§ 95A.03 DEFINITIONS.

   (A)   Any term used in this chapter that is not otherwise defined in this chapter has the same meaning as when used in a comparable context in laws of the United States relating to federal income taxation or in Title LVII of the Ohio Revised Code, unless a different meaning is clearly required. If a term used in this chapter that is not otherwise defined in this chapter is used in a comparable context in both the laws of the United States relating to federal income tax and in R.C. Title LVII and the use is not consistent, then the use of the term in the laws of the United States relating to federal income tax shall control over the use of the term in R.C. Title LVII.

   (B)   For purposes of this section, the singular shall include the plural, and the masculine shall include the feminine and the gender-neutral.

   (C)   As used in this chapter:

      (1)   ADJUSTED FEDERAL TAXABLE INCOME, for a person required to file as a C corporation, or for a person that has elected to be taxed as a C corporation under division (C)(24)(d) of this section, means a C corporation’s federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:

         (a)   Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.

         (b)   Add an amount equal to 5% of intangible income deducted under division (C)(1)(a) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code;

         (c)   Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code;

         (d)   1.   Except as provided in division (C)(1)(d)2. of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code;

            2.   Division (C)(1)(d)1. of this section does not apply to the extent the income or gain is income or gain described in section 1245 or 1250 of the Internal Revenue Code.

         (e)   Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;

         (f)   In the case of a real estate investment trust or regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income;

         (g)   Deduct, to the extent not otherwise deducted or excluded in computing federal taxable income, any income derived from a transfer agreement or from the enterprise transferred under that agreement under R.C. § 4313.02;

         (h)   1.   Except as limited by divisions (C)(1)(h)2., 3., and 4. of this section, deduct any net operating loss incurred by the person in a taxable year beginning on or after January 1, 2016.

            The amount of such net operating loss shall be deducted from net profit that is reduced by exempt income to the extent necessary to reduce municipal taxable income to zero, with any remaining unused portion of the net operating loss carried forward to not more than five consecutive taxable years following the taxable year in which the loss was incurred, but in no case for more years than necessary for the deduction to be fully utilized.

            2.   No person shall use the deduction allowed by division (C)(1)(h) of this section to offset qualifying wages.

            3.   a.   For taxable years beginning in 2018, 2019, 2020, 2021, or 2022, a person may not deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, more than 50% of the amount of the deduction otherwise allowed by division (C)(1)(h)1. of this section.

               b.   For taxable years beginning in 2023 or thereafter, a person may deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, the full amount allowed by division (C)(1)(h)1. of this section.

            4.   Any pre-2017 net operating loss carryforward deduction that is available must be utilized before a taxpayer may deduct any amount pursuant to division (C)(1)(h) of this section.

            5.   Nothing in division (C)(1)(h)3.a. of this section precludes a person from carrying forward, for use with respect to any return filed for a taxable year beginning after 2018, any amount of net operating loss that was not fully utilized by operation of division (C)(1)(h)3.a. of this section. To the extent that an amount of net operating loss that was not fully utilized in one or more taxable years by operation of division (C)(1)(h)3.a. of this section is carried forward for use with respect to a return filed for a taxable year beginning in 2019, 2020, 2021, or 2022, the limitation described in division (C)(1)(h)3.a. of this section shall apply to the amount carried forward.

         (i)   Deduct any net profit of a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer’s federal taxable income unless an affiliated group of corporations includes that net profit in the group’s federal taxable income in accordance with § 95A.06(C)(5)(c)2. of this chapter.

         (j)   Add any loss incurred by a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer’s federal taxable income unless an affiliated group of corporations includes that loss in the group’s federal taxable income in accordance with § 95A.06(C)(5)(c)2. of this chapter.

      If the taxpayer is not a C corporation, is not a disregarded entity that has made the election described in division (C)(48)(b) of this section, is not a publicly traded partnership that has made the election described in division (C)(24)(d) of this section, and is not an individual, the taxpayer shall compute adjusted federal taxable income under this section as if the taxpayer were a C corporation, except guaranteed payments and other similar amounts paid or accrued to a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deductible expense unless such payments are in consideration for the use of capital and treated as payment of interest under section 469 of the Internal Revenue Code or United States Treasury regulations. Amounts paid or accrued to a qualified self-employed retirement plan with respect to a partner, former partner, shareholder, former shareholder, member, or former member of the taxpayer, amounts paid or accrued to or for health insurance for a partner, former partner, shareholder, former shareholder, member, or former member, and amounts paid or accrued to or for life insurance for a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deduction.

      Nothing in division (C)(1) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.

      (2)   (a)   ASSESSMENT means any of the following:

            1.   A written finding by the Tax Commissioner that a person has underpaid municipal income tax, or owes penalty and interest, or any combination of tax, penalty, or interest, to the municipal corporation;

            2.   A full or partial denial of a refund request issued under § 95A.09(F)(2)(b) of this chapter;

            3.   The Tax Commissioner’s denial of a taxpayer’s request for use of an alternative apportionment method, issued under § 95A.06(B)(2)(b) of this chapter; or

            4.   The Tax Commissioner’s requirement for a taxpayer to use an alternative apportionment method, issued under § 95A.06(B)(2)(c) of this chapter.

            5.   For purposes of divisions (C)(2)(a)1., 2., 3., and 4. of this section, an assessment shall commence the person’s time limitation for making an appeal to the Local Board of Tax Review pursuant to § 95A.18 of this chapter, and shall have “ASSESSMENT” written in all capital letters at the top of such finding.

         (b)   ASSESSMENT does not include notice(s) denying a request for refund issued under § 95A.09(F)(2)(c) of this chapter, a billing statement notifying a taxpayer of current or past-due balances owed to the municipal corporation, a Tax Commissioner’s request for additional information, a notification to the taxpayer of mathematical errors, or a Tax Commissioner’s other written correspondence to a person or taxpayer that does not meet the criteria prescribed by division (C)(2)(a) of this section.

      (3)   AUDIT means the examination of a person or the inspection of the books, records, memoranda, or accounts of a person, ordered to appear before the Tax Commissioner, for the purpose of determining liability for a municipal income tax.

      (4)   BOARD OF REVIEW has same meaning as “Local Board of Tax Review”.

      (5)   CALENDAR QUARTER means the three-month period ending on the last day of March, June, September, or December.

      (6)   CASINO OPERATOR and CASINO FACILITY have the same meanings as in R.C. § 3772.01.

      (7)   CERTIFIED MAIL, EXPRESS MAIL, UNITED STATES MAIL, POSTAL SERVICE, and similar terms include any delivery service authorized pursuant to R.C. § 5703.056.

      (8)   COMPENSATION means any form of remuneration paid to an employee for personal services.

      (9)   DISREGARDED ENTITY means a single member limited liability company, a qualifying subchapter S subsidiary, or another entity if the company, subsidiary, or entity is a disregarded entity for federal income tax purposes.

      (10)   DOMICILE means the true, fixed and permanent home of the taxpayer to which, whenever absent, the taxpayer intends to return.

      (11)   EXEMPT INCOME means all of the following:

         (a)   The military pay or allowances of members of the armed forces of the United States or members of their reserve components, including the national guard of any state;

         (b)   1.   Except as provided in division (C)(11)(b)2. of this section, intangible income;

            2.   A municipal corporation that taxed any type of intangible income on March 29, 1988, pursuant to Section 3 of S.B. 238 of the 116th General Assembly, may continue to tax that type of income if a majority of the electors of the municipal corporation voting on the question of whether to permit the taxation of that type of intangible income after 1988 voted in favor thereof at an election held on November 8, 1988.

         (c)   Social Security benefits, railroad retirement benefits, unemployment compensation, pensions, retirement benefit payments, payments from annuities, and similar payments made to an employee or to the beneficiary of an employee under a retirement program or plan, disability payments received from private industry or local, state, or federal governments or from charitable, religious or educational organizations, and the proceeds of sickness, accident, or liability insurance policies. As used in division (C)(11)(c) of this section, UNEMPLOYMENT COMPENSATION does not include supplemental unemployment compensation described in section 3402(o)(2) of the Internal Revenue Code;

         (d)   The income of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent such income is derived from tax-exempt real estate, tax-exempt tangible or intangible property, or tax-exempt activities;

         (e)   Compensation paid under R.C. §§ 3501.28 or 3501.36 to a person serving as a precinct election official to the extent that such compensation does not exceed $1,000 for the taxable year. Such compensation in excess of $1,000 for the taxable year may be subject to taxation by a municipal corporation. A municipal corporation shall not require the payer of such compensation to withhold any tax from that compensation;

         (f)   Dues, contributions, and similar payments received by charitable, religious, educational, or literary organizations or labor unions, lodges, and similar organizations;

         (g)   Alimony and child support received;

         (h)   Awards for personal injuries or for damages to property from insurance proceeds or otherwise, excluding compensation paid for lost salaries or wages or awards for punitive damages;

         (i)   Income of a public utility when that public utility is subject to the tax levied under R.C. §§ 5727.24 or 5727.30. This division (C)(11)(i) does not apply for purposes of R.C. Chapter 5745;

         (j)   Gains from involuntary conversions, interest on federal obligations, items of income subject to a tax levied by the state and that a municipal corporation is specifically prohibited by law from taxing, and income of a decedent’s estate during the period of administration except such income from the operation of a trade or business;

         (k)   Compensation or allowances excluded from federal gross income under section 107 of the Internal Revenue Code;

         (l)   Employee compensation that is not qualifying wages as defined in division (C)(35) of this section;

         (m)   Compensation paid to a person employed within the boundaries of a United States Air Force base under the jurisdiction of the United States Air Force that is used for the housing of members of the United States Air Force and is a center for Air Force operations, unless the person is subject to taxation because of residence or domicile. If the compensation is subject to taxation because of residence or domicile, tax on such income shall be payable only to the municipal corporation of residence or domicile.

         (n)   1.   Except as provided in divisions (C)(11)(n)2., 3., and 4. of this section, qualifying wages described in §§ 95A.05(B)(2)(a) or (B)(5) of this chapter to the extent the qualifying wages are not subject to withholding for the municipality under either of those divisions.

            2.   The exemption provided in division (C)(11)(n)1. of this section does not apply with respect to the municipal corporation in which the employee resided at the time the employee earned the qualifying wages.

            3.   The exemption provided in division (C)(11)(n)1. of this section does not apply to qualifying wages that an employer elects to withhold under § 95A.05(B)(4)(b) of this chapter.

            4.   The exemption provided in division (C)(11)(n)1. of this section does not apply to qualifying wages if both of the following conditions apply:

               a.   For qualifying wages described in § 95A.05(B)(2)(a) of this chapter, the employee’s employer withholds and remits tax on the qualifying wages to the municipal corporation in which the employee’s principal place of work is situated, or, for qualifying wages described in § 95A.05(B)(5) of this chapter, the employee’s employer withholds and remits tax on the qualifying wages to the municipal corporation in which the employer’s fixed location is located;

               b.   The employee receives a refund of the tax described in division (C)(11)(n)4.a. of this section on the basis of the employee not performing services in that municipal corporation.

