(A) Authority to levy tax.
(1) The tax on income and the withholding tax established by this Chapter 101 are authorized by Article XVIII, § 3 of the Ohio Constitution. The tax on income and the withholding tax established by this Chapter 101 are deemed to be levied in accordance with, and to be consistent with, the provisions and limitations of R.C. Ch. 718. This chapter is deemed to incorporate the provisions of R.C. Ch. 718.
(2) The tax is an annual tax levied on the income of every person residing in or earning or receiving income in the municipal corporation, and shall be measured by municipal taxable income. The municipality shall tax income at a uniform rate.
(3) The tax shall be levied, collected, and paid with respect to the income, qualifying wages, commissions, and other compensation earned and shall be levied with respect to the net profits of the persons, businesses, professions, or other activities earned or received from and after the effective date as noted in § 101.02.
(B) Purposes of tax; rate.
(1) The purposes of the income tax are to provide funding for general municipal functions of the city, there shall be, and is hereby, levied a tax on salaries, wages, commissions, and other compensation including fees, sick pay, bonuses, tips, rents, and on net profits, as defined in § 101.03, including professional association and partnerships, royalties, and employer supplemental unemployment benefits or subpay. Other taxable income includes wage continuation pay, contests, prizes, and awards, all gaming, schemes of chance, wagering, lotteries or any other gambling including all Ohio lottery and casino winnings subject to § 101.03(C)(21)(d), dismissal pay, severance pay, incentive payments, property in lieu of cash payments, depreciation recapture, and other compensation earned, received and/or accrued.
(2) Said income tax for the purposes specified in § 101.01(B)(1) shall be levied, collected and paid with respect to the definitions in § 101.03 at the rate of 1.5% per annum upon income subject to tax for individuals as outlined in § 101.04; for employer withholding as outlined in § 101.05; and for business income subject to net profit tax as outlined in § 101.06.
(C) Allocation of funds. The funds collected under the provisions of Chapter 101 shall be deposited, after payment of costs and expenses of collections, in the following funds at the outlined proportions:
Fund 101 General Fund 100% for any and all municipal purposes
(D) Statement of procedural history; state mandated changes to municipal income tax.
(1) Significant and wide-ranging amendments to R.C. Ch. 718 were enacted by Am Sub HB 5, passed by the 130th General Assembly, and signed by Governor Kasich on December 19, 2014, and H.B. 5 required municipal corporations to conform to and adopt the provisions of R.C. Ch. 718 in order to have the authority to impose, enforce, administer and collect a municipal income tax.
(2) As mandated by H.B. 5, municipal income tax Ordinance 2015-19, effective January 1, 2016, comprehensively amends Chapter 91 in accordance with the provisions of R.C. Ch. 718 to allow the municipality to continue the income tax and withholding tax administration and collection efforts on behalf of the municipality.
(Ord. 19-2015, passed 11-23-15)
Statutory reference:
Authority for tax on income and withholding tax, see R.C. § 718.04