(A) Authority to levy tax.
(1) The tax on income and the withholding tax established by this Chapter 41 are authorized by Article XVIII, § 3 of the Ohio Constitution. The tax on income and the withholding tax established by this Chapter 41 are deemed to be levied in accordance with, and to be consistent with, the provisions and limitations of R.C. Chapter 718. This chapter is deemed to incorporate the provisions of R.C. Chapter 718.
(2) The tax is an annual tax levied on the income of every person residing in or earning or receiving income in the municipal corporation, and shall be measured by municipal taxable income. The municipality shall tax income at a uniform rate. The tax is levied on municipal taxable income, as defined herein.
(B) Purposes of tax; rate.
(1) To provide funds for general municipal operations, maintenance, new equipment, extension and enlargement of municipal services and facilities and capital improvements of the village there shall be and is hereby levied a tax on salaries, wages, commissions and other compensation and on net profits, as hereinafter provided.
(2) Subject to the provisions of § 10.07 of this code of ordinances, an annual tax for the purposes specified in division (A) hereof shall be imposed on and after January 1, 2016 at the rate of 1% per annum.
(C) Allocation of funds. The funds collected under the provisions of this chapter shall be deposited in the General Fund and the fund shall be disbursed in the following manner:
(1) The part thereof as shall be necessary to defray all costs of collecting the taxes and the cost of administering and enforcing the provisions thereof;
(2) Seventy-five percent of the net available income tax receipts received annually shall be used to defray operating expenses of the village;
(3) Twenty-five percent of the net available income tax receipts received annually shall be deposited in the Capital Improvements Fund to be used for capital improvements in the village.
(D) Statement of procedural history; state mandated changes to municipal income tax.
(1) Significant and wide-ranging amendments to R.C. Chapter 718 were enacted by Am Sub HB 5, passed by the 130th General Assembly, and signed by Governor Kasich on December 19, 2014, and H.B. 5 required municipal corporations to conform to and adopt the provisions of R.C. Chapter 718 in order to have the authority to impose, enforce, administer and collect a municipal income tax.
(2) As mandated by H.B. 5, municipal income tax Ordinance 18-15, effective January 1, 2016, comprehensively amends Chapter 38 in accordance with the provisions of R.C. Chapter 718 to allow the municipality to continue the income tax and withholding tax administration and collection efforts on behalf of the municipality.
(Ord. 18-15, passed 12-21-2015)
Statutory reference:
Authority for tax on income and withholding tax, see R.C. § 718.04