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(a) Withholding provisions.
(1) Each employer, agent of an employer, or other payer located or doing business in the city shall withhold an income tax from the qualifying wages earned and/or received by each employee in the city. Except for qualifying wages for which withholding is not required under § 886.03 or division (a)(2)D. or F. of this section, the tax shall be withheld at the rate, specified in § 886.03 of this chapter, of 1.5%. An employer, agent of an employer, or other payer shall deduct and withhold the tax from qualifying wages on the date that the employer, agent, or other payer directly, indirectly, or constructively pays the qualifying wages to, or credits the qualifying wages to the benefit of, the employee.
(2) A. Except as provided in division (a)(2)B. of this section, an employer, agent of an employer, or other payer shall remit to the Tax Administrator of the city the greater of the income taxes deducted and withheld or the income taxes required to be deducted and withheld by the employer, agent, or other payer according to the following schedule:
1. Taxes required to be deducted and withheld shall be remitted monthly to the Tax Administrator if the total taxes deducted and withheld or required to be deducted and withheld by the employer, agent or other payer on behalf of the city in the preceding calendar year exceeded $2,399, or if the total amount of taxes deducted and withheld or required to be deducted and withheld on behalf of the city in any month of the preceding calendar quarter exceeded $200.
Payment under division (a)(2)A.1. of this section shall be made so that the payment is received by the Tax Administrator not later than 15 days after the last day of each month for which the tax was withheld.
2. Any employer, agent of an employer, or other payer not required to make payments under division (a)(2)A.1. of this section of taxes required to be deducted and withheld shall make quarterly payments to the Tax Administrator not later than the fifteenth day of the month following the end of each calendar quarter.
3. Intentionally left blank.
B. If the employer, agent of an employer, or other payer is required to make payments electronically for the purpose of paying federal taxes withheld on payments to employees under § 6302 of the Internal Revenue Code, 26 C.F.R. 31.6302-1 or any other federal statute or regulation, the payment shall be made by electronic funds transfer to the Tax Administrator of all taxes deducted and withheld on behalf of the city. The payment of tax by electronic funds transfer under this division does not affect an employer’s, agent’s or other payer’s obligation to file any return as required under this section.
C. An employer, agent of an employer or other payer shall make and file a return showing the amount of tax withheld by the employer, agent or other payer from the qualifying wages of each employee and remitted to the Tax Administrator. A return filed by an employer, agent or other payer under this division shall be accepted by Tax Administrator and the city as the return required of an nonresident employee whose sole income subject to the tax under this chapter is the qualifying wages reported by the employee’s employer, agent of an employer, or other payer.
D. An employer, agent of an employer or other payer is not required to withhold city income tax with respect to an individual’s disqualifying disposition of an incentive stock option if, at the time of the disqualifying disposition, the individual is not an employee of either the corporation with respect to whose stock the option has been issued or of such corporation’s successor entity.
E. 1. An employee is not relieved from liability for a tax by the failure of the employer, agent of an employer, or other payer to withhold the tax as required under this chapter or by the employer’s, agent’s, or other payer’s exemption from the requirement to withhold the tax.
2. The failure of an employer, agent of an employer, or other payer to remit to the city the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer, agent, or other payer in connection with the failure to remit the tax withheld.
F. Compensation deferred before June 26, 2003, is not subject to city income tax or income tax withholding requirement to the extent the deferred compensation does not constitute qualifying wages at the time the deferred compensation is paid or distributed.
G. Each employer, agent of an employer or other payer required to withhold taxes is liable for the payment of that amount required to be withheld, whether or not such taxes have been withheld, and such amount shall be deemed to be held in trust for the city until such time as the withheld amount is remitted to the Tax Administrator.
H. On or before the last day of February of each year, an employer shall file a withholding reconciliation return with the Tax Administrator listing:
1. The names, addresses, and Social Security numbers of all employees from whose qualifying wages tax was withheld or should have been withheld for the city during the preceding calendar year;
2. The amount of tax withheld, if any, from each such employee, the total amount of qualifying wages paid to such employee during the preceding calendar year;
3. The name of every other municipal corporation for which tax was withheld or should have been withheld from such employee during the preceding calendar year;
4. Any other information required for federal income tax reporting purposes on Internal Revenue Service Form W-2 or its equivalent form with respect to such employee; and
5. Other information as may be required by the Tax Administrator.
I. The officer or the employee of the employer, agent of an employer, or other payer with control or direct supervision of or charged with the responsibility for withholding the tax or filing the reports and making payments as required by this section, shall be personally liable for a failure to file a report or pay the tax due as required by this section. The dissolution of an employer, agent of an employer, or other payer does not discharge the officer’s or employee’s liability for a failure of the employer, agent of an employer, or other payer to file returns or pay any tax due.
J. An employer is required to deduct and withhold city income tax on tips and gratuities received by the employer’s employees and constituting qualifying wages, but only to the extent that the tips and gratuities are under the employer’s control. For the purposes of this division, a tip or gratuity is under the employer’s control if the tip or gratuity is paid by the customer to the employer for subsequent remittance to the employee, or if the customer pays the tip or gratuity by credit card, debit card or other electronic means.
