(A) Authority to levy tax.
(1) The tax on income and the withholding tax established by this subchapter are authorized by Article XVIII, § 3 of the State Constitution. The tax on income and the withholding tax established by this subchapter are deemed to be levied in accordance with, and to be consistent with, the provisions and limitations of R.C. § 718. This subchapter is deemed to incorporate the provisions of R.C. § 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. The tax is levied on municipal taxable income, as defined herein.
(R.C. § 718.04)
(B) Purpose of tax; rate.
(1) The purpose of levying a tax is to provide funds for the purposes of general municipal operation maintenance of equipment, extension, enlargement and improvement of municipal services and facilities and capital improvements, from the tax derived on all salaries, wages, commissions and other compensations earned by residents of the village; on all salaries, wages, commissions and other compensation earned by nonresidents of the village for work done or services performed or rendered in the village or for an employer located within the village; on the net profits earned on all businesses, professions or other activities conducted by residents of the village; on the net profits earned on all businesses, professions or other activities conducted in the village by nonresidents, and on the net profits earned by all corporations doing business in the village as the result of work done or services performed or rendered in the village; requiring the filing of returns and furnishing of information by employers and all those subject to said tax; imposing on employers the duty of collecting the tax at the source and paying the same to the village; providing for the administration, collection, and enforcement of said tax; and declaring violation thereof to be a misdemeanor and imposing penalties therefor.
(2) Subject to the provisions of this subchapter, an annual tax for the purposes specified in this subchapter hereof shall be imposed on and after January 1, 1970 at the rate of 1% per annum, and on and after January 1, 1988 at the rate of 1.5%.
(R.C. § 718.04)
(C) Statement of procedural history; state mandated changes to municipal income tax.
(1) Significant and wide-ranging amendments to R.C. § 718 were enacted by Am. Sub. HB 5, passed by the 130th General Assembly, and signed by Governor Kasich on December 19, 2014. HB 5 required municipal corporations to conform to and adopt the provisions of R.C. § 718 in order to have the authority to impose, enforce, administer and collect a municipal income tax.
(2) As mandated by HB 5, municipal income tax Ord. 15-17, effective January 1, 2016, comprehensively amends Ord. 1969-09 (and all subsequent amendments thereto, if any) in accordance with the provisions of R.C. § 718 to allow the village to continue the income tax and withholding tax administration and collection on behalf of the municipality. This subchapter shall be construed so as to conform to and adopt the provisions of R.C. § 718.
(Ord. 15-17, passed 12-7-2015)