(a) Returns and Requirements.
(1) Annual return requirements. Each taxpayer, whether an individual, corporation or unincorporated business entity, subject to the provisions of Section 191.03(a) to (f), shall file a return or returns, as necessary, setting forth the aggregate amount of salaries, wages, commissions and other personal service compensation; net profits from business or other activities, including the rental from use of real and personal property; and other income taxable under the Ordinance for the period covered by the return or returns and other pertinent facts information.
(2) Who need not file an annual return:
A. Any person who has no income need not file an annual return. Any person who has exempt income must file a return and declare to the Administrator the nature of his exemption. Any person who has taxable income must file a tax return with the Tax Administrator.
B. A non-resident individual who is employed in this Municipality and withheld at the source equal to the existing tax rate need not file an annual return as set forth in subsection (a)(1) hereof.
(3) Dates and requirements for annual returns. Except as provided in subsection (a)(2) hereof on or before April 30th of the year following the effective date of the Ordinance, each taxpayer, whether individual, corporation or unincorporated business entity subject to the provisions of Section 191.03(a) to (f), must make and file with the Administrator a return on a form prescribed by and obtainable upon request from the Administrator whether or not a tax is due.
(4) Fiscal Year Account. If the annual return is made for a fiscal year or any period less than a year, said return shall be made within four (4) months from the end of each fiscal year or other period.
(5) Declaration of Estimated Tax Return. Except as provided in subsection (a)(6) hereof, on or before April 30th of the year following the effective date of the Ordinance and on or before April 30th of each year thereafter, each taxpayer, whether an individual, corporation, unincorporated business entity subject to the provisions of Section 191.03(a) to (f), must make and file with the Administrator an estimated tax return. If an estimate is not filed, an estimate may be filed by the Administrator if there is reason to believe an estimate will be owed.
(6) Requirement of filing.
A. A declaration of estimated tax shall be filed by every taxpayer who anticipates receiving taxable income not subject to withholding.
B. Taxpayer's final return for the preceding year may be used as the basis for the current year, if tax liability exceeds one hundred dollars ($100.00), or he may use the same figures used for estimating the Federal income tax adjusted to exclude any income or deductions not taxable or permissible under the Municipal Income Tax Ordinance. In the event a taxpayer has not previously been required to file a return, a declaration of estimated tax on anticipated income shall be filed in good faith.
(7) Date of filing. Those taxpayers reporting on a calendar year basis shall file a declaration of estimated tax on or before April 30th of each year or within four (4) months of the date the taxpayer becomes subject to the tax for the first time.
A. The filing of a Declaration of Estimated Tax does not relieve the taxpayer of the obligation of filing a final return, even though there is no change in the declared tax liability. A final return must be filed to obtain a refund of any overpayment of over one dollar ($1.00).
B. Those taxpayers reporting on a fiscal year basis shall file a declaration of estimated tax within four (4) months of the date the taxpayer becomes subject to the tax for the first time.
(8) Forms of Filing.
A. 1. Such declaration of estimated tax shall be filed on a form furnished by or obtainable from the Administrator of the Lorain City Income Tax Department.
2. Should the declaration of estimated tax indicate an overpayment, such overpayment shall not be refunded until the final return has been filed.
B. The original estimate of tax liability or any subsequent amendment thereof may be increased or decreased by filing an amended declaration of estimated tax on or before any quarterly payment dates as set forth in subsection (a)(9) hereof. Such amendment may be made on the quarterly billing forms.
(9) Date of payments.
A. The estimated tax may be paid in full with the first declaration of estimated tax each year or in equal installments on or before the last day of the fourth, sixth, ninth and twelfth months of the taxable year.
B. The declaration of estimated tax must be accompanied by at least one-fourth (1/4) of the estimated tax shown due thereon.
C. In the event an amended declaration of estimated tax has been filed, the unpaid balance shown due thereon shall be paid in equal installments over the remaining payment dates.
(10) Final returns required. The filing of a declaration of estimated tax does not relieve the taxpayer of the necessity of filing a final return even though there is no change in the declared tax liability. A final return must be filed to obtain a refund of any overpayment of over one dollar ($1.00)
(11) Non- reimbursed business and moving expenses. An individual taxpayer residing in a Municipality which allows these deductions and who is permitted for federal income tax purposes to deduct certain business expenses from gross wages, salaries or commissions (IRC Section 62), may file a copy of Federal Income Tax Form 2106 or an itemized statement of expenses with his municipal tax return claiming only deductions allowable under Part 1 of Form 2106, no matter whether all or part of such wages, salaries or commissions are subject to withholding. Items deducted on the 2106 must be substantiated by attaching copy of Schedule A of Federal Form 1040. Expenses attributable to moving that are deductible for federal tax purposes may be deducted if incurred after residency has been established or , if reimbursement was included in W-2 and the total reimbursement was included as involved income earned while a resident of this Municipality.
(12) Resident combined return. An individual taxpayer residing in the City of Lorain who has taxable compensation (salary, wages, etc.) and who also has a distributive share of net profits or loss from an unincorporated business entity or total ownership of an unincorporated business entity, the net profit of which is wholly or partly subject to taxation by the City of Lorain (or would be so subject if net profits existed), must report the taxable compensation and business net profits or loss on the same return. However, whether or not such compensation and net profit or loss are combined on one return, the following rules are to be applied:
There is to be no offset of business losses against wages and other employee compensation.
(13) Joint filing. A husband and wife may file, in any tax year, a joint return.
Husband and wife are liable jointly and severally for payment of the tax associated with the joint return. A husband and wife's tax return shall be deemed a joint return whenever the facts indicate that the taxpayers intended to have the filed tax return be a joint return. Conclusive indications of such intention include when the husband and wife both signed the tax return, when the return reports both spouses' income or when the husband and wife were both required to file tax returns but only one spouse filed a tax return.
(14) Partnerships and other unincorporated business. The tax is on the partnership or other unincorporated business as an entity, whether resident or non-resident, and a return is required disclosing the net profits allocable to this Municipality and the tax paid thereon (see Section 191.03(c) and (d)). In addition, any resident partner or member of any unincorporated entity is required to make a return and pay the tax on income allocable outside this Municipality in accordance with Section 191.03(c)(5) and (d)(4).
(15) Fiduciary returns. Trustees of trusts and executors and administrators of estates having income taxable under the Ordinance are required to file returns and pay the tax thereon (also see subsection (a)(14) hereof).
(b) Information Required and Reconciliation With Federal Returns for Individuals or Businesses.
(1) Information. In returns filed hereunder, there shall be set forth the aggregate amount of salaries, wages, bonuses, incentive payments, commissions, fees and other compensation subject to the tax earned from each employer, taxable net profits, and other pertinent information as the Administrator may require.
(2) Items not taxable or deductible. Where figures of total income, total deductions and net profits are included as shown by a federal return, then any items of income as are not subject to municipal income tax and unallowable expenses shall be eliminated in determining net income subject to municipal income tax. The fact that any taxpayer is not required to file a federal income tax return does not relieve him from filing a municipal income tax return.
(3) Changes on return:
A. If a change in federal income tax liability as finally determined by the Federal Internal Revenue Service or by judicial decision results in an additional amount of tax payable to this Municipality, a report of such change shall be filed by the taxpayer within three (3) months from the final determination of federal tax liability. (See subsection (f) hereof).
B. If a change in federal income tax liability results in a reduction of taxes owed and paid to this Municipality, a claim for refund shall be filed with the Administrator as prescribed in subsection (f) hereof.
(c) Extensions.
(1) Requests. All extension requests must be made on or before the date for filing the return and, for good cause shown, the Administrator may extend the time for filing such returns for a period not to exceed six (6) months or one (1) month beyond any extension granted by the Federal Internal Revenue Service. Upon receipt of a copy of any extension granted by the Internal Revenue Service within this guideline, an extension shall be automatically granted by the Administrator.
(2) Automatic. In cases where an automatic four (4) month extension (Form 4868) has been granted by the Internal Revenue Service, an automatic extension is granted by the Administrator without written request. A copy of Form 4868 must be attached to the return when filed. However, should any tax due be anticipated, the provisions of subsection (c)(3) must be met.
(3) Payment requirement. In cases where a balance is due on such annual return, the total of the estimated balance is due at the time the extension is filed.
(4) Supplemental documents. Information returns, schedules and statements needed to support tax returns are to be filed within the time limits set forth for filing the tax returns and made a part thereof.
(d) Consolidated returns.
(1) General. The filing of consolidated returns shall be limited to corporations filing estimated net profit returns and annual net profit returns.
(2) Who may file a consolidated return. Consolidated returns may be filed by a group of corporations who are affiliated through stock ownership and who join in the filing of a federal consolidated income tax return. A consolidated return must include all subsidiaries, which are includable members of an "affiliated group" as defined in the Federal Consolidated Return Regulation.
(3) Discontinuing filing consolidated returns. When a consolidated return has been filed for any taxable year, the consolidated group must continue to file consolidated returns in subsequent years unless:
A. Permission in writing is granted by the Administrator to file separate returns; or
B. The affiliated group terminates in such manner that a federal consolidated income tax return is no longer required; or
C. Permission in writing has been granted by the Commissioner of Internal Revenue to discontinue filing a federal consolidated income tax return.
(4) Corporation entering or leaving an affiliated group. If a corporation becomes a member of the affiliated group during the taxable year, or if a corporation ceases to be a member of the affiliated group during that taxable year, the consolidated return must include the income of each subsidiary for the portion of the year during which it was a member of the affiliated group as computed in accordance with the Federal Consolidated Return Regulations.
(5) Allocation fractions. In determining the allocation fraction where a corporation becomes a member of the group, or ceases to be a member of the group during the taxable year, the property fraction shall be determined on the basis of the average net book value of the property during the period such corporation was a member of the group. The rental portion of the fraction, however, shall be computed at eight (8) times the rent during this period. The gross receipts and wage fractions shall be based upon actual figures.
(6) Common consent. All subsidiary corporations must agree in writing to the filing of the consolidated return. They will be liable jointly and severally for the tax as will be the parent corporation. The consent to file a consolidated return must be filed with the initial consolidated return on or before the due date for filing, including extensions of time within which to file the return.
(7) Loss carryover limitations. The net operating loss carryover of a corporation which filed a separate return in a prior year may be carried over to a consolidated return year in the same manner permitted by the Internal Revenue Code. For the purposes of this rule, to the extent that the loss can only be carried forward to the same corporation's taxable net income, the net income attributable to this Municipality in a year a loss is being utilized shall be computed by using only the same corporation's net income and allocation methods.
(8) Computing net income. In consolidating the net income, the taxable income of each corporation shall be computed in accordance with the provisions governing the taxable income of separate corporations except that unrealized profits and losses in transactions between members of the affiliated group shall be eliminated in the same manner and amount as computed in accordance with the Federal Consolidated Income Tax Return Regulations.
(9) Non- deductible expense rule. In determining expenses that are not allowable because they are allocable to non-taxable income, such calculations shall be based on the consolidated net income.
(e) Allocation of Net Profits by Administrator. 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, or in case any person operates a division, branch, factory, office, laboratory or activity within a member taxing Municipality constituting a portion only of its total business, the Administrator shall require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to said taxing Municipality. If the Administrator finds that net profits are not properly allocated to said taxing Municipality by reason of transactions with municipality by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory or activity, or by some other method, he shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits.
(f) Amended Returns. Where necessary, an amended return must be filed in order to report additional income and pay any additional tax due or claim a refund of tax overpaid subject to the requirements or limitations contained in the Ordinance. Such return shall be clearly marked "Amended". A taxpayer may not change the method of accounting or apportionment of the net profits after the due date for filing the original return. Amended returns cannot be filed after three (3) years from the original filing date. (Ord. 152-94. Passed 12-19-94.)
(g) Duties of Owner of Rented or Leased Property.
(1) All property owners of rental or leased property who rent to tenants of residential, commercial or industrial premises, shall file with the Administrator a report showing the names and addresses of each such tenant who occupies residential, commercial or industrial premises within the corporation limits of the Municipality.
(2) Within thirty days after a new tenant occupies residential, commercial or industrial rental property of any kind within the Municipality, all property owners of rental or leased residential, commercial or industrial property who rent to tenants, shall file with the Administrator a report showing the names and addresses of each such tenant who occupies residential, commercial or industrial premises within the corporation limits of the Municipality.
(3) Within thirty days after a tenant vacates a rental or leased residential, commercial or industrial property located within the Municipality, the property owner of such vacated rental or leased property shall file with the Administrator a report showing the date of vacating from the rental or leased residential, commercial or industrial property and identifying such vacating tenant. (Ord. 173-03. Passed 12-1-03.)