K. The Tax Administrator shall consider any tax withheld by an employer at the request of an employee, when such tax is not otherwise required to be withheld by this chapter, to be tax required to be withheld and remitted for the purposes of this section.
(b) Occasional entrant - withholding.
(1) A. As used in this division:
1. “Employer” includes a person that is a related member to or of an employer.
2. “Fixed location” means a permanent place of doing business in this state, such as an office, warehouse, storefront, or similar location owned or controlled by an employer.
3. “Principal place of work” means the fixed location to which an employee is required to report for employment duties on a regular and ordinary basis. If the employee is not required to report for employment duties on a regular and ordinary basis to a fixed location, “principal place of work” means the worksite location in this state to which the employee is required to report for employment duties on a regular and ordinary basis. If the employee is not required to report for employment duties on a regular and ordinary basis to a fixed location or worksite location, “principal place of work” means the location in this state at which the employee spends the greatest number of days in a calendar year performing services for or on behalf of the employee’s employer.
If there is not a single municipal corporation in which the employee spent the “greatest number of days in a calendar year” performing services for or on behalf of the employer, but instead there are two or more municipal corporations in which the employee spent an identical number of days that is greater than the number of days the employee spent in any other municipal corporation, the employer shall allocate any of the employee’s qualifying wages subject to division (b)(1)B.1.a. of this section among those two or more municipal corporations. The allocation shall be made using any fair and reasonable method, including, but not limited to, an equal allocation among such municipal corporations or an allocation based upon the time spent or sales made by the employee in each such municipal corporation. A municipal corporation to which qualifying wages are allocated under this division shall be the employee’s “principal place of work” with respect to those qualifying wages for the purposes of this section.
For the purposes of this division, the location at which an employee spends a particular day shall be determined in accordance with division (b)(1)B.2. of this section, except that “location” shall be substituted for “municipal corporation” wherever “municipal corporation” appears in that division.
4. “Professional athlete” means an athlete who performs services in a professional athletic event for wages or other remuneration.
5. “Professional entertainer” means a person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.
6. “Public figure” means a person of prominence who performs services at discrete events, such as speeches, public appearances, or similar events, for wages or other remuneration on a per-event basis.
7. “Worksite location” means a construction site or other temporary worksite in this state at which the employer provides services for more than 20 days during the calendar year. “Worksite location” does not include the home of an employee.
B. 1. Subject to divisions (b)(1)C., (b)(1)E., and (b)(2) of this section, an employer is not required to withhold city income tax on qualifying wages paid to an employee for the performance of personal services in the city if the employee performed such services in the city on 20 or fewer days in a calendar year, unless one of the following conditions applies:
a. The employee’s principal place of work is located in the city;
b. The employee performed services at one or more presumed worksite locations in the city. For the purposes of this division, “presumed worksite location” means a construction site or other temporary worksite in the city at which the employer provides or provided services that can reasonably be, or would have been, expected by the employer to last more than 20 days in a calendar year. Services can “reasonably be expected by the employer to last more than 20 days” if either of the following applies at the time the services commence:
i. The nature of the services are such that it will require more than 20 days of the services to complete the services; or
ii. The agreement between the employer and its customer to perform services at a location requires the employer to perform the services at the location for more than 20 days.
c. The employee is a resident of the city and has requested that the employer withhold tax from the employee’s qualifying wages as provided in § 886.04; and
d. The employee is a professional athlete, professional entertainer, or public figure, and the qualifying wages are paid for the performance of services in the employee’s capacity as a professional athlete, professional entertainer, or public figure.
2. For the purposes of division (b)(1)B.1. of this section, an employee shall be considered to have spent a day performing services in the city only if the employee spent more time performing services for or on behalf of the employer in the city than in any other municipal corporation on that day. For the purposes of determining the amount of time an employee spent in a particular location, the time spent performing one or more of the following activities shall be considered to have been spent at the employee’s principal place of work:
a. Traveling to the location at which the employee will first perform services for the employer for the day;
b. Traveling from a location at which the employee was performing services for the employer to any other location;
c. Traveling from any location to another location in order to pick up or load, for the purpose of transportation or delivery, property that has been purchased, sold, assembled, fabricated, repaired, refurbished, processed, remanufactured or improved by the employee’s employer;
d. Transporting or delivering property described in division (b)(1)B.2.c. of this section, provided that, upon delivery of the property, the employee does not temporarily or permanently affix the property to real estate owned, used, or controlled by a person other than the employee’s employer; and
e. Traveling from the location at which the employee makes the employee’s final delivery or pick-up for the day to either the employee’s principal place of work or a location at which the employee will not perform services for the employer.
C. If the principal place of work of an employee is located in another Ohio municipal corporation that imposes an income tax, the exception from withholding requirements described in division (b)(1)B.1. of this section shall apply only if, with respect to the employee’s qualifying wages described in that division, the employer withholds and remits tax on such qualifying wages to that municipal corporation.
D. 1. Except as provided in division (b)(1)D.2. of this section, if, during a calendar year, the number of days an employee spends performing personal services in the city exceeds the 20-day threshold, the employer shall withhold and remit tax to the city for any subsequent days in that calendar year on which the employer pays qualifying wages to the employee for personal services performed in the city.
