(A) "Municipal Taxable Income" for a resident of the Municipality 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 division (20)(B) of Section 194.03
of this Chapter, further reduced by any "Pre-2017 Net Operating Loss Carryforward" equals "Municipal Taxable Income."
(ii) "Net profit" is included in "income," and is defined in Section 194.03
(23) of this Chapter. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in division (1)(H) of Section 194.03
. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 194.062
(E).
(iii) Section 194.03
(14) provides the following: offsetting and net operating loss carryforward treatment in (14)(A)(ii)(a); resident's distributive share of net profit from pass-through entity treatment in (14)(A)(ii)(b); treatment of S Corporation distributive share of net profit in the hands of the shareholder in (14)(A)(iii); restriction of amount of loss permitted to be carried forward for use by taxpayer in a subsequent taxable year in (14)(A)(iv).
(v) Unless otherwise prohibited by provisions in Chapter 718 of the Ohio Revised Code (Substitute House Bill 5, 130th Ohio General Assembly): In the case of a resident individual who is a partner in a general partnership, limited liability partnership, or limited partnership, a member in a limited liability company (recognized or taxed as a partnership by the Federal Internal Revenue Service) or part owner of an association, or other form of unincorporated entity, income shall include such individual's distributive share of net profits earned, accrued, or received during the effective period of the Ordinance that is not attributable to the Municipality under the method of allocation provided in this chapter and not otherwise taxed against the entity by the Municipality.
(vi) Unless otherwise prohibited by provisions in Chapter 718 of the Ohio Revised Code (Substitute House Bill 5, 130th Ohio General Assembly): In the case of a resident individual who is a shareholder of an S corporation, income shall include such individual's distributive share of net profits earned, accrued, or received during the effective period of the Ordinance that is not attributable to the Municipality under the method of allocation provided in this chapter and not otherwise taxed against the entity by the Municipality, to the extent the S corporation's income is apportioned to Ohio (Senate Bill 180, 125th Ohio General Assembly).
(c) Allowable employee business expense deduction is described in (20)(B) of Section 194.03
of this Chapter, and is subject to the limitations provided in that section.
(B) "Municipal Taxable Income" for a nonresident of the Municipality 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 Municipality as provided in Section 194.062
of this Chapter, reduced by allowable employee business expense deduction as found in (20)(B) of Section 194.03
of this Chapter, further reduced by any "Pre-2017 Net Operating Loss Carryforward" equals "Municipal Taxable Income".
(ii) "Net profit" is included in "income," and is defined in Section 194.03
(23) of this Chapter. This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in division (1)(H) of Section 194.03
. "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.
(c) "Apportioned or sitused to the Municipality as provided in Section 194.062
of this Chapter" includes the apportionment of net profit income attributable to work done or services performed in the Municipality. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 194.062
(E) of this Chapter.
(d) "Allowable employee business expense deduction" as described in (20)(B) of Section 194.03
of this Chapter, is subject to the limitations provided in that section. For a nonresident of the Municipality, the deduction is limited to the extent the expenses are related to the performance of personal services by the nonresident in the Municipality.
(Ord. 2015-101. Passed 12-15-15.)