subject to Tax. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City, in the absence of actual records thereof, shall be determined as follows:
(1) Multiply the entire net profits by business allocation percentage to be the average ratio of:
A. The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City during the taxable period to the average net book value of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. As used herein, real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereupon by 8.
B. Wages, salaries, and other compensation paid or accrued during the taxable period to persons employed in the business or profession for services performed in the City to wages, salaries, and other compensation or accrued during the same period to persons employed in the business or profession, wherever their services are performed.
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the City to gross receipts of the business or profession during the same period from sales and services, wherever made or performed. In the event the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulation, be substituted so as to produce such results.
(2) As used in this section, “sales made in the City” means:
A. All sales of tangible personal property which is delivered within the City regardless of where title passes if tangible personal property is shipped or delivered from a stock of goods within the City.
B. All sales of tangible personal property which is delivered within the City regardless of where title passes even though transported from a point outside the City if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion.
C. All sales of tangible personal properly which is shipped from a place within the City to purchasers outside the City regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
For the purpose of this section, the taxable base shall be determined in accordance with federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for federal income taxes adjusted to the requirements of this section. (See addenda for text of Section 718.02)
(c) Consolidated Return.
(1) Filing of consolidated returns may be permitted or required in accordance with Rules and Regulations prescribed by the Administrator pursuant to the authority contained in Section 181.08.
(2) A corporation which owns or controls at least eighty percent (80%) of the common stock of another corporation or corporations may at its option make a consolidated return, provided that affiliated corporations which do no business within the United States shall not be included in such consolidated return.
(3) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the City of Alliance, constituting a portion only of its total business, the Administrator shall require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to the City of Alliance. If the Administrator finds net profits are not properly allocated to the City of Alliance by reason of transactions with stockholders or with corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory, or activity or by some other method, he shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to the City of Alliance.
(d) Exemptions. The tax provided for herein shall not be levied on the following:
(1) Funds received from local, state, or federal governments because of service in the Armed Forces of the United States by the person rendering such service, or as a result of another person rendering such service.
(2) Poor relief, pensions, unemployment insurance benefits, social security benefits and/or similar payments, including disability benefits received from private industry or local, state, or federal government, or from charitable, religious, or educational organizations.
(3) Alimony received.
(4) Income, dues, contributions, receipts from casual entertainment, amusements, sport events and health and welfare activities received by religious, fraternal, charitable, scientific, literary, educational institutions or organizations, labor unions, lodges and similar organizations.
(5) Any association, organization, corporation, club or trust, which is exempt from federal tax on income by reason of its charitable, religious, educational, literary, scientific, etc. purposes.
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the State from which the City is specifically prohibited front taxing and income of a decedent's estate during the period of administration, except such income from the operation of a business.
(7) Earnings and income of all persons under sixteen (16) years of age whether residents or non-residents.
(8) Dividends.
(9) Interest.
(10) Relocation costs of any employee that are reimbursed by the employer.
(11) The tax provided for herein shall not be levied upon any compensation, net profits or other income that the Municipality is precluded from taxing under Ohio R.C. Chapter 718.
(e) Taxable Income Amplified.
(1) Gross wages, salaries, commissions and other compensation to include:
A. Sick and vacation pay.
B. Income from wage continuation plans (includes retirement incentive plans).
C. Stock options - taxed when exercised on amount indicated on W-2 forms.
D. Cost of group term life insurance over $50,000.00, tax on entire amount.
E. Severance pay or separation payments.
F. Compensation paid in property or the use thereof at fair market value to the same extent as taxable under Federal Internal Revenue Act and so indicated on the W-2 form.
G. Tips.
H. Contributions made by or on behalf of employees to tax deferred annuity plan (401-K plans and the like), proportionate to the amounts earned in Alliance.
I. Stipends - if work required (vow of poverty not recognized).
J. Income from guaranteed annual wage contracts.
K. Third party disability pay - employer paid premiums.
L. Bonuses.
M. Health insurance premiums withheld each payday by employer from employee wages for future monthly premium payments (nondeferrable).
(2) Net profits from:
A. Corporations.
B. Unincorporated businesses.
1. Sole proprietorship - Schedule C.
2. Rental properties - Schedule E.
3. Partnerships - Schedule E - Tax is imposed on individual partner.
4. Farm net income - Schedule F.
C. Trusts and estates (file and pay as entity).
(3) Directors’ fees,
(4) Income from jury duty.
(5) Supplemental unemployment pay - paid by employer.
(6) Union steward fees.
(7) Strike benefits paid by company.
(8) Profit sharing - if from non-qualified plan.
(9) Moving expense reimbursement in excess of Federal Form 3903 allowance.
(Ord. 04-07. Passed 5-21-07.)