2. An employer required to begin withholding tax for the city under division (b)(1)D.1. of this section may elect to withhold tax for the city for the first 20 days on which the employer paid qualifying wages to the employee for personal services performed in the city.
E. If an employer’s fixed location is the city and the employer qualifies as a small employer as defined in § 886.02, the employer shall withhold municipal income tax on all of the employee’s qualifying wages for a taxable year and remit that tax only to the city, regardless of the number of days which the employee worked outside the corporate boundaries of the city.
To determine whether an employer qualifies as a small employer for a taxable year, the employer will be required to provide the Tax Administrator with the employer’s federal income tax return for the preceding taxable year.
(2) Divisions (b)(1)B.1. and (b)(1)D. of this section shall not apply to the extent that the Tax Administrator and an employer enter into an agreement regarding the manner in which the employer shall comply with the requirements of § 886.04.
(Ord. 163-2015, passed 12-21-2015)
(a) (1) An annual city income tax return shall be completed and filed by every individual taxpayer and any taxpayer that is not an individual for each taxable year for which the taxpayer is subject to the tax, whether or not a tax is due thereon.
A. The Tax Administrator may accept on behalf of all nonresident individual taxpayers a return filed by an employer, agent of an employer or other payer under § 886.04 of this chapter when the nonresident individual taxpayer’s sole income subject to the tax is the qualifying wages reported by the employer, agent of an employer or other payer, and no additional tax is due the city.
B. Retirees having no municipal taxable income for the city income tax purposes may file with the Tax Administrator a written exemption from these filing requirements on a form prescribed by the Tax Administrator. The written exemption shall indicate the date of retirement and the entity from which retired. The exemption shall be in effect until such time as the retiree receives municipal taxable income taxable to the city, at which time the retiree shall be required to comply with all applicable provisions of this chapter.
(2) If an individual is deceased, any return or notice required of that individual shall be completed and filed by that decedent’s executor, administrator or other person charged with the property of that decedent.
(3) If an individual is unable to complete and file a return or notice required by the city, the return or notice required of that individual shall be completed and filed by the individual’s duly authorized agent, guardian, conservator, fiduciary or other person charged with the care of the person or property of that individual.
(4) Returns or notices required of an estate or a trust shall be completed and filed by the fiduciary of the estate or trust.
(5) The city shall permit spouses to file a joint return.
(6) A. Each return required to be filed under this division shall contain the signature of the taxpayer or the taxpayer’s duly authorized agent and of the person who prepared the return for the taxpayer. The return shall include the taxpayer’s Social Security number or taxpayer identification number. Each return shall be verified by a declaration under penalty of perjury.
B. The Tax Administrator shall require a taxpayer who is an individual to include, with each annual return; and amended return, copies of the following documents: all of the taxpayer’s Internal Revenue Service Form W-2, “Wage and Tax Statements,” including all information reported on the taxpayer’s federal W-2, as well as taxable wages reported or withheld for any municipal corporation; the taxpayer’s Internal Revenue Service Form 1040; and, with respect to an amended tax return, any other documentation necessary to support the adjustments made in the amended return. An individual taxpayer who files the annual return required by this section electronically is not required to provide paper copies of any of the foregoing to the Tax Administrator unless the Tax Administrator requests such copies after the return has been filed.
C. The Tax Administrator may require a taxpayer that is not an individual to include, with each annual net profit return, amended net profit return, or request for refund required under this section, copies of only the following documents: the taxpayer’s Internal Revenue Service Form 1041, Form 1065, Form 1120, Form 1120-REIT, Form 1120F or Form 1120S, and, with respect to an amended tax return or refund request, any other documentation necessary to support the refund request or the adjustments made in the amended return.
A taxpayer that is not an individual and that files an annual net profit return electronically through the Ohio Business Gateway or in some other manner shall either mail the documents required under this division to the Tax Administrator at the time of filing or, if electronic submission is available, submit the documents electronically through the Ohio Business Gateway.
D. After a taxpayer files a tax return, the Tax Administrator may request, and the taxpayer shall provide, any information, statements or documents required by the city to determine and verify the taxpayer’s municipal income tax liability. The requirements imposed under division (a)(6) of this section apply regardless of whether the taxpayer files on a generic form or on a form prescribed by the Tax Administrator.
(7) A. 1. Except as otherwise provided in this chapter, each individual income tax return required to be filed under this section shall be completed and filed as required by the Tax Administrator on or before the date prescribed for the filing of state individual income tax returns under R.C. § 5747.08(G). The taxpayer shall complete and file the return or notice on forms prescribed by the Tax Administrator or on generic forms, together with remittance made payable to the city. No remittance is required if the net amount due is $10 or less.
2. Except as otherwise provided in this chapter, each annual net profit return required to be filed under this section by a taxpayer that is not an individual shall be completed and filed as required by the Tax Administrator on or before the fifteenth day of the fourth month following the end of the taxpayer’s taxable year. The taxpayer shall complete and file the return or notice on forms prescribed by the Tax Administrator or on generic forms, together with remittance made payable to the city. No remittance is required if the net amount due is $10 or less.
