§ 35.07 DETERMINING MUNICIPAL TAXABLE INCOME FOR INDIVIDUALS.

   (A)   "Municipal taxable income" for a resident of the municipality is calculated as follows:

      (1)   "Income" reduced by "exempt income" to the extent such exempt income is otherwise included in income, reduced by allowable employee business expense deduction as found in division (2) under MUNICIPAL TAXABLE INCOME of § 35.06, further reduced by any "pre-2017 net operating loss carryforward" equals "municipal taxable income".

         (a)   "Income" is defined in § 35.06.

            1.   "Qualifying wages" is defined in § 35.06.

            2.   "Net profit" is included in "income", and is defined in § 35.06. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in division (1)(h) under ADJUSTED FEDERAL TAXABLE INCOME of § 35.06. Treatment of net profits received by an individual taxpayer from rental real estate is provided in § 35.14(E).

            3.   The definition INCOME in § 35.06 provides the following: offsetting and net operating loss carryforward treatment in division (1)(b)1.; resident's distributive share of net profit from pass-through entity treatment in (1)(b)2.; treatment of S Corporation distributive share of net profit in the hands of the shareholder in (1)(c); restriction of amount of loss permitted to be carried forward for use by taxpayer in a subsequent taxable year in (1)(d).

            4.   "Pass-through entity" is defined in § 35.06.

         (b)   "Exempt income" is defined in § 35.06.

         (c)   Allowable employee business expense deduction is described in division (2) under definition MUNICIPAL TAXABLE INCOME of § 35.06, and is subject to the limitations provided in that section.

         (d)   "Pre-2017 net operating loss carryforward" is defined in § 35.06.

   (B)   "Municipal taxable income" for a nonresident of the municipality is calculated as follows:

      (1)   "Income" reduced by "exempt income" to the extent such exempt income is otherwise included in income, as applicable, apportioned or sitused to the municipality as provided in § 35.14, reduced by allowable employee business expense deduction as found in division (2) under the definition MUNICIPAL TAXABLE INCOME of § 35.06, further reduced by any "pre-2017 net operating loss carryforward" equals "municipal taxable income".

         (a)   "Income" is defined in § 35.06.

            1.   "Qualifying wages" is defined in § 35.06.

            2.   "Net profit" is included in "income", and is defined in § 35.06. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in division (1)(h) under definition ADJUSTED FEDERAL TAXABLE INCOME of § 35.06. "Net profit" for a nonresident individual includes any net profit of the nonresident, but excludes the distributive share of net profit or loss of only pass-through entity owned directly or indirectly by the nonresident.

            3.   "Pass-through entity" is defined in § 35.06.

         (b)   "Exempt income" is defined in § 35.06.

         (c)   "Apportioned or sitused to the municipality as provided in § 35.14 includes the apportionment of net profit income attributable to work done or services performed in the municipality. Treatment of net profits received by an individual taxpayer from rental real estate is provided in § 35.14(E).

         (d)   "Allowable employee business expense deduction" as described in division (2) under definition MUNICIPAL TAXABLE INCOME of § 35.06, is subject to the limitations provided in that section. For a nonresident of the municipality, the deduction is limited to the extent the expenses are related to the performance of personal services by the nonresident in the municipality.

         (e)   "Pre-2017 net operating loss carryforward" is defined in § 35.06.

(Ord. 2015-32, passed 12-14-2015)