(a) Municipal taxable income for a resident of the City is calculated as follows:
(1) Income reduced by exempt income to the extent such exempt income is otherwise included in income, reduced by allowable employee business expense deduction as found in Section 792.03(c)(20)B., further reduced by any pre-2017 net operating loss carryforward equals Municipal taxable income.
A. "Income" is defined in Section 792.03(c)(14).
1. "Qualifying wages" is defined in Section 792.03(c)(34).
2. "Net profit" is included in income, and is defined in Section 792.03(c)(23). This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in Section 792.03(c)(23)C. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 792.062(e).
3. Section 792.03(c)(14) provides the following: offsetting and net operating loss carryforward treatment in Section 792.03(c)(14)A.2.a.; resident's distributive share of net profit from pass through entity treatment in Section 792.03(c)(14)A.2.b.; treatment of S corporation distributive share of net profit in the hands of the shareholder in Section 792.03(c)(14)A.3.; restriction of amount of loss permitted to be carried forward for use by taxpayer in a subsequent taxable year in Section 792.03(c)(14)A.4.
4. "Pass through entity" is defined in Section 792.03(c)(27).
B. "Exempt income" is defined in Section 792.03(c)(11).
C. Allowable employee business expense deduction is described in Section 792.03(c)(20)B., and is subject to the limitations provided in that section.
D. "Pre-2017 net operating loss carryforward" is defined in Section 792.03(c)(32).
(b) Municipal taxable income for a nonresident of the City is calculated as follows:
(1) Income reduced by exempt income to the extent such exempt income is otherwise included in income, as applicable, apportioned or sitused to the City as provided in Section 792.062, reduced by allowable employee business expense deduction as found in Section 792.03(c)(20)B., further reduced by any pre-2017 net operating loss carryforward equals Municipal taxable income.
A. "Income" is defined in Section 792.03(c)(14).
1. "Qualifying wages" is defined in Section 792.03(c)(34).
2. "Net profit" is included in income, and is defined in Section 792.03(c)(23). This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in Section 792.03(c)(23)C. "Net profit" for a nonresident individual includes any net profit of the nonresident, but excludes the distributive share of net profit or loss of only pass through entity owned directly or indirectly by the nonresident.
3. "Pass-through entity" is defined in Section 792.03(c)(27).
B. "Exempt income" is defined in Section 792.03(c)(11).
C. "Apportioned or sitused to the City of Euclid as provided in Section 792.062 of this chapter" includes the apportionment of net profit income attributable to work done or services performed in the City. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 792.062(e).
D. Allowable employee business expense deduction as described in Section 792.03(c)(20)B., is subject to the limitations provided in that section. For a nonresident of the City, the deduction is limited to the extent the expenses are related to the performance of personal services by the nonresident in the City.
E. "Pre-2017 net operating loss carryforward" is defined in Section 792.03(c)(32).
(Ord. 151-2015. Passed 12-7-15; Ord. 6-2018. Passed 1-16-18.)