B. Any taxpayer that has duly requested an automatic six-month extension for filing the taxpayer’s federal income tax return shall automatically receive an extension for the filing of the city’s income tax return. The extended due date of the city’s income tax return shall be the fifteenth day of the tenth month after the last day of the taxable year to which the return relates. An extension of time to file under this division is not an extension of the time to pay any tax due unless the Tax Administrator grants an extension of that date.
1. A copy of the federal extension request shall be included with the filing of the city’s income tax return.
2. A taxpayer that has not requested or received a six-month extension for filing the taxpayer’s federal income tax return may submit a written request that the Tax Administrator grant the taxpayer a six-month extension of the date for filing the taxpayer’s city income tax return. If the request is received by the Tax Administrator on or before the date the city income tax return is due, the Tax Administrator shall grant the taxpayer’s requested extension.
C. If the Tax Commissioner extends for all taxpayers the date for filing state income tax returns under R.C. § 5747.08(G), a taxpayer shall automatically receive an extension for the filing of the city’s income tax return. The extended due date of the city’s income tax return shall be the same as the extended due date of the state income tax return.
D. If the Tax Administrator considers it necessary in order to ensure the payment of the tax imposed by the city, the Tax Administrator may require taxpayers to file returns and make payments otherwise than as provided in this division, including taxpayers not otherwise required to file annual returns.
E. To the extent that any provision in this division (a)(7) conflicts with any provision in division (c) of this section, the provisions in division (c) prevail.
(8) A. For taxable years beginning after 2015, the city shall not require a taxpayer to remit tax with respect to net profits if the net amount due is $10 or less.
B. Any taxpayer not required to remit tax to the city for a taxable year pursuant to division (a)(8)A. of this section shall file with the city an annual net profit return under division (a)(6)C. of this section.
(9) If a payment is required to be made by electronic funds transfer, the payment is considered to be made when the payment is credited to an account designated by the Tax Administrator for the receipt of tax payments, except that, when a payment made by electronic funds transfer is delayed due to circumstances not under the control of the taxpayer, the payment is considered to be made when the taxpayer submitted the payment. This division shall not apply to payments required to be made under § 886.04(a)(2)A.1. or provisions for semi- monthly withholding.
(10) Taxes withheld for the city by an employer, the agent of an employer, or other payer as described in § 886.04 shall be allowed to the taxpayer as credits against payment of the tax imposed on the taxpayer by the city, unless the amounts withheld were not remitted to the city and the recipient colluded with the employer, agent, or other payer in connection with the failure to remit the amounts withheld.
(11) Each return required by the city to be filed in accordance with this division shall include a box that the taxpayer may check to authorize another person, including a tax return preparer who prepared the return, to communicate with the Tax Administrator about matters pertaining to the return.
(12) The Tax Administrator shall accept for filing a generic form of any income tax return, report or document required by the city, provided that the generic form, once completed and filed, contains all of the information required by ordinance, resolution or rules and regulations adopted by the city or the Tax Administrator, and provided that the taxpayer or tax return preparer filing the generic form otherwise complies with the provisions of this chapter and of the city’s ordinance, resolution, or rules and regulations governing the filing of returns, reports, or documents.
(b) Filing via Ohio Business Gateway.
(1) Any taxpayer subject to municipal income taxation with respect to the taxpayer’s net profit from a business or profession may file the city’s income tax return, estimated municipal income tax return or extension for filing a municipal income tax return, and may make payment of amounts shown to be due on such returns, by using the Ohio Business Gateway.
(2) Any employer, agent of an employer, or other payer may report the amount of municipal income tax withheld from qualifying wages, and may make remittance of such amounts, by using the Ohio Business Gateway.
(3) Nothing in this section affects the due dates for filing employer withholding tax returns.
(c) Extension for service in or for the Armed Forces.
(1) Each member of the national guard of any state and each member of a reserve component of the Armed Forces of the United States called to active duty pursuant to an executive order issued by the President of the United States or an act of the Congress of the United States, and each civilian serving as support personnel in a combat zone or contingency operation in support of the Armed Forces, may apply to the Tax Administrator of the city for both an extension of time for filing of the return and an extension of time for payment of taxes required by the city during the period of the member’s or civilian’s duty service, and for 180 days thereafter. The application shall be filed on or before the one hundred eightieth day after the member’s or civilian’s duty terminates. An applicant shall provide such evidence as the Tax Administrator considers necessary to demonstrate eligibility for the extension.
(2) A. If the Tax Administrator ascertains that an applicant is qualified for an extension under this section, the Tax Administrator shall enter into a contract with the applicant for the payment of the tax in installments that begin on the one hundred eighty-first day after the applicant’s active duty or service terminates. The Tax Administrator may prescribe such contract terms as the Tax Administrator considers appropriate. However, taxes pursuant to a contract entered into under this division are not delinquent, and the Tax Administrator shall not require any payments of penalties or interest in connection with those taxes for the extension period.
