(A) Rate; income taxed.
(1) For the purposes specified in § 36.01, an annual tax shall be imposed on and after January 1, 2004, at the rate of 2% per annum upon the following:
(a) On all salaries, wages, commissions and other compensation earned or paid during the effective period of this chapter by residents of the city;
(b) On all salaries and wages earned through employment with the city during the effective period of this chapter;
(c) On all salaries, wages, commissions and other compensation earned for work performed on city property when the property is located in a governmental subdivision where there is no municipal or joint economic development district income tax levied;
(d) On all salaries, wages, commissions and other compensation earned or paid during the effective period of this chapter by nonresidents for work done or services performed or rendered in the city;
(e) On the portion attributable to the city of the net profits earned during the effective period of this chapter by 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;
(f) On the portion of the distributive share of the net profits earned during the effective period of this chapter by a resident, partner or owner of a resident unincorporated business entity, or a resident stockholder of a resident S-corporation not attributable to the city and not levied against such unincorporated business entity or S-corporation;
(g) On the portion attributable to the city of the net profits earned during the effective period of this chapter by all nonresident unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered, and business or other activities conducted in the city, whether or not such unincorporated business entity has any office or place of business in the city;
(h) On the portion of the distributive share of the net profits earned during the effective period of this chapter by a resident partner or owner of a nonresident unincorporated business entity or a resident stockholder of a nonresident S-corporation, not attributable to the city and not levied against such unincorporated business entity or S-corporation, whether or not such business entities have an office or place of business in the city; and
(i) On the portion attributable to the city of the net profits earned during the effective period of this chapter by 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.
(2) Rental income received by a taxpayer shall be included in the computation of net profits from business activities under divisions (A)(1)(e), (A)(1)(f), (A)(1)(g), (A)(1)(h) and (A)(1)(i) of this section. All persons engaged in the rental of real estate shall, when filing their annual return, complete and file with the Tax Administrator a form obtainable at the income tax office specifying their tenants’ names, addresses and such other information as requested, if known.
(B) Determination of taxable net profits. The portion of the net profits attributable to the city of a taxpayer conducting a business, profession or other entity, both within and without the boundaries of the city, shall be determined as provided in R.C. § 718.02 and in accordance with the rules and regulations adopted by the Tax Administrator of the city pursuant to this chapter.
(C) Operating loss carried forward.
(1) The portion of a net operating loss (including rental losses) sustained in any taxable year subsequent to August 1, 1992, 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 or applied against any wages, salaries or other compensation earned as an employee of any employer. A loss in one city may never off-set the gain in another city. However, a loss in one city may off-set a business or rental gain in the same city. Failure to allocate an operating loss or failure to file a return on or before the end of the twelfth month following the tax year in which a net operating loss was sustained, nullifies the loss carry-forward privilege.
(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 Tax 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 city.
(2) In the case of a corporation that carried 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 Tax 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 Tax 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 allocations as he or she deems appropriate to produce a fair and proper allocation of net profits to the city.
(E) Exceptions.
(1) The tax provided for herein shall not be levied upon the military pay or allowances of members of the Armed Forces of the United States, or upon the net profits of any civic, charitable, religious, fraternal or other organization exempted from the payment of property or income tax under the provisions of R.C. § 718.01.
(2) No provision of this chapter shall be construed as levying this income tax upon any form of personal or business income, other than those forms listed in division (A) of this section, or additionally and specifically exempted in this section.
(Prior Code, § 880A.03) (Ord. 92-11, passed 7-1-1991; Ord. 95-4, passed 4-11-1995; Res. 03-R31, passed 6-24-2003; Ord. 2003-23, passed 12-9-2003; Ord. 2004-15, passed 8-10-2004)