“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 but not limited to bonuses, incentive and profit-sharing payments, vacation pay, payments received under a wage continuation plan from an employer or third party during the period of disability or sickness, and contributions made by or on behalf of an employee to a tax deferred plan such as a 401k, 403b, IRA, Keogh, SEP or other similar plans, and 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 Section 1803.25(e) of this chapter.
(2) For the purposes of division (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 (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 must 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 (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 City of Brook Park as provided in Section 1803.13(n) or division(e) of this section.
(4) Any amount of a net operating loss used to reduce a taxpayer's net profit for a taxable year will 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 City of Brook Park, 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 Section 1808.01.
(e) For residents, an S corporation shareholder's distributive share of net profits of the S corporation to the extent the distributive share would be allocated or apportioned to this state under R.C. § 5733.05(B)(1) and (2) if the S corporation were a corporation subject to taxes imposed under R.C. Chapter 5733, and the tax shall apply to the distributive share of a shareholder of an S corporation in the hands of the shareholder of the S corporation.
(Ord. 9984-2015. Passed 12- 15-15; Ord. 11012-2018. Passed 1-23-18.)