B. If the Tax Administrator determines that an applicant is qualified for an extension under this section, the applicant shall neither be required to file any return, report or other tax document nor be required to pay any tax otherwise due to the city before the one hundred eighty-first day after the applicant’s active duty or service terminates.
C. Taxes paid pursuant to a contract entered into under division (c)(2)A. of this section are not delinquent. The Tax Administrator shall not require any payments of penalties or interest in connection with those taxes for the extension period.
(3) A. Nothing in this division denies to any person described in this division the application of divisions (c)(1) and (c)(2) of this section.
B. 1. A qualifying taxpayer who is eligible for an extension under the Internal Revenue Code shall receive both an extension of time in which to file any return, report or other tax document and an extension of time in which to make any payment of taxes required by the city in accordance with this chapter. The length of any extension granted under this division (c)(3)B.1. of this section shall be equal to the length of the corresponding extension that the taxpayer receives under the Internal Revenue Code. As used in this division, “qualifying taxpayer” means a member of the national guard or a member of a reserve component of the Armed Forces of the United States called to active duty pursuant to either an executive order issued by the President of the United States or an act of the Congress of the United States, or a civilian serving as support personnel in a combat zone or contingency operation in support of the Armed Forces.
2. Taxes whose payment is extended in accordance with division (c)(3)B.1. of this section are not delinquent during the extension period. Such taxes become delinquent on the first day after the expiration of the extension period if the taxes are not paid prior to that date. The Tax Administrator shall not require any payment of penalties or interest in connection with those taxes for the extension period. The Tax Administrator shall not include any period of extension granted under division (c)(3)B.1. of this section in calculating the penalty or interest due on any unpaid tax.
(4) For each taxable year to which division (c)(1), (c)(2) or (c)(3) of this section applies to a taxpayer, the provisions of divisions (c)(2)B. and (c)(2)C. of this section, as applicable, apply to the spouse of that taxpayer if the filing status of the spouse and the taxpayer is married filing jointly for that year.
(d) Consolidated municipal income tax return.
(1) As used in this section:
A. “Affiliated group of corporations” means an affiliated group as defined in § 1504 of the Internal Revenue Code, except that, if such a group includes at least one incumbent local exchange carrier that is primarily engaged in the business of providing local exchange telephone service in this state, the affiliated group shall not include any incumbent local exchange carrier that would otherwise be included in the group.
B. “Consolidated federal income tax return” means a consolidated return filed for federal income tax purposes pursuant to § 1501 of the Internal Revenue Code.
C. “Consolidated federal taxable income” means the consolidated taxable income of an affiliated group of corporations, as computed for the purposes of filing a consolidated federal income tax return, before consideration of net operating losses or special deductions. “Consolidated federal taxable income” does not include income or loss of an incumbent local exchange carrier that is excluded from the affiliated group under division (d)(1)A. of this section.
D. “Incumbent local exchange carrier” has the same meaning as in R.C. § 4927.01.
E. “Local exchange telephone service” has the same meaning as in R.C. § 5727.01.
(2) A. For taxable years beginning on or after January 1, 2016, a taxpayer that is a member of an affiliated group of corporations may elect to file a consolidated municipal income tax return for a taxable year if at least one member of the affiliated group of corporations is subject to the city’s income tax in that taxable year, and if the affiliated group of corporations filed a consolidated federal income tax return with respect to that taxable year. The election is binding for a five-year period beginning with the first taxable year of the initial election unless a change in the reporting method is required under federal law. The election continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing consolidated municipal income tax returns under division (d)(2)B. of this section or a taxpayer receives permission from the Tax Administrator. The Tax Administrator shall approve such a request for good cause shown.
B. An election to discontinue filing consolidated municipal income tax returns under this section must be made in the first year following the last year of a five-year consolidated municipal income tax return election period in effect under division (d)(2)B. of this section. The election to discontinue filing a consolidated municipal income tax return is binding for a five-year period beginning with the first taxable year of the election.
C. An election made under division (d)(2)A. or (d)(2)B. of this section is binding on all members of the affiliated group of corporations subject to a municipal income tax.
(3) A taxpayer that is a member of an affiliated group of corporations that filed a consolidated federal income tax return for a taxable year shall file a consolidated city income tax return for that taxable year if the Tax Administrator determines, by a preponderance of the evidence, that intercompany transactions have not been conducted at arm’s length and that there has been a distortive shifting of income or expenses with regard to allocation of net profits to the city. A taxpayer that is required to file a consolidated city income tax return for a taxable year shall file a consolidated city income tax return for all subsequent taxable years, unless the taxpayer requests and receives written permission from the Tax Administrator to file a separate return or a taxpayer has experienced a change in circumstances.
(4) A taxpayer shall prepare a consolidated city income tax return in the same manner as is required under the United States Department of Treasury regulations that prescribe procedures for the preparation of the consolidated federal income tax return required to be filed by the common parent of the affiliated group of which the taxpayer is a member.
(5) A. Except as otherwise provided in divisions (d)(5)B., (d)(5)C. or (d)(5)D. of this section, corporations that file a consolidated municipal income tax return shall compute adjusted federal taxable income, as defined in § 886.02, by substituting “consolidated federal taxable income” for “federal taxable income” wherever “federal taxable income” appears in that division and by substituting “an affiliated group of corporation’s” for “a C corporation’s” wherever “a C corporation’s” appears in that division.
