(A) Authority to levy tax.
(1) The tax on income and the withholding tax established by this Chapter 99 are authorized by Article XVIII, Section 3 of the Ohio Constitution. The tax on income and the withholding tax established by this Chapter 99 are deemed to be levied in accordance with, and to be consistent with, the provisions and limitations of R.C. Chapter 718. This chapter is deemed to incorporate the provisions of R.C. Chapter 718.
(2) The tax is an annual tax levied on the income of every person residing in or earning or receiving income in the municipal corporation, and shall be measured by municipal taxable income. The municipality shall tax income at a uniform rate. The tax is levied on municipal taxable income, as defined herein.
(B) Purposes of tax; rate. To provide funds for the purpose of general municipal operations; maintenance of equipment; new equipment; extension, enlargement, and improvement of municipal services and facilities; and capital improvements of the city, there is levied a tax at the rate of 2% upon municipal taxable income.
(C) Allocation of funds. The funds collected under the provisions of this chapter shall be deposited in the treasury of the city to the credit of the Income Tax Fund. The funds shall be disbursed in the following order, to wit:
(1) Such part thereof as shall be necessary to defray all costs of collecting the taxes and the cost of administering and enforcing the provisions thereof.
(2) Not more than 90% of net available income tax receipts received annually shall be used to defray operating expenses of the city.
(3) At least 10% of net available income tax receipts received annually shall be set aside and used for capital improvements for the city including, but not limited to, development and construction of storm sewers and street improvements; for public buildings, parks and playgrounds; and for equipment necessary for the Police, Fire, Street, Traffic and Safety Departments.
(D) Statement of procedural history; state mandated changes to municipal income tax.
(1) Significant and wide-ranging amendments to R.C. Chapter 718 were enacted by Am Sub HB 5, passed by the 130th General Assembly, and signed by Governor Kasich on December 19, 2014, and H.B. 5 required municipal corporations to conform to and adopt the provisions of R.C. Chapter 718 in order to have the authority to impose, enforce, administer and collect a municipal income tax.
(2) As mandated by H.B. 5, municipal income tax Ordinance 31-2015, effective January 1, 2016, comprehensively amends Chapter 99 in accordance with the provisions of R.C. Chapter 718 to allow the municipality to continue the income tax and withholding tax administration and collection efforts on behalf of the municipality.
(Ord. 31-2015, passed 9-28-15)
Statutory reference:
Authority for tax on income and withholding tax, see R.C. § 718.04