(a) As used in this section:
(1) “Limited liability company” means a limited liability company formed under R.C. Chapter 1705 or under the laws of another state.
(2) “Pass-through entity” means a partnership, limited liability company, S corporation, or any other class of entity the income or profits from which are given pass-through treatment under the Internal Revenue Code.
(3) “Income from a pass-through entity” means partnership income of partners, membership interests of members of a limited liability company, distributive shares of shareholders of an S corporation, or other distributive or proportionate ownership shares of income from other pass-through entities.
(4) “Owner” means a partner of a partnership, a member of a limited liability company, a shareholder of an S corporation, or other person with an ownership interest in a pass- through entity.
(5) “Owner’s proportionate share,” with respect to each owner of a pass-through entity, means the ratio of (a) the owner’s income from the pass-through entity that is subject to taxation by the municipal corporation, to (b) the total income from that entity of all owners whose income from the entity is subject to taxation by that municipal corporation.
(b) On and after January 1, 2003, any resident owner who receives income from a pass-through entity shall be entitled to a credit for taxes paid to another municipal corporation by a pass-through entity that does not conduct business in the Municipality. The amount of the credit shall equal the lesser of the following amounts, subject to division (c) of this section:
(1) The owner’s proportionate share of the amount, if any, of tax paid by the pass-through entity to another municipal corporation in this state;
(2) The owner’s proportionate share of the amount of tax that would be imposed on the pass-through entity by the municipal corporation in which the taxpayer is domiciled if the pass-through entity conducted business in the municipal corporation.
(c) The amount of credit allowed by division (b) of this section shall be multiplied by the percentage, less than 100%, of the amount of income taxes paid on compensation by the individual resident taxpayer to another municipal corporation.
(d) A single member limited liability company that is a disregarded entity for federal tax purposes may elect to be a separate taxpayer from its single member if all of the following conditions are met:
(1) The limited liability company’s single member is also a limited liability company.
(2) 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;
(3) The limited liability company and its single member each make an election to be treated as a separate taxpayer under division (d) of this section;
(4) 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.
(5) The Municipality consents to the election.
(6) The election is made 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.
(7) For purposes of division (d) of this section, the Municipality is the primary place of business of a limited liability company if, for the limited liability company’s taxable year, its income tax liability is greater in the Municipality than in any other municipal corporation in Ohio, and its tax liability to the Municipality for the taxable year is at least four hundred thousand dollars ($400,000).
(Ord. 2345. Passed 6-8-06.)