191.01 Purpose, period and rate.
191.02 Definitions.
191.03 Imposition of tax.
191.04 Effective period.
191.05 Return and payment of tax.
191.06 Collection at source.
191.07 Declarations.
191.08 Duties, responsibilities and authority of the Finance Director.
191.09 Investigating authority of the Finance Director; penalty for divulging confidential information.
191.10 Interest and penalties.
191.11 Collection of unpaid taxes and refund of overpayments.
191.12 Board of Adjudication and Board of Tax Appeals.
191.13 Allocation of funds.
191.14 Credit for tax paid to another municipality or county.
191.15 Savings clause.
191.16 Collection of tax after termination of chapter.
191.99 Penalty.
CROSS REFERENCES
Taxation - see CHTR. Art. VI
Municipal income taxes - see Ohio R.C. Ch. 718
Income tax effective January 1, 2016 - see ADM. Ch. 192
(a) There shall be and is hereby levied an annual tax on and after January 1, 1997 at the rate of one percent (1.0%) upon those classes of earnings and income set forth in Section 191.03 to provide revenues for expenditure on capital improvements, capital outlays and for general municipal operation.
(b) For the period of January 1, 2023 through December 31, 2025 there shall be and is hereby levied a tax upon those classes of earnings and income set forth in Section 191.03 in addition to the tax, if any, levied by the first paragraph of this section, at the rate of one-half of one percent (0.5%) for the purpose of providing revenues for the operation of the Department of Public Safety which includes the Division of Police, the Division of Fire and the Emergency Medical Rescue Service. (Ord. 22-02. Passed 12-5-22.)
As used in this chapter, the following words shall have the meaning ascribed to them in this section, except as and if the context clearly indicates or requires a different meaning.
(a) “Association” means a partnership, limited partnership, or any other form of unincorporated enterprise, owned by two or more persons.
(b) “Board of Adjudication” means the Board created by and constituted as provided in Section 191.12(a).
(c) “Board of Tax Appeals” means the Board created by and constituted as provided in Section 191.12(b).
(d) “Business” means an enterprise, profession, undertaking or other entity of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association, corporation or any other entity.
(e) “Corporation” means a corporation or joint stock association organized under the laws of the United States, the State of Ohio or any other state, territory or foreign country or dependency.
(f) “Employee” means one who works for wages, salary, commission or other type of compensation in the service of an employer.
(g) “Employer” means an individual, partnership, association, corporation, governmental body, unit or agency, or any other entity, whether or not organized for profit having a place of business or doing business within the City of Eaton and who or that employs one or more persons on a salary, wage, commission, or other compensation basis.
(h) “Fiscal year” means an accounting period of twelve months or less ending on any day other than December 31.
(i) “Gross receipts” means the total income from any source whatsoever required to be included in the return.
(j) “Net profits” means the net gain from the operations of a business, profession, enterprise or other activity, excluding capital gains and losses after provision for all ordinary and necessary expenses, paid or accrued in accordance with the accounting system used by the taxpayer for federal income tax purposes, adjusted to the requirements of this chapter.
(k) “Non-resident” means any individual who is not a resident as herein defined.
(l) “Non-resident unincorporated business entity” means an unincorporated business entity not having a place of business within the City of Eaton.
(m) “Other activity” means any undertaking, not otherwise specifically defined herein which is normally entered into for profit, including, but not limited to, rental of real and personal property and a business conducted by a trust or guardianship estate.
(n) “Person” means every natural person, partnership, fiduciary, association or corporation. Whenever used in any section prescribing and imposing a penalty, “person” includes an officer or employee of a corporation, or member or employee of an association, who as such officer, employee or member is under a duty to perform the act in respect of which the violation occurs.
(o) “Place of business” means any bona fide office (other than a mere statutory office), factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his regular employees regularly in attendance.
(p) “Resident” means an individual domiciled in the City of Eaton. Any person who maintains a space of abode within the City for a total of 183 days or more within any twelve month period shall be deemed a resident.
(q) “Resident unincorporated business entity” means an unincorporated business entity having a place of business within the City of Eaton.
(r) “Taxable income” means gross wages, salaries, and other compensation paid by an employer or employers before any deductions, other than ordinary and necessary business expenses in the same manner as provided by the Internal Revenue Code, and/or net profits as herein defined.
