(A) Duty of withholding.
(1) Except as otherwise provided herein, it is the duty of each employer within or doing business within the Village of Anna, who employs one or more persons, whether as an employee, officer, director, or otherwise, to deduct each time any compensation is paid the tax of 1% and 3/4% from:
(a) Qualifying wages, to include bonuses, incentive payments, fees, commissions, or other forms of compensation paid to residents of the Village of Anna, regardless of the place where the services are rendered; and
(b) All compensation paid nonresidents for services rendered, work performed, or other activities engaged in within the Village of Anna.
(2) All employers within or doing business within the Village of Anna are required to make the collections and deductions specified in this section, regardless of the fact that the services on account of which any particular deduction is required, as to residents of the Village of Anna, were performed outside the Village of Anna.
(3) Employers who do not maintain permanent office or place of business in the Village of Anna, but who are subject to tax on net profits attributable to Village of Anna, under the method of allocation provided for in the regulations, are considered to be employers within Village of Anna and subject to the requirement of withholding.
(4) The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation paid. If the employer has withheld the tax and failed to pay the tax withheld to the Commissioner, the employee is not liable for the tax so withheld.
(5) Commissions and fees paid to professional men, brokers, and others who are independent contractors, and not employees of the payor, are not subject to withholding or collection of the tax at the source. The taxpayers must in all instances file a declaration and return and pay the tax pursuant to the provisions of §§ 35.05 and 35.07 of the regulations.
(6) Where a nonresident receives compensation for personal services rendered or performed partly within and partly without Village of Anna, the withholding employer shall deduct, withhold, and remit the tax on that portion of the compensation which is earned within the Village of Anna in accordance with the following rules of apportionment.
(a) If the nonresident is a sales person, agent, or other employee whose compensation depends directly on the volume of business transacted or chiefly effected by him or her, the deducting and withholding shall attach to the portion of the entire compensation which the volume of business transacted or chiefly effected by the employee within the Village of Anna bears to the total volume of business transacted by him or her within and outside the Village of Anna.
(b) The deducting and withholding of personal service compensation of other nonresident employees, including officers of corporations, shall attach to the proportion of the personal service compensation of the employee which the total number of his or her working hours within the Village of Anna is of the total number of working hours.
(c) The fact that nonresident employees are subject to call at any time does not permit the allocation of pay for time worked in the Village of Anna on a seven-day per week basis. The percentage of time worked in the Village of Anna will be computed on the basis of a 40-hour week unless the employer notifies the Commissioner that a greater or lesser number of hours per week is worked.
(d) The occasional entry into the Village of Anna of a nonresident employee who performs the duties for which he or she is employed primarily outside the village, shall not be deemed to take the employee out of the class of those rendering their services entirely outside the Village of Anna.
(7) An employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions.
(8) An employer required to withhold the tax on compensation paid to an employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid to the employee for expenses necessarily and actually incurred by the employee in the actual performance of his or her services, provided the expenses are incurred in earning compensation, including commissions, and are not deducted as a business expense by the employee under § 35.03 of these regulations.
(9) An employer whose records show that an employee is a nonresident of the Village of Anna, and has no knowledge to the contrary, shall be relieved of the responsibility of withholding the tax on personal service compensation paid to the employee for services rendered or work done outside the Village of Anna by the employee, provided, however, that the employer must withhold the tax on all personal service compensation paid the employee after the Commissioner notifies the employer in writing that the employee is a resident of the Village of Anna. All employees are required to notify the employer of any change of residence and the date thereof.
(10) A Village of Anna employer required to withhold the tax from a Village of Anna resident for work done or services performed in another municipality, and who does so withhold and remit to the other municipality, shall be relieved from the requirement of withholding the Village of Anna tax from the Village of Anna resident, except where the rate of tax for the other municipality is less than the rate of tax imposed by the regulations, in that case the employer shall withhold and remit the difference to the Village of Anna.
(11) No person shall be required to withhold the tax on the qualifying wages or other compensation paid domestic servants employed exclusively in or about the person’s residence, but the employee shall be subject to all the requirements of the regulations.
(12) On and after January 1, 2001, compensation paid to an individual for personal services performed within the Village of Anna, if the individual does not reside in the Village of Anna, performs personal services in the Village of Anna on 12 or fewer days in the calendar year and, if the individual is an employee, the principal place of business of the employer is located outside the Village of Anna, the employer is exempt from withholding the tax from the employee.
(B) Return and payment of tax withheld and status of employers.
(1) (a) The deductions from salaries, qualifying wages, and other compensation required to be made by employers are to begin with the compensation earned on and after the effective date of the regulations.
(b) The employer (in addition to any return required to be filed with respect to his or her own earnings or net profits) shall, on or before the last day of the month next following each quarterly period, make a return and pay to the Commissioner the full amount of the tax so deducted or withheld with respect to compensation paid all of his or her employees subject to the tax under the regulations. Provided, however, that where he or she deems the precaution necessary, the Commissioner may require an employer to remit withholding taxes at more frequent intervals. The return required to be filed under this chapter shall be made on a form furnished by or obtainable on request from the Commissioner.