         (o)   1.   Except as provided in division (C)(11)(o)2. or 3. of this section, compensation that is not qualifying wages paid to a nonresident individual for personal services performed in the municipality on not more than 20 days in a taxable year.

            2.   The exemption provided in division (C)(11)(o)1. of this section does not apply under either of the following circumstances:

               a.   The individual’s base of operation is located in the municipality; or

               b.   The individual is a professional athlete, professional entertainer, or public figure, and the compensation is paid for the performance of services in the individual’s capacity as a professional athlete, professional entertainer, or public figure. For purposes of division (C)(11)(o)2.b. of this section, PROFESSIONAL ATHLETE, PROFESSIONAL ENTERTAINER, and PUBLIC FIGURE have the same meanings as in § 95A.05 (B) of this chapter.

            3.   Compensation to which division (C)(11)(o) of this section applies shall be treated as earned or received at the individual’s base of operation. If the individual does not have a base of operation, the compensation shall be treated as earned or received where the individual is domiciled.

            4.   For purposes of division (C)(11)(o) of this section, BASE OF OPERATION means the location where an individual owns or rents an office, storefront, or similar facility to which the individual regularly reports and at which the individual regularly performs personal services for compensation.

         (p)   Compensation paid to a person for personal services performed for a political subdivision on property owned by the political subdivision, regardless of whether the compensation is received by an employee of the subdivision or another person performing services for the subdivision under a contract with the subdivision, if the property on which services are performed is annexed to a municipal corporation pursuant to R.C. § 709.023 on or after March 27, 2013, unless the person is subject to such taxation because of residence. If the compensation is subject to taxation because of residence, municipal income tax shall be payable only to the municipal corporation of residence.

         (q)   Income the taxation of which is prohibited by the constitution or laws of the United States. Any item of income that is exempt income of a pass-through entity under division (C)(11) of this section is exempt income of each owner of the pass-through entity to the extent of that owner’s distributive or proportionate share of that item of the entity’s income.

         (r)   Starting January 1, 2024, the income of individuals under 18 years of age.

      (12)   FORM 2106 means Internal Revenue Service form 2106 filed by a taxpayer pursuant to the Internal Revenue Code.

      (13)   GENERIC FORM means an electronic or paper form that is not prescribed by a particular municipal corporation and that is designed for reporting taxes withheld by an employer, agent of an employer, or other payer, estimated municipal income taxes, or annual municipal income tax liability, including a request for refund.

      (14)   IN THIS CITY means within the city limits of Bowling Green, Ohio, or any land owned by the city even though outside the city limits.

      (15)   INCOME means the following:

         (a)   1.   For residents, all income, salaries, qualifying wages, commissions, and other compensation from whatever source earned or received by the resident, including the resident’s distributive share of the net profit of pass-through entities owned directly or indirectly by the resident and any net profit of the resident, except as provided in division (C)(24)(d) of this section.

            2.   For the purposes of division (C)(15)(a)1. of this section:

               a.   Any net operating loss of the resident incurred in the taxable year and the resident’s distributive share of any net operating loss generated in the same taxable year and attributable to the resident’s ownership interest in a pass-through entity shall be allowed as a deduction, for that taxable year and the following five taxable years, against any other net profit of the resident or the resident’s distributive share of any net profit attributable to the resident’s ownership interest in a pass-through entity until fully utilized, subject to division (C)(15)(a)4. of this section;

               b.   The resident’s distributive share of the net profit of each pass-through entity owned directly or indirectly by the resident shall be calculated without regard to any net operating loss that is carried forward by that entity from a prior taxable year and applied to reduce the entity’s net profit for the current taxable year.

            3.   Division (C)(15)(a)2. of this section does not apply with respect to any net profit or net operating loss attributable to an ownership interest in an S corporation unless shareholders’ distributive shares of net profits from S corporations are subject to tax in the municipal corporation as provided in division (C)(15)(e) of this section.

            4.   Any amount of a net operating loss used to reduce a taxpayer’s net profit for a taxable year shall reduce the amount of net operating loss that may be carried forward to any subsequent year for use by that taxpayer. In no event shall the cumulative deductions for all taxable years with respect to a taxpayer’s net operating loss exceed the original amount of that net operating loss available to that taxpayer.

         (b)   In the case of nonresidents, all income, salaries, qualifying wages, commissions, and other compensation from whatever source earned or received by the nonresident for work done, services performed or rendered, or activities conducted in the municipality, including any net profit of the nonresident, but excluding the nonresident’s distributive share of the net profit or loss of only pass-through entities owned directly or indirectly by the nonresident.

         (c)   For taxpayers that are not individuals, net profit of the taxpayer;

         (d)   Lottery, sweepstakes, gambling and sports winnings, winnings from games of chance, and prizes and awards. If the taxpayer is a professional gambler for federal income tax purposes, the taxpayer may deduct related wagering losses and expenses to the extent authorized under the Internal Revenue Code and claimed against such winnings. Credit for tax withheld or paid to another municipal corporation on such winnings paid to the municipal corporation where winnings occur is limited to the credit as specified in § 95A.08(A) of this chapter.

         (e)   For residents, an S corporation shareholder’s distributive share of net profits of an S corporation.

      (16)   INTANGIBLE INCOME means income of any of the following types: income yield, interest, capital gains, dividends, or other income arising from the ownership, sale, exchange, or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in R.C. Chapter 5701, and patents, copyrights, trademarks, trade names, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation. INTANGIBLE INCOME does not include prizes, awards, or other income associated with any lottery winnings, gambling winnings, or other similar games of chance.

      (17)   INTERNAL REVENUE CODE means the “Internal Revenue Code of 1986,” 100 Sta. 2085, 26 U.S.C.A. 1, as amended.

      (18)   LIMITED LIABILITY COMPANY means a limited liability company formed under R.C. Chapter 1705 or under the laws of another state.

      (19)   LOCAL BOARD OF TAX REVIEW and BOARD OF TAX REVIEW means the entity created under § 95A.18 of this chapter.

      (20)   MUNICIPAL CORPORATION means, in general terms, a status conferred upon a local government unit, by state law giving the unit certain autonomous operating authority such as the power of taxation, power of eminent domain, police power and regulatory power, and includes a joint economic development district or joint economic development zone that levies an income tax under R.C. §§ 715.691, 715.70, 715.71, or 715.74.

      (21)   (a)   MUNICIPAL TAXABLE INCOME means the following:

            1.   For a person other than an individual, income reduced by exempt income to the extent otherwise included in income and then, as applicable, apportioned or sitused to the municipality under § 95A.06(B) of this chapter, and further reduced by any pre-2017 net operating loss carryforward available to the person for the municipality.

            2.   a.   For an individual who is a resident of a municipality other than a qualified municipal corporation, income reduced by exempt income to the extent otherwise included in income, then reduced as provided in division (C)(21)(b) of this section, and further reduced by any pre-2017 net operating loss carryforward available to the individual for the municipality.

               b.   For an individual who is a resident of a qualified municipal corporation, Ohio adjusted gross income reduced by income exempted, and increased by deductions excluded, by the qualified municipal corporation from the qualified municipal corporation’s tax on or before December 31, 2013. If a qualified municipal corporation, on or before December 31, 2013, exempts income earned by individuals who are not residents of the qualified municipal corporation and net profit of persons that are not wholly located within the qualified municipal corporation, such individual or person shall have no municipal taxable income for the purposes of the tax levied by the qualified municipal corporation and may be exempted by the qualified municipal corporation from the requirements of R.C. § 718.03.

            3.   For an individual who is a nonresident of the municipality, income reduced by exempt income to the extent otherwise included in income and then, as applicable, apportioned or sitused to the municipality under § 95A.06(B) of this chapter, then reduced as provided in division (C)(21)(b) of this section, and further reduced by any pre-2017 net operating loss carryforward available to the individual for the municipality.

         (b)   In computing the municipal taxable income of a taxpayer who is an individual, the taxpayer may subtract, as provided in division (C)(21)(a)2.a. or (C)(21)(a)3. of this section, the amount of the individual’s employee business expenses reported on the individual’s form 2106 that the individual deducted for federal income tax purposes for the taxable year, subject to the limitation imposed by section 67 of the Internal Revenue Code. For the municipal corporation in which the taxpayer is a resident, the taxpayer may deduct all such expenses allowed for federal income tax purposes. For a municipal corporation in which the taxpayer is not a resident, the taxpayer may deduct such expenses only to the extent the expenses are related to the taxpayer’s performance of personal services in that nonresident municipal corporation.

      (22)   MUNICIPALITY means the City of Bowling Green.

      (23)   NET OPERATING LOSS means a loss incurred by a person in the operation of a trade or business. NET OPERATING LOSS does not include unutilized losses resulting from basis limitations, at-risk limitations, or passive activity loss limitations.

      (24)   (a)   NET PROFIT for a person other than an individual means adjusted federal taxable income.

         (b)   NET PROFIT for a person who is an individual means the individual’s net profit required to be reported on schedule C, schedule E, or schedule F reduced by any net operating loss carried forward. For the purposes of this division, the net operating loss carried forward shall be calculated and deducted in the same manner as provided in division (C)(1)(h) of this section.

         (c)   For the purposes of this chapter, and notwithstanding division (C)(24)(a) of this section, net profit of a disregarded entity shall not be taxable as against that disregarded entity, but shall instead be included in the net profit of the owner of the disregarded entity.

         (d)   1.   For purposes of this chapter, PUBLICLY TRADED PARTNERSHIP means any partnership, an interest in which is regularly traded on an established securities market. A PUBLICLY TRADED PARTNERSHIP may have any number of partners.

            2.   For the purposes of this chapter, and notwithstanding any other provision of this chapter, the net profit of a publicly traded partnership that makes the election described in division (C)(24)(d) of this section shall be taxed as if the partnership were a C corporation, and shall not be treated as the net profit or income of any owner of the partnership.

            3.   A publicly traded partnership that is treated as a partnership for federal income tax purposes and that is subject to tax on its net profits in one or more municipal corporations in this state may elect to be treated as a C corporation for municipal income tax purposes. The publicly traded partnership shall make the election in every municipal corporation in which the partnership is subject to taxation on its net profits. The election shall be made on the annual tax return filed in each such municipal corporation. Once the election is made, the election is binding for a five-year period beginning with the first taxable year of the initial election. The election continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing municipal income tax returns as a C corporation for municipal purposes under division (C)(24)(d)4. of this section.

            4.   An election to discontinue filing as a C corporation must be made in the first year following the last year of a five-year election period in effect under division (C)(24)(d)3. of this section. The election to discontinue filing as a C corporation is binding for a five-year period beginning with the first taxable year of the election and continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing municipal income tax returns as a partnership for municipal purposes. An election to discontinue filing as a partnership must be made in the first year following the last year of a five-year election period.

            5.   The publicly traded partnership shall not be required to file the election with any municipal corporation in which the partnership is not subject to taxation on its net profits, but division (C)(24)(d) of this section applies to all municipal corporations in which an individual owner of the partnership resides.

