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(a) Rental income received by a taxpayer shall be included in the computation of net profits from business activities only if and to the extent that the rental ownership, management or operations of the real estate from which such rentals are derived, whether so rented, managed or operated by a taxpayer individually or through agents or other representatives, constitute a business activity of the taxpayer in whole or in part. Net profits not constituting a business activity remain taxable, and shall be taxed using the books and records method.
(b) Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of one hundred twenty-five dollars ($125.00) per month, it shall be prima-facie evidence that the rental, ownership, management or operation of such properties is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax, provided that in the case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits of the lessee, whether or not such rental exceeds one hundred twenty-five dollars ($125.00) per month, and provided, further, that in the case of farm property, the owner shall be considered engaged in a business activity when he or she shares in crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds such one hundred twenty-five dollars ($125.00) per month, and provided, further, that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds such one hundred twenty-five dollars ($125.00) per month.
(c) On or before October 16, 1993, all property owners of rental or leased residential property shall file with the Administrator of the City of Euclid, Ohio a report showing the names and addresses of each such tenant who occupies residential premises within the corporation limits of the City as of October 1, 1993.
(d) Beginning October 1, 1993, and thereafter, within 30 days after a new tenant occupies residential rental property of any kind within the City, all property owners of a rental or leased residential property shall file with the Administrator a report showing the names and addresses of each tenant who occupies a residential premises within the corporation limits of the City.
(e) Beginning October 1, 1993, and thereafter, within 30 days after a tenant vacates a rental or leased residential property located within the City, all property owners of rental or leased residential property shall file with the Administrator a report showing the date of vacating from the rental or leased residential property and identifying such vacating tenant.
(f) For the purposes of this section, “tenant” shall mean:
(1) If there is a written lease or rental agreement, the person or persons who sign the written lease or rental agreement with the owner.
(2) If there is an oral lease or rental agreement, the person or persons with whom the owner enters into the oral lease or rental agreement.
(g) In the event of violations of this section, the following penalties shall be imposed: A fine of not more than twenty-five dollars ($25.00) for a first offense; a fine of not more than fifty dollars ($50.00) for a second offense; a fine of not more than one hundred dollars ($100.00) for each offense, for a third and all subsequent offenses.
(Ord. 262-1966. Passed 12-23-66; Ord. 180-2004. Passed 10-18-04; Ord. 207-2009. Passed 12-7-09.)
(a) The portion of a net operating loss sustained in any taxable year subsequent to January 1, 2004, allocable to the City, may be applied against the portion of the profit of succeeding tax years allocable to the City until exhausted, but in no event for more than five taxable years immediately following the year in which the loss occurred. No portion of a net operating loss shall be carried back against net profits of any prior year.
(b) The portion of net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
(c) The portion of a net operating loss sustained in any taxable year allocable to the city may not be offset against salaries, wages, commissions and other non-business compensation.
(d) The Tax Administrator shall provide by rules und regulations the manner in which such net operating loss carry-forward shall be determined.
(Ord. 175-2004. Passed 10-18-04; Ord. 153-2006. Passed 9-18-06; Ord. 207-2009. Passed 12-7-09.)
The tax provided for herein shall not be levied on the following:
(a) Military pay or allowance of active members of the Armed Forces of the United States and of members of their reserve components, including the National Guard;
(b) Poor relief, unemployment insurance benefits or similar payments, including disability benefits received from local, State or Federal governments, or charitable, religious or educational organizations;
(c) Proceeds of insurance paid by reason of the death of the insured and proceeds from pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived;
(d) Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are 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;
(e) Alimony received;
(f) Personal earnings of any natural person under eighteen years of age;
(g) Compensation paid to a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000.00) annually.
(h) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained clergy's compensation. The clergy must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination, and must have authority to perform all sacraments of the religious body.
(i) Compensation for personal injuries or for damages to property by way of insurance or otherwise, but this exceptions does not apply to compensation paid for lost salaries or wages or to compensation from punitive damages;
(j) Interest, dividends and other revenue from intangible property;
(k) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State from which the City 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);
(l) 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;
(m) Income, 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;
(n) Income, 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 to impose net income taxes.
(Ord. 262-1966. Passed 12-23-66; Ord. 207-2009. Passed 12-7-09.)