(2) If more than the amount of tax required to be deducted by the regulations is withheld from an employee’s pay, the excess may be refunded by the employer or the Commissioner, depending upon the circumstances and the time when the over-withholding is determined as follows.
(a) Current employees.
1. If the over-withholding is discovered in the same quarterly period, the employer shall make the necessary adjustment directly with the employee, and the amount to be reported on the quarterly form as withheld shall be the corrected amount.
2. If the over-withholding is discovered in a subsequent quarter of the same calendar year, the employer may make proper adjustment with the employee. In that case the form for the quarter in which the adjustment is made shall indicate the total amount actually withheld, the amount of the adjustment deducted therefrom, and the corrected amount reported on the report.
3. If the over-withholding is discovered in the following year, the employer should notify the Commissioner of the over-withholding and the circumstances thereof. Upon proper verification, the Commissioner shall refund to the employee the amount of the excess withholding, upon request of the taxpayer.
(b) Former employees.
1. In case too much has been withheld from an employee who is no longer employed by the employer, the employer shall notify the Commissioner of the amount and the circumstances of the overwithholding and the Commissioner shall then refund to the employee the amount of the excess withholding, upon request of the taxpayer; or
2. If the error is discovered by the employee, the employee shall file a claim with the Commissioner and, upon verification thereof by the employer, the Commissioner shall refund to the employee the amount of the excess withholding upon request of the taxpayer.
(c) Nonresidents employed outside the village. Where an employer has withheld the tax from all qualifying wages of a nonresident of the Village of Anna, and the nonresident has been employed outside of the Village of Anna for all or a part of the time, the employee shall file a claim with the Commissioner covering the erroneous withholding and the Commissioner shall, upon verification thereof by the employer, refund to the employee the amount of the excess withholding upon request of the taxpayer.
(d) Insufficient withholding.
1. If less than the amount of tax required to be deducted is withheld from an employee, the deficiency shall be withheld from subsequent qualifying wages.
2. However, if the employee-employer relationship has terminated, the employer shall notify the Commissioner of the deficiency and the reason.
(3) Every employer is deemed to be a trustee for the Village of Anna in collecting and holding the tax required under the regulations to be withheld, and the funds so collected by the withholding are deemed to be trust funds.
(4) Every employer required to deduct and withhold the tax at the source is liable directly to the Village of Anna for payment of the tax, whether actually collected from the employee or not.
(5) On or before the last day of February following any calendar year in which the deductions have been made by an employer, the employer shall file with the Commissioner, in the form prescribed by the Commissioner, an information return for each employee from whom the Village of Anna income tax has been withheld, showing the name, address, and social security number of the employee, the total amount of compensation paid during the year, and the amount of the Village of Anna income tax withheld from the employee.
(6) For the convenience of employers, the information return may be made in one of three ways at the election of each employer, as follows.
(a) Those employers using Form W-2 furnished commercially, may submit a copy of the commercial Form W-2, providing the copy furnished the Village of Anna clearly shows the information required in division (B)(5) immediately preceding.
(b) Those employers not using Form W-2 furnished commercially may obtain forms upon request from the Commissioner at a nominal fee.
(c) Where the furnishing of this information as above indicated will create a distinct hardship, the employer, upon written request to the Commissioner, may be permitted to furnish a list of all employees subject to the tax, which list shall show the employee’s full name, last known address, social security number, gross amount of compensation paid during the year, and the amount of the Village of Anna income tax withheld. The list may be compiled on any mechanical equipment presently used by the employer, but provision must be made for spacing equal to at least three lines between each name. The employer’s name must be indicated on each sheet, each sheet must be numbered, and the total number of sheets comprising the complete report indicated on the first page.
(d) The gross compensation to be reported for each employee shall be for the full 12 calendar months of the year or the portion thereof as the employee reported on was employed.
(7) In addition to the information returns, and at the time the same are filed, the employer shall file with the Commissioner a form to enable the Commissioner to reconcile the sum total of compensation paid and taxes withheld as disclosed by information return W-2, or list of employees, and prior returns and remittances made pursuant to the regulations.
(8) Every employer, individual, or business conducting business inside the Village of Anna and paying for services, labor, bonuses, awards, or other types of compensation and reporting the payment on a Federal Form 1099 is required to file a copy of the Federal Form 1099 with the Department of Taxation on or before February 28 of each year.
(C) Fractional parts of cent. In deducting and withholding the tax at the source, and in payment of any tax due under the regulations, a fractional part of a cent shall be disregarded unless it amounts to ½ cent or more, in which case it shall be increased to one cent.
(Ord. 670-77, passed 11-9-1977; Am. Ord. 1232-98, passed 11-24-1998; Am. Ord. 1338-01, passed 6-26-2001; Am. Ord. 1339-01, passed 6-26-2001; Am. Ord. 1428-04, passed 6-22-2004; Am. Ord. 1464-05, passed 12-13-2005; Am. Ord. 1482-01, passed 8-8-2006; Am. Ord. 1690-15, passed 12-22-2015)