            6.   The individual owners of the partnership not filing as a C corporation shall be required to file with their municipal corporation of residence, and report partnership distribution of net profit.

      (25)   NONRESIDENT means an individual that is not a resident of the municipality.

      (26)   OHIO BUSINESS GATEWAY means the online computer network system, created under R.C. § 125.30, that allows persons to electronically file business reply forms with state agencies and includes any successor electronic filing and payment system.

      (27)   OTHER PAYER means any person, other than an individual’s employer or the employer’s agent, that pays an individual any amount included in the federal gross income of the individual. OTHER PAYER includes casino operators and video lottery terminal sales agents.

      (28)   PASS-THROUGH ENTITY means a partnership not treated as an association taxable as a C corporation for federal income tax purposes, a limited liability company not treated as an association taxable as a C corporation for federal income tax purposes, an S corporation, or any other class of entity from which the income or profits of the entity are given pass-through treatment for federal income tax purposes. PASS-THROUGH ENTITY does not include a trust, estate, grantor of a grantor trust, or disregarded entity.

      (29)   PENSION means any amount paid to an employee or former employee that is reported to the recipient on an IRS form 1099-R, or successor form. PENSION does not include deferred compensation, or amounts attributable to nonqualified deferred compensation plans, reported as FICA/Medicare wages on an IRS form W-2, Wage and Tax Statement, or successor form.

      (30)   PERSON includes individuals, firms, companies, joint stock companies, business trusts, estates, trusts, partnerships, limited liability partnerships, limited liability companies, associations, C corporations, S corporations, governmental entities, and any other entity.

      (31)   POSTAL SERVICE means the United States Postal Service, or private delivery service delivering documents and packages within an agreed upon delivery schedule, or any other carrier service delivering the item.

      (32)   POSTMARK DATE, DATE OF POSTMARK, and similar terms include the date recorded and marked by a delivery service and recorded electronically to a database kept in the regular course if its business and marked on the cover in which the payment or document is enclosed, the date on which the payment or document was given to the delivery service for delivery.

      (33)   (a)   PRE-2017 NET OPERATING LOSS CARRYFORWARD means any net operating loss incurred in a taxable year beginning before January 1, 2017, to the extent such loss was permitted, by a resolution or ordinance of the municipality that was adopted by the municipality before January 1, 2016, to be carried forward and utilized to offset income or net profit generated in such municipality in future taxable years.

         (b)   For the purpose of calculating municipal taxable income, any pre-2017 net operating loss carryforward may be carried forward to any taxable year, including taxable years beginning in 2017 or thereafter, for the number of taxable years provided in the resolution or ordinance or until fully utilized, whichever is earlier.

      (34)   QUALIFIED MUNICIPAL CORPORA-TION means a municipal corporation that, by resolution or ordinance adopted on or before December 31, 2011, adopted Ohio adjusted gross income, as defined by R.C. § 5747.01, as the income subject to tax for the purposes of imposing a municipal income tax.

      (35)   QUALIFYING WAGES means wages, as defined in section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted as follows:

         (a)   Deduct the following amounts:

            1.   Any amount included in wages if the amount constitutes compensation attributable to a plan or program described in section 125 of the Internal Revenue Code.

            2.   Any amount included in wages if the amount constitutes payment on account of a disability related to sickness or an accident paid by a party unrelated to the employer, agent of an employer, or other payer.

            3.   Any amount included in wages that is exempt income.

         (b)   Add the following amounts:

            1.   Any amount not included in wages solely because the employee was employed by the employer before April 1, 1986.

            2.   Any amount not included in wages because the amount arises from the sale, exchange, or other disposition of a stock option, the exercise of a stock option, or the sale, exchange, or other disposition of stock purchased under a stock option. This division (C)(35)(b)2. applies only to those amounts constituting ordinary income.

            3.   Any amount not included in wages if the amount is an amount described in section 401(k), 403(b), or 457 of the Internal Revenue Code. This division (C)(35)(b)3. applies only to employee contributions and employee deferrals.

            4.   Any amount that is supplemental unemployment compensation benefits described in section 3402(o)(2) of the Internal Revenue Code and not included in wages.

            5.   Any amount received that is treated as self-employment income for federal tax purposes in accordance with section 1402(a)(8) of the Internal Revenue Code.

            6.   Any amount not included in wages if all of the following apply:

               a.   For the taxable year the amount is employee compensation that is earned outside of the United States and that either is included in the taxpayer’s gross income for federal income tax purposes or would have been included in the taxpayer’s gross income for such purposes if the taxpayer did not elect to exclude the income under section 911 of the Internal Revenue Code;

               b.   For no preceding taxable year did the amount constitute wages as defined in section 3121(a) of the Internal Revenue Code;

               c.   For no succeeding taxable year will the amount constitute wages; and

               d.   For any taxable year the amount has not otherwise been added to wages pursuant to either division (C)(35)(b) of this section or R.C. § 718.03, as that section existed before the effective date of H.B. 5 of the 130th General Assembly, March 23, 2015.

      (36)   RELATED ENTITY means any of the following:

         (a)   An individual stockholder, or a member of the stockholder’s family enumerated in section 318 of the Internal Revenue Code, if the stockholder and the members of the stockholder’s family own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer’s outstanding stock;

         (b)   A stockholder, or a stockholder’s partnership, estate, trust, or corporation, if the stockholder and the stockholder’s partnerships, estates, trusts, or corporations own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer’s outstanding stock;

         (c)   A corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under division (C)(36)(d) of this section, provided the taxpayer owns directly, indirectly, beneficially, or constructively, at least 50% of the value of the corporation’s outstanding stock;

         (d)   The attribution rules described in section 318 of the Internal Revenue Code apply for the purpose of determining whether the ownership requirements in divisions (C)(36)(a) through (c) of this section have been met.

      (37)   RELATED MEMBER means a person that, with respect to the taxpayer during all or any portion of the taxable year, is either a related entity, a component member as defined in section 1563(b) of the Internal Revenue Code, or a person to or from whom there is attribution of stock ownership in accordance with section 1563(e) of the Internal Revenue Code except, for purposes of determining whether a person is a related member under this division, “twenty per cent” shall be substituted for “5 percent” wherever “5 percent” appears in section 1563(e) of the Internal Revenue Code.

      (38)   RESIDENT means an individual who is domiciled in the municipality as determined under § 95A.04(B) of this chapter.

      (39)   S CORPORATION means a person that has made an election under subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code for its taxable year.

      (40)   SCHEDULE C means Internal Revenue Service schedule C (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

      (41)   SCHEDULE E means Internal Revenue Service schedule E (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

      (42)   SCHEDULE F means Internal Revenue Service schedule F (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

      (43)   SINGLE MEMBER LIMITED LIABILITY COMPANY means a limited liability company that has one direct member.

      (44)   SMALL EMPLOYER means any employer that had total revenue of less than $500,000 during the preceding taxable year. For purposes of this division, TOTAL REVENUE means receipts of any type or kind, including, but not limited to, sales receipts; payments; rents; profits; gains, dividends, and other investment income; commissions; premiums; money; property; grants; contributions; donations; gifts; program service revenue; patient service revenue; premiums; fees, including premium fees and service fees; tuition payments; unrelated business revenue; reimbursements; any type of payment from a governmental unit, including grants and other allocations; and any other similar receipts reported for federal income tax purposes or under generally accepted accounting principles. SMALL EMPLOYER does not include the federal government; any state government, including any state agency or instrumentality; any political subdivision; or any entity treated as a government for financial accounting and reporting purposes.

      (45)   TAX COMMISSIONER means the individual charged with direct responsibility for administration of an income tax levied by a municipal corporation in accordance with this chapter, and also includes the following:

         (a)   A municipal corporation acting as the agent of another municipal corporation;

         (b)   A person retained by a municipal corporation to administer a tax levied by the municipal corporation, but only if the municipal corporation does not compensate the person in whole or in part on a contingency basis;

         (c)   The Central Collection Agency (CCA) or the Regional Income Tax Agency (RITA) or their successors in interest, or another entity organized to perform functions similar to those performed by the Central Collection Agency and the Regional Income Tax Agency.

      (46)   TAX RETURN PREPARER means any individual described in section 7701(a)(36) of the Internal Revenue Code and 26 C.F.R. § 301.7701-15 .

      (47)   TAXABLE YEAR means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code.

      (48)   (a)   TAXPAYER means a person subject to a tax levied on income by a municipal corporation in accordance with this chapter. TAXPAYER does not include a grantor trust or, except as provided in division (C)(48)(b)1. of this section, a disregarded entity.

         (b)   1.   A single member limited liability company that is a disregarded entity for federal tax purposes may be a separate taxpayer from its single member in all Ohio municipal corporations in which it either filed as a separate taxpayer or did not file for its taxable year ending in 2003, if all of the following conditions are met:

               a.   The limited liability company’s single member is also a limited liability company.

               b.   The limited liability company and its single member were formed and doing business in one or more Ohio municipal corporations for at least five years before January 1, 2004.

               c.   Not later than December 31, 2004, the limited liability company and its single member each made an election to be treated as a separate taxpayer under R.C. § 718.01(L) as this section existed on December 31, 2004.

               d.   The limited liability company was not formed for the purpose of evading or reducing Ohio municipal corporation income tax liability of the limited liability company or its single member.

               e.   The Ohio municipal corporation that was the primary place of business of the sole member of the limited liability company consented to the election.

            2.   For purposes of division (C)(48)(b)1.e. of this section, a municipal corporation was the primary place of business of a limited liability company if, for the limited liability company’s taxable year ending in 2003, its income tax liability was greater in that municipal corporation than in any other municipal corporation in Ohio, and that tax liability to that municipal corporation for its taxable year ending in 2003 was at least $400,000.

      (49)   TAXPAYERS’ RIGHTS AND RESPONSIBILITIES means the rights provided to taxpayers in R.C. §§ 718.11, 718.12, 718.19, 718.23, 718.36, 718.37, 718.38, 5717.011, and 5717.03 and any corresponding ordinances of the municipality, and the responsibilities of taxpayers to file, report, withhold, remit, and pay municipal income tax and otherwise comply with R.C. Chapter 718 and resolutions, ordinances, and rules adopted by a municipal corporation for the imposition and administration of a municipal income tax.

      (50)   VIDEO LOTTERY TERMINAL has the same meaning as in R.C. § 3770.21.

      (51)   VIDEO LOTTERY TERMINAL SALES AGENT means a lottery sales agent licensed under R.C. Chapter 3770 to conduct video lottery terminals on behalf of the state pursuant to R.C. § 3770.21.

(Ord. 8463, passed 11-2-2015; Am. Ord. 8542, passed 12-5-2016; Am. Ord. 9121, passed 9-18-2023)

Statutory reference:

   Related definitions, see R.C. § 718.01

§ 95A.04 INCOME SUBJECT TO TAX FOR INDIVIDUALS.

   (A)   Determining municipal taxable income for individuals.

      (1)   MUNICIPAL TAXABLE INCOME for a resident of the municipality is calculated as follows: “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 § 95A.03(C)(21)(b) of this chapter, further reduced by any “pre-2017 net operating loss carryforward” equals MUNICIPAL TAXABLE INCOME.

