As used in this Chapter, and in the accompanying rules and regulations, unless the context clearly indicates or requires a different meaning:
(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:
(I) 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,
(II) Add an amount equal to five percent (5%) of intangible income deducted under section (I) of this definition, 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;
(III) 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 section 1221 or 1231 of the Internal Revenue Code;
(IV) (A) Except as provided in (IV)(B) of this definition, 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 section 1221 or 1231 of the Internal Revenue Code;
(B) Section (IV)(A) of this definition does not apply to the extent the income or gain is income or gain described in section 1245 or 1250 of the Internal Revenue Code.
(V) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;
(VI) 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;
(VII) 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 not be allowed as a deduction.
(b) “Association” means any partnership, limited partnership, S-corporation, or other form of unincorporated enterprise owned by two or more persons.
(c “Board of Review” or “Board” means the Board created by and constituted as provided in Section 880.13.
(d) “Business” means any enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association, corporation or any other entity, including but not limited to the renting or leasing of property, real, personal or mixed.
(e) “City” means the City of Lima.
(f) “Corporation” means a corporation or joint stock association organized under the laws of the United States, the State of Ohio, or any other state, territory, or foreign country or dependency.
(g) “Director of Taxation” means the Director of Taxation for the City of Lima or the persons designated and appointed by the Mayor to execute the duties of the Director of Taxation.
(h) “Domicile” means a principal residence that the taxpayer intends to use for an indefinite time and to which whenever he is absent he intends to return. A taxpayer has only one domicile even though he may have more than one residence.
(i) “Employee” means one who works for wages, salary, commission, or other types of compensation in the service of an employer. Any person upon whom an employer is required to withhold for either Federal Income Tax or Social Security or on whose account payments are made under the Ohio Workmen’s Compensation Law, shall prima facie be an employee.
(j) “Employer” means any individual, partnership, association, corporation, governmental agency, board, body, bureau, department, subdivision, or unit, 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. It does not include a person who employs only domestic help for such person’s private residence.
(k) “Fiscal year” means an accounting period of twelve months ending on any date other than December 31.
(l) “Gross receipts” means total income of taxpayers from whatever source derived.
(m) “Income from a pass-through entity” means partnership income of partners, membership interests of members of a limited liability company, distributive shares of shareholders of an S corporation, or other distributive or proportionate ownership shares of income from other pass-through entities.
(n) “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, investments 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.
(o) “Internal Revenue Code” means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.
(p) “Joint Economic Development District” means districts created under the Ohio Revised Code sections 715.70 through 715.83, as amended from time to time.
(q) “Limited liability company” means a limited liability company formed under Chapter 1705 of the Ohio Revised Code or under the laws of another state.
(r) “Net profits” for a taxpayer other than an individual means adjusted federal taxable income and “net profit” for a taxpayer who is an individual means the individual’s profit, other than amounts described as net operating losses in the accompanying rules and regulations, required to be reported on schedule C, schedule E, or schedule F.
(s) “Non-qualified deferred compensation plan” means a compensation plan described in section 3121(v)(2)(C) of the Internal Revenue Code.
(t) “Nonresident” means any individual or entity domiciled outside the City.
(u) “Nonresident incorporated business entity” means an incorporated business entity not having an office or place of business within the City.
(v) “Nonresident unincorporated business entity” means any unincorporated business entity not having an office or place of business within the City.
(w) “Other payer” means any person, other than an individual’s employer or the employer’s agent, that pays an individual any amount included in the federal gross income of the individual.
(x) “Owner” means a partner of a partnership, a member of a limited liability company, a shareholder of an S corporation, or other person with an ownership interest in a pass-through entity.
(y) “Owner’s proportionate share”, with respect to each owner of a pass-through entity, means the ratio of (a)the owner’s income from the pass-through entity that is subject to taxation by the City, to (b)the total income from that entity of all owners whose income from the entity is subject to taxation by the City.
(z) “Pass-through entity” means a partnership, limited liability company, or any other class of entity the income or profits from which are given pass-through treatment under the Internal Revenue Code, excluding S corporations.
