(a) To provide funds for the purpose of general municipal operation, maintenance of equipment, new equipment, extension, enlargement, and improvement of municipal services and facilities, and capital improvements of municipal services and facilities, and capital improvements of the Village, there is hereby levied or taxed on or after July 1, 1986, at a rate of one-percent (1%) per annum upon the following:
(1) All salaries, qualifying wages, commissions, other compensation and other income from whatever source earned or received during the effective period of this chapter by resident individuals of the Village of Cardington;
(2) All income, salaries, qualifying wages, commissions, and other compensation earned during the effective period of this chapter by non- resident individuals for work done or services performed or rendered in the Village of Cardington;
(3) Resident Businesses.
A. The portion attributable to the Village of Cardington of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions, or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the Village of Cardington; and
B. The portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the Village of Cardington and not levied against such unincorporated business entity.
C. The Village of Cardington shall not tax compensation received by a non-resident individual for personal services performed within the Village of Cardington if:
1. The services are performed on no more than twelve days in a calendar year, and
2. The principal place of business of the non-resident individual’s employer is located outside the Village of Cardington. This exemption shall not apply to professional entertainers, professional athletes, or promoters of professional entertainment or sporting events and their employees as defined by the legislative authority of the Village of Cardington.
(4) Non-resident Businesses:
A. There is also hereby levied or taxed during the effective period of this chapter, at a rate of one-percent (1%) per annum upon the following: The portion attributable to the Village of Cardington of the net profits earned during the effective period of this chapter of all non-residents unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in the Village of Cardington whether or not such unincorporated business entity has an office or place of business in the Village of Cardington.
B. The portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a non-resident unincorporated business entity not attributable to the Village of Cardington and not levied against such unincorporated business entity; and
C. The portion attributable to the Village of Cardington of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the Village of Cardington, whether or not such corporations have an office or place of business in the Village of Cardington.
D. Pass-through entity income shall be taxed in a manner as determined by the Director of Taxation. The Director shall specify by ordinance whether the Village of Cardington shall tax the income of pass-through entities in the hands of the entity or in the hands of the individual owners. It shall not be necessary for the Director to apply the same treatment to each class of pass-through entities and the Director may specify a different ordinance or rule for each class of pass-through entities.
(5) Non-resident Individual.
A. A non-resident individual who works in the Village of Cardington twelve (12) or fewer days per year shall be considered an occasional entrant, and shall not be subject to the Village of Cardington municipal income tax for those twelve (12) days. For purposes of the twelve-day calculation, any portion of a day worked in the Village of Cardington shall be counted as one day worked in the Village of Cardington.
B. Beginning with the thirteenth day, the employer of such a non- resident individual shall begin withholding the Village of Cardington income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the Village of Cardington in accord with the requirements of this chapter. Since the individual can no longer be considered to have been an occasional entrant, the employer is further required to remit taxes on income earned in the Village of Cardington by the individual for the first twelve days.
C. If the individual is self-employed, it shall be the responsibility of the individual to remit the appropriate income tax to the Village of Cardington.
D. The twelve-day occasional entry rule does not apply to entertainers or professional athletes, their employees or individuals who perform services on their behalf, or to promoters and booking agents of such entertainment events and sporting events.
(6) On all income from gambling, lottery, and/or sports winnings by a resident of the Village. No regard is given to losses or to the location where the gambling, lottery, and/or sports winnings were received.
(b) Determination of Taxable Income.
(1) The portion of the net profits attributable to the Village of Cardington of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the Village of Cardington shall be determined as provided in section 718.02 of the Revised Code and in accordance with the rules and regulations adopted by the Director pursuant to this chapter.
(2) If the Director determines that under the particular circumstances of a specific taxpayer use of the statutory three factor formula is not the appropriate allocation method, the Director may approve the use of books and records as a substitute method under the following conditions:
A. The net profits allocable to the Village of Cardington from business, professional, or other activities conducted in the Village by corporations or unincorporated entities (whether resident or non- resident) may be determined from the records of the taxpayer only if the taxpayer has bona fide records which disclose with reasonable accuracy what portion of his et profits is attributable to that part of his activities conducted within the Village.
B. If the books and records of the taxpayer are used as the basis for apportioning net profits, a statement must accompany the return explaining the manner in which such apportionment is made in sufficient detail to enable the Director to determine whether the net profits attributable to the Village are apportioned with reasonable accuracy.
C. In determining the income allocable to the Village from the books and records of a taxpayer, and adjustment may be made for the contribution made to the production of such income by headquarters activities of the taxpayer, whether such headquarters is within or without the Village.
(c) Operating Loss Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to the date of the enactment of this chapter, allocable to the Village of Cardington may be applied against the portion of the profit of succeeding year(s) allocable to the Village of Cardington until exhausted but in no event for more than five (5) taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year. A loss in one village or municipality may never offset the gain in another village or municipality. Failure to allocate an operating loss or failure to file a return on or before the end of the twelfth month following the tax year in which a net operating loss was sustained nullifies the loss carry-forward privilege.
(2) The portion of a new operating loss sustained shall be allocated to the Village of Cardington in the same manner as provided herein for allocating net profits to the Village of Cardington.
(3) The Director shall provide by Rules and Regulations the manner in which such net operating loss carry-forward shall be determined.
(d) Consolidated Returns.
(1) Any affiliate group that files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the Village. However, once the affiliated group has elected to file a consolidated return or a separate return with the Village, the affiliated group may not change its method of filing in any subsequent tax year without written approval from the Village.
(2) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the Village of Cardington constituting a portion only of its total business, the Director shall require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to the Village of Cardington. If the Director finds net profits are not properly allocated to the Village of Cardington by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory or activity or by some other method, he shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to the Village of Cardington.
(3) The Village of Cardington shall accept consolidated returns from affiliated groups of corporations that file consolidated returns (for the same tax reporting period) for Federal Income Tax purposes.
(e) Exclusions. The tax imposed by this chapter shall not be levied upon any of the following:
(1) The military pay or allowances of members of the armed forces of the United States, and of members of their respective components, including the Ohio National Guard;
(2) The net income of any charitable, scientific, religious, literary, fraternal, educational or other organization specified in section 718.01 of the Revised Code to the extent that such net income is derived from tax-exempt real estate, tax-exempt tangible or intangible property, or tax-exempt activities;.
(3) Intangible income;
(4) Compensation paid under Section 3501.28 or 3501.36 of the Ohio Revised Code to a person serving as a precinct election official to the extent that such compensation does not exceed one thousand dollars annually. Such compensation in excess of one thousand dollars shall be subject to the tax provided for herein. The Village of Cardington shall not require the payer of such compensation to withhold any tax from that compensation;
(5) Compensation paid to an employee of a transit authority, regional transit authority, or regional transit commission created under Ohio R.C. Chapter 306 for operating a transit bus or other motor vehicle for the authority or commission in or through the Village of Cardington, unless the bus or vehicle is operated on a regularly scheduled route, the operator is subject to such a tax by reason of residence or domicile in the Village of Cardington, or the headquarters of the authority or commission is located within the Village of Cardington;
(6) The income of a public utility when that public utility is subject to the tax levied under Sections 5727.24 or 5727.30 of the Revised Code, except starting January 1, 2002, the income of an electric company or combined company, as defined in Section 5727.01 of the Revised Code, and except starting January 1, 2004, the income of a telephone company may be taxed by the Village of Cardington. For a combined company, only the income attributed from the activity of an electric company shall be subject to taxation by the Village of Cardington. The income of an electric company or combined company subject to taxation by the Village of Cardington shall be computed by taking into the account the adjustments provided in Ohio R.C. Section 5733.04(I)(16);
(7) On and after January 1, 2001, Compensation paid to a nonresident individual for personal services performed by the individual within the Village of Cardington, on twelve or fewer days in the calendar year except
A. If the individual is an employee of another person, the principal place of business of the individual’s employer is located in another municipal corporation in this state that imposes a tax applying to compensation paid to the individual for services performed on those days; and the individual is not liable to that other municipal corporation for tax on the compensation paid for such services; or if
B. The individual is a professional entertainer, professional athlete, the promoter of a professional entertainment or sports event or the employee of such a promoter, all as may be reasonably defined by the Village.
(8) On and after January 1, 2003, parsonage allowances excluded pursuant to section 107 of the Internal Revenue Code. For purposes of this Ordinance, ”parsonage allowance” shall be defined as the extent of the rental allowance or rental value of a house provided as part of an ordained minister’s compensation. and the ordained minister must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination, and must have authority to perform all sacraments of the church. “Church” means a fellowship of believers, congregation, society, corporation, convention, or association that is formed primarily or exclusively for religious purposes and that is not formed for the private profit of any person.
(9) On and after January 1, 2005, an S corporation shareholder’s distributive share of net profits of the S corporation, other than any part of the distributive share of net profits that represents qualifying wages as defined in section 3121(a) of the Internal Revenue Code or net earnings from self- employment as defined in section 1402(a) of the Internal Revenue Code.
(10) Employee compensation that is not “qualifying wages” as defined in section 718.03 of the Revised Code.
(11) The following are a non-exclusive list of income sources or classification that are exempt from taxation by the Village of Cardington:
A. Payments from qualified pension plans;
B. Interest income;
C. Social Security income;
D. Dividend income;
E. Disability income; and
F. Unemployment compensation.
(12) The tax provided for herein shall not be levied upon the income of persons who are under eighteen (18) years of age and who are full-time elementary, junior high or high school students.
(Ord. 2005-27. Passed 11-7-05.)