(a) Income Taxed. Subject to the provisions of Section 880.16, a permanent annual tax for the purposes specified in Section 880.01 shall be imposed at the rate of one and three-quarters percent per annum, effective December 1, 1978, and such additional amounts as may be imposed by ordinance, upon the following:
(1) On all salaries, wages, commissions and other compensation, including, but not limited to, earned income derived from gaming, wagering, lotteries, including the Ohio State lottery, or schemes of chance, which shall not be taxed as business income unless an individual has an effective Federal gambler's permit received during the effective period of this chapter by residents or domiciliaries of the Municipality;
(2) On all salaries, wages, commissions and other compensation received 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 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 Municipality;
B. On the portion attributable to the Municipality 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 Municipality, upon which the tax was not paid by the entity;
(4) A. On the portion attributable to the Municipality of the net profits earned and accrued or received during the effective period of this chapter of all nonresident 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 Municipality, whether or not such association or other unincorporated 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 and accrued or received during the effective period of this chapter of a resident partner or owner of a nonresident association or other unincorporated business entity not attributable to the Municipality on which the tax was not paid by the entity; and
(5) On the portion attributable to the Municipality 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 Municipality, whether or not such corporations have a place of business in the Municipality.
(Ord. 86-22. Passed 11-25-86.)
(b) Determination of Net Profits. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the Municipality, 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 Municipality, 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 herein, real property includes 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 Municipality, 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 Municipality, 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 division (b)(1)C. of this section, "sales made in the Municipality" means:
A. All sales of tangible personal property which is delivered within the Municipality, regardless of where title passes, if shipped or delivered from a stock of goods within the Municipality;
B. All sales of tangible personal property which is delivered within the Municipality, regardless of where title passes, even though transported from a point outside the Municipality, if the taxpayer is regularly engaged through his or her own employees in the solicitation or promotion of sales within the Municipality, and the sales result from such solicitation or promotion;
C. All sales of tangible personal property which is shipped from a place within the Municipality, to purchasers outside the Municipality, regardless of where title passes, if the taxpayer is not, through his or her own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) Determination of Taxable Base. For the purpose 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 Superintendent of Taxation.
(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 his or her total business, the Superintendent may require such additional information as he or she deems necessary to ascertain whether net profits are properly allocated to the Municipality. If the Superintendent 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.
(e) Exceptions. The tax provided for in this chapter shall not be levied upon:
(1) Pay or allowances of active members of the Armed Forces of the United States, or the income 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 sixteen years of age;
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State which the Municipality 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;
(7) 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 states or their political subdivisions to impose net income taxes on income derived from interstate commerce; or
(8) Salaries, wages, commissions and other compensation and net profits the taxation of which is prohibited by the Ohio Constitution or any act of the Ohio General Assembly limiting the power of the Municipality to impose net income taxes. (Ord. 78-47. Passed 7-18-78; Ord. 93-2. Passed 1-12-93.)
(Ord. 10-15. Passed 12-14-10; Ord. 15-17. Passed 11-10-15.)