(a) Method of Determination. This Section 791.05 does not apply to taxpayers that are subject to and required to file reports under Chapter 5745 of the Revised Code.
(1) Except as otherwise provided in Section 791.05(a)(4), for taxable years beginning on or after January 1, 2008, the net profits from a business or profession conducted both within and without the Village shall be considered as having a taxable situs in the Village for purposes of imposing the Village income tax to the extent of the amount determined by multiplying the entire net profits by a business allocation percent determined by the average ratio of the following:
A. The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the Village during the taxable period to the average original cost of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.
As used in this subsection (a)(1)(a), “real property” shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereof by eight (8).
B. Wages, salaries and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the Village to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed, excluding compensation that is not taxable by the Village under Section 718.011 of the Revised Code.
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the Village to gross receipts of the business or profession during the same period from sales and services, wherever made or performed. In the event that the foregoing apportionment formula does not produce an equitable result, another basis may be substituted, under the Rules and Regulations, so as to produce an equitable result.
(2) For taxable years beginning on or after January 1, 2008, no taxpayer shall use the books and records method of apportionment. Except as otherwise provided in Section 718.02 of the Revised Code and subsection (a) hereof, all taxpayers shall use the statutory apportionment formula set forth in this section.
(3) Except as otherwise provided in subsection (d) hereof, for taxable years beginning on or after January 1, 2008, the net profits from rental activity not constituting a business or profession shall be subject to tax by the Village only if the property generating the net profit is located in the Village.
(4) This Section shall not apply to individuals who are residents of the Village and, except as otherwise provided in Section 718.01 of the Revised Code, the Village shall impose its tax on all income earned and/or received by residents of the Village from whatever source derived in accordance with Section 791.03 of this chapter.
(b) Sales Made in the Village. As used in Section 791.05(a)(3)(c), “sales made in the Village” means:
(1) All sales of tangible personal property delivered within the Village regardless of where title passes if shipped or delivered from a stock of goods within the Village;
(2) All sales of tangible personal property delivered within the Village regardless of where title passes even though transported from a point outside the Village, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village, and the sales result from such solicitation or promotion; or
(3) All sales of tangible personal property shipped from a place within the Village to purchasers outside of the Village regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) Total Allocation. Add together the percentages determined in accordance with Section 791.05 (a)(1)(a), (a)(1)(b), and (a)(1)(c), or such of the aforesaid percentages as are applicable to the particular taxpayer, and divide the total so obtained by the number of percentages used in deriving the total in order to obtain the business allocation percentage referred to in Section 791.05(a)(1). A factor is applicable even though it may be allocable entirely within or without the Village.
(d) Rentals. Rental income received by a taxpayer shall be included in the computation of net profits from business activities under divisions (c) to (e) of Section 791.03, only if and to the extent that the rental, ownership, management or operations of the real estate from which such rentals are derived, whether so rented, managed or operated by a taxpayer individually or through agents or other representatives, constitutes a business activity of the taxpayer in whole or in part.
Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of one hundred twenty-five dollars ($125.00) per month, it shall be prima-facie evidence that the rental, ownership, management or operation of such properties, is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax. However, in the case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits, of the lessee, whether or not such rental exceeds of one hundred twenty- five dollars ($125.00) per month; provided further that in the case of farm property, the owner shall be considered engaged in a business activity when he shares in crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds of one hundred twenty-five dollars ($125.00) per month. It is provided further that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds of one hundred twenty-five dollars ($125.00) per month.
(e) Operating Loss; Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to January 1, 1968, allocable to the Village may be applied against the portion of the net profit of succeeding tax years allocable to the Village, until exhausted but in no event for more than five (5) taxable years immediately following the year in which the loss occurred. No portion of a net operating loss shall be carried back against net profits of any prior year.
(2) The portion of net operating loss sustained shall be allocated to the Village in the same manner as provided herein for allocating net profits to the Village.
(3) The Tax Administrator shall provide by Rules and Regulations the manner in which such net operating loss carry forward shall be determined.
(Ord. 2007-55. Passed 12-11-07.)