Such tax shall be levied, collected and paid with respect to the salaries, wages, commissions and other compensation and with respect to the net profits of businesses, professions or other activities earned and accrued or received from January 1, 1982 until June 30, 2007 at the rate of one and three-quarters percent (1.75%); and from July 1, 2007 and thereafter until repealed at the rate of two percent (2.0%).
(Ord. 04-07. Passed 5-21-07.)
(a) Council hereby directs that each taxpayer except as herein provided, shall, whether or not a tax is due thereon, make and file a return on or before April 15 of the year following the effective date of this chapter, and on or before April 15 of each year thereafter. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within 105 days from the end of such fiscal year or period. This method of filing, termed "universal filing", shall be in effect until such time as Council provides otherwise, subject to the exception set forth in subsection (f) hereof. If directed by Council, the Tax Administrator is authorized to provide by regulation that the return of an employer showing the amount of tax deducted by such employer from the salaries, income, wages, commissions or other compensation of an employee, and paid by him to the Tax Administrator, may be accepted as the return required of any employee whose whole income, subject to tax under this chapter is such salary, wages, commissions or other compensation.
The return shall be filed with the Administrator on a form or forms furnished by or obtainable upon request from the Administrator setting forth:
(1) The aggregate amounts of salaries, wages, commissions and other compensation earned and gross income from the business, profession or other activity, less allowable expenses incurred in the acquisition of such gross income earned during the preceding year and subject to such tax;
(2) The amount of the tax imposed by this chapter on such earnings and profits; and
(3) Such other pertinent statements, information returns or other information as the Administrator may require.
(b) The Administrator may extend the time for filing of the annual return upon the request of the taxpayer for a period of not to exceed six months, or one month beyond any extension requested of or granted by the Internal Revenue Service for the filing of the federal income tax return. A tentative return, accompanied by payment of the amount of tax shown to be due shall be filed by the date the return is normally due. No penalty shall be assessed in those cases in which the return is filed and the final tax paid within the period as extended, but interest at the rate of twelve percent (12%) per annum as imposed under Section 181.10 shall be assessed on the tax due.
Any taxpayer that has requested an extension for filing a federal income tax return may request an extension for the filing of a municipal income tax return. The taxpayer shall make the request by filing a copy of the taxpayer’s request for a federal filing extension with the Administrator. The request for extension shall be filed not later than the last day for filing, the municipal income tax return as prescribed in this chapter. The Municipality shall grant such a request for extension for a period not less than the period of the federal extension request. The Municipality may deny a taxpayer’s request for extension only if the taxpayer fails to timely file the request, fails to file a copy of the request for the federal extension, owes the Municipality any delinquent income tax or any penalty, interest, assessment, or other charge for the late payment or nonpayment of income tax, or has failed to file any required income tax return, report, or other related document for a prior tax period. The granting of an extension for filing a municipal income tax return does not extend the last date for paying the tax without penalty unless the Municipality grants an extension of that date.
(c) The taxpayer making a return shall, at the time of the filing thereof, pay to the Administrator the amount of taxes shown as due thereon; provided, however, that where any portion of the tax so due is deducted at the source pursuant to the provisions of Section 181.06, or where any portion of such tax is paid by the taxpayer pursuant to the provisions of Section 181.07, or where an income tax has been paid to another municipality, credit for the amount so paid in accordance with Sections 181.06, 181.07 and 181.14 hereof, shall be deducted from the amount shown to be due and only the balance, if any, shall be due and payable at the time of filing and return.
(d) A taxpayer who has overpaid the amount of tax to which the City of Alliance is entitled under the provisions of this chapter may have such overpayment applied against any subsequent liability hereunder or, at his election indicated on he return, such overpayment (or part thereof) shall be refunded, provided, however, that no additional taxes or refunds of less than one dollar ($1.00) shall be collected or refunded.
(e) All individuals, businesses, employers, brokers or others doing business who engage persons, either on a commission basis, or as independent contractors, and are not subject to withholding shall indicate the total amount of earnings, payment, commission and bonuses to such as are residents of the City of Alliance, or who do business in the City of Alliance, supported by form(s) 1099A attached, providing the same information as is required on Federal Form 1099.
(f) Retirees having no taxable income for municipal income tax purposes shall be exempt from these filing requirements and any subsequent penalties upon the filing of a registration form with the Tax Administrator in the manner prescribed. Such registration shall be in effect until that time in which the retiree registrant received taxable income for municipal income tax purposes, at which time the retiree shall be required to comply with the provisions of this chapter, including the filing requirements.
(g) Amended returns:
(1) Where necessary, an amended return shall be filed in order to report additional income and pay any additional tax due, or claim a refund of tax overpaid, subject to the requirements and/or limitations contained in Sections 181.11 and 181.14. Such amended returns shall be on a form obtainable on request from the Income Tax Administrator. A taxpayer may not change the method of accounting or appointment of net profits after the due date for filing the original return.