(s) “Taxable year” means the calendar year, or the fiscal year, upon the basis of which the net profits are to be computed under this chapter and, in the case of a return for a fractional part of a year, the period for which such return is required to be made. Unless approved by the Finance Director, the taxable year of a wage earner shall be a calendar year.
(t) “Taxpayer” means a person, whether an individual, partnership, association or any corporation or other entity, required hereunder to file a return or pay tax.
The singular shall include the plural, and the masculine shall include the feminine and the neuter.
(Ord. 96-14. Passed 11-18-96.)
(Ord. 96-14. Passed 11-18-96.)
(1) On all salaries, wages, commissions and other compensation received during the effective period of this chapter by residents of the City of Eaton.
(2) On all salaries, wages, commissions and other compensation received during the effective period of this chapter by non-residents for work done or services performed or rendered in the City of Eaton.
(3) A. On the portion attributable to the City of Eaton of the net profits earned and accrued or received during the effective period of this chapter of all resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City of Eaton.
B. On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the City of Eaton upon which the tax was not paid by the entity.
(4) A. On the portion attributable to the City of Eaton of the net profits earned and accrued or received during the effective period of this chapter of all non-resident associations, 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 City of Eaton, whether or not such association or other unincorporated business entity has an office or place of business in the City of Eaton.
B. On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a non-resident association or other unincorporated business entity not attributable to the City of Eaton on which the tax was not paid by the entity.
(5) On the portion attributable to the City of Eaton of the net profits earned and accrued or received 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 City of Eaton, whether or not such corporations have a place of business in the City of Eaton.
(b) The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City of Eaton, in the absence of actual records thereof, shall be determined as follows:
(1) Multiply the entire net profits by a business allocation percentage to be the average ratio of:
A. The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City of Eaton during the taxable period to the average net book value of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.
As used in the preceding paragraph, real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereon by eight;
B. Wages, salaries and other compensation paid or accrued during the taxable period to persons employed in the business or profession for services performed in the City of Eaton to wages, salaries, and other compensation paid or accrued during the same period to persons employed in the business, or profession, wherever their services are performed;
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the City of Eaton to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(2) As used in subsection (b)(1)C. hereof, “sales made in the City of Eaton” means:
A. All sales of tangible personal property which is delivered within the City of Eaton regardless of where title passes if shipped or delivered from a stock of goods within the City of Eaton;
B. All sales of tangible personal property which is delivered within the City of Eaton regardless of where title passes even though transported from a point outside the City of Eaton if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City of Eaton and the sales result from such solicitation or promotion;
C. All sales of tangible personal property which is shipped from a place within the City of Eaton to purchasers outside the City of Eaton regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) For the purposes of this section, the taxable base shall be determined in accordance with federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for federal income taxes adjusted to the requirements of this chapter.
(d) Consolidated Returns.
(1) Filing of consolidated returns may be permitted or required in accordance with rules and regulations prescribed by the Finance Director.
(2) Allocation of income and deductions between related taxpayers; 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 City of Eaton constituting a portion only of its total business, the Finance Director may require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to the City of Eaton. If the Finance Director finds net profits are not properly allocated to the City of Eaton 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 City of Eaton.
(e) Exceptions. The tax provided for herein shall not be levied upon:
(1) Military pay or allowances of members of the armed forces of the United States, or upon the net profits of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities.
(2) Poor relief, unemployment, insurance benefits, old age pensions or similar payments, including disability benefits received from local, state or federal governments or charitable, religious or educational organizations.
(3) Proceeds of insurance paid by reason of the death of the insured; pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived.
(4) Receipts from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations.
(5) Personal earnings of all persons under eighteen years of age.
(6) Interest and dividends from intangible property.
(7) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the State of Ohio from which the City of Eaton is specifically prohibited from taxing, and income of a decedent’s estate during the period of administration (except such income from the operation of a business).
(8) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the State or their political subdivisions to impose net income taxes on income derived from interstate commerce.
(9) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of the City of Eaton to impose net income taxes.
(10) Core benefit credits or payments provided by an employer to an employee which are treated as tax-free dollars by applicable IRS regulations, except that contributions by an individual to a retirement or deferred compensation plan are not to be excluded from taxable income. However, due to the variety of such benefit and retirement plans, determination of the taxable status will be made on an individual basis after a determination request is submitted by the employer.
(Ord. 96-14. Passed 11-18-96.)
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