(a) Unless an exemption certificate is filed for the tax year 2008 or subsequent tax years thereafter on a form provided by the administrator, each taxpayer shall, whether or not a tax is due thereon, make and file a return on or before April 15 of the year following the effective date of this chapter (Ordinance 262-1966, passed December 23, 1966), and on or before April 15 of each year thereafter through tax year 2007. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within one hundred five (105) days from the end of such fiscal year or period. Beginning with tax year 2008, the filing dates shall correspond to the federal filing dates if the federal filing dates are other than April 15th and/or one hundred five (105) days from the end of such fiscal year or period.
(b) Retirees having no taxable income for City of Euclid income tax purposes may file, with the administrator, a written request for exemption from these filing requirements, and shall be exempt if the request is granted by the administrator. The request shall be filed using the prescribed exemption certificate, which is available from the City of Euclid income tax office. Such exemption, if granted, shall be in effect until such time as the retiree receives income taxable for City of Euclid income tax purposes, at which time the retiree shall be required to comply with all applicable provisions of this chapter, including the filing requirements.
(c) Any business, profession, association or corporation reporting a net loss is subject to the filing requirements of this chapter.
(d) Each taxpayer may offset business losses against business net profits from any business conducted in the city or in any municipality that does not levy an income tax on net profits therefrom. However, partnership and S corporation distributive share losses are not deductible from an individual's rental or sole proprietorship income.
(e) A loss from the operation of a business may not be used to offset the income on a taxpayer's W-2 form.
(f) Unreimbursed employee business expenses deductible on federal form 2106 are deductible expenses for city income tax purposes. However, the deductions shall be subject to federal guidelines, and to review and audit by the city's income tax office. Expenses must be allocated proportionate to the related income.
(Ord. 101-1988. Passed 6-16-88; Ord. 178-2004. Passed 10-18-04; Ord. 15-2008. Passed 1-22-08; Ord. 207-2009. Passed 12-7-09.)
The return shall be filed with the Administrator on a form or forms furnished by or obtainable upon request from the Administrator, or on a generic form as defined in this chapter, setting forth:
(a) The aggregate amounts of income, salaries, wages, commissions, lottery winnings, gambling winnings, other compensation, and other income earned or received and gross income from a business, profession or other enterprise or any activity, less allowable expenses incurred in the acquisition of such gross income earned during the preceding year and subject to such tax;
(b) The amount of the tax imposed by this chapter on such earnings and profits; and
(c) Such other pertinent statements, information returns or other information as the Administrator may require. Pertinent information may include, but not be limited to, copies of all W-2 forms, 1099 miscellaneous income forms, page one of form 1040, pages one and two of form 1120, 1120s (including (K-1), 2106, 1065, schedule C (including cost of goods manufactured and/or sold), schedule E, schedule F and any other federal schedules, if applicable.
(Ord. 262-1966. Passed 12-23-66; Ord. 228-2003. Passed 12-1-03; Ord. 207-2009. Passed 12-7-09.)
(a) The Administrator may extend the time for filing of the annual return upon the request of the taxpayer for a period of not more than six months, or one month beyond any extension requested of or granted by the Internal Revenue Service for the filing of the federal income tax return. For taxable year 2004 the extended due date shall be the last day of the month following the month to which the due date of the federal income tax return has been extended. For taxable years subsequent to 2004 the extended due date shall be the last day of the month to which the due date of the federal income tax return has been extended, if the annual return is filed through the Ohio Business Gateway. If not filed through the Ohio Business Gateway the extended due date remains the last day of the month following the month to which the due date of the federal income tax return has been extended. The Administrator may deny the extension if the taxpayer's income tax account with the city is delinquent in any way.
(b) The Administrator may require a tentative return, accompanied by payment of the amount of tax shown to be due thereon, by the date the return is normally due. No penalty or interest shall be assessed in those cases in which the return is filed and the final tax paid within the period as extended.
(Ord. 262-1966. Passed 12-23-66; Ord. 207-2009. Passed 12-7-09.)
(a) Any affiliated group which files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the city. However, once the affiliated group has elected to file a consolidated return or a separate return with the city, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the Administrator.
(b) In the case of a corporation that carried 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 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 City. If the Administrator finds that net profits are not properly allocated to the City 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 City.
(Ord. 262-1966. Passed 12-23-66; Ord. 207-2009. Passed 12-7-09.)
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