B. No corporation filing a consolidated city income tax return shall make any adjustment otherwise required under § 886.02(c)(1) to the extent that the item of income or deduction otherwise subject to the adjustment has been eliminated or consolidated in the computation of consolidated federal taxable income.
C. If the net profit or loss of a pass-through entity having at least 80% of the value of its ownership interest owned or controlled, directly or indirectly, by an affiliated group of corporations is included in that affiliated group’s consolidated federal taxable income for a taxable year, the corporation filing a consolidated city income tax return shall do one of the following with respect to that pass-through entity’s net profit or loss for that taxable year:
1. Exclude the pass-through entity’s net profit or loss from the consolidated federal taxable income of the affiliated group and, for the purpose of making the computations required in this division (d), exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to the city. If the entity’s net profit or loss is so excluded, the entity shall be subject to taxation as a separate taxpayer on the basis of the entity’s net profits that would otherwise be included in the consolidated federal taxable income of the affiliated group.
2. Include the pass-through entity’s net profit or loss in the consolidated federal taxable income of the affiliated group and, for the purpose of making the computations required in this division (d), include the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to the city. If the entity’s net profit or loss is so included, the entity shall not be subject to taxation as a separate taxpayer on the basis of the entity’s net profits that are included in the consolidated federal taxable income of the affiliated group.
D. If the net profit or loss of a pass-through entity having less than 80% of the value of its ownership interest owned or controlled, directly or indirectly, by an affiliated group of corporations is included in that affiliated group’s consolidated federal taxable income for a taxable year, all of the following shall apply:
1. The corporation filing the consolidated municipal income tax return shall exclude the pass-through entity’s net profit or loss from the consolidated federal taxable income of the affiliated group and, for the purposes of making the computations required in this division (d), exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to the city; and
2. The pass-through entity shall be subject to city income taxation as a separate taxpayer in accordance with this chapter on the basis of the entity’s net profits that would otherwise be included in the consolidated federal taxable income of the affiliated group.
(6) Corporations filing a consolidated city income tax return shall make the computations required under this division (d) by substituting “consolidated federal taxable income attributable to” for “net profit from” wherever “net profit from” appears in that section and by substituting “affiliated group of corporations” for “taxpayer” wherever “taxpayer” appears in that section.
(7) Each corporation filing a consolidated city income tax return is jointly and severally liable for any tax, interest, penalties, fines, charges or other amounts imposed by the city in accordance with this chapter on the corporation, an affiliated group of which the corporation is a member for any portion of the taxable year, or any one or more members of such an affiliated group.
(8) Corporations and their affiliates that made an election or entered into an agreement with the city before January 1, 2016, to file a consolidated or combined tax return with the city may continue to file consolidated or combined tax returns in accordance with such election or agreement for taxable years beginning on and after January 1, 2016.
(Ord. 163-2015, passed 12-21-2015)
(a) Every individual taxpayer domiciled in the city who is required to and does pay, or has acknowledged liability for, a municipal tax to another municipality on or measured by the same income, qualifying wages, commissions, net profits or other compensation taxable under this chapter may claim a non-refundable credit upon satisfactory evidence of the tax paid to the other municipality. Subject to division (c) of this section, the credit shall not exceed the tax due the city under this chapter. If the tax rate of the other municipality is less than 1.5%, the credit shall be limited to the tax due at the lower rate.
(b) The city shall grant a credit against its tax on income to a resident of the city who works in a joint economic development zone created under R.C. § 715.691 or a joint economic development district created under R.C. §§ 715.70, 715.71, or 715.72 to the same extent that it grants a credit against its tax on income to its residents who are employed in another municipal corporation.
(c) If the amount of tax withheld or paid to the other municipality is less than the amount of tax required to be withheld or paid to the other municipality, then for purposes of division (a) of this section, “the income, qualifying wages, commissions, net profits or other compensation” subject to tax in the other municipality shall be limited to the amount computed by dividing the tax withheld or paid to the other municipality by the tax rate for that municipality.
(d) Intentionally left blank.
(Ord. 163-2015, passed 12-21-2015)
(a) As used in this section:
(1) “Estimated taxes” means the amount that the taxpayer reasonably estimates to be the taxpayer’s tax liability for the city’s income tax for the current taxable year.
(2) “Tax liability” means the total taxes due to the city for the taxable year, after allowing any credit to which the taxpayer is entitled, and after applying any estimated tax payment, withholding payment, or credit from another taxable year.
(b) (1) Every taxpayer shall make a declaration of estimated taxes for the current taxable year, on the form prescribed by the Tax Administrator, if the amount payable as estimated taxes is at least $200. For the purposes of this section:
A. Taxes withheld for the city from qualifying wages shall be considered as paid to the city in equal amounts on each payment date unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case they shall be considered as paid on the dates on which the amounts were actually withheld; and
B. An overpayment of tax applied as a credit to a subsequent taxable year is deemed to be paid on the date of the postmark stamped on the cover in which the payment is mailed or, if the payment is made by electronic funds transfer, the date the payment is submitted. As used in this division, “date of the postmark” means, in the event there is more than one date on the cover, the earliest date imprinted on the cover by the Postal Service.
