(a) Income Taxed. Subject to the provisions of Section 880.15, an annual tax for the purposes specified in Section 880.01(a) shall be imposed on and after January 1, 2002, at the rate of one and one-half percent per year upon the following:
(1) On all salaries, wages, commissions and other compensation earned and/or received during the effective period of this chapter by residents of the City.
A. For clarification purposes, “income” shall include winnings in excess of five thousand dollars ($5,000) from lotteries, gaming, wagering or games of chance, whether or not the lottery, gaming, wagering or game of chance took place in the City.
B. Deductions shall be allowed against gambling and sports winnings only if the taxpayer is considered a professional gambler for federal income tax purposes.
C. Subsections (a)(1)A. and B. above shall become effective for income from winnings from lotteries, gaming, wagering or games of chance earned or won after December 1, 2012.
(2) On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the City;
(3) On the portion attributable to the City of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City;
(4) On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity by the City;
(5) On the portion attributable to the City of the net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City, whether or not such unincorporated business entity has an office or place of business in the City;
(6) On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity by the City; and
(7) On the portion attributable to the City of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the City, whether or not such corporations have an office or place of business in the City.
(b) Businesses Within and Without City. The portion of the net profits attributable to the City of a taxpayer conducting a business, profession and all other activity both within and without the boundaries of the City shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
(c) Operating Loss Carry-Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to the effective date of the first ordinance of the City permitting loss carry-forwards, allocable to the City, may be applied against the portion of the profit of succeeding years allocable to the City, until exhausted, but in no event for more than five taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year.
(2) The portion of a net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
(3) The Administrator shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined.
(d) Consolidated Returns.
(1) Filing of consolidated returns may be permitted, required or denied in accordance with rules and regulations prescribed by the Administrator.
(2) In the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the City constituting a portion only of its total business, the Administrator shall require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the City. If the Administrator finds that net profits are not properly allocated to the City by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory or activity or by some other method, he or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the City.
(e) Exempted Income. The provisions of this chapter shall not be construed as levying a tax upon the following income:
(1) Military pay or allowances of members of the Armed Forces of the United States, or income of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities;
(2) Poor relief, unemployment insurance benefits, old age pensions or similar payments, including disability benefits received from local, State or Federal governments or charitable, religious or educational organizations;
(3) Proceeds of insurance paid by reason of the death of the insured; pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered, from whatever source derived;
(4) Receipts from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations;
(5) Alimony received;
(6) Personal earnings of any natural person under eighteen years of age;
(7) Compensation for personal injuries or for damages to property by way of insurance or otherwise;
(8) Interest subject to the Ohio Intangible Tax or specifically exempted by the Ohio Intangible Tax Law, dividends and other revenue from intangible property;
(9) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State which the City is specifically prohibited from taxing, and income of a decedent's estate during the period of administration, except such income from the operation of a business;
(10) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce; and
(11) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State or any act of the Ohio General Assembly limiting the power of the City to impose net income tax.
(Ord. 2726. Passed 8-20-01; Ord. 3094. Passed 10-22-12.)