(a) It is the duty of each employer who employs one or more persons on a salary, wage, commission or other compensation basis, to deduct from compensation paid to any employee subject to this chapter, the tax of one percent of such salary, wage, bonus, incentive payment, commission or other compensation due by such employer to such employee. The tax shall be deducted by the employer from:
(1) All compensation paid to employees who are nonresidents of the Village for services rendered, work performed or other activities engaged in to earn such compensation, within the Village; and
(2) The gross amount of all salaries, wages, bonuses, incentive payments, commissions or other form of compensation paid to employees who are residents of the Village, regardless of the place where the services are rendered.
(b) All employers who or which maintain an office or other place of business in the Village are required to make the collections and deductions specified in this section, regardless of the fact that the services on account of which any particular deduction is required, as to residents of the Village were performed at a place of business of any such employer situated outside the Village.
(c) The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation received.
(d) Commissions, which are fees paid to professional men and women, brokers and others who are independent contractors and not employees of the payor, are not subject to withholding or collection of the tax at the source. Such taxpayers must in all instances file returns and pay the tax pursuant to the provisions of Section 880.05.
(e) In the case of employees who are nonresidents of the Village, the amount to be deducted is one percent of the compensation paid with respect to personal services rendered in the Village.
Where a nonresident receives compensation for personal services rendered or performed partly within and partly outside the Village, the withholding employer shall deduct, withhold and remit that portion of the compensation which is earned within the Village in accordance with the following rules of apportionment.
(1) If the nonresident is a salesperson, agent or other employee whose compensation on the basis of commissions depends directly on the volume of business transacted by him or her, the deducting and withholding shall attach to the portion of the entire compensation which the volume of business transacted by the employee within the Village bears to the volume of business transacted by him or her within and outside the Village.
(2) The deducting and withholding of personal service compensation of all other employees (including officers of a corporation) shall attach to the portion of the personal service compensation of such employee which the total number of working days employed within the Village bears to the total number of working days employed within and outside of the Village.
(3) If it is impossible to apportion the earnings as provided above, because of the peculiar nature of the service of the employee or the unusual basis of compensation, apportionment shall be made in accordance with the facts and the tax deducted and withheld accordingly.
(4) The occasional entry into the Village of a nonresident employee who performs the duties for which he or she is employed entirely outside the Village, but enters the Village for the purpose of reporting, receiving instructions, accounting, etc., incidental to his or her duties outside the Village, shall not be deemed to take such employee out of the class of those rendering their services entirely outside the Village.
(f) Subject to subsection (g) hereof, an employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions, whether by way of a drawing account or otherwise, where such advances are in excess of commissions earned.
(g) An employer required to withhold the tax on compensation paid to an employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid by the employer to the employee for expense necessarily and actually incurred by the employee in the actual performance of his or her services, provided, however, that such expense must be of the kind and in the amount recognized and allowed as a deductible expenses for Federal Income Tax purposes.
(Ord. 654. Passed 12-5-78.)
(h) Every owner of one or more rental units within the Village is hereby directed to furnish to the Income Tax Administrator a semi-annual roster, on a form provided by or obtainable from said Tax Administrator, containing the names of all adult persons residing in each such rental unit and shall also file a statement of any changes in the roster at the end of each month. The semi-annual statement provided for herein shall be filed with the Tax Administrator on or before January 31 and July 31 of each year, unless an extension of time is granted by the Tax Administrator. The first such roster will be due to be filed on the first filing date (January or July) after the effective date of this section (Ordinance 888, passed September 16, 1997).
(Ord. 888. Passed 9-16-97.)