§ 151.03  IMPOSITION OF TAX.
   (A)   Subject to provisions of § 151.16 of this chapter, an annual tax, for the purpose specified in § 151.01, shall be, and is hereby, levied on and after January 1, 2016, at the rate of 1.25% per annum upon the following:
      (1)   On all salaries, wages, including sick and vacation pay, commissions, and other compensation earned during the effective period of this chapter by residents.
         (a)   Stock options or other compensation received in the form of property are taxable when included on Form W-2 or Form 1099 for federal purposes.
         (b)   Nonqualified pension plan contributions of (or premiums paid by) the taxpayer’s employer in the case of nonqualified plans are taxable when made and reported on IRS Form W-2 or Form 1099.
         (c)   Gambling winnings. On all income received as gambling winnings as reported on Internal Revenue Service Form W-2G, Form 5754 and/or any other form required by the Internal Revenue Service that reports winnings from gambling. Gambling includes, but is not limited to, bingo, keno, slot machines, casino games, horse racing, dog racing, jai alai,  sweepstakes, wagering pools, lotteries, prizes and any other wagering transactions.
      (2)   On all salaries, wages, including sick and vacation pay, commissions, and other compensation earned, during the effective period of this chapter, by non-residents for work done or service performed in the municipality, or as a result of employment with an employer in the municipality.
      (3)   (a)   On the portion attributable to the municipality of the net profits earned during the effective period of this chapter of all resident associations, unincorporated businesses, professions,  or other entities, derived from sales made, work done, or services performed or rendered, or business or other activities conducted in the municipality.
         (b)   On a resident partner’s or owner’s share of the net profits earned during the effective period of this chapter of a resident association or other unincorporated entity not attributable to the municipality and not levied against such association or other unincorporated entity.
      (4)   (a)   On the portion attributable to the municipality of the net profits, earned during the effective period of this chapter, of all non-resident associations, unincorporated businesses, professions, or other entities, derived from sales made, work done, or services performed or rendered or business or other activities conducted in the municipality, whether or not such association or other unincorporated entity has an office or place of business in the municipality.
         (b)   On a resident partner’s or owner’s share of the net profits earned during the effective period of this chapter of a non-resident association or other unincorporated entity not attributable to the municipality, and not levied against such association or other unincorporated entity.
      (5)   On the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, or services performed or rendered, and business or other activities conducted in the municipality whether or not such corporations have an office or place of business in the municipality.
      (6)   A husband and wife may file a joint return either when engaged in the same or separate businesses, but may not deduct business losses of either from compensation paid by an employer.
   (B)   Allocation of net profits.  Where a person conducts a business both within and outside the municipality, the portion of the entire net profits of such business to be allocated as having been made within the municipality may be determined from the records of such business, if such a business has bona fide records which disclose with reasonable accuracy what portion of its net profits is attributable to that part of its activities conducted within the municipality, or at the option of the taxpayer may be determined by the following formula, which shall be used if the taxpayer has no bona fide records showing net profits from Lebanon business activities, subject, however, to the provisions of division (D)(2) hereof.
      (1)   Multiply the entire net profits of the business apportionment percentage to be determined by:
         (a)   Ascertaining the percentage which the average net book value of the real and tangible personal property owned or used in the business and situated within the municipality, during the period covered by the return, is of the average net book value of all the real and tangible personal property owned or used in the business, wherever  situated, during such period.
         (b)   Ascertaining the percentage which the gross receipts of the business from sales made and services performed in the municipality, during the period covered by the return, are of the total gross receipts from all sales and services, wherever made or performed, during such period.
         (c)   Ascertaining the percentage which the total wages, salaries, commissions, and other compensation paid, during the period covered by the return to employees for services performed in the municipality is of the total wages, salaries, commissions, and other compensation paid during such period to all employees within and outside the municipality.
         (d)   Adding together the percentages determined in accordance with subparagraphs (a), (b), and (c) above or such of the aforesaid percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in deriving such total.
      (2)   A factor is applicable even though it may be allocable entirely in or outside the municipality. Provided, however, that in the event a just and equitable result cannot be obtained under the formula provided for herein, the Board of Review, upon application of the taxpayer or the Tax Commissioner, shall, under uniform regulations adopted by the Board, have the authority to substitute other factors or methods calculated to effect a fair and proper allocation.
   (C)   Operating loss carry forward.
      (1)   The portion of a net operating loss, based on income taxable under this chapter, sustained in the taxable years of 2004, 2005 and 2006, will expire with the filing of tax year 2005. No operating loss will be allowed as a carry forward or back beginning after December, 2006.
      (2)   The portion of a net operating loss sustained shall be allocated to the municipality in the same manner as provided herein for allocating net profits to the municipality.
      (3)   The Tax Commissioner 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 or required in accordance with rules and regulations prescribed by the Tax Commissioner.
      (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, the Tax Commissioner shall require such information, in addition to the return hereinafter provided for, as he or she may deem necessary to ascertain whether net profits are properly allocated to the municipality. If the Tax Commissioner finds that net profits are not properly allocated to the municipality by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, he or she may require the filing of a consolidated return or adjust such transactions so as to produce a fair and proper allocation of net profits to the municipality.
   (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 commissioned officers of the Public Health Service, or upon the net profits of any civic, charitable, religious, fraternal, or other organization specified in R.C. § 718.01 to the extent that such net profits are exempted from municipal income taxes under such section.
      (2)   Twelve-day occasional entry rule. 
         (a)   The tax provided for herein shall not be levied upon the compensation of an individual if all of the following apply:
            1.   The individual does not reside in the city.
            2.   The compensation is paid for personal services performed by the individual in the city on 12 or fewer days during the calendar year.
            3.   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 division (E)(2)(a)2. of this section 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.
            4.   The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such promoter, all as reasonably may be defined by the city.
      (b)   For the purposes of the 12-day calculation, DAY means any part of a 24-hour calendar day where compensation is earned in the city.
      (c)   Beginning with the 13th day, the individual shall no longer be considered an occasional entrant and is liable for the taxes on income earned for the first 12 days.
      (d)   Income tax withheld by a nonresident employer and paid to the city as a result of the employer being subject to the $150 de minimus provision set forth at § 151.06(G) cannot be refunded to an individual under the 12-day occasional entry provision.
(Am. Ord. 3030, passed 7-13-76; Am. Ord. 7751, passed 12-28-99; Am. Ord. 8021, passed 12-28-00; Am. Ord. 8882, passed 12-9-03; Am. Ord. 9337, passed 6-13-06; Am. Ord. 2015-082, passed 7-27-15)