(a) Subject to the provisions of Section 191.16, an annual tax for the purposes specified in Section 191.01 shall be levied, at the rate of one and five-tenths percent (1.5%) per annum until December 31, 1987, and on and after January 1, 1988, and until December 31, 2013, at the rate of two percent (2%) per annum, upon the following.
(1) On all income, qualifying wages, commissions and other compensations earned and/or received on and after January 1, 1959, by residents of the City.
A. For further clarification "income" includes, but is not limited to, lottery, gambling and sports winnings, and games of chance.
B. If the taxpayer is not considered a professional gambler for federal income tax purposes, a deduction shall be allowed. the deduction shall be the lesser of $2,500, or a deduction equal to the amount of income combined from lottery, gambling and sports winnings, and games of chance, up to $2,500. If said income is payable to the taxpayer over more than one year, the deduction applies only in the first year in which the income is received.
C. If the taxpayer is considered a professional gambler for federal income tax purposes, related deductions as permitted by the Internal Revenue Code shall be allowed against gambling and sports winnings.
(2) On all income, qualifying wages, commissions and other compensation earned and/or received on and after January 1, 1959, by nonresidents for work done or services performed or rendered in the City. Separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer shall be allocable only to the City.
A. Louisville shall not, however, tax the compensation of a non-resident individual who will be deemed to be an occasional entrant if all of the following apply:
1. The compensation is paid for personal services performed by the individual in The City on twelve or fewer days during the calendar year, in which case the individual shall be considered an occasional entrant for purposes of The City income tax. A day is a full day or any fractional part of a day.
2. 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 Section 191.03(a)(2) 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.
3. The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by The City.
B. Beginning with the thirteenth day an individual deemed to have been an occasional entrant to The City performs services within The City, the employer of said individual shall begin withholding The City income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to The City in accordance with the requirements of this ordinance. Since the individual can no longer be considered to have been an occasional entrant, the employer is further required to remit taxes on income earned in The City by the individual for the first twelve days.
C. If the individual is self-employed, it shall be the responsibility of the individual to remit the appropriate income tax to The City.
(3) A. On the portion attributable to the City of the net profits earned on and after January 1, 1959, of all resident unincorporated businesses, professions or other activities, derived from work done or services performed or rendered and business or other activities conducted in the City.
B. On the portion of the distributive share of the net profits earned and/or received on and after January 1, 1959, of a resident partner or owner of a resident unincorporated business entity not attributable to the City, and not levied against such unincorporated business entity.
(4) A. On the portion attributable to the City of the net profits earned on and after January 1, 1959, of all nonresident unincorporated businesses, professions or other activities, derived from work done or services performed or rendered and business or other activities conducted in the City, whether or not such unincorporated business entity has an office or place of business in Louisville.
B. On the portion of the distributive share of the net profits earned and/or received on and after January 1, 1959, of a resident partner or owner of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.
(5) Tax that is due on net profits distributed to partners, shareholders, and/or owners of associations and unincorporated businesses and pass-through entities, shall be collected and remitted to Louisville by the entities on behalf of its partners, shareholders, and/or owners and owners.
(6) Effective for tax years 2004 and later, the distributive share of income paid to an S corporation shareholder shall be taxable only to the extent of the portion, if any, that represents wage income.
(7) On the portion attributable to the City of the net profits earned on and after January 1, 1959, of all corporations derived from work done or services performed or rendered and business or other activities conducted in the City, whether or not such corporations have an office or place of business in Louisville.
(b) Determination of Allocation of Tax (Method of Determination).
(1) Net profit from a business or profession conducted both within and without the boundaries of the City of Louisville shall be considered as having a taxable situs in the City of Louisville for purposes of municipal income taxation in the same proportion as the average ratio of:
A. The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City of Louisville during the taxable period to the average of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. As used in this section, real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereon by eight.
B. Wages, salaries, and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the City of Louisville to wages, salaries, and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed. For tax year 2004 and subsequent tax years, wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages.
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the City of Louisville to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
In the event that the foregoing allocation formula does not produce an equitable result, another basis (including the books and records method) may, under uniform regulations, be substituted so as to produce such result.
(2) As used in subsection (b)(1) hereof, "sales made in the City of Louisville" means:
A. All sales of tangible personal property which is delivered within the City of Louisville regardless of where title passes if shipped or delivered from a stock of goods within the City of Louisville;
B. All sales of tangible personal property which is delivered within the City of Louisville regardless of where title passes even though transported from a point outside the City of Louisville if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City of Louisville and the sales result from such solicitation or promotion;
C. All sales of tangible personal property which is shipped from a place within the City of Louisville to purchasers outside the City of Louisville regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) Exceptions. The tax provided for herein shall not be levied upon the following:
(1) Military pay or allowances of members of the armed forces of the United States and of members of their reserve components, including the National Guard.
(2) Upon the net profits of any civic, charitable, religious, fraternal or other organization specified in Ohio R. C. 718.01 to the extent that such net profits are exempted from municipal income taxes under such section.
(3) Poor relief, payments from pensions, unemployment compensation or similar payments, including disability benefits received from private industry or local, state or Federal governments, or from charitable, religious or educational organizations.
(4) Alimony received.
(5) Dues, contributions and similar payments received by charitable, religious, educational or literary organizations or labor unions, lodges and similar organizations.
(6) Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are from casual entertainment, amusements, sports events and health and welfare activities conducted by bona fide charitable, religious and educational organizations and associations, and only to the extent that the said income is exempt from Federal Income Tax.
(7) Any association, organization, corporation, club or trust, which is exempt from Federal taxes on income by reason of its charitable, religious, educational, literary, scientific, etc., purposes, but not including unrelated income that is subject to federal tax.
(8) Gains from involuntary conversions, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State from which the City is specifically prohibited from taxing, and income of decedent's estate during the period of administration, except such income from the operation of a business.
(9) Earnings and income of all individuals under sixteen years of age whether residents or nonresidents.
(10) Compensation for personal injuries or for damages to property by way of insurance or otherwise, but this exclusion does not apply to compensation paid for lost salaries or wages or to compensation from punitive damages.
(11) Compensation paid to a precinct election official, to the extent that such compensation does not exceed $1,000 annually.
(12) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained clergy's compensation. The clergy must be duly ordained, commissioned, or licensed by a religious body constituting a religious denomination, and must have authority to perform all sacraments of the religious body.
(13) Income, salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce, and/or is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of a municipality to impose net income taxes.
(d) The following provisions apply with respect to the carry forward of net operating losses:
(1) The portion of a net operating loss sustained by a taxpayer in any taxable year subsequent to 2001, attributable to the City, may be applied against the portion of the net profits of the taxpayer attributable to the City in succeeding taxable years until exhausted, but in no event for more than three taxable years immediately following the taxable year in which the loss occurred. No portion of a net operating loss sustained by a taxpayer shall be carried back against net profits of any prior taxable year.
(2) The portion of a net operating loss sustained by a taxpayer for any taxable year attributable to the City shall be determined in the same manner as provided herein for determining net profits attributable to the City. (Ord. 09-10. Passed 4-6-09.)