         (a)   INCOME is defined in § 95A.03(C)(15) of this chapter.

            1.   QUALIFYING WAGES is defined in § 95A.03(C)(34).

            2.   NET PROFIT is included in “income”, and is defined in § 95A.03(C)(24) of this chapter. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in § 95A.03(C)(1)(h). Treatment of net profits received by an individual taxpayer from rental real estate is provided in § 95A.06 (B)(5).

            3.   § 95A.03 (C)(15) provides the following: offsetting and net operating loss carryforward treatment in § 95A.03 (C)(15)(a)2.a.; resident’s distributive share of net profit from pass through entity treatment in § 95A.03 (C)(15)(a)2.b.; treatment of S corporation distributive share of net profit in the hands of the shareholder in § 95A.03 (C)(15)(a)3.; restriction of amount of loss permitted to be carried forward for use by taxpayer in a subsequent taxable year in § 95A.03 (C)(15)(a)4.

            4.   PASS THROUGH ENTITY is defined in § 95A.03(C)(28).

         (b)   EXEMPT INCOME is defined in § 95A.03(C)(11) of this chapter.

         (c)   Allowable employee business expense deduction is described in § 95A.03 (C)(201(b) of this chapter, and is subject to the limitations provided in that section.

         (d)   PRE-2017 NET OPERATING LOSS CARRYFORWARD is defined in § 95A.03(C)(33) of this chapter.

      (2)   MUNICIPAL TAXABLE INCOME for a nonresident of the municipality is calculated as follows: “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 § 95A.06 (B) of this chapter, reduced by allowable employee business expense deduction as found in § 95A.03(C)(21)(b) of this chapter, further reduced by any “pre-2017 net operating loss carryforward” equals MUNICIPAL TAXABLE INCOME.

         (a)   INCOME is defined in § 95A.03(C)(15) of this chapter.

            1.   QUALIFYING WAGES is defined in § 95A.03(C)(35).

            2.   NET PROFIT is included in “income”, and is defined in § 95A.03(C)(24) of this chapter. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in § 95A.03(C)(1)(h). 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 § 95A.03(C)(28).

         (b)   EXEMPT INCOME is defined in § 95A.03(C)(11) of this chapter.

         (c)   “Apportioned or sitused to the municipality as provided in § 95A.06(B) of this chapter” 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 § 95A.06(B)(5).

         (d)   “Allowable employee business expense deduction” as described in § 95A.03 (C)(21)(b) of this chapter, 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 § 95A.03(C)(33) of this chapter.

   (B)   Domicile.

      (1)   As used in this division (B):

         (a)   DOMICILE means the true, fixed and permanent home of the taxpayer to which whenever absent, the taxpayer intends to return.

         (b)   An individual is presumed to be domiciled in the municipality for all or part of a taxable year if the individual was domiciled in the municipality on the last day of the immediately preceding taxable year or if the Tax Commissioner reasonably concludes that the individual is domiciled in the municipality for all or part of the taxable year.

         (c)   An individual may rebut the presumption of domicile described in division (B)(1)(a) of this section if the individual establishes by a preponderance of the evidence that the individual was not domiciled in the municipality for all or part of the taxable year.

      (2)   For the purpose of determining whether an individual is domiciled in the municipality for all or part of a taxable year, factors that may be considered include, but are not limited to, the following:

         (a)   The individual’s domicile in other taxable years;

         (b)   The location at which the individual is registered to vote;

         (c)   The address on the individual’s driver’s license;

         (d)   The location of real estate for which the individual claimed a property tax exemption or reduction allowed on the basis of the individual’s residence or domicile;

         (e)   The location and value of abodes owned or leased by the individual;

         (f)   Declarations, written or oral, made by the individual regarding the individual’s residency;

         (g)   The primary location at which the individual is employed;

         (h)   The location of educational institutions attended by the individual’s dependents as defined in section 152 of the Internal Revenue Code, to the extent that tuition paid to such educational institution is based on the residency of the individual or the individual’s spouse in the municipal corporation or state where the educational institution is located; and

         (i)   The number of contact periods the individual has with the municipality. For the purposes of this division, an individual has one “contact period” with the municipality if the individual is away overnight from the individual’s abode located outside of the municipality and while away overnight from that abode spends at least some portion, however minimal, of each of two consecutive days in the municipality. For purposes of this section, the state’s contact period test or bright-line test and resulting determination have no bearing on municipal residency or domicile.

      (3)   All applicable factors are provided in R.C. § 718.012.

   (C)   Exemption for member or employee of General Assembly and certain judges.

      (1)   Only the municipal corporation of residence shall be permitted to levy a tax on the income of any member or employee of the Ohio General Assembly, including the Lieutenant Governor, whose income is received as a result of services rendered as such member or employee and is paid from appropriated funds of this state.

      (2)   Only the municipal corporation of residence and the city of Columbus shall levy a tax on the income of the Chief Justice or a Justice of the Supreme Court received as a result of services rendered as the Chief Justice or Justice. Only the municipal corporation of residence shall levy a tax on the income of a judge sitting by assignment of the Chief Justice or on the income of a district court of appeals judge sitting in multiple locations within the district, received as a result of services rendered as a judge.

(Ord. 8463, passed 11-2-2015)

Statutory reference:

   Domicile, see R.C. § 718.012

   Exclusion of General Assembly employee or member and certain judges from tax, see R.C. § 718.50

§ 95A.05 COLLECTION AT SOURCE.

   (A)   Collection at source; withholding from qualifying wages.

      (1)   (a)   Each employer, agent of an employer, or other payer located or doing business in the municipality shall withhold from each employee an amount equal to the qualifying wages of the employee earned by the employee in the municipality multiplied by the applicable rate of the municipality’s income tax, except for qualifying wages for which withholding is not required under division (B) or division (A)(4) or (A)(6) of this section. 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.

         (b)   In addition to withholding the amounts required under division (A)(1)(a) of this section, an employer, agent of an employer, or other payer may also deduct and withhold, on the request of an employee, taxes for the municipal corporation in which the employee is a resident.

      (2)   An employer, agent of an employer, or other payer shall remit to the Tax Commissioner of the municipality 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, along with any report required by the Tax Commissioner to accompany such payment, according to the following schedule:

         (a)   Any employer, agent of an employer, or other payer not required to make payments under division (A)(2)(b) of this section of taxes required to be deducted and withheld shall make quarterly payments to the Tax Commissioner not later than the last day of the month following the end of each calendar quarter.

         (b)   Taxes required to be deducted and withheld shall be remitted monthly to the Tax Commissioner 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 municipal corporation 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 municipality in any month of the preceding calendar quarter exceeded $200. Payment under this division (A)(2)(b) shall be made so that the payment is received by the Tax Commissioner not later than 15 days after the last day of each month.

      (3)   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 Commissioner. A return filed by an employer, agent, or other payer under this division shall be accepted by the municipality as the return required of an 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, unless the municipality requires all resident individual taxpayers to file a tax return under § 95A.09(A) of this chapter,

      (4)   An employer, agent of an employer, or other payer is not required to withhold municipal 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.

      (5)   (a)   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.

         (b)   The failure of an employer, agent of an employer, or other payer to remit to the municipality 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.

      (6)   Compensation deferred before June 26, 2003, is not subject to any municipal corporation income tax or municipal 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.

      (7)   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 municipality until such time as the withheld amount is remitted to the Tax Commissioner.

      (8)   On or before the last day of February of each year, an employer shall file a withholding reconciliation return with the Tax Commissioner listing the names, addresses, and Social Security numbers of all employees from whose qualifying wages tax was withheld or should have been withheld for the municipality during the preceding calendar year, the amount of tax withheld, if any, from each such employee’s qualifying wage, the total amount of qualifying wages paid to such employee during the preceding calendar year, 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, 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 other information as may be required by the Tax Commissioner. Beginning with tax year 2016, employers with more than 25 employees are required to submit W-2’s electronically to the Commissioner in the same format thereon as provided to the Social Security Administration or other electronic format approved by the Commissioner. All payments not subject to withholding shall be reported on a form by the Commissioner.

      (9)   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 division (A), shall be personally liable for a failure to file a report or pay the tax due as required by this division (A). 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.

      (10)   An employer is required to deduct and withhold municipal income tax on tips and gratuities received by the employer’s employees and constituting qualifying wages 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.

      (11)   A Tax Commissioner 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 division (A).

   (B)   Collection at source; occasional entrant.

      (1)   The following terms as used in this division (B):

         (a)   EMPLOYER includes a person that is a related member to or of an employer.

         (b)   PROFESSIONAL ATHLETE means an athlete who performs services in a professional athletic event for wages or other remuneration.

         (c)   PROFESSIONAL ENTERTAINER means a person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.

         (d)   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.

         (e)   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.

         (f)   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.

         (g)   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.

            1.   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)(2)(a)1. 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.

            2.   For the purposes of this division (B)(1)(g), the location at which an employee spends a particular day shall be deemed in accordance with division (B)(2)(b) of this section, except that “location” shall be substituted for “municipal corporation” wherever “municipal corporation” appears in that division.

      (2)   (a)   Subject to divisions (B)(3), (B)(5), and (B)(6) of this section, an employer is not required to withhold municipal income tax on qualifying wages paid to an employee for the performance of personal services in a municipal corporation that imposes such a tax if the employee performed such services in the municipal corporation on 20 or fewer days in a calendar year, unless one of the following conditions applies:

            1.   The employee’s principal place of work is located in the municipality.

            2.   The employee performed services at one or more presumed worksite locations in the municipality. For the purposes of this division, PRESUMED WORKSITE LOCATION means a construction site or other temporary worksite in this state at which the employer provides services that can reasonably be 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:

               a.   The nature of the services are such that it will require more than 20 days of actual services to complete the services; or

               b.   The agreement between the employer and its customer to perform services at a location requires the employer to perform actual services at the location for more than 20 days.

            3.   The employee is a resident of the municipality and has requested that the employer withhold tax from the employee’s qualifying wages as provided in § 95A.05(A) of this chapter.

            4.   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 within the municipality.

         (b)   For the purposes of division (B)(2)(a) of this section, an employee shall be considered to have spent a day performing services in a municipal corporation only if the employee spent more time performing services for or on behalf of the employer in that municipal corporation 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:

            1.   Traveling to the location at which the employee will first perform services for the employer for the day;

            2.   Traveling from a location at which the employee was performing services for the employer to any other location;

            3.   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;

            4.   Transporting or delivering property described in division (B)(2)(b)3. 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/or

            5.   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.

      (3)   If the principal place of work of an employee is located in a municipal corporation that imposes an income tax in accordance with this chapter, the exception from withholding requirements described in division (B)(2)(a) 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 the municipal corporation in which the employee’s principal place of work is located.

      (4)   (a)   Except as provided in division (B)(4)(b) of this section, if, during a calendar year, the number of days an employee spends performing personal services in a municipal corporation exceeds the 20-day threshold described in division (B)(2)(a) of this section, the employer shall withhold and remit tax to that municipal corporation for any subsequent days in that calendar year on which the employer pays qualifying wages to the employee for personal services performed in that municipal corporation.