(2) Within three months from the final determination of any federal tax liability affecting the taxpayer's City of Alliance tax liability, such taxpayer shall make and file an amended City of Alliance return showing income subject to the City of Alliance tax based upon such final determination of federal tax liability, and pay any additional tax shown due thereon or make a claim for refund of any overpayment.
(h) No refund shall be allowed unless a written request is presented to the Administrator within three years of the date the taxes were due.
(i) When the taxpayer's tax return indicates that a refund is due and a refund is not issued within 180 days after the Tax Administrator has received proper verification and substantiation as to the validity of the refund claim, interest at the rate of six percent (6%) per annum shall be paid on the amount to be refunded after the date shown validating return.
(j) Information returns, schedules and statements required to support tax returns which are incomplete shall be filed within the limits set forth for the filing of the tax returns and the failure to file such information returns, schedules and statements shall be deemed to be a violation. However, the taxpayer shall have ten days after notification by the Administrator to file the items required by this section.
(Ord. 04-07. Passed 5-21-07.)
(a) Each employer within the City of Alliance or doing business within the City of Alliance who employs one or more persons on a salary, wage, commission or other compensation basis (including tips and gratuities) shall deduct at the time of the payment of such salary, wage, commission or other compensation (including tips and gratuities), the tax imposed by Section 181.03 at the rate of one and three-quarters percent (1.75%) until June 30, 2007; and at a rate of two percent (2.0%) effective July 1, 2007 and continuing thereafter until repealed.
(b) Each employer shall, on or before the last day of the month following the close of the calendar quarter ending March 31, June 30, September 30 and December 31 make a return and pay to the Income Tax Administrator the amount of taxes so deducted. However, (when required by the Tax Administrator through an administrative ruling or adopted by the Board of Review), any employer who deducts taxes in the amount of five hundred dollars ($500.00) or more per month shall remit to the Tax Administrator on or before the twentieth day of the second and third months of each calendar quarter the taxes so deducted monthly, which remittance may be based on an estimate made by the employer of the employer's most recent payroll. Also, by January 31, each employer shall file a withholding reconciliation prescribed by and attainable from the Administrator attaching form(s) W-2, setting forth the names and addresses of all employee from whose compensation the tax was withheld during the preceding calendar year and the amount of tax withheld from his employees and such other information as may be required by the rules and regulations adopted by the Administrator.
(c) Such employers, in collecting such tax, shall be deemed to hold the same until payment is made by such employer to the City of Alliance, as a trustee for the benefit of the City of Alliance and any such tax collected by such employer from his employees shall, until the same is paid to the City of Alliance, be deemed a trust fund in the hands of such employer.
(d) However, no person shall be required to withhold the tax on the wages, or other compensation paid domestic servants employed exclusively in or about such person's residence, even though the residence is in the City, but such employee shall be subject to all the requirements of this chapter.
(e) (1) Beginning January 1, 2001, the Municipality shall not require any nonresident employer, agent of such an employer or other payer that is not situated in the Municipality to deduct and withhold taxes from the taxable income of an individual unless the total amount of tax required to be deducted and withheld for the Municipality on account of all the employer’s employees or all of the other payer’s payees exceeds one hundred fifty dollars ($150.00) for the calendar year beginning on or after that date. If the total amount of tax required to be deducted and withheld on account of all of the nonresident employer’s employees or all of the other payer’s payees exceeds one hundred fifty dollars ($150.00) for the calendar year beginning on or after January 1, 2001, the Municipality may require the employer, agent or other payer to deduct and withhold taxes in each ensuing year even if the amount required to be deducted and withheld in each of those ensuing years is one hundred fifty dollars ($150.00) or less, except as otherwise provided in subsection (e)(2) hereof.
(2) If a nonresident employer, agent of such an employer, or other payer that is not situated in the Municipality is required to deduct and withhold taxes for the ensuing year under subsection (e)(1) hereof, and the total amount of tax required to be deducted and withheld under that subsection in each of three consecutive ensuing years is one hundred fifty dollars ($150.00) or less, the Municipality shall not require the employer, agent, or other payer to deduct and withhold taxes in any year following the last of those consecutive years unless the amount required to be deducted and withheld in any such following year exceeds one hundred fifty dollars ($150.00).
(f) All individuals, businesses, employers, brokers or others doing business who engage persons, either on a commission basis, or as independent contractors, contract employees, and are not subject to withholding shall indicate the total amount of earnings, payments, commission and bonuses to such as are residents of the City of Alliance, or who do business in the City of Alliance copies of Federal Form 1099 or shall attach a list which shall indicate social security numbers, names, addresses and amounts paid.
(g) Liability for payment: All officers of a corporation or the employees having control or supervision or charged with the responsibility of filing the return and making payment, shall be personally liable for failure to file the return or pay the tax due as required herein. The dissolution, bankruptcy or reorganization of any such employer does not discharge any officer's or employee's liability for a prior failure of such business to file a return or pay taxes due.
(Ord. 04-07. Passed 5-21-07.)
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