(2) Taxpayers filing joint returns shall file joint declarations of estimated taxes. A taxpayer may amend a declaration under rules prescribed by the Tax Administrator. A taxpayer having a taxable year of less than 12 months shall make a declaration under rules prescribed by the Tax Administrator.
(3) The declaration of estimated taxes shall be filed on or before the date prescribed for the filing of municipal income tax returns under § 886.05(a)(7) or on or before the fifteenth day of the fourth month after the taxpayer becomes subject to tax for the first time.
(4) Taxpayers reporting on a fiscal year basis shall file a declaration on or before the fifteenth day of the fourth month after the beginning of each fiscal year or period.
(5) The original declaration or any subsequent amendment may be increased or decreased on or before any subsequent quarterly payment day as provided in this section.
(c) (1) The required portion of the tax liability for the taxable year that shall be paid through estimated taxes made payable to the city, including the application of tax refunds to estimated taxes and withholding on or before the applicable payment date, shall be as follows:
A. On or before the fifteenth day of the fourth month after the beginning of the taxable year, 22.5% of the tax liability for the taxable year;
B. On or before the fifteenth day of the sixth month after the beginning of the taxable year, 45% of the tax liability for the taxable year;
C. On or before the fifteenth day of the ninth month after the beginning of the taxable year, 67.5% of the tax liability for the taxable year; and
D. On or before the fifteenth day of the twelfth month of the taxable year, 90% of the tax liability for the taxable year.
(2) When an amended declaration has been filed, the unpaid balance shown due on the amended declaration shall be paid in equal installments on or before the remaining payment dates.
(3) On or before the fifteenth day of the fourth month of the year following that for which the declaration or amended declaration was filed, an annual return shall be filed and any balance which may be due shall be paid with the return in accordance with § 886.05.
(d) (1) In the case of any underpayment of any portion of a tax liability, penalty and interest may be imposed pursuant to § 886.18 upon the amount of underpayment for the period of underpayment, unless the underpayment is due to reasonable cause as described in division (e) of this section. The amount of the underpayment shall be determined as follows:
A. For the first payment of estimated taxes each year, 22.5% of the tax liability, less the amount of taxes paid by the date prescribed for that payment;
B. For the second payment of estimated taxes each year, 45% of the tax liability; less the amount of taxes paid by the date prescribed for that payment;
C. For the third payment of estimated taxes each year, 67.5% of the tax liability, less the amount of taxes paid by the date prescribed for that payment; and
D. For the fourth payment of estimated taxes each year, 90% of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
(2) The period of the underpayment shall run from the day the estimated payment was required to be made to the date on which the payment is made. For purposes of this section, a payment of estimated taxes on or before any payment date shall be considered a payment of any previous underpayment only to the extent the payment of estimated taxes exceeds the amount of the payment presently required to be paid to avoid any penalty.
(e) An underpayment of any portion of tax liability determined under division (d) of this section shall be due to reasonable cause and the penalty imposed by this section shall not be added to the taxes for the taxable year if any of the following apply.
(1) The amount of estimated taxes that were paid equals at least 90% of the tax liability for the current taxable year, determined by annualizing the income received during the year up to the end of the month immediately preceding the month in which the payment is due.
(2) The amount of estimated taxes that were paid equals at least 100% of the tax liability shown on the return of the taxpayer for the preceding taxable year, provided that the immediately preceding taxable year reflected a period of 12 months and the taxpayer filed a return with the city under § 886.05 for that year.
(3) The taxpayer is an individual who resides in the city but was not domiciled there on the first day of January of the calendar year that includes the first day of the taxable year.
(Ord. 163-2015, passed 12-21-2015)
A person may round to the nearest whole dollar all amounts the person is required to enter on any return, report, voucher or other document required under this chapter. Any fractional part of a dollar that equals or exceeds $0.50 shall be rounded to the next whole dollar, and any fractional part of a dollar that is less than $0.50 shall be dropped. If a person chooses to round amounts entered on a document, the person shall round all amounts entered on the document.
(Ord. 163-2015, passed 12-21-2015)
(a) As used in this section, “withholding tax” has the same meaning as in § 886.18.
(b) Upon receipt of a request for a refund, the Tax Administrator, in accordance with this section, shall refund to employers, agents of employers, other payers, or taxpayers, with respect to any income or withholding tax levied by the city:
(1) Overpayments of $10 or more; and
(2) Amounts paid erroneously if the refund requested is $10 or more.
(c) (1) Except as otherwise provided in this chapter, requests for refund shall be filed with the Tax Administrator, on the form prescribed by the Tax Administrator within three years after the tax was due or paid, whichever is later. The Tax Administrator may require the requestor to file with the request any documentation that substantiates the requestor’s claim for a refund.
(2) On filing of the refund request, the Tax Administrator shall determine the amount of refund due and certify such amount for payment. Except as provided in division (c)(3) of this section, the Tax Administrator shall issue an assessment to any taxpayer whose request for refund is fully or partially denied. The assessment shall state the amount of the refund that was denied, the reasons for the denial, and instructions for appealing the assessment.