         (b)   An employer required to begin withholding tax for a municipal corporation under division (B)(4)(a) of this section may elect to withhold tax for that municipal corporation for the first 20 days on which the employer paid qualifying wages to the employee for personal services performed in that municipal corporation.

         (c)   If an employer makes the election described in division (B)(4)(b) of this section, the taxes withheld and paid by such an employer during those first 20 days to the municipal corporation in which the employee’s principal place of work is located are refundable to the employee.

      (5)   Without regard to the number of days in a calendar year on which an employee performs personal services in any municipal corporation, an 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 municipal corporation in which the employer’s fixed location is located if the employer qualifies as a small employer as defined in § 95A.03 of this chapter. To determine whether an employer qualifies as a small employer for a taxable year, a Tax Commissioner may require the employer to provide the Tax Commissioner with the employer’s federal income tax return for the preceding taxable year.

      (6)   Divisions (B)(2)(a) and (B)(4) of this section shall not apply to the extent that a Tax Commissioner and an employer enter into an agreement regarding the manner in which the employer shall comply with the requirements of § 95A.05(A) of this chapter.

(Ord. 8463, passed 11-2-2015; Am. Ord. 8542, passed 12-5-2016)

Statutory reference:

   Definitions, see R.C. § 718.01

   Occasional entrant, withholding, see R.C. § 718.011

   Withholding from qualifying wages, see R.C. § 718.03

§ 95A.06 INCOME SUBJECT TO NET PROFIT TAX.

   (A)   Determining municipal taxable income for taxpayers who are not individuals.  MUNICIPAL TAXABLE INCOME for a taxpayer who is not an individual for the municipality is calculated as follows: “Income” reduced by “exempt income” to the extent otherwise included in income, multiplied by apportionment, further reduced by any “pre-2017 net operating loss carryforward” equals MUNICIPAL TAXABLE INCOME.

      (1)   INCOME for a taxpayer that is not an individual means the “net profit” of the taxpayer.

         (a)   NET PROFIT for a person other than an individual is defined in § 95A.03(C)(24).

         (b)   ADJUSTED FEDERAL TAXABLE INCOME is defined in § 95A.03(C)(1) of this chapter.

      (2)   EXEMPT INCOME is defined in § 95A.03(C)(11) of this chapter.

      (3)   APPORTIONMENT means the apportionment as determined by division (B) of this section.

      (4)   PRE-2017 NET OPERATING LOSS CARRYFORWARD is defined in § 95A.03(C)(33) of this chapter.

   (B)   Net profit; income subject to net profit tax; alternative apportionment. This division (B) applies to any taxpayer engaged in a business or profession in the municipality unless the taxpayer is an individual who resides in the municipality or the taxpayer is an electric company, combined company, or telephone company that is subject to and required to file reports under R.C. Chapter 5745.

      (1)   Net profit from a business or profession conducted both within and without the boundaries of the municipality shall be considered as having a taxable situs in the municipality for purposes of municipal income taxation in the same proportion as the average ratio of the following:

         (a)   1.   The average original cost of the real property and tangible personal property owned or used by the taxpayer in the business or profession in the municipality during the taxable period to the average original cost of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.

            2.   As used in the preceding paragraph, tangible personal or 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 thereon by eight;

         (b)   Wages, salaries, and other compensation paid during the taxable period to individuals employed in the business or profession for services performed in the municipality to wages, salaries, and other compensation paid during the same period to individuals employed in the business or profession, wherever the individual’s services are performed, excluding compensation from which taxes are not required to be withheld under § 95A.05(B) of this chapter; and

         (c)   Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the municipality to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.

      (2)   (a)   If the apportionment factors described in division (B)(1) of this section do not fairly represent the extent of a taxpayer’s business activity in the municipality, the taxpayer may request, or the Tax Commissioner of the municipality may require, that the taxpayer use, with respect to all or any portion of the income of the taxpayer, an alternative apportionment method involving one or more of the following:

            1.   Separate accounting;

            2.   The exclusion of one or more of the factors;

            3.   The inclusion of one or more additional factors that would provide for a more fair apportionment of the income of the taxpayer to the municipality; and/or

            4.   A modification of one or more of the factors.

         (b)   A taxpayer request to use an alternative apportionment method shall be in writing and shall accompany a tax return, timely filed appeal of an assessment, or timely filed amended tax return. The taxpayer may use the requested alternative method unless the Tax Commissioner denies the request in an assessment issued within the period prescribed by § 95A.19(A) of this chapter.

         (c)   A Tax Commissioner may require a taxpayer to use an alternative apportionment method as described in division (B)(2)(a) of this section only by issuing an assessment to the taxpayer within the period prescribed by § 95A.19(A) of this chapter.

         (d)   Nothing in division (B)(2) of this section nullifies or otherwise affects any alternative apportionment arrangement approved by a Tax Commissioner or otherwise agreed upon by both the Tax Commissioner and taxpayer before January 1, 2016.

      (3)   As used in division (B)(1)(b) of this section, WAGES, SALARIES, AND OTHER COMPENSATION includes only wages, salaries, or other compensation paid to an employee for services performed at any of the following locations:

         (a)   A location that is owned, controlled, or used by, rented to, or under the possession of one of the following:

            1.   The employer;

            2.   A vendor, customer, client, or patient of the employer, or a related member of such a vendor, customer, client, or patient; or

            3.   A vendor, customer, client, or patient of a person described in division (B)(3)(a)2. of this section, or a related member of such a vendor, customer, client, or patient.

         (b)   Any location at which a trial, appeal, hearing, investigation, inquiry, review, court-martial, or similar administrative, judicial, or legislative matter or proceeding is being conducted, provided that the compensation is paid for services performed for, or on behalf of, the employer or that the employee’s presence at the location directly or indirectly benefits the employer;

         (c)   Any other location, if the Tax Commissioner determines that the employer directed the employee to perform the services at the other location in lieu of a location described in division (B)(3)(a) or (b) of this section solely in order to avoid or reduce the employer’s municipal income tax liability. If a Tax Commissioner makes such a determination, the employer may dispute the determination by establishing, by a preponderance of the evidence, that the Tax Commissioner’s determination was unreasonable.

      (4)   For the purposes of division (B)(1)(c) of this section, receipts from sales and rentals made and services performed shall be sitused to a municipal corporation as follows:

         (a)   Gross receipts from the sale of tangible personal property shall be sitused to the municipal corporation in which the sale originated. For the purposes of this division, a sale of property originates in a municipal corporation if, regardless of where title passes, the property meets any of the following criteria:

            1.   The property is shipped to or delivered within the municipal corporation from a stock of goods located within the municipal corporation;

            2.   The property is delivered within the municipal corporation from a location outside the municipal corporation, provided the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within such municipal corporation and the sales result from such solicitation or promotion; or

            3.   The property is shipped from a place within the municipal corporation to purchasers outside the municipal corporation, provided that the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.

         (b)   Gross receipts from the sale of services shall be sitused to the municipal corporation to the extent that such services are performed in the municipal corporation.

         (c)   To the extent included in income, gross receipts from the sale of real property located in the municipal corporation shall be sitused to the municipal corporation.

         (d)   To the extent included in income, gross receipts from rents and royalties from real property located in the municipal corporation shall be sitused to the municipal corporation.

         (e)   Gross receipts from rents and royalties from tangible personal property shall be sitused to the municipal corporation based upon the extent to which the tangible personal property is used in the municipal corporation.

      (5)   (a)   The net profit received by an individual taxpayer from the rental of real estate owned directly by the individual or by a disregarded entity owned by the individual shall be subject to tax only by the municipal corporation in which the property generating the net profit is located and the municipal corporation in which the individual taxpayer that receives the net profit resides.

         (b)   A municipal corporation shall allow such taxpayers to elect to use separate accounting for the purpose of calculating net profit sitused under this division (B)(5) to the municipal corporation in which the property is located.

      (6)   (a)   Except as provided in division (B)(6)(b) of this section, commissions received by a real estate agent or broker relating to the sale, purchase, or lease of real estate shall be sitused to the municipal corporation in which the real estate is located. Net profit reported by the real estate agent or broker shall be allocated to a municipal corporation based upon the ratio of the commissions the agent or broker received from the sale, purchase, or lease of real estate located in the municipal corporation to the commissions received from the sale, purchase, or lease of real estate everywhere in the taxable year.

         (b)   An individual who is a resident of a municipal corporation that imposes a municipal income tax shall report the individual’s net profit from all real estate activity on the individual’s annual tax return for that municipal corporation. The individual may claim a credit for taxes the individual paid on such net profit to another municipal corporation to the extent that such credit is allowed under § 95A.08(A) of this chapter.

      (7)   (a)   If, in computing a taxpayer’s adjusted federal taxable income, the taxpayer deducted any amount with respect to a stock option granted to an employee, and if the employee is not required to include in the employee’s income any such amount or a portion thereof because it is exempted from taxation under §§ 95A.03(C)(11)(l) and 95A.03(C)(35)(a)4. of this chapter, by a municipal corporation to which the taxpayer has apportioned a portion of its net profit, the taxpayer shall add the amount that is exempt from taxation to the taxpayer’s net profit that was apportioned to that municipal corporation. In no case shall a taxpayer be required to add to its net profit that was apportioned to that municipal corporation any amount other than the amount upon which the employee would be required to pay tax were the amount related to the stock option not exempted from taxation.

         (b)   This division (B)(7) applies solely for the purpose of making an adjustment to the amount of a taxpayer’s net profit that was apportioned to a municipal corporation under this section.

      (8)   When calculating the ratios described in division (B)(1) of this section for the purposes of that division or division (B)(2) of this section, the owner of a disregarded entity shall include in the owner’s ratios the property, payroll, and gross receipts of such disregarded entity.

   (C)   Consolidated federal income tax return.

      (1)   As used in this division (C):

         (a)   AFFILIATED GROUP OF CORPORATIONS means an affiliated group as defined in section 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 section 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 (C)(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 municipal 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.

            1.   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.

            2.   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 (C)(2)(b) of this section; or

            3.   A taxpayer receives permission from the Tax Commissioner. The Tax Commissioner 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 (C)(2)(a) 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 (C)(2)(a) or (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 municipal income tax return for that taxable year if the Tax Commissioner 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 municipal corporation. A taxpayer that is required to file a consolidated municipal income tax return for a taxable year shall file a consolidated municipal income tax return for all subsequent taxable years unless the taxpayer requests and receives written permission from the Tax Commissioner to file a separate return or a taxpayer has experienced a change in circumstances.

