(a) Each employer located, or doing business within the City who employs one or more persons on an income, salary, wage, commission, or other compensation basis, excluding exempted incomes set forth in Section 183.16, and subject to the provisions of subsection (b) hereof, shall deduct, at the time such income, salary, wage, commission, or other compensation is paid, allocated or set aside, the tax of 1% of the gross income, salaries, wages, commissions, or other compensation due from the employer to the employee, and shall make a return to the Tax Administrator and pay to the City the amount of taxes so deducted on or before the last day of the month following such withholding. Tax shall be withheld only from qualifying wages as defined in Section 183.01, with the following adjustments:
(1) Deduct any amount included in wages if the amount constitutes compensation attributable to a plan or program described in Section 125 of the Internal Revenue Code.
(2) Add any amount not included in wages solely because the employee was employed by the employer prior to April 1, 1986, and thereby exempt from the Medicare tax. The wages shall be taxed as if they were subject to the Medicare tax.
(3) Add any amount not included in wages because the amount arises from the sale, exchange or other disposition of a stock option, the exercise of a stock option, or the sale, exchange or other disposition of stock purchased under a stock option and the municipal corporation has not, by resolution or ordinance, exempted the amount from withholding and tax. This subsection applies only to those amounts constituting ordinary income. Further, an employer is not required to make any withholding with respect to an individual’s disqualifying disposition of an incentive stock option, if, at the time of the disqualifying disposition, the individual is not an employee of the corporation with respect to whose stock the option has been issued.
(4) Add any amount not included in wages if the amount is an amount described in section 401(k) or 457 of the Internal Revenue Code. This subsection applies only to employee contributions and employee deferrals.
(5) Add any amount that is supplemental unemployment compensation benefits described in section 3402(o)(2) of the Internal Revenue Code and not included in wages.
(b) If the taxes withheld by an employer for the City during the previous tax year averaged less than three hundred dollars ($300.00) per month, payments may be made quarterly on or before the last day of the month following the end of each quarter, subject to the approval of the Tax Administrator. The Tax Administrator may revoke the approval of quarterly filing and payments whenever the Tax Administrator has reason to believe that the conditions for granting such authorization have changed. Notice of such revocation shall be made in writing and provided to the employer by the Tax Administrator and, in such case, the employer must begin to file in accordance with the provisions of this section including subsection (a). If the taxes withheld by an employer for the City during the previous tax year averaged three hundred dollars ($300.00) per month or more, payments must be made on a monthly basis and shall be made on or before the last day of the month following the end of the month for which taxes were withheld.
(c) The payment of taxes withheld shall be on a form obtainable from the Tax Administrator, or on any acceptable generic form. Such employer, in collecting the tax, shall be deemed to hold the same as trustee for the benefit of the City until payment is made by such employer to the City, and any such tax collected by such employer from his employees shall, until the same is paid to the City, be deemed a trust fund in the hands of such employer. Such employer shall be liable for the payment of the tax required to be deducted and withheld, whether or not such taxes have in fact been withheld.
(d) All officers of a corporation or the employees having control or supervision or charged with the responsibility of filing the return and making payment, shall be personally liable for failure to file the return or pay the tax due as required herein. The dissolution, bankruptcy, or reorganization of any such employer does not discharge any officer’s or employee’s liability for a prior failure of such business, to file a return or pay taxes due.
(e) On or before February 28 of each year, each employer shall file a withholding tax reconciliation for the preceding calendar year, showing the sum total of all compensation paid to all employees, the portion of which, (if any), was not subject to withholding, along with an explanation for same, and the portion of which was subject to withholding, together with the amount of such withholdings remitted. Such return shall include information concerning each employee from whom Loveland tax was withheld, or should have been withheld, setting forth the name, address and social security number of each such employee, the total amount of compensation paid during the year, the amount of Loveland tax withheld and such other information has may be required by the rules and regulations established by the Tax Administrator. In lieu of submitting forms W-2 for each employee, an alternative method of reporting must be approved by the Tax Administrator, or his duly authorized agent.
(f) A nonresident employer, agent of such an employer, or other payer that is not located in the City of Loveland and is exempt from withholding pursuant to this section shall report all taxable income paid to its employees or agents working in the City on an annual basis. This report shall be due on or before February 28 of each year, and shall include a calculation of the total compensation earned in the City by all employees during the preceding calendar