For purposes of these Rules and Regulations, the singular shall include the plural and the masculine shall included the feminine and the neuter with regard to the terms, phrases, words and the derivatives used herein. As used in these Rules and Regulations, the following words defined herein shall have the meaning ascribed to them in this chapter except where the context indicates or requires a different meaning.
(1) “Administrator” means the individual designated by this Ordinance, whether appointed or elected, to administer and enforce the provisions of this Ordinance.
(2) “Association” means a partnership, cooperative, limited partnership, joint venture or any other form of unincorporated enterprise owned by two or more persons.
(4) “Business” means an enterprise, cooperative 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, excluding, however, all non-profit corporations which are exempt from the payment of federal income tax. The administration of a decedent’s estate by the executor or administrator and the mere custody, supervision and management of trust property under an intervivos or testamentary trust unaccompanied by the actual operation of a business, shall not be construed as the operation of a business.
(5) “Business Allocation” as used in these regulations, means the portion of the net profits to be allocated as having been made in the City of Lorain, either under the separate accounting method or under the three-factor formula of property, payroll, and sales, or under a substitute method, as provided for in the Income Tax Ordinance. See Section 191.04.
(6) “Business deductions” are the ordinary and necessary expenses actually incurred in the operation of the business.
(7) “City” as used herein, means the City of Lorain.
(8) “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, foreign country or dependency.
(9) “Dishonored checks” means any check received in payment of taxes which is returned unpaid by the bank.
(10) “Domicile” is that place where an individual has his true, fixed and permanent home and principal establishment and to which, whenever he is absent, he has the intention of returning.
(11) “Employee” means one who works for wages, salary, commission or other type of compensation in the service of an employer. Generally, the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished, but also as to the details and means by which that result is accomplished. Any person from whom an employer is required to withhold for federal income tax purposes shall prima facie be deemed an employee.
(12) “Employee expenses”. When required to travel, an employee may deduct travel expenses when not reimbursed for same.
(13) “Employer” means an individual, association, corporation or other entity, who or that employs one or more persons on a salary, wage, commission or other compensation basis whether or not such employer is engaged in business or operated for a profit. The term “employer” includes the State of Ohio, its political subdivisions and its agencies, instrumentalities, boards, bureaus, departments, etc., as well as other governmental subdivisions, agencies, instrumentalities, boards, bureaus, departments., etc., to the extent that any such body withholds tax on a mandatory or voluntary basis. No rights, duties or obligations are imposed with respect to any such body not otherwise authorized by law.
“Employer” shall be further defined to be an individual, partnership, association, corporation or any other entity who books or contracts for an individual and/or groups to perform or entertain at their place of business or rents facilities for the purpose of providing such entertainment.
The term “Employer” does not include any person who employs only domestic help for such person's private residence.
(14) “Fiscal year” means an accounting period of twelve (12) months or less ending on any day other than December 31st. Only fiscal years accepted by the Internal Revenue Service for federal income tax purposes may be used for municipal income tax purposes.
(15) “Gross receipts” means the total income from any source whatsoever. Gross receipts shall include, but not be limited to, income in the form of commissions, fees, rentals, real and tangible personal property, and other compensation for work or services performed or rendered, as well as income from sales of stock in trade.
(16) “Independent contractor” is a person who while performing service for another, is not under the direction and control of such other person, as to the result to be accomplished by the work and as to the details and means by which said result is accomplished such as authors, professional men, etc.
(17) “Intangible property” is hereby defined to be:
A. Shares of stock in corporations, associations and joint stock companies.
B. Interest bearing obligations (notes, corporate bonds, bonds, either Federal, State and other governmental agencies, savings accounts).
C. Income from purchased annuities.
(18) “Net profits” means the net gain from the operation of a business, profession, enterprise or other activity after deduction of all ordinary and necessary expenses paid or accrued in accordance with the accounting method used by the taxpayer for federal income tax purposes.
A. Net profits as disclosed on any return filed pursuant to the provisions of the Ordinance shall be computed by the same accounting method used in reporting net income to the Federal Internal Revenue Service (providing such method does not conflict with any provisions of the Ordinance).
All ordinary and necessary expenses of doing business, including reasonable compensation paid employees, shall be allowed, but no deduction may be claimed for salary or withdrawal of a proprietor or of the partners, members or other owners of any unincorporated business or enterprise.
1. If not claimed as part of the cost of goods sold elsewhere in the return filed, there may be claimed and allowed a reasonable deduction for depreciation, depletion, obsolescence, losses resulting from theft or casualty not compensated for by insurance or otherwise of property used in trade or business, but the amount may not exceed that recognized for the purposes of the federal income tax.
2. Current amortization of equipment, facilities and other property under the provisions of the Internal Revenue Code, if recognized as such for federal income tax purposes, may be included as an expense deduction hereunder.
3. Where depreciable property is voluntarily destroyed, only the cost of such demolition and the undepreciated balance thereof will be allowed as an expense in the year of such demolition to the extent allowable for federal income tax purposes.
4. Bad debts in a reasonable amount may be allowed in the year ascertained worthless and charged off; or, if the reserve method is used, a reasonable addition to the reserve may be claimed, but in no event shall the amount exceed the amount allowable for federal income tax purposes.
5. Only taxes directly connected with the business may be claimed as a deduction. If for any reason the income from property is not subject to the tax, then taxes on and other expenses of said property are not deductible. In any event, the following taxes are not deductible from income: the tax under the Ordinance, federal or other taxes based upon income, gift or inheritance taxes, franchise tax, and taxes for local benefits or improvements to property which tend to appreciate the value thereof.
6. Capital gains and losses, ordinary gains or losses, as determined under the Internal Revenue Code, from sale, exchange or other disposition of property shall not be taken into consideration in arriving at net profits earned.
7. In general, non-taxable income and expenses incurred in connection therewith are not to be considered in determining net profits.
(19) “Non-resident” means an individual domiciled outside the boundaries of the City of Lorain.
(20) “Non-resident unincorporated business entity” means an unincorporated business entity not having an office or place of business within the Municipality.
(21) “Ordinance” means the Income Tax Ordinance enacted by the Council in the City of Lorain and any amendments and supplements thereto.
(22) “Person” means every natural person, fiduciary, association, corporation or other entity. Whenever used in a clause prescribing or imposing a penalty, the term “person”, as applied to an unincorporated entity, shall mean the partners or members thereof, and as applied to a corporation, the officers thereof.
(23) “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. A taxpayer does not have a place of business outside of the City of Lorain solely by consigning goods to an independent factor for sale outside of City limits.
(24) “Real property”, as the term is used in the Regulations, shall include commercial property, residential property, farm property and any and all types of real estate.
(25) “Resident” means an individual domiciled in the City of Lorain at any time during the taxable year.
(26) “Resident unincorporated business entity” means an unincorporated business entity having an office or place of business within the City of Lorain.
(Ord. 152-94. Passed 12-19-94.)
(27) “Taxable income” means wages, salaries or other compensation paid by an employer or employers before any deductions and/or the net profits from the operation of a business, profession or other enterprise or activity adjusted in accordance with the provisions of this chapter, and all income received as gambling winnings as reported on IRS Form W-2G, Form 5754 and/or any other Form required by the Internal Revenue Service that reports winnings from gambling and sweepstakes prize winnings over the amount of six hundred dollars ($600.00).
(Ord. 157-11. Passed 10-17-11.)
(28) “Taxable year” means the calendar year or the fiscal year used as the basis on which net profits are to be computed under the Ordinance, and in the case of a return for a fractional part of a year, the period for which such return is required to be made.
(29) “Taxing municipality” means any municipal corporation levying a municipal income tax on salaries, wages, commissions and other compensation earned by individuals and on the net profits earned from the operation of a business, profession or other activity.
(30) “Taxpayer” means a person (whether an individual, association, corporation or other entity) required by the Ordinance to file a return or pay a tax.
(31) “Fundamental change” means any substantial alteration by an employer, including liquidation, dissolution, bankruptcy and reorganizations such as merger, consolidation, acquisition, transfer or change in identity, form or organization.
(32) “Manager” means any of the employer's officers, responsible persons, employees having control or supervision, and employees charged with the responsibility of filing the return, paying taxes and otherwise complying with the Ordinance.
(Ord. 152-94. Passed 12-19-94.)
(33) “Tenant” means:
A. If there is a written lease or rental agreement, the person or persons who sign the written lease or rental agreement with the owner.
B. If there is an oral lease or rental agreement, the person or persons with whom the owner enters into the oral lease or rental agreement.
(Ord. 173-03. Passed 12-1-03.)