      (4)   A taxpayer shall prepare a consolidated municipal 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 (C)(5)(b), (c), and (d) of this section, corporations that file a consolidated municipal income tax return shall compute adjusted federal taxable income, as defined in § 95A.03(C)(1) of this chapter, 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 municipal income tax return shall make any adjustment otherwise required under § 95A.03(C)(1) of this chapter 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 municipal 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 division (B) of this section, exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to a municipal corporation. 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 division (B) of this section, include the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to a municipal corporation. 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 division (B) of this section, exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group’s net profit sitused to a municipal corporation; and

            2.   The pass-through entity shall be subject to municipal 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 municipal income tax return shall make the computations required under division (B) of this section 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 municipal income tax return is jointly and severally liable for any tax, interest, penalties, fines, charges, or other amounts imposed by a municipal corporation 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 a municipal corporation before January 1, 2016, to file a consolidated or combined tax return with such municipal corporation 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.

   (D)   Tax credit for businesses that foster new jobs in Ohio. The municipality, by ordinance, may grant a refundable or nonrefundable credit against its tax on income to a taxpayer to foster job creation in the municipality. If a credit is granted under this division, it shall be measured as a percentage of the new income tax revenue the municipality derives from new employees of the taxpayer and shall be for a term not exceeding three years. Before the municipality passes an ordinance granting a credit, the municipality and the taxpayer shall enter into an agreement specifying all the conditions of the credit.

   (E)   Tax credits to foster job retention. The municipality, by ordinance, may grant a refundable or nonrefundable credit against its tax on income to a taxpayer for the purpose of fostering job retention in the municipality. If a credit is granted under this division, it shall be measured as a percentage of the income tax revenue the municipality derives from the retained employees of the taxpayer, and shall be for a term not exceeding three years. Before the municipality passes an ordinance allowing such a credit, the municipality and the taxpayer shall enter into an agreement specifying all the conditions of the credit.

(Ord. 8463, passed 11-2-2015)

Statutory reference:

   Consolidated municipal tax return, see R.C. § 718.06

   Definitions, see R.C. § 718.01

   Fostering job retention; tax credits, see R.C. § 718.151

   Fostering new jobs; tax credits. see R.C. § 718.15

   Income subject to tax, see R.C. § 718.02

§ 95A.07 DECLARATION OF ESTIMATED TAX.

   (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 a municipal corporation’s income tax for the current taxable year.

      (2)   TAX LIABILITY means the total taxes due to a municipal corporation 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 Commissioner, if the amount payable as estimated taxes is at least $200. For the purposes of this section:

         (a)   Taxes withheld from qualifying wages shall be considered as paid to the municipal corporation for which the taxes were withheld in equal amounts on each payment date. If the taxpayer establishes the dates on which all amounts were actually withheld, the amounts withheld shall be considered as paid on the dates on which the amounts were actually withheld.

         (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.

         (c)   A taxpayer having a taxable year of less than 12 months shall make a declaration under rules prescribed by the Tax Commissioner.

      (d)   Taxes withheld by a casino operator or by a lottery sales agent under R.C. § 718.031 are deemed to be paid to the municipal corporation for which the taxes were withheld on the date the taxes are withheld from the taxpayer’s winnings.

      (2)   Taxpayers filing joint returns shall file joint declarations of estimated taxes.

      (3)   The declaration of estimated taxes shall be filed on or before the date prescribed for the filing of municipal income tax returns under § 95A.09(A)(7) of this chapter or on or before the fifteenth day of the fourth month of the first taxable year 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 municipality or Tax Commissioner, 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 thirteenth month of the taxable year, 90% of the tax liability for the taxable year.

      (2)   A taxpayer may amend a declaration under rules prescribed by the Tax Commissioner. 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. The amended declaration must be filed on the next applicable due date as outlined in divisions (C)(1)(a) through (d) of this section.

      (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 § 95A.09(A) of this chapter.

         (a)   For taxpayers who are individuals, or who are not individuals and are reporting and filing on a calendar year basis, the annual tax return is due on the same date as the filing of the federal tax return, unless extended pursuant to R.C. § 5747.08(G).

         (b)   For taxpayers who are not individuals, and are reporting and filing on a fiscal year basis or any period other than a calendar year, the annual return is due on the fifteenth day of the fourth month following the end of the taxable year or period.

      (4)   An amended declaration is required whenever the taxpayer’s estimated tax liability changes during the taxable year. A change in estimated tax liability may either increase or decrease the estimated tax liability for the taxable year.

   (D)   (1)   In the case of any underpayment of any portion of a tax liability, penalty and interest may be imposed pursuant to § 95A.10 of this chapter 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 municipal corporation under § 95A.09(A) of this chapter for that year.

      (3)   The taxpayer is an individual who resides in the municipality but was not domiciled there on the first day of January of the calendar year that includes the first day of the taxable year.

   (F)   A Tax Commissioner may waive the requirement for filing a declaration of estimated taxes for any class of taxpayers after finding that the waiver is reasonable and proper in view of administrative costs and other factors.

(Ord. 8463, passed 11-2-2015; Am. Ord. 8660, passed 2-20-2018)

Statutory reference:

   Estimated taxes, see R.C. § 718.08

§ 95A.08 CREDIT FOR TAX PAID.

   (A)   Credit to residents for tax paid to another municipality.

      (1)   When the taxable income of a resident of the municipality is subject to a municipal income tax in another municipality on the same income taxable under this chapter, such resident shall be allowed a credit of the amount of income tax paid on such taxable income to the other municipality equal to 50% of the amount obtained by multiplying the lower of the tax rate of such other municipality, or of this municipality, by the taxable income earned in or attributable to the municipality of employment or business activity. Income taxed by another municipality that is offset by a loss is not eligible for credit.

      (2)   A claim for refund or credit under this section shall be made in such manner as the Commissioner may by regulation provide.

      (3)   No credit shall be given for any school district income tax.

   (B)   Refundable credit for qualifying loss.

      (1)   As used in this division (B):

         (a)   NONQUALIFIED DEFERRED COMPENSATION PLAN means a compensation plan described in section 3121(v)(2)(C) of the Internal Revenue Code.

         (b)   1.   Except as provided in division (B)(1)(b)2. of this section, QUALIFYING LOSS means the excess, if any, of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan over the total amount of income the taxpayer has recognized for federal income tax purposes for all taxable years on a cumulative basis as compensation with respect to the taxpayer’s receipt of money and property attributable to distributions in connection with the nonqualified deferred compensation plan.

            2.   If, for one or more taxable years, the taxpayer has not paid to one or more municipal corporations income tax imposed on the entire amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan, then the QUALIFYING LOSS is the product of the amount resulting from the calculation described in division (B)(1)(b)1. of this section computed without regard to division (B)(1)(b)2. of this section and a fraction the numerator of which is the portion of such compensation on which the taxpayer has paid income tax to one or more municipal corporations and the denominator of which is the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.

            3.   With respect to a nonqualified deferred compensation plan, the taxpayer sustains a QUALIFYING LOSS only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.

         (c)   QUALIFYING TAX RATE means the applicable tax rate for the taxable year for the which the taxpayer paid income tax to a municipal corporation with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan. If different tax rates applied for different taxable years, then the QUALIFYING TAX RATE is a weighted average of those different tax rates. The weighted average shall be based upon the tax paid to the municipal corporation each year with respect to the nonqualified deferred compensation plan.

      (2)   (a)   Except as provided in division (B)(4) of this section, a refundable credit shall be allowed against the income tax imposed by a municipal corporation for each qualifying loss sustained by a taxpayer during the taxable year. The amount of the credit shall be equal to the product of the qualifying loss and the qualifying tax rate.

         (b)   A taxpayer shall claim the credit allowed under this division (B) from each municipal corporation to which the taxpayer paid municipal income tax with respect to the nonqualified deferred compensation plan in one or more taxable years.

         (c)   If a taxpayer has paid tax to more than one municipal corporation with respect to the nonqualified deferred compensation plan, the amount of the credit that a taxpayer may claim from each municipal corporation shall be calculated on the basis of each municipal corporation’s proportionate share of the total municipal corporation income tax paid by the taxpayer to all municipal corporations with respect to the nonqualified deferred compensation plan.

         (d)   In no case shall the amount of the credit allowed under this division (B) exceed the cumulative income tax that a taxpayer has paid to a municipal corporation for all taxable years with respect to the nonqualified deferred compensation plan.

      (3)   (a)   For purposes of this division (B), municipal corporation income tax that has been withheld with respect to a nonqualified deferred compensation plan shall be considered to have been paid by the taxpayer with respect to the nonqualified deferred compensation plan.

         (b)   Any municipal income tax that has been refunded or otherwise credited for the benefit of the taxpayer with respect to a nonqualified deferred compensation plan shall not be considered to have been paid to the municipal corporation by the taxpayer.

      (4)   The credit allowed under this division (B) is allowed only to the extent the taxpayer’s qualifying loss is attributable to:

         (a)   The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or

         (b)   The employee’s failure or inability to satisfy all of the employer’s terms and conditions necessary to receive the nonqualified deferred compensation.

   (C)   Credit for person working in joint economic development district or zone. A municipality shall grant a credit against its tax on income to a resident of the municipality 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, pursuant to division (A) of this section.

   (D)   Credit for tax beyond statute for obtaining refund.

      (1)   Income tax that has been deposited or paid to the municipality, but should have been deposited or paid to another municipal corporation, is allowable by the municipality as a refund, but is subject to the three-year limitation on refunds as provided in § 95A.09(F) of this chapter.

      (2)   Income tax that should have been deposited or paid to the municipality, but was deposited or paid to another municipal corporation, shall be subject to collection and recovery by the municipality. To the extent a refund of such tax or withholding is barred by the limitation on refunds as provided in § 95A.09(F), the municipality will allow a non-refundable credit equal to the tax or withholding paid to the other municipality against the income tax the municipality claims is due. If the municipality’s tax rate is higher, the tax representing the net difference of the tax rates is also subject to collection by the municipality, along with any penalty and interest accruing during the period of nonpayment.

      (3)   No carryforward of credit will be permitted when the overpayment is beyond the three-year limitation for refunding of same as provided in § 95A.09(F) of this chapter.

      (4)   Nothing in this division (D) requires a municipality to allow credit for tax paid to another municipal corporation if the municipality has reduced credit for tax paid to another municipal corporation. Division (A) of this section regarding any limitation on credit shall prevail.

(Ord. 8463, passed 11-2-2015)

Statutory reference:

   Qualifying loss; refundable credit, see R.C. § 718.021

   Second municipality imposing tax after time period allowed for refund, see R.C. § 718.121

   Worker in joint economic development zone or district, see R.C. § 718.16

§ 95A.09 ANNUAL RETURN.

   (A)   Return and payment of tax.

      (1)   (a)   An annual return with respect to the income tax levied on municipal taxable income by the municipality shall be completed and filed by every taxpayer for any taxable year for which the taxpayer is subject to the tax, regardless of whether or not income tax is due.

         (b)   The Tax Commissioner shall accept on behalf of all nonresident and resident a return filed by an employer, agent of an employer, or other payer located in the municipality under § 95A.05(A)(3) of this chapter when the nonresident or resident 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 to the municipality.