(3) If the Tax Administrator denies in whole or in part a refund request included within the taxpayer’s originally filed annual income tax return, the Tax Administrator shall notify the taxpayer, in writing, of the amount of the refund that was denied, the reasons for the denial, and instructions for requesting an assessment that may be appealed under § 886.21.
(d) A request for a refund that is received after the last day for filing specified in division (c) of this section shall be considered to have been filed in a timely manner if any of the following situations exist.
(1) The request is delivered by the postal service, and the earliest Postal Service postmark on the cover in which the request is enclosed is not later than the last day for filing the request.
(2) The request is delivered by the Postal Service, the only postmark on the cover in which the request is enclosed was affixed by a private postal meter, the date of that postmark is not later than the last day for filing the request, and the request is received within seven days of such last day.
(3) The request is delivered by the Postal Service, no postmark date was affixed to the cover in which the request is enclosed or the date of the postmark so affixed is not legible, and the request is received within seven days of the last day for making the request.
(e) Interest shall be allowed and paid on any overpayment by a taxpayer of any municipal income tax obligation from the date of the overpayment until the date of the refund of the overpayment, except that if any overpayment is refunded within 90 days after the final filing date of the annual return or 90 days after the completed return is filed, whichever is later, no interest shall be allowed on the refund. For the purpose of computing the payment of interest on amounts overpaid, no amount of tax for any taxable year shall be considered to have been paid before the date on which the return on which the tax is reported is due, without regard to any extension of time for filing that return. Interest shall be paid at the interest rate described in § 886.18(a)(4).
(Ord. 163-2015, passed 12-21-2015)
(a) Income tax that has been deposited with the city, but should have been deposited with another municipality, is allowable by the city as a refund but is subject to the three-year limitation on refunds.
(b) Income tax that was deposited with another municipality but should have been deposited with the city is subject to recovery by the city. If the city’s tax on that income is imposed after the time period allowed for a refund of the tax or withholding paid to the other municipality, the city shall allow a non- refundable credit against the tax or withholding the city claims is due with respect to such income or wages, equal to the tax or withholding paid to the first municipality with respect to such income or wages.
(c) If the city’s tax rate is less than the tax rate in the other municipality, then the non-refundable credit shall be calculated using the city’s tax rate. However, if the city’s tax rate is greater than the tax rate in the other municipality, the tax due in excess of the non-refundable credit is to be paid to the city, along with any penalty and interest that accrued during the period of nonpayment.
(d) Nothing in this section permits any credit carry-forward.
(Ord. 163-2015, passed 12-21-2015)
(a) (1) If a taxpayer’s tax liability shown on the annual tax return for the city changes as a result of an adjustment to the taxpayer’s federal or state income tax return, the taxpayer shall file an amended return with the city. The amended return shall be filed on a form required by the Tax Administrator.
(2) If a taxpayer intends to file an amended consolidated municipal income tax return, or to amend its type of return from a separate return to a consolidated return, based on the taxpayer’s consolidated federal income tax return, the taxpayer shall notify the Tax Administrator before filing the amended return.
(b) (1) In the case of an underpayment, the amended return shall be accompanied by payment of any combined additional tax due, together with any penalty and interest thereon. If the combined tax shown to be due is $10 or less, no payment need be made. The amended return shall reopen those facts, figures, computations or attachments from a previously filed return that are not affected, either directly or indirectly, by the adjustment to the taxpayer’s federal or state income tax return only:
A. To determine the amount of tax that would be due if all facts, figures, computations, and attachments were reopened; or
B. If the applicable statute of limitations for civil actions or prosecutions under § 886.12 has not expired for a previously filed return.
(2) The additional tax to be paid shall not exceed the amount of tax that would be due if all facts, figures, computations, and attachments were reopened; i.e., the payment shall be the lesser of the two amounts.
(c) (1) In the case of an overpayment, a request for refund may be filed under this division within the period prescribed by division (d) of this section for filing the amended return, even if it is filed beyond the period prescribed in that division if it otherwise conforms to the requirements of that division. If the amount of the refund is less than $10, no refund need be paid by the city. A request filed under this division shall claim refund of overpayments resulting from alterations only to those facts, figures, computations or attachments required in the taxpayer’s annual return that are affected, either directly or indirectly, by the adjustment to the taxpayer’s federal or state income tax return, unless it is also filed within the time prescribed in § 886.09.
(2) The amount to be refunded shall not exceed the amount of refund that would be due if all facts, figures, computations and attachments were reopened. All facts, figures, computations and attachments may be reopened to determine the refund amount due by inclusion of all facts, figures, computations, and attachments.
(d) Within 60 days after the final determination of any federal or state tax liability affecting the taxpayer’s city tax liability, that taxpayer shall make and file an amended city return showing income subject to city income tax based upon such final determination of federal or state tax liability. The taxpayer shall pay any additional city income tax shown due thereon or make a claim for refund of any overpayment, unless the tax or overpayment is less than $10.
(Ord. 163-2015, passed 12-21-2015)
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