(a) It is the duty of each employer within, or doing business within, the City who employs one or more persons on a salary, wage, commission or other compensation basis to deduct when such salary, wage, commission or other compensation is paid, allocated, apportioned or set aside, the tax of one (1) percent plus any additional tax of limited duration imposed by ordinance or resolution of the qualifying wages due by such employer to such employee. The tax shall be deducted by the employer from:
(1) All qualifying wages paid to employees who are non-residents of the City of Bucyrus for services rendered, work performed, or other activities engaged in to earn such qualifying wages within the City of Bucyrus; and
(2) All qualifying wages paid to employees who are residents of the City of Bucyrus, regardless of the place where the services are rendered, unless said services are rendered in another municipality levying a tax and the employer is required to withhold tax from said wages for that municipality. In which case, the employer shall withhold and remit tax to the City of Bucyrus for only the difference, if any, between the tax imposed by such other taxing municipality and the tax imposed by the Ordinance on said qualifying wages.
(b) An employer is not required to make any withholding 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 the corporation with respect to whose stock has been issued.
(c) The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation received. The failure of an employer to remit to the City the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer in connection with the failure to remit the tax withheld.
(d) Commissions and fees paid to professional persons, brokers, and others who are independent contractors and not employees of the payor, are not subject to withholding or collection of the tax at the source. Such taxpayers must in all instances file returns and pay tax pursuant to the provisions of Section 185.02 of the Ordinance. (See Sections 187.05 and 187.06).
(e) Where a non-resident employee receives compensation for personal services rendered or performed partly within and partly without the City of Bucyrus, the withholding employer shall withhold and remit from that portion of the compensation which was earned within the City of Bucyrus, in accordance with the following rules of apportionment, income tax of one (1) percent plus any additional tax of limited duration imposed by ordinance or resolution of said compensation:
(1) If the non-resident is a salesperson, agent, or other employee whose compensation on the basis of commission depends directly on the volume of business transacted by said non-resident, the deducting and withholding shall attach to the portion of the entire compensation which the value of business transacted by said non-resident within the City of Bucyrus bears to the total volume of business transacted by said non-resident within and outside the City of Bucyrus.
(2) The deducting and withholding of personal service compensation of all other employees (including officers of corporations) shall attach to the portion of the personal service compensation of such employee which the total number of working days employed within the City of Bucyrus bears to the total number of working days employed within and outside the City of Bucyrus.
(3) If it is impossible to apportion the earnings as provided above because of the peculiar nature of the service of the employee, or the unusual basis of compensation, apportionment shall be made in accordance with the facts and the tax deducted and withheld accordingly.
(4) The occasional entry into the City of Bucyrus of a non-resident employee who performs the duties for which he is employed entirely outside the City of Bucyrus, but enters the City for the purpose of reporting, receiving instructions, accounting, etc., incidental to his duties outside the City shall not be deemed to take such employee out of the class of those rendered their services entirely outside the City of Bucyrus.
(f) An employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions (whether by way of drawing account or otherwise - but see subsection (g) below) where such advances are in excess of commissions earned.
(g) An employer required to withhold the tax on compensation paid to an employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid by the employer to the employee for expense necessarily and actually incurred by the employee in the actual performance of his services, provided, that such expense must be of the kind and in the amount recognized as deductible for Federal Income Tax purposes.
(Res. 240-2003. Passed 12-30-03.)