      (2)   If an individual is deceased, any return or notice required of that individual shall be completed and filed by that decedent’s executor, Commissioner, 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 municipality in accordance with this chapter, 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. Such duly authorized agent, guardian, conservator, fiduciary, or other person charged with the care of the person or property of that individual shall provide, with the filing of the return, appropriate documentation to support that they are authorized to file a return or notice on behalf of the taxpayer. This notice shall include any legally binding authorizations, and contact information including name, address, and phone number of the duly authorized agent, guardian, conservator, fiduciary, or other person.

      (4)   Returns or notices required of an estate or a trust shall be completed and filed by the fiduciary of the estate or trust. Such fiduciary shall provide, with the filing of the return, appropriate documentation to support that they are authorized to file a return or notice on behalf of the taxpayer. This notice shall include any legally binding authorizations, and contact information including name, address, and phone number of the fiduciary.

      (5)   No municipal corporation shall deny spouses the ability to file a joint return.

      (6)   (a)   Each return required to be filed under this section 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, and 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)   A taxpayer who is an individual is required to include, with each annual return, amended return, or request for refund required under this section, copies of only 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 or refund request, any other documentation necessary to support the refund request or 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 Commissioner unless the Tax Commissioner requests such copies after the return has been filed.

         (c)   A taxpayer that is not an individual is required 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.

         (d)   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 Commissioner at the time of filing or, if electronic submission is available, submit the documents electronically through the Ohio business gateway or a portal provided by municipality. The department of taxation shall publish a method of electronically submitting the documents required under this division through the Ohio business gateway on or before January 1, 2016. The department shall transmit all documents submitted electronically under this division to the appropriate Tax Commissioner.

         (e)   After a taxpayer files a tax return, the Tax Commissioner shall request, and the taxpayer shall provide, any information, statements, or documents required by the municipality to determine and verify the taxpayer’s municipal income tax liability. The requirements imposed under this division (A)(6) apply regardless of whether the taxpayer files on a generic form or on a form prescribed by the Tax Commissioner.

         (f)   Any other documentation, including schedules, other municipal income tax returns, or other supporting documentation necessary to verify credits, income, losses, or other pertinent factors on the return shall also be included to avoid delay in processing, or disallowance by the Tax Commissioner of undocumented credits or losses.

      (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 Commissioner 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 Commissioner or on generic forms, together with remittance made payable to the municipality or Tax Commissioner.

            2.   Except as otherwise provided in this chapter, each annual net profit income tax 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 Commissioner on or before the fifteenth day of the fourth month following the end of the taxpayer’s taxable year or period. The taxpayer shall complete and file the return or notice on forms prescribed by the tax Commissioner or on generic forms, together with remittance made payable to the municipality or Tax Commissioner.

            3.   In the case of individual income tax return required to be filed by an individual, and net profit income tax return required to be filed by a taxpayer who is not an individual, no remittance is required if the amount shown to be due is $10 or less.

         (b)   If the Tax Commissioner considers it necessary in order to ensure the payment of the tax imposed by the municipality in accordance with this chapter, the Tax Commissioner may require taxpayers to file returns and make payments otherwise than as provided in this section, including taxpayers not otherwise required to file annual returns.

         (c)   With respect to taxpayers to whom division (B) of this section applies, to the extent that any provision in this division (A)(7) conflicts with any provision in division (B) of this section, the provision in division (B) prevails.

      (8)   (a)   For taxable years beginning after 2015, the municipality shall not require a taxpayer to remit tax with respect to net profits if the amount due is $10 or less.

         (b)   Any taxpayer not required to remit tax to the municipality for a taxable year pursuant to division (A)(8)(a) of this section shall file with the municipality an annual net profit return under divisions (A)(6)(c) and (d) of this section.

      (9)   This division shall not apply to payments required to be made under § 95A.05(A)(2)(b) of this chapter.

         (a)   If any report, claim, statement, or other document required to be filed, or any payment required to be made, within a prescribed period or on or before a prescribed date under this chapter is delivered after that period or that to the Tax Commissioner or other municipal official with which the report, claim, statement, or other document is required to be filed, or to which the payment is required to be made, the date of the postmark stamped on the cover in which the report, claim, statement, or other document, or payment is mailed shall be deemed to be the date of delivery or the date of payment. THE DATE OF 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.

         (b)   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 Commissioner 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. For purposes of this section, SUBMITTED THE PAYMENT means the date which the taxpayer has designated for the delivery of payment, which may or may not be the same date as the date the payment was initiated by the taxpayer.

      (10)   The amounts withheld for the municipality by an employer, the agent of an employer, or other payer as described in § 95A.05(A) of this chapter shall be allowed to the recipient of the compensation as credits against payment of the tax imposed on the recipient unless the amounts withheld were not remitted to the municipality 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 municipality to be filed in accordance with this section 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 Commissioner about matters pertaining to the return. The return or instructions accompanying the return shall indicate that by checking the box the taxpayer authorizes the Tax Commissioner to contact the preparer or other person concerning questions that arise during the examination or other review of the return and authorizes the preparer or other person only to provide the Tax Commissioner with information that is missing from the return, to contact the Tax Commissioner for information about the examination or other review of the return or the status of the taxpayer’s refund or payments, and to respond to notices about mathematical errors, offsets, or return preparation that the taxpayer has received from the Tax Commissioner and has shown to the preparer or other person. Authorization by the taxpayer of another person to communicate with the Tax Commissioner about matters pertaining to the return does not preclude the Tax Commissioner from contacting the taxpayer regarding such matters.

      (12)   The Tax Commissioner of the municipality shall accept for filing a generic form of any income tax return, report, or document required by the municipality in accordance with this chapter, provided that the generic form, once completed and filed, contains all of the information required by ordinances, resolutions, or rules adopted by the municipality or Tax Commissioner, and provided that the taxpayer or tax return preparer filing the generic form otherwise complies with the provisions of this chapter and of the municipality’s ordinance or resolution governing the filing of returns, reports, or documents.

      (13)   When income tax returns, reports, or other documents require the signature of a tax return preparer, the Tax Commissioner shall accept a facsimile of such a signature in lieu of a manual signature.

      (14)   (a)   As used in this division (A)(14), WORKSITE LOCATION has the same meaning as in § 95A.05(B) of this chapter.

         (b)   1.   A person may notify a tax Commissioner that the person does not expect to be a taxpayer with respect to the municipal corporation for a taxable year if both of the following conditions apply:

               a.   The person was required to file a tax return with the municipal corporation for the immediately preceding taxable year because the person performed services at a worksite location within the municipal corporation, and the person has filed all appropriate and required returns and remitted all applicable income tax and withholding payments as provided by this chapter. The tax Commissioner is not required to accept an affidavit from a taxpayer who has not complied with the provisions of this chapter; and

               b.   The person no longer provides services in the municipal corporation, and does not expect to be subject to the municipal corporation’s income tax for the taxable year.

            2.   The person shall provide the notice in a signed affidavit that briefly explains the person’s circumstances, including the location of the previous worksite location and the last date on which the person performed services or made any sales within the municipal corporation. The affidavit also shall include the following statement: “The affiant has no plans to perform any services within the municipal corporation, make any sales in the municipal corporation, or otherwise become subject to the tax levied by the municipal corporation during the taxable year. If the affiant does become subject to the tax levied by the municipal corporation for the taxable year, the affiant agrees to be considered a taxpayer and to properly register as a taxpayer with the municipal corporation, if such a registration is required by the municipal corporation’s resolutions, ordinances, or rules.” The person shall sign the affidavit under penalty of perjury.

            3.   If a person submits an affidavit described in division (A)(14)(b) of this section, the tax Commissioner shall not require the person to file any tax return for the taxable year unless the tax Commissioner possesses information that conflicts with the affidavit or if the circumstances described in the affidavit change, or the taxpayer has engaged in activity which results in work being performed, services provided, sales made, or other activity that results in municipal taxable income reportable to the municipality in the taxable year. It shall be the responsibility of the taxpayer to comply with the provisions of this chapter relating to the reporting and filing of municipal taxable income on an annual municipal income tax return, even if an affidavit has been filed with the tax Commissioner for the taxable year. Nothing in division (A)(14) of this section prohibits the tax Commissioner from performing an audit of the person.

   (B)   Return and payment of tax; individuals serving in combat zone.

      (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 Commissioner of the municipality for both an extension of time for filing of the return and an extension of time for payment of taxes required by the municipality in accordance with this chapter 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 Commissioner considers necessary to demonstrate eligibility for the extension.

      (2)   (a)   If the Tax Commissioner ascertains that an applicant is qualified for an extension under this division (B), the Tax Commissioner 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. Except as provided in division (B)(2)(c) of this section, the Tax Commissioner may prescribe such contract terms as the Tax Commissioner considers appropriate.

         (b)   If the Tax Commissioner ascertains that an applicant is qualified for an extension under this division (B), 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 municipality 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 (B)(2)(a) of this section are not delinquent. The Tax Commissioner shall not require any payments of penalties or interest in connection with those taxes for the extension period.

      (3)   (a)   Nothing in this division (B)(3) denies to any person described in this division the application of divisions (B)(1) and (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 municipality in accordance with this chapter. The length of any extension granted under division (B)(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 section, 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 the payment of which is extended in accordance with division (B)(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 Commissioner shall not require any payment of penalties or interest in connection with those taxes for the extension period. The Tax Commissioner shall not include any period of extension granted under division (B)(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 (B)(1), (2), or (3) of this section applies to a taxpayer, the provisions of divisions (B)(2)(b) and (c) or (B)(3) 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.

   (C)   Use of Ohio Business Gateway; types of filings authorized.

      (1)   Any taxpayer subject to municipal income taxation with respect to the taxpayer’s net profit from a business or profession may file any municipal income tax return or, 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 division (C) affects the due dates for filing employer withholding tax returns or deposit of any required tax.

      (4)   The use of the Ohio Business Gateway by municipal corporations, taxpayers, or other persons does not affect the legal rights of municipalities or taxpayers as otherwise permitted by law. The State of Ohio shall not be a party to the administration of municipal income taxes or to an appeal of a municipal income tax matter, except as otherwise specifically provided by law.

      (5)   Nothing in this division (C) shall be construed as limiting or removing the authority of any municipal corporation to administer, audit, and enforce the provisions of its municipal income tax.

   (D)   Extension of time to file.

      (1)   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 a municipal income tax return. The extended due date of the municipal 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. The extended due date of the municipal return for any taxpayer that is not an individual shall be the fifteenth day of the eleventh month after the last day of the taxable year to which the return relates.

      (2)   Any taxpayer that qualifies for an automatic federal extension for a period other than six months for filing the taxpayer’s federal income tax return shall automatically receive an extension for the filing of a municipal income tax return. The extended due date of the municipal income tax return shall be the same as that of the extended federal income tax return.

      (3)   A taxpayer that has not requested or received a six-month extension for filing the taxpayer’s federal income tax return may request that the Tax Commissioner grant the taxpayer a six-month extension of the date for filing the taxpayer’s municipal income tax return. If the request is received by the Tax Commissioner on or before the date the municipal income tax return is due, the Tax Commissioner shall grant the taxpayer’s requested extension.

      (4)   An extension of time to file under this chapter is not an extension of the time to pay any tax due unless the Tax Commissioner grants an extension of that date.

