196.01 Filing net profit taxes; election to be subject to provisions of chapter.
196.03 Applicability; taxable situs; apportionment.
196.04 Information provided to tax administrators; confidentiality.
196.05 Filing of annual return; remittance; disposition of funds.
196.06 Electronic filing.
196.07 Consolidated returns.
196.08 Failure to pay tax.
196.09 Declaration of estimated taxes.
196.10 Additional penalties.
196.11 Assessments against taxpayer.
196.12 Refund applications.
196.13 Amended returns.
196.14 Examination of records and other documents and persons.
196.15 Credits.
196.16 Reckless violations; penalties.
CROSS REFERENCES
Income Tax - see ADM. Ch. 181
(1) The state tax commissioner shall serve as the sole administrator of the municipal net profit tax for which the taxpayer as defined in Section 196.02(C) of this Chapter is liable for the term of the election;
(B) (1) A taxpayer shall make the initial election on or before the first day of the third month after the beginning of the taxpayer's taxable year by notifying the tax commissioner and the Village of Elida, on a form prescribed by the tax commissioner.
(2) (a) The election, once made by the taxpayer, applies to the taxable year in which the election is made and to each subsequent taxable year until the taxpayer notifies the tax commissioner and the Village of Elida of its termination of the election.
(b) A notification of termination shall be made, on a form prescribed by the tax commissioner, on or before the first day of the third month of any taxable year.
(1) Prescribe all forms necessary to administer those sections;
(2) Adopt such rules as the tax commissioner finds necessary to carry out those sections;
(3) Appoint and employ such personnel as are necessary to carry out the duties imposed upon the tax commissioner by those sections.
(D) The tax commissioner shall not be considered a tax administrator, as that term is defined in section 718.01 of the Ohio Revised Code and Section 181.03.
(Ord. 1122-2018. Passed 3-27-18.)
If a term used in Sections 196.01 to 196.16 of this Chapter that is not otherwise defined in this chapter is used in a comparable context in both the laws of the United States relating to federal income tax and in Title LVII of the Ohio Revised Code and the use is not consistent, then the use of the term in the laws of the United States relating to federal income tax shall have control over the use of the term in Title LVII of the Ohio Revised Code, unless the term is defined in Chapter 5703 of the Ohio Revised Code, in which case the definition in that chapter shall control. Any reference in this chapter to the Internal Revenue Code includes other laws of the United States related to federal income taxes. If a term is defined in both this section and Section 181.03, the definition in this section shall control for all uses of that term in Sections 196.02 to 196.16 of this Chapter.
(A) "Municipal taxable income" means income apportioned or sitused to the municipal corporation under Section 196.03, as applicable, reduced by any pre-2017 net operating loss carryforward available to the person for the municipal corporation.
(B) "Adjusted federal taxable income," for a person required to file as a C corporation, or for a person that has elected to be taxed as a C corporation as described in division (D)(5) of section 718.01 of the Ohio Revised Code and Section 181.03, means a C corporation's federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:
(1) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
(2) Add an amount equal to five per cent of intangible income deducted under division (B)(1) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code.
(3) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code.
(4) (a) Except as provided in division (B)(4)(b) of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code.
(b) Division (B)(4)(a) of this section does not apply to the extent the income or gain is income or gain described in section 1245 or 1250 of the Internal Revenue Code.
(5) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income.
(6) In the case of a real estate investment trust or regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income.
(7) Deduct, to the extent not otherwise deducted or excluded in computing federal taxable income, any income derived from a transfer agreement or from the enterprise transferred under that agreement under section 4313.02 of the Ohio Revised Code.
(8) Deduct exempt income to the extent not otherwise deducted or excluded in computing adjusted federal taxable income.
(9) Deduct any net profit of a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that net profit in the group's federal taxable income in accordance with division (E)(3)(b) of Section 196.07 of this Chapter.
(10) Add any loss incurred by a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that loss in the group's federal taxable income in accordance with division (E)(3)(b) of Section 196.07 of this Chapter.
If the taxpayer is not a C corporation, is not a disregarded entity that has made the election described in division (L)(2) of section 718.01 of the Ohio Revised Code, and is not a publicly traded partnership that has made the election described in division (D)(5) of section 718.01 of the Ohio Revised Code, the taxpayer shall compute adjusted federal taxable income under this section as if the taxpayer were a C corporation, except guaranteed payments and other similar amounts paid or accrued to a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deductible expense unless such payments are in consideration for the use of capital and treated as payment of interest under section 469 of the Internal Revenue Code or United States treasury regulations. Amounts paid or accrued to a qualified self-employed retirement plan with respect to a partner, former partner, shareholder, former shareholder, member, or former member of the taxpayer, amounts paid or accrued to or for health insurance for a partner, former partner, shareholder, former shareholder, member, or former member, and amounts paid or accrued to or for life insurance for a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deduction.
