181.081 CREDIT FOR TAX PAID TO ANOTHER MUNICIPALITY.

   (A)   Limitation. Where a Resident of Fairfield is subject to a municipal income tax in another Municipality he shall not pay a total municipal income tax on the same income greater than the tax imposed at the higher rate. Credit is not given to School or County tax paid.

   (B)   Credits to Residents. Resident individuals of Fairfield who are required to pay and do pay, a tax to another municipality on salaries, wages, commissions or other compensation for work done or services performed in such other municipality, or a Net Profits from Businesses, professions or other activities conducted in such other municipality, may claim a credit of the amount of tax paid by them or on their behalf for the same taxable period to such other municipality but only to the extent of the tax imposed by this chapter on such compensation or Net Profits.

   (C)   Method of Applying for Credit. No credit will be given unless the Taxpayer claims such on his final return or other form prescribed by the Tax Administrator, and presents such evidence of the payment of a similar tax to only another municipality, as the Tax Administrator may require.

      (1)   Tax credit for taxes paid to another City is limited to the income determined to be taxable by the Tax Administrator or designee. The credit allowed is limited to the income taxed by another City. The credit allowed for taxes paid to another Municipality whose rate is higher than Fairfield's rate is calculated by dividing the tax withheld by that City's tax rate and multiplying that income by the tax rate imposed by this chapter. A taxpayer who pays a tax to a City whose rate is less than the tax rate imposed by this chapter shall only receive credit for the tax paid. No excess tax withheld for a Municipality whose rate is higher than Fairfield's rate shall apply to income taxed by another Municipality whose rate is lower than Fairfield's rate.

      (2)   Tax credit for taxes paid by a resident on his net profits shall be limited to the income determined to be taxable by the Tax Administrator or designee. If the taxpayer pays directly to another Municipality for his unincorporated entity but has additional unincorporated entities sustaining losses, the tax credit allowed will be reduced to the net taxable income recognized by the City. No taxes paid to another Municipality will be credited or refunded or applied to other income of the taxpayer.

      (3)   A refund must be claimed by the taxpayer or his employer within three (3) years of the date of filing the final return for the year for which such refund is claimed. The Tax Administrator shall prescribe rules for verification.

    A statement satisfactory to the Tax Administrator from the taxing authority of the Municipality to which the taxes are paid that a Fairfield Resident or his Employer is paying the tax shall be considered as fulfilling the requirement of this article.

(Ord. 107-20. Passed 12-7-20.)