As used in this chapter, the following words shall have the meanings ascribed to them in this section, except as and if the context clearly indicates or requires a different meaning. The singular shall include the plural. The masculine gender shall include the feminine and the neuter genders.
(a) "Adjusted federal taxable income" means a C corporation's federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:
(1) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
(2) Add an amount equal to five percent (5%) of intangible income deducted under division (a)(1) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code.
(3) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in sections 1221or 1231 of the Internal Revenue Code.
(4) A. Except as provided in division (a)(4)B. of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in sections 1221 or 1231 of the Internal Revenue Code.
B. Division (a)(4)A. of this section does not apply to the extent the income or gain is income or gain described in sections 1245 or 1250 of the Internal Revenue Code.
(5) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income.
(6) In the case of a real estate investment trust and regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income.
(7) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute adjusted federal taxable income as if the taxpayer were a C corporation, except:
A. Guaranteed payments and other similar amounts paid or accrued to a partner, former partner, member, or former member shall not be allowed as a deductible expense; and
B. Amounts paid or accrued to a qualified self-employed retirement plan with respect to an owner or owner-employee of the taxpayer, amounts paid or accrued to or for health insurance for an owner or owner employee, and amounts paid or accrued to or for life insurance for an owner or owner-employee shall be not allowed as a deduction.
Nothing in division (a) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.
Nothing in this chapter shall be construed as limiting or removing the ability of any municipal corporation to administer, audit, and enforce the provisions of its municipal income tax.
(b) "Association" means a partnership, limited partnership, or any other form of unincorporated enterprise owned by two or more persons.
(c) "Business" means an enterprise, activity, profession, or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, fiduciary, limited liability company, trust, association, corporation or any other entity.
(d) "City" means the City of Grandview Heights, Ohio.
(e) "Corporation" means a corporation or joint stock association organized under the laws of the United States, State of Ohio, or any other state, territory or foreign country or dependency.
(f) "Employee” means one who works for wages, salary, commissions or other type of compensation in the service of an employer.
(g) "Employer" means an individual, partnership, association, corporation, governmental body, unit or agency or any other entity, whether or not organized for profit, that employs one or more persons on a salary, wage, commission, or other compensation basis.
(h) "Director of Finance" means the Director of Finance of the City of Grandview Heights, Ohio.
(i) "Fiscal year" means an accounting period of twelve months or less ending on any day other than December 31.
(j) "Generic form" means an electronic or paper form designed for reporting estimated municipal income taxes and annual municipal income tax liability or for filing a refund claim that is not prescribed by a particular municipal corporation for the reporting of that municipal corporation's tax on income, which contains all the information required on City's regular tax return, estimated payment forms, and request for refund forms, and is in a similar format that will allow processing of the generic form without altering the City's procedures for processing forms.
(k) "Gross receipts" means the total income from any source whatsoever.
(l) "Intangible income" means income of any of the following types: income yield, interest, capital gains, dividends, or other income arising from the ownership, sale, exchange, or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in Chapter 5701. of the Ohio Revised Code, and patents, copyrights, trademarks, tradenames, investments in real estate investment trusts, investment in regulated investment companies, and appreciation on deferred compensation. "Intangible income" does not include prizes, awards or other income associated with any lottery winnings or other similar games of chance.
(m) "Internal Revenue Code" means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.
(n) "Limited liability company" means a limited liability company formed under Chapter 1705. of the Ohio Revised Code or under the similar laws of another state.
(o) “Net profits.”
(1) For taxable years beginning prior to January 1, 2004, “net profits” means the net gain from the operation of a business, profession, enterprise or other activity, whether or not such business, profession, enterprise or other activity is conducted for profit or is ordinarily conducted for profit, after provision for all ordinary and necessary expenses either paid or accrued in accordance with the accounting system used by the taxpayer for federal income tax purposes without deduction of taxes imposed by this chapter, federal, state or other taxes based on income, and in the case of an association, without deduction of salaries paid to partners, and other owners, and otherwise adjusted to the requirements of this chapter.
(2) For taxable years beginning on or after January 1, 2004, "net profits" for a taxpayer other than an individual means adjusted federal taxable income and "net profits" for a taxpayer who is an individual means the individual's profit, other than amounts described in Section 181.14, required to be reported on schedule C, schedule E, or schedule F.
(p) "Nonresident" means any natural person who is not domiciled in the City and whose usual place of abode is outside the City.
(q) "Nonresident unincorporated business entity” means an unincorporated business entity not having an office or place of business within the City.
(r) "Pass-through entity" means a partnership, limited liability company, S corporation, or any other class of entity the income or profits of which are given pass-through treatment under the Internal Revenue Code.
(s) "Person" means every natural person, firm, company, business trust, estate, trust, partnership, limited liability company, fiduciary, association, corporation, or any other entity. Whenever used in any clause prescribed and imposing a penalty, the term "person” as applied to any unincorporated entity shall mean the parties or members thereof, and as applied to corporations, the offficers thereof.
(t) "Place of business" means any bona-fide office, other than a mere statutory office, factory, warehouse or other place which is occupied and used by the taxpayer in carrying on any business activity individually or through any one or more of his regular employees regularly in attendance.
(u) "Qualifying wages" means wages as defined in section 3121(a) of the Internal Revenue Code, including non-qualified deferred compensation and stock options, without regard to any wage limitations, adjusted in accordance with section 718.03(A) of the Ohio Revised Code.
(v) "Resident" means any natural person who is domiciled in the City or whose usual place of abode is in the City.
(w) "Resident unincorporated business entity" means an unincorporated business entity having an office or place of business within the City.
(x) "Schedule C" means Internal Revenue Service schedule C filed by a taxpayer pursuant to the Internal Revenue Code.
(y) "Schedule E" means Internal Revenue Service schedule E filed by a taxpayer pursuant to the Internal Revenue Code.
(z) "Schedule F" means Internal Revenue Service schedule F filed by a taxpayer pursuant to the Internal Revenue Code.
(ac) "S corporation" means a corporation that has made an election under subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code for its entire taxable year.
(bb) "Taxable income" means qualifying wages paid by an employer or employers, compensation for personal services, other income defined by statute as taxable, and/or the net profits from the operation of a business, profession, or other enterprise or activity adjusted in accordance with the provisions of this chapter. "Taxable income" includes prizes, awards or other income associated with any lottery winnings or other similar games of chance.
(cc) "Taxable year" means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code.
(Ord. 05-38. Passed 10-3-05.)