(aa) “Person” means any individual, partnership, fiduciary, association, corporation, firm, company, business trust, estate, trust, limited liability company, governmental entity, or any other entity. Whenever used in any clause prescribing and imposing a penalty, the term “person” as applied to an association, means the partners or members thereof, and as applied to a corporation, means the officers thereof, and in the case of any unincorporated entity or corporation not having any partner, member, or officer within the City, any employee or agent of such unincorporated entity or corporation who can be found within the City.
(bb) “Place of business” means any bona fide office(other than a mere statutory office), factory, warehouse, or other space which is occupied and used by the taxpayer in carrying on any business activity, individually or through one or more of his regular employees regularly in attendance.
(cc) “Principal place of business” means in the case of an employer having headquarter’s activities at a place of business within a taxing municipality, the place of business at which the headquarters is situated. In the case of any employer not having its headquarters’ activities at a place of business within a taxing municipality, the term means the largest place of business located in a taxing municipality.
(dd) “Qualified plan” means a retirement plan satisfying the requirements under section 401 of the Internal Revenue Code.
(ee) “Qualifying wages” means wages, as defined in section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted in accordance with section 718.03(A) of the Ohio Revised Code.
(ff) “Resident” means any individual or entity domiciled in the City.
(gg) “Resident incorporated business entity” means an incorporated business whose office, place or operations or business situs is within the City.
(hh) “Resident unincorporated business entity” means any unincorporated business entity having an office or place of business within the City.
(ii) “Return preparer” means any person other than a taxpayer that is authorized by a taxpayer to complete or file an income tax return, report, or other document for or on behalf of the taxpayer.
(jj) “Rules and Regulations” means the Rules and Regulations adopted by the Director of Taxation pursuant to this Chapter.
(kk) “Schedule C” means Internal Revenue Service schedule C filed by a taxpayer pursuant to the Internal Revenue Code.
(ll) “Schedule E” means Internal Revenue Service schedule E filed by a taxpayer pursuant to the Internal Revenue Code.
(mm) “Schedule F” means Internal Revenue Service schedule F filed by a taxpayer pursuant to the Internal Revenue Code.
(nn) “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 taxable year.
(oo) “Taxable income” means qualifying wages paid by an employer or employers, compensation for personal services, other income defined by statute as taxable and/or adjusted federal taxable income from the operation of a business, profession, or other enterprise or activity adjusted in accordance with the provisions of this Chapter.
Taxable income shall include, but is not limited to:
(1) Employee contributions to cost of fringe benefits.
(2) Sick pay and vacation pay.
(3) Income from wage-continuation plans.
(4) Cost of group life term insurance over $50,000.00.
(5) Severance pay.
(6) Tips.
(7) Contributions made by or on behalf of employees to a tax- deferred annuity plan (401K plans and similar plans).
(8) Disability pay if received as a benefit from employment (to include third party plans).
(9) Bonuses.
(10) Supplemental unemployment pay which is paid by employer (SUB-Pay).
(11) All other compensation unless specifically exempted by this section of the Codified Ordinances of the City of Lima.
(pp) “Taxable year” means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code. Unless approved by the Director of Taxation, the taxable year of an individual shall be the calendar year.
(qq) “Taxing municipality” means a municipality levying a tax on income earned by a nonresident working within such municipality or on income earned by its residents.
(rr) “Taxpayer” means any person, subject to a tax on income levied by a municipal corporation and required hereunder to file a return or pay a tax. “Taxpayer” does not include any person that is a disregarded entity or a qualifying subchapter S subsidiary for federal income tax purposes, but “taxpayer” includes any other person who owns the disregarded entity or qualifying subchapter S subsidiary.
(ss) Words in the singular number include the plural number, and words in the masculine gender include the feminine and neuter genders, and all periods set forth shall be inclusive of the first and last mentioned dates.
(tt) Nothing in these definitions 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 these definitions shall be construed as limiting or removing the ability of the City to administer, audit, and enforce the provisions of its municipal income tax.