An annual tax for the purposes specified in Section 128.0101 shall be imposed on and after January 1, 1981, at the rate of one and one-half percent (1-1/2%) per annum upon the following:
(a) On all income, salaries, qualifying wages, commissions and other compensation earned and/or received on and after january 1, 1981, by residents of the City. For clarification "income" includes, but is not limited to, lottery, gambling and sports winnings, and games of chance.
(1) If the taxpayer is considered a professional gambler for federal income tax purposes, related deductions as permitted by the Internal Revenue Code shall be allowed against gambling and sports winnings.
(2) If the taxpayer is not considered a professional gambler for federal income tax purposes, a deduction equal to the amount of up to $600 of income combined from lottery, gambling and sports winnings, and games of chance, or a deduction of $600, whichever is less, shall be allowed, provided that in no case shall the deduction exceed the amount of combined income from lottery, gambling and sports winnings, and games of chance. If said income is payable to the taxpayer in more than one year, the deduction applies only in the first year in which the income is received.
(b) On all income, salaries, qualifying wages, commissions and other compensation earned and/or received on and after January 1, 1981, by nonresidents of the City for work done or services performed or rendered within the City. Separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer shall be allocable only to the city.
(1) Lakewood shall not, however, tax the compensation of a non-resident individual who will be deemed to be an occasional entrant if all of the following apply:
A. The compensation is paid for personal services performed by the individual in the City on twelve or fewer days during the calendar year, in which case the individual shall be considered an occcasional entrant for purposes of the City income tax. A day is a full day or any fractional part of a day.
B. In the case of an individual who is an employee, the principal place of business of the individual's employer is located outside the City and the individual pays tax on compensation described in Section 128.0501(b) to the municipality, if any, in which the employer's principal place of business is located, and no portion of that tax is refunded to the individual.
C. The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by the City.
(2) Beginning with the thirteenth day an individual deemed to have been an occasional entrant to the City performs services within the City, the employer of said individual shall begin withholding the City income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the City in accordance with the requirements of this chapter. 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 City by the individual for the first twelve days.
(3) If the individual is self-employed, it shall be the responsibility of the individual to remit the appropriate income tax to the City.
(c) (1) On the portion attributable to the City on the net profits earned on and after January 1, 1981, of all resident unincorporated business entities or professions or other activities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City.
(2) On the portion of the distributive share of the net profits earned or received on and after January 1, 1981, 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. The tax imposed on the individual members or owners of a resident unincorporated business entity shall be collected by the resident unincorporated business entity, and remitted on behalf of the individual members or owners.
(d) (1) On the portion attributable to the City of the net profits earned on or after January 1, 1981, of all nonresident unincorporated business entities, professions or other activities, derived from sales made, work done, services performed or rendered and business and other activities conducted in the City, whether or not such unincorporated business entity has an office or place of business in the City.
(2) On the portion of the distributive share of the net profits earned or received on or after January 1, 1981, 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.
(e) Effective for tax years 2004 and later, the distributive share of income paid to an C corporation shareholder shall be taxable in the following manner:
(1) If no portion of the net profits of the S corporation are allocated or apportioned to the State of Ohio, the distributive share is taxable only to the extent that it represents wages or net earnings from self-employment.
(2) If any portion of the net profits of the S corporation are allocated or apportioned to the State of Ohio, the full amount of the distributive share is taxable.
(f) On the portion attributable to the City of the net profits earned on and after January 1, 1981, 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.
(g) On the portion attributable to this Municipality pursuant to the terms of this chapter and including "Royalty income", which means income earned from a royalty interest in the production of an oil or gas well.
(Ord. 71-10. Passed 11-1-10.)