      (5)   If the State 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 a municipal income tax return. The extended due date of the municipal income tax return shall be the same as the extended due date of the state income tax return.

   (E)   Amended returns.

      (1)   (a)   A taxpayer shall file an amended return with the Tax Commissioner in such form as the Tax Commissioner requires if any of the facts, figures, computations, or attachments required in the taxpayer’s annual return to determine the tax due levied by the municipality in accordance with this chapter must be altered.

         (b)   Within 60 days after the final determination of any federal or state tax liability affecting the taxpayer’s municipal tax liability, that taxpayer shall make and file an amended municipal return showing income subject to the municipal income tax based upon such final determination of federal or state tax liability, and pay any additional municipal income tax shown due thereon or make a claim for refund of any overpayment, unless the tax or overpayment is $10 or less.

         (c)   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 Commissioner before filing the amended return.

      (2)   (a)   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, such amount need not accompany the amended return. Except as provided under division (E)(2)(b) of this section, the amended return shall not 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 unless the applicable statute of limitations for civil actions or prosecutions under § 95A.19 of this chapter has not expired for a previously filed return.

         (b)   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.

      (3)   (a)   In the case of an overpayment, a request for refund may be filed under this division within the period prescribed by § 95A.19(A)(2) of this chapter 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 $10 or less, no refund need be paid by the municipality to the taxpayer. Except as set forth in division (E)(3)(b) of this section, a request filed under this division shall claim refund of overpayments resulting from alterations to only 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 division (F) of this section. Except as set forth in division (E)(3)(b) of this section, the request shall not reopen those facts, figures, computations, or attachments that are not affected, either directly or indirectly, by the adjustment to the taxpayer’s federal or state income tax return.

         (b)   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.

   (F)   Refunds.

      (1)   Upon receipt of a request for a refund, the Tax Commissioner of the municipality, in accordance with this division (F), shall refund to employers, agents of employers, other payers, or taxpayers, with respect to any income or withholding tax levied by the municipality:

         (a)   Overpayments of more than $10; and

         (b)   Amounts paid erroneously if the refund requested exceeds $10.

      (2)   (a)   Except as otherwise provided in this chapter, returns setting forth a request for refund shall be filed with the Tax Commissioner, within three years after the tax was due or paid, whichever is later. Any documentation that substantiates the taxpayer’s claim for a refund must be included with the return filing. Failure to remit all documentation, including schedules, other municipal income tax returns, or other supporting documentation necessary to verify credits, income, losses or other pertinent factors on the return will cause delay in processing, and/or disallowance of undocumented credits or losses.

         (b)   On filing of the refund request, the Tax Commissioner shall determine the amount of refund due and certify such amount to the appropriate municipal corporation official for payment. Except as provided in division (F)(2)(c) of this section, the Commissioner 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.

         (c)   If a Tax Commissioner denies in whole or in part a refund request included within the taxpayer’s originally filed annual income tax return, the Tax Commissioner 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 § 95A.18 of this chapter.

      (3)   A request for a refund that is received after the last day for filing specified in division (F)(2) of this section shall be considered to have been filed in a timely manner if any of the following situations exist:

         (a)   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.

         (b)   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.

         (c)   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.

      (4)   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 § 95A.10(A)(4) of this chapter.

      (5)   As used in this division (F), WITHHOLDING TAX has the same meaning as in § 95A.10 of this chapter.

(Ord. 8463, passed 11-2-2015; Am. Ord. 9121, passed 9-18-2023)

Statutory reference:

   Amended returns, see R.C. § 718.41

   Annual return; filing; extensions, see R.C. § 718.05

   Filing extension for certain armed forces service, see R.C. § 718.052

   Limitations, see R.C. § 718.12

   Requests for refunds, see R.C. § 718.19

   Use of Ohio Business Gateway, see R.C. § 718.051

§ 95A.10 PENALTY, INTEREST, FEES, AND CHARGES.

   (A)   As used in this section:

      (1)   APPLICABLE LAW means this chapter, the resolutions, ordinances, codes, directives, instructions, and rules adopted by the municipality provided such resolutions, ordinances, codes, directives, instructions, and rules impose or directly or indirectly address the levy, payment, remittance, or filing requirements of a municipal income tax.

      (2)   FEDERAL SHORT-TERM RATE means the rate of the average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of three years or less, as determined under section 1274 of the Internal Revenue Code, for July of the current year.

      (3)   INCOME TAX, ESTIMATED INCOME TAX, and WITHHOLDING TAX mean any income tax, estimated income tax, and withholding tax imposed by a municipal corporation pursuant to applicable law, including at any time before January 1, 2016.

      (4)   INTEREST RATE AS DESCRIBED IN DIVISION (A) OF THIS SECTION means the federal short-term rate, rounded to the nearest whole number per cent, plus 5%. The rate shall apply for the calendar year next following the July of the year in which the federal short-term rate is determined in accordance with division (A)(2) of this section.

      (5)   RETURN includes any tax return, report, reconciliation, schedule, and other document required to be filed with a Tax Commissioner or municipal corporation by a taxpayer, employer, any agent of the employer, or any other payer pursuant to applicable law, including at any time before January 1, 2016.

      (6)   UNPAID ESTIMATED INCOME TAX means estimated income tax due but not paid by the date the tax is required to be paid under applicable law.

      (7)   UNPAID INCOME TAX means income tax due but not paid by the date the income tax is required to be paid under applicable law.

      (8)   UNPAID WITHHOLDING TAX means withholding tax due but not paid by the date the withholding tax is required to be paid under applicable law.

      (9)   WITHHOLDING TAX includes amounts an employer, any agent of an employer, or any other payer did not withhold in whole or in part from an employee’s qualifying wages, but that, under applicable law, the employer, agent, or other payer is required to withhold from an employee’s qualifying wages.

   (B)   (1)   This section shall apply to the following:

         (a)   Any return required to be filed under applicable law for taxable years beginning on or after January 1, 2016;

         (b)   Income tax, estimated income tax, and withholding tax required to be paid or remitted to the municipality on or after January 1, 2016 for taxable years beginning on or after January 1, 2016

      (2)   This section does not apply to returns required to be filed or payments required to be made before January 1, 2016, regardless of the filing or payment date. Returns required to be filed or payments required to be made before January 1, 2016, but filed or paid after that date shall be subject to the ordinances or rules,, as adopted from time to time before January 1, 2016 of this municipality.

   (C)   The municipality shall impose on a taxpayer, employer, any agent of the employer, and any other payer, and will attempt to collect, the interest amounts and penalties prescribed in this section when the taxpayer, employer, any agent of the employer, or any other payer for any reason fails, in whole or in part, to make to the municipality timely and full payment or remittance of income tax, estimated income tax, or withholding tax or to file timely with the municipality any return required to be filed.

      (1)   Interest shall be imposed at the rate defined as “interest rate as described in division (A) of this section,” per annum, on all unpaid income tax, unpaid estimated income tax, and unpaid withholding tax. This imposition of interest shall be assessed per month, or fraction of a month.

      (2)   With respect to unpaid income tax and unpaid estimated income tax, a penalty equal to 15% of the amount not timely paid shall be imposed.

      (3)   With respect to any unpaid withholding tax, a penalty up to 50% of the amount not timely paid shall be imposed.

      (4)   With respect to returns other than estimated income tax returns, the municipality shall impose a penalty not exceeding $25 for each failure to timely file each return, regardless of the liability shown, except that the City of Bowling Green shall abate or refund the penalty assessed on a taxpayer's first failure to timely file a return after the taxpayer files that return.

   (D)   With respect to income taxes, estimated income taxes, withholding taxes, and returns, the municipality shall not impose, seek to collect, or collect any penalty, amount of interest, charges or additional fees not described in this section.

   (E)   With respect to income taxes, estimated income taxes, withholding taxes, and returns, the municipality shall not refund or credit any penalty, amount of interest, charges, or additional fees that were properly imposed or collected before January 1, 2016.

   (F)   The Tax Commissioner may, in the Tax Commissioner’s sole discretion, abate or partially abate penalties or interest imposed under this section when the Tax Commissioner deems such abatement or partial abatement to be appropriate. Such abatement or partial abatement shall be properly documented and maintained on the record of the taxpayer who received benefit of such abatement or partial abatement.

   (G)   The municipality may impose on the taxpayer, employer, any agent of the employer, or any other payer the municipality’s post-judgment collection costs and fees, including attorney’s fees.

(Ord. 8463, passed 11-2-2015; Am. Ord. 8660, passed 2-20-2018; Am. Ord. 9121, passed 9-18-2023)

Statutory reference:

   Interest and penalties, see R.C. § 718.27

§ 95A.11 AUDIT.

   (A)   At or before the commencement of an audit, as defined in § 95A.03(C)(3) of this chapter, the Tax Commissioner shall provide to the taxpayer a written description of the roles of the Tax Commissioner and of the taxpayer during an audit and a statement of the taxpayer’s rights, including any right to obtain a refund of an overpayment of tax. At or before the commencement of an audit, the Tax Commissioner shall inform the taxpayer when the audit is considered to have commenced.

   (B)   Except in cases involving suspected criminal activity, the Tax Commissioner shall conduct an audit of a taxpayer during regular business hours and after providing reasonable notice to the taxpayer. A taxpayer who is unable to comply with a proposed time for an audit on the grounds that the proposed time would cause inconvenience or hardship must offer reasonable alternative dates for the audit.

   (C)   (1)   At all stages of an audit by the Tax Commissioner, a taxpayer is entitled to be assisted or represented by an attorney, accountant, bookkeeper, or other tax practitioner. The Tax Commissioner shall prescribe a form by which a taxpayer may designate such a person to assist or represent the taxpayer in the conduct of any proceedings resulting from actions by the Tax Commissioner. If a taxpayer has not submitted such a form, the Tax Commissioner may accept other evidence, as the Tax Commissioner considers appropriate, that a person is the authorized representative of a taxpayer.

      (2)   A taxpayer may refuse to answer any questions asked by the person conducting an audit until the taxpayer has an opportunity to consult with the taxpayer’s attorney, accountant, bookkeeper, or other tax practitioner. This division does not authorize the practice of law by a person who is not an attorney.

   (D)   A taxpayer may record, electronically or otherwise, the audit examination.

   (E)   The failure of the Tax Commissioner to comply with a provision of this section shall neither excuse a taxpayer from payment of any taxes owed by the taxpayer nor cure any procedural defect in a taxpayer’s case.

   (F)   If the Tax Commissioner fails to substantially comply with the provisions of this section, the Tax Commissioner, upon application by the taxpayer, shall excuse the taxpayer from penalties and interest arising from the audit.

(Ord. 8463, passed 11-2-2015)

Statutory reference:

   Audits, see R.C. § 718.36

§ 95A.12 ROUNDING.

   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, rounding down to the nearest whole dollar. If a person chooses to round amounts entered on a document, the person shall round all amounts entered on the document.

(Ord. 8463, passed 11-2-2015)

Statutory reference:

   Rounding of amounts, see R.C. § 718.25