Nothing in division (B) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.
(C) "Taxpayer" has the same meaning as in section 718.01 of the Ohio Revised Code, except that "taxpayer" does not include natural persons or entities subject to the tax imposed under Chapter 5745 of the Ohio Revised Code. "Taxpayer" may include receivers, assignees, or trustees in bankruptcy when such persons are required to assume the role of a taxpayer.
(E) "Taxable year" means the calendar year or the taxpayer's fiscal year ending during the calendar year, or fractional part thereof, upon which the calculation of the taxpayer's adjusted federal taxable income is based pursuant to this chapter. If a taxpayer's taxable year is changed for federal income tax purposes, the taxable year for purposes of Sections 196.01 to 196.16 of this Chapter is changed accordingly but may consist of an aggregation of more than one taxable year for federal income tax purposes. The tax commissioner may prescribe by rule an appropriate period as the taxable year for a taxpayer that has had a change of its taxable year for federal income tax purposes, for a taxpayer that has two or more short taxable years for federal income tax purposes as the result of a change of ownership, or for a new taxpayer that would otherwise have no taxable year.
(F) "Assessment" means a notice of underpayment or nonpayment of a tax issued pursuant to Section 196.11 of this Chapter.
(Ord. 1122-2018. Passed 3-27-18.)
This section applies to any taxpayer that is engaged in a business or profession in the Village of Elida and that has made the election under Section 196.01 of this Chapter.
(A) Except as otherwise provided in division (B) of this section, net profit from a business or profession conducted both within and without the boundaries of the Village of Elida shall be considered as having a taxable situs in the Village of Elida for purposes of municipal income taxation in the same proportion as the average ratio of the following:
(1) The average original cost of the real property and tangible personal property owned or used by the taxpayer in the business or profession in the Village of Elida during the taxable period to the average original cost of all of 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, tangible personal or 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;
(2) Wages, salaries, and other compensation paid during the taxable period to individuals employed in the business or profession for services performed in the Village of Elida to wages, salaries, and other compensation paid during the same period to individuals employed in the business or profession, wherever the individual's services are performed, excluding compensation from which taxes are not required to be withheld under section 718.01 of the Ohio Revised Code;
(3) Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the Village of Elida to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.
(B) (1) If the apportionment factors described in division (A) of this section do not fairly represent the extent of a taxpayer's business activity in the Village of Elida, the taxpayer may request, or the tax commissioner may require, that the taxpayer use, with respect to all or any portion of the income of the taxpayer, an alternative apportionment method involving one or more of the following:
(a) Separate accounting;
(b) The exclusion of one or more of the factors;
(c) The inclusion of one or more additional factors that would provide for a more fair apportionment of the income of the taxpayer to the municipal corporation;
(d) A modification of one or more of the factors.
(2) A taxpayer request to use an alternative apportionment method shall be in writing and shall accompany a tax return, timely filed appeal of an assessment, or timely filed amended tax return. The taxpayer may use the requested alternative method unless the tax commissioner denies the request in an assessment issued within the period prescribed by division (A) of Section 196.11 of this Chapter.
(3) The tax commissioner may require a taxpayer to use an alternative apportionment method as described in division (B)(1) of this section only by issuing an assessment to the taxpayer within the period prescribed by division (A) of Section 196.11 of this Chapter.
(C) As used in division (A)(2) of this section, "wages, salaries, and other compensation" includes only wages, salaries, or other compensation paid to an employee for services performed at any of the following locations:
(1) A location that is owned, controlled, or used by, rented to, or under the possession of one of the following:
(a) The employer;
(b) A vendor, customer, client, or patient of the employer, or a related member of such a vendor, customer, client, or patient;
(c) A vendor, customer, client, or patient of a person described in division (C)(1)(b) of this section, or a related member of such a vendor, customer, client, or patient.
(2) Any location at which a trial, appeal, hearing, investigation, inquiry, review, courtmartial, or similar administrative, judicial, or legislative matter or proceeding is being conducted, provided that the compensation is paid for services performed for, or on behalf of, the employer or that the employee's presence at the location directly or indirectly benefits the employer;
(3) Any other location, if the tax commissioner determines that the employer directed the employee to perform the services at the other location in lieu of a location described in division (C)(1) or (2) of this section solely in order to avoid or reduce the employer's municipal income tax liability. If the tax commissioner makes such a determination, the employer may dispute the determination by establishing, by a preponderance of the evidence, that the tax commissioner's determination was unreasonable.
(D) For the purposes of division (A)(3) of this section, receipts from sales and rentals made and services performed shall be sitused to the Village of Elida as follows:
(1) Gross receipts from the sale of tangible personal property shall be sitused to the Village of Elida only if, regardless of where title passes, the property meets either of the following criteria:
(a) The property is shipped to or delivered within the Village of Elida from a stock of goods located within the Village of Elida.
