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This section applies to any taxpayer that is engaged in a business or profession in the city and that has made the election under § 95A.80 of this chapter.
(A) Except as otherwise provided in division (B) of this section, net profit from a business or profession conducted both within and without the boundaries of the city shall be considered as having a taxable situs in the city for purposes of municipal income taxation in the same proportion as the average ratio of the following:
(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 city 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.
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.
(2) Wages, salaries, and other compensation paid during the taxable period to individuals employed in the business or profession for services performed in the city 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)(1) of this chapter.
(3) Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the city to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.
(B) (1) If the apportionment factors described in division (A) of this section do not fairly represent the extent of a taxpayer’s business activity in the city, the taxpayer may request, or the Tax Commissioner 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:
(a) Separate accounting;
(b) The exclusion of one or more of the factors;
(c) The inclusion of one or more additional factors that would provide for a more fair apportionment of the income of the taxpayer to the municipal corporation;
(d) A modification of one or more of the factors.
(2) 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.90(A).
(3) The Tax Commissioner may require a taxpayer to use an alternative apportionment method as described in division (B)(1) of this section only by issuing an assessment to the taxpayer within the period prescribed by § 95A.90(A).
(C) As used in division (A)(2) 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:
(1) A location that is owned, controlled, or used by, rented to, or under the possession of one of the following:
(a) The employer;
(b) A vendor, customer, client, or patient of the employer, or a related member of such a vendor, customer, client, or patient;
(c) A vendor, customer, client, or patient of a person described in division (C)(1)(b) of this section, or a related member of such a vendor, customer, client, or patient.
(2) 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;
(3) 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 (C) (1) or (2) of this section solely in order to avoid or reduce the employer’s municipal income tax liability. If the 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.
(D) For the purposes of division (A)(3) of this section, receipts from sales and rentals made and services performed shall be sitused to the city as follows:
(1) Gross receipts from the sale of tangible personal property shall be sitused to the City of Bowling Green only if, regardless of where title passes, the property meets either of the following criteria:
(a) The property is shipped to or delivered within the city from a stock of goods located within the city.
(b) The property is delivered within the city from a location outside the city, provided the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the city and the sales result from such solicitation or promotion.
(2) Gross receipts from the sale of services shall be sitused to the city to the extent that such services are performed in the city.
(3) To the extent included in income, gross receipts from the sale of real property located in the city shall be sitused to the city.
(4) To the extent included in income, gross receipts from rents and royalties from real property located in the city shall be sitused to the city.
(5) Gross receipts from rents and royalties from tangible personal property shall be sitused to the city based upon the extent to which the tangible personal property is used in the city.
(E) Commissions received by a real estate agent or broker relating to the sale, purchase, or lease of real estate shall be sitused to the city in which the real estate is located. Net profit reported by the real estate agent or broker shall be allocated to the city based upon the ratio of the commissions the agent or broker received from the sale, purchase, or lease of real estate located in the city to the commissions received from the sale, purchase, or lease of real estate everywhere in the taxable year.
(F) 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 of this chapter by the city or substantially similar provision of the codified ordinances of another municipal corporation, the taxpayer shall add the amount that is exempt from taxation to the taxpayer’s net profit that was apportioned to the city. In no case shall a taxpayer be required to add to its net profit that was apportioned to the city 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. This division applies solely for the purpose of making an adjustment to the amount of a taxpayer’s net profit that was apportioned to the city under this section.
(G) When calculating the ratios described in division (A) of this section for the purposes of that division or division (B) 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.
(Ord. 8660, passed 2-20-2018)
(A) Any information gained as a result of returns, investigations, hearings, or verifications required or authorized by §§ 95A.80 to 95A.95 of this chapter is confidential, and no person shall disclose such information, except for official purposes, in accordance with a proper judicial order, or as provided in R.C. § 4123.271 or R.C. § 5703.21. The Tax Commissioner may furnish the Internal Revenue Service with copies of returns filed. This section does not prohibit the publication of statistics in a form which does not disclose information with respect to particular taxpayers.
