(1) On all income, salaries, wages, commissions and other compensation received during the effective period of this chapter by residents of Germantown, and on all income, salaries, wages, commissions, and other compensation received during the effective period of this Chapter by nonresidents for work done or services performed or rendered in the Municipality of Germantown.
(2) 12-Day Occasional Entry Rule. The Municipality of Germantown shall not tax the compensation of a nonresident individual for personal services or work performed by the individual in the Municipal corporation on twelve (12) or fewer days in a calendar year (which hereby classifies the individual as an “occasional entrant”) unless one of the following applies:
A. The individual is the employee of another person, the principal place of business in which the employee normally works is located in another municipal corporation in this State that imposes a tax applying to compensation paid to the individual for services performed on those days, and the individual is not liable to that other municipal corporation for tax on the compensation paid for such services.
B. The individual is a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event or an employee of such promoter, all as may be reasonably defined by the Municipality of Germantown.
1. For purposes of the 12-Day Calculation, any portion of a day worked in the Municipality of Germantown shall be counted as one day worked in the Municipality of Germantown.
2. Beginning with the thirteenth (13th) day, the employer of said individual shall begin withholding the Municipality of Germantown income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the Municipality of Germantown in accordance with Section 181.06 of the Income Tax Ordinance. Since the individual can no longer be considered to have been an occasional entrant, the employer is further required to remit taxes on income earned in the Municipality of Germantown by the individual for the first twelve days.
3. Income tax withheld from an occasional entrant and paid by a non-resident employer to the Municipality of Germantown is subject to being refunded only to the municipality in which the employer's principal place of business is located, and only after the municipality has established that the employee has a liability to them. However, any tax withheld for the Municipality of Germantown under the $150 deminimus provision is not subject to refund even if the employee for which tax was withheld is an occasional entrant.
(3) A. On the portion attributable to Germantown of the net profits earned and accrued or received during the effective period of this chapter of all resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in Germantown.
B. On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to Germantown upon which the tax was not paid by the entity.
C. On the portion attributable to Germantown of the net profits earned and accrued or received during the effective period of this chapter of all nonresident associations, unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in Germantown, whether or not such association or other unincorporated business entity has an office or place of business in Germantown.
D. On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a nonresident association or other unincorporated business entity not attributable to Germantown on which the tax was not paid by the entity.
(4) On the portion attributable to Germantown of the net profits earned and accrued or received 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 Germantown.
(b) The portion of the entire net profits of a taxpayer to be allocated as having been derived from within Germantown, in the absence of actual records thereof, shall be determined as follows:
(1) Multiply the entire net profits by a business allocation percentage to be the average ratio of:
A. The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in Germantown during the taxable period to the average net book value 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 the preceding paragraph, 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 thereon by eight.
B. Wages, salaries and other compensation paid or accrued during the taxable period to persons employed in the business or profession for services performed in Germantown to wages, salaries and other compensation paid or accrued during the same period to persons employed in the business or profession, wherever their services are performed;
C. All sales of tangible personal property which is shipped from a place within Germantown to purchasers outside Germantown regardless of where titles 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) For the purpose of this section, the taxable base shall be determined in accordance with Federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for Federal income taxes adjusted to the requirements of this chapter. With respect to loss carry forward and business losses against personal income, the following shall apply:
(1) Net operating losses may be carried forward for three (3) years. No portion of a net operating loss shall be carried back against net profits of a prior year. Losses shall not be allowed (in whole or in part) to be allocated to the municipality as loss carry forward if the loss occurred during a time period in which gross receipts (in whole or in part) were not allocated and reported to the municipality.
(2) In determining income subject to taxation, losses from the operation of a business or profession cannot be used to reduce wages from employment or other employment compensation.
(d) Consolidated Returns.
(1) Any affiliated group which files a consolidated return for Federal income tax purposes pursuant to section 1501 of the Internal Revenue Code may file a consolidated return with the Municipality of Germantown. However, once the affiliated group has elected to file a consolidated return or a separate return with the municipality, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the Municipality of Germantown.
(2) Allocation of income and deductions between related taxpayer; 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 Germantown constituting a portion only of its total business, the Superintendent may require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to Germantown. If the Superintendent finds net profits are not properly allocated to Germantown 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 shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to Germantown.
(e) Exceptions. The tax provided for herein shall not be levied upon:
(1) Pay or allowances of active members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard.
(2) The 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.
(3) 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.
(4) 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.
(5) Receipts from seasonal or causal entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations.
(6) Personal earnings of all persons under eighteen years of age.
(7) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State of Ohio from which Germantown 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).
(8) Expenses deductible on Federal form 2106, subject to audit and approval by the Superintendent.
(9) Compensation paid under section 3501.28 or 3501.36 of the Revised Code to a person serving as a precinct election official, to the extent that such compensation does not exceed one thousand dollars annually
(10) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained minister's compensation.
(11) Alimony paid.
(12) Income, 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 State or their political subdivisions to impose net income taxes on income derived from interstate commerce.
(13) Income, salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of the City to impose net income taxes.
(Ord. 18-22. Passed 6-4-18.)