(b) The property is delivered within the Village of Elida from a location outside the Village of Elida, provided the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village of Elida and the sales result from such solicitation or promotion.
(2) Gross receipts from the sale of services shall be sitused to the Village of Elida to the extent that such services are performed in the Village of Elida.
(3) To the extent included in income, gross receipts from the sale of real property located in the Village of Elida shall be sitused to the Village of Elida.
(4) To the extent included in income, gross receipts from rents and royalties from real property located in the Village of Elida shall be sitused to the Village of Elida.
(5) Gross receipts from rents and royalties from tangible personal property shall be sitused to the Village of Elida based upon the extent to which the tangible personal property is used in the Village of Elida.
(E) Commissions received by a real estate agent or broker relating to the sale, purchase, or lease of real estate shall be sitused to the Village of Elida in which the real estate is located. Net profit reported by the real estate agent or broker shall be allocated to the Village of Elida based upon the ratio of the commissions the agent or broker received from the sale, purchase, or lease of real estate located in the Village of Elida to the commissions received from the sale, purchase, or lease of real estate everywhere in the taxable year.
(F) If, in computing a taxpayer's adjusted federal taxable income, the taxpayer deducted any amount with respect to a stock option granted to an employee, and if the employee is not required to include in the employee's income any such amount or a portion thereof because it is exempted from taxation under Chapter 181, the taxpayer shall add the amount that is exempt from taxation to the taxpayer's net profit that was apportioned to the Village of Elida. In no case shall a taxpayer be required to add to its net profit that was apportioned to the Village of Elida any amount other than the amount upon which the employee would be required to pay tax were the amount related to the stock option not exempted from taxation.
This division applies solely for the purpose of making an adjustment to the amount of a taxpayer's net profit that was apportioned to the Village of Elida under this section.
(G) When calculating the ratios described in division (A) of this section for the purposes of that division or division (B) of this section, the owner of a disregarded entity shall include in the owner's ratios the property, payroll, and gross receipts of such disregarded entity. (Ord. 1122-2018. Passed 3-27-18.)
(A) Any information gained as a result of returns, investigations, hearings, or verifications required or authorized by Sections 196.01 to 196.16 of this Chapter is confidential, and no person shall disclose such information, except for official purposes, in accordance with a proper judicial order, or as provided in section 4123.271 or 5703.21 of the Ohio Revised Code. The tax commissioner may furnish the internal revenue service with copies of returns filed. This section does not prohibit the publication of statistics in a form which does not disclose information with respect to particular taxpayers.
(B) In May and November of each year, the tax commissioner shall provide the Village of Elida tax administrator with the following information for every taxpayer that filed tax returns with the commissioner under Sections 196.01 to 196.16 of this Chapter and that had municipal taxable income apportionable to the Village of Elida under this chapter for any prior year:
(1) The taxpayer's name, address, and federal employer identification number;
(2) The taxpayer's apportionment ratio for, and amount of municipal taxable income apportionable to, the Village of Elida pursuant to Section 196.03 of this Chapter;
(3) The amount of any pre-2017 net operating loss carryforward utilized by the taxpayer;
(4) Whether the taxpayer requested that any overpayment be carried forward to a future taxable year;
(5) The amount of any credit claimed under section 718.94 of the Ohio Revised Code.
(C) Not later than thirty days after each distribution made to municipal corporations under section 718.83 of the Ohio Revised Code, the tax commissioner shall provide to the Village of Elida a report stating the name and federal identification number of every taxpayer that made estimated payments that are attributable to the Village of Elida and the amount of each such taxpayer's estimated payment.
(D) The information described under divisions (B) and (C) of this section shall be provided to the individual or individuals designated by the Village of Elida tax administrator under section 718.83(D) of the Ohio Revised Code.
(E) (1) The City/Village expects that the tax commissioner will, pursuant to section 718.84(E) of the Ohio Revised Code, provide tax returns and other information it receives in the performance of its administration of the municipal net profits tax for taxpayers making the election provided in Section 196.01 of this Chapter. The tax administrator shall review these returns and information, as well as the information received pursuant to divisions (B) and (C) of this section, and has discretion to refer any taxpayer for audit by the tax commissioner. Such referral shall be made on a form prescribed by the commissioner and shall include any information that forms the basis for the referral.
(2) If the tax commissioner declines to audit a taxpayer referred by the tax administrator under this section, the Village of Elida reserves its right to pursue any and all remedies, whether at law or in equity, to ensure that the correct tax liability has been calculated and paid by the taxpayer.
(Ord. 1122-2018. Passed 3-27-18.)
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