(B) In May and November of each year, the Tax Commissioner shall provide the City Tax Administrator with the following information for every taxpayer that filed tax returns with the Commissioner under §§ 95A.80 to 95A.95 of this chapter and that had municipal taxable income apportionable to the city under this chapter for any prior year:
(1) The taxpayer’s name, address, and federal employer identification number;
(2) The taxpayer’s apportionment ratio for, and amount of municipal taxable income apportionable to, the city pursuant to § 95A.82 of this chapter;
(3) The amount of any pre-2017 net operating loss carryforward utilized by the taxpayer;
(4) Whether the taxpayer requested that any overpayment be carried forward to a future taxable year;
(5) The amount of any credit claimed under R.C. § 718.94.
(C) Not later than 30 days after each distribution made to municipal corporations under R.C. § 718.83, the Tax Commissioner shall provide to the city a report stating the name and federal identification number of every taxpayer that made estimated payments that are attributable to the city and the amount of each such taxpayer’s estimated payment.
(D) The information described under divisions (B) and (C) of this section shall be provided to the individual or individuals designated by the City Tax Administrator under R.C. § 718.83(D).
(E) (1) The city expects that the Tax Commissioner will, pursuant to R.C. § 718.84(E), provide tax returns and other information it receives in the performance of its administration of the municipal net profits tax for taxpayers making the election provided in § 95A.80 of this chapter. The Tax Administrator shall review these returns and information, as well as the information received pursuant to divisions (B) and (C) of this section, and has discretion to refer any taxpayer for audit by the Tax Commissioner. Such referral shall be made on a form prescribed by the Commissioner and shall include any information that forms the basis for the referral.
(2) If the Tax Commissioner declines to audit a taxpayer referred by the Tax Administrator under this section, the city reserves its right to pursue any and all remedies, whether at law or in equity, to ensure that the correct tax liability has been calculated and paid by the taxpayer.
(Ord. 8660, passed 2-20-2018)
(A) (1) For each taxable year, every taxpayer shall file an annual return. Such return, along with the amount of tax shown to be due on the return less the amount paid for the taxable year under § 95A.88 of this chapter shall be submitted to the Tax Commissioner, on a form and in the manner prescribed by the Commissioner, on or before the fifteenth day of the fourth month following the end of the taxpayer’s taxable year.
(3) The remittance shall be made payable to the Treasurer of State and in the form prescribed by the Tax Commissioner. If the amount payable with the tax return is $10 or less, no remittance is required.
(B) (1) 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 identification number. Each return shall be verified by a declaration under penalty of perjury.
(b) A taxpayer that files an annual tax return electronically through the Ohio Business Gateway or in another manner as prescribed by the Tax Commissioner shall either submit the documents required under this division electronically as prescribed at the time of filing or, if electronic submission is not available, mail the documents to the Tax Commissioner. The Department of Taxation shall publish a method of electronically submitting the documents required under this division on or before January 1, 2019.
(3) After a taxpayer files a tax return, the Tax Commissioner may request, and the taxpayer shall provide, any information, statements, or documents required to determine and verify the taxpayer’s municipal income tax.
(D) (1) (a) Any taxpayer that has duly requested an automatic extension for filing the taxpayer’s federal income tax return shall automatically receive an extension for the filing of a tax return with the Commissioner under this section. The extended due date of the return shall be the fifteenth day of the tenth month after the last day of the taxable year to which the return relates.
(b) 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 Commissioner grant the taxpayer a six-month extension of the date for filing the taxpayer’s municipal income tax return. If the Commissioner receives the request on or before the date the municipal income tax return is due, the Commissioner shall grant the taxpayer’s extension request.
(c) An extension of time to file under division (D)(1) of this section is not an extension of the time to pay any tax due unless the Tax Commissioner grants an extension of that date.
(2) If the Commissioner considers it necessary in order to ensure payment of a tax imposed in accordance with § 95A.05 of this chapter, the 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.
(E) Each return required 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 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 Commissioner with information that is missing from the return, to contact the 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 Commissioner and has shown to the preparer or other person.
(F) When income tax returns or other documents require the signature of a tax return preparer, the Tax Commissioner shall accept a facsimile or electronic version of such a signature in lieu of a manual signature.
(Ord. 8660, passed 2-20-2018)
(A) All taxpayers that have made the election allowed under § 95A.80 of this chapter shall file any tax return or extension for filing a tax return, and shall make payment of amounts shown to be due on such returns, electronically, either through the Ohio Business Gateway or in another manner as prescribed by the Tax Commissioner.
(B) A taxpayer may apply to the Commissioner, on a form prescribed by the Commissioner, to be excused from the requirement to file returns and make payments electronically. For good cause shown, the Commissioner may excuse the applicant from the requirement and permit the applicant to file the returns or make the payments by non-electronic means.
(C) The Tax Commissioner may adopt rules establishing the following:
(1) The format of documents to be used by taxpayers to file returns and make payments by electronic means;
(2) The information taxpayers must submit when filing tax returns by electronic means.
(Ord. 8660, passed 2-20-2018)
(A) As used in this section:
(1) 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.
(2) CONSOLIDATED FEDERAL INCOME TAX RETURN means a consolidated return filed for federal income tax purposes pursuant to section 1501 of the Internal Revenue Code.
(3) 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 (A)(1) of this section.
(4) INCUMBENT LOCAL EXCHANGE CARRIER has the same meaning as in R.C. § 4927.01.
(5) LOCAL EXCHANGE TELEPHONE SERVICE has the same meaning as in R.C. § 5727.01.
(B) (1) A taxpayer that is a member of an affiliated group of corporations may elect to file a consolidated tax return for a taxable year if at least one member of the affiliated group of corporations is subject to 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. The election is binding for a five-year period beginning with the first taxable year of the initial election unless a change in the reporting method is required under federal law. The election continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing consolidated tax returns under division (B)(2) of this section or a taxpayer receives permission from the Tax Commissioner. The Tax Commissioner shall approve such a request for good cause shown.
(2) An election to discontinue filing consolidated tax returns under this section must be made on or before the fifteenth day of the fourth month of the year following the last year of a five-year consolidated tax return election period in effect under division (B)(1) of this section. The election to discontinue filing a consolidated tax return is binding for a five-year period beginning with the first taxable year of the election.
(3) An election made under division (B)(1) or (2) of this section is binding on all members of the affiliated group of corporations subject to a municipal income tax.
(5) When an election made under § 95A.80 of this chapter is terminated, a valid election made under this section is binding upon the Tax Administrator for the remainder of the five-year period.
(C) 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 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 a municipal corporation. A taxpayer that is required to file a consolidated tax return for a taxable year shall file a consolidated tax return for all subsequent taxable years unless the taxpayer requests and receives written permission from the Commissioner to file a separate return or a taxpayer has experienced a change in circumstances.
(D) A taxpayer shall prepare a consolidated 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.
(E) (1) Except as otherwise provided in divisions (E)(2), (3), and (4) of this section, corporations that file a consolidated tax return shall compute adjusted federal taxable income, as defined in § 95A.81 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.
(2) No corporation filing a consolidated tax return shall make any adjustment otherwise required under § 95A.81(B) 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.
(3) 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 tax return shall do one of the following with respect to that pass-through entity’s net profit or loss for that taxable year:
(a) 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 § 95A.82 of this chapter, 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.
(b) 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 § 95A.82 of this chapter, 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.
(4) 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:
(a) The corporation filing the consolidated 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 § 95A.82 of this chapter, 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;
(F) Corporations filing a consolidated tax return shall make the computations required under § 95A.82 of this chapter 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.
(G) Each corporation filing a consolidated tax return is jointly and severally liable for any tax, interest, penalties, fines, charges, or other amounts applicable under §§ 95A.80 to 95A.95 of this chapter or R.C. Chapter 5703 to 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.
(Ord. 8660, passed 2-20-2018)
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