(a) Applicability of tax. An annual tax for the purposes specified in § 880.01 shall be imposed on and after January 1, 1974, at the rate of 1% per year upon the following:
(1) On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by residents of the municipality.
(2) On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the municipality.
(3) A. On the portion attributable to the municipality 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 municipality.
B. On 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 municipality and not levied against such unincorporated business entity by the municipality.
(4) On earnings, payments, bonuses, commissions and/or fees received by professional, brokers and others who are independent contractors and not employees.
(5) A. On the portion attributable to the municipality of the net profits earned during the effective period of this chapter of all nonresident 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 municipality, whether or not such incorporated business entity has an office or place of business in the municipality.
B. On 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 nonresident unincorporated business entity not attributable to the municipality and not levied against such unincorporated business entity by the municipality.
(6) On the portion attributable to the municipality, 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 municipality, whether or not such corporations have an office or place of business in the municipality.
(b) The portion of the net profits attributable to this municipality of a taxpayer conducting a business, profession or other activity both within and without the boundaries of this municipality shall be determined as provided in the Revised Code of Ohio and in accordance with the rules and regulations adopted by the Finance Director pursuant to this chapter.
(c) In the computation of any tax due under this chapter, a business loss of a previous tax year shall not be allowed or carried forward to reduce the tax due in any subsequent tax year.
(d) For no reason may a business loss be offset against salaries, wages, commissions or other personal service compensation.
(e) Determination of taxable income. The portion of the net profits attributable to the municipality of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the municipality shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
(f) Consolidated returns.
(1) Filing of consolidated returns may be permitted, required or denied in accordance with the rules and regulations prescribed by the Administrator. However, an affiliated group of corporations shall, subject to the provisions of this chapter, have the privilege of making a consolidated return with respect to the income tax imposed for the taxable year in lieu of separate returns. The making of a consolidated return shall be upon the conditions that a consolidated return for the affiliated group is filed with the Internal Revenue Service, and that all corporations which at any time during the taxable year have been members of the affiliated group consent to all the consolidated return regulations prescribed by the laws prior to the last day prescribed by law for the filing of such return, the making of a consolidated return shall be considered as such consent. In the case of a corporation which is a member of the affiliated group for a fractional part of the year, the consolidated return shall include the income of such corporation for such part of the year as it is a member of the affiliated group.
(2) In the case of a corporation that carries 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 municipality constituting a portion only of its total business, the Administrator shall require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the municipality. If the Administrator finds net profits are not properly allocated to the municipality 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 or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the municipality.
(g) Other taxable income.
(1) Contributions to an IRA, SEP IRA, H.R. 10 plan or any other deferred compensation program are taxable.
(2) Income from Subchapter S corporations, limited liability companies and other pass-through entities are taxable to a resident shareholder to the extent not subject to Columbiana Corporate Income Tax. A shareholder or member in such an entity must include in their income their share of the corporation’s taxable income whether or not the amount was actually distributed to them.
(3) The premium value of group term life insurance coverage in excess of fifty thousand dollar ($50,000.00) which is purchased with employer contributions is taxable. This income is referred to as “imputed income”.
(4) The ordinary income portion of a stock option or employee stock purchase plan is subject to the tax.
(5) Supplemental Unemployment Benefit payments (SUB Payments) are subject to the tax.
(6) Winnings over five thousand dollars ($5,000.00) earned or derived from gaming, wagering, lotteries (including, but not limited to, Ohio State Lottery) or games of chance.
(7) Early retirement incentives and wage continuation plans are taxable.
(8) Executor, administrator and trustee fees are taxable.
(9) Royalties are taxable.
(h) Exemptions. The provisions of this chapter shall not be construed as levying a tax upon the following:
(1) Funds received from local, state, or federal governments because of service in the forces of the United States by the person rendering such service or as a result of another person rendering such service.
(2) Alimony payments, child support, poor relief, pensions, social security, unemployment compensation (but not including Supplemental Unemployment Benefits) and disability benefits received from private industry or local, state or federal governments or from charitable, religious or educational organizations.
(3) Dues, contributions and similar payment received by charitable, religious, educational, or literary organizations or labor unions, lodges, and similar organizations.
(4) Receipts from casual entertainment, amusements, sports events, and health and welfare activities conducted by bona fide charitable, religious and educational organizations and associations.
(5) Any association, organization, corporation, club or trust, which is exempt from federal taxes on income by reason of its charitable, religious and educational organizations and associations.
(6) Gains from involuntary conversions, cancellation of indebtedness, interest on federal obligations and income of a decedent’s estate during the period of administration (except such income from the operation of a business).
(7) Earnings and income of all persons under 18 years of age, whether residents or non- residents.
(8) On or after January 1, 2001, compensation paid to an individual for personal services performed in this municipality.
A. If the individual does not reside in this municipality; and
B. If they perform such.
C. If this individual is an employee and the principal place of business of the individual’s employer is located outside this municipal corporation, and the individual pays taxes on this compensation to the municipal corporation in which the employers’ principal place of business is located and that no portion of that tax is refunded to this individual.
(9) The rental value of a home furnished to a minister of the gospel as part of his or her compensation or the rental allowance paid to him or her as compensation to the extent used by the minister to rent or provide a home.
(Ord. 73-O-66, passed 11-20-1973; Ord. 04-O-2146, passed 7-6-2004)