In the case of the residents of the Municipality, an annual tax of one percent (1%) is imposed on all qualifying wages, commissions and other compensation, and other taxable income earned or accrued on and after June 1, 1978. For the purpose of determining the tax on the earnings of the resident taxpayers, taxed under Section 181.03, the source of the earnings and the place or places in, or at which the services were rendered are immaterial. All such earnings, wherever earned or paid, are taxable.
(a) The following are items that are subject to the tax.
(1) Qualifying wages, bonuses or incentive payments received by an individual, whether directly or through an agent or whether in cash or in property, for services rendered on and after June 1, 1978:
A. As an officer or employee, or both, of a corporation (including charitable and other nonprofit corporations), joint stock associations or joint stock company;
B. As an employee (as distinguished from a partner or member) of a partnership, limited partnership, limited liability company, or any other form of unincorporated enterprise owned by one or more persons;
C. As an employee (as distinguished from the proprietor) of a business, trade or profession conducted by an individual owner;
D. As an officer or employee (whether elected, appointed or commissioned) of a governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, subdivision, section or unit of the State or any of the political subdivisions thereof;
E. As an officer or employee (whether elected, appointed or commissioned) of a governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, subdivision, section or unit of the United States Government, or of a corporation created and owned or controlled by the United States Government or any of its agencies;
F. As an employee of any other entity or person.
(2) Qualifying wages, bonuses or incentive payments received by an individual, whether directly or through an agent and whether in cash or in property, for services rendered on and after June l, 1978;
A. Whether based upon hourly, daily, weekly, semimonthly, annual, unit of production or piecework rates;
B. Whether paid by an individual, limited liability company, limited partnership, partnership, association, corporation ( including charitable and other nonprofit corporations), governmental administration, agency, arm, authority, board, body, branch, department, division, subdivision, section or unit, or any other entity.
(3) Commissions received by a taxpayer whether directly or through an agent and whether in cash or in property, for services rendered on and after June 1, 1978, regardless of how computed, by whom or wheresoever paid. If amounts received as a drawing account exceed the commissions earned, the tax is payable on the gross amounts received. Amounts received from an employer by way of expenses and not by way of compensation and used as such by the individual receiving them are not deemed to be compensation if the employer deducts such expense advances as such from his gross income for the purpose of determining his net profits taxable under this chapter. If such commissions are included in the net earnings of a trade, business, profession, enterprise or activity regularly carried on by such individual and, therefore subject to tax under Section 181.03(a) they shall not again be separately taxed. In such case, such net earnings shall be taxed as provided in Section 183.12.
(4) The receipt of fees and other compensation for personal services rendered shall be deemed to be subject to taxation under this chapter.
(5) On the net profit of a proprietorship or business entity, regardless of where the entity is located.
(6) The resident's share of net profits from a pass-through entity located outside the Municipality.
(7) Domestic servants are subject to municipal tax under this chapter, but are not subject to withholding provisions. That is to say, the domestic shall report earnings and pay the tax directly to the Municipal Income Tax Department.
(b) The provisions of this chapter shall not be construed as levying a tax upon the following:
(1) Proceeds from welfare benefits, unemployment insurance benefits, supplemental unemployment benefits, social security benefits or similar payments received from local, state or federal governments or charitable or religious organizations.
(2) Proceeds of insurance, annuities, Workers' Compensation insurance, permanent disability benefits, compensation for damage for personal injuries and like reimbursements, not including damages for loss of profits or qualifying wages.
(3) Compensation for damage to property by way of insurance or otherwise.
(4) Interest and dividends from intangible property.
(5) Military pay and allowances received as a member of the armed forces of the United States and of members of their reserve components, including the Ohio National Guard (ORC 718.01).
(6) If exempt for Federal income tax purposes, fellowship and scholarship grants are excluded from Municipal income tax.
(7) Compensation paid under section 3501.28 or 3501.36 of the Ohio Revised Code to a person serving as a precinct official, to the extent that such compensation does not exceed one thousand dollars ($1,000.00) annually. Such compensation in excess of one thousand dollars may be subjected to taxation. The payer of such compensation is not required to withhold Municipal tax from that compensation.
(8) Alimony (not deductible as an expense).
(9) Capital gains.
(10) Patent and copyright income.
(11) Royalties (if derived from intangible property).
(12) Annuities (at time of distribution).
(13) Profit sharing from qualified plans.
(14) As of January 1, 2003, the housing allowance of ministers commissioned by a church or denomination to conduct worship services.
A. The church or denomination must furnish a copy of the bylaws or minutes setting forth the amounts that are designated for housing allowance. The minister cannot designate the breakdown himself. This could change each year depending on the housing allowance, therefore the church Minutes must record each time a change occurs.
B. A minister is not eligible for a housing allowance with respect to secular earnings.
C. For part-time ministers or those with dual-purpose income, the deduction cannot be greater than the income received for conducting worship services.
D. The deduction cannot be greater than that allowed by the Internal Revenue Service. A copy of the Internal Revenue Service schedule and/or worksheet must accompany the Municipal tax return.
(Ord. 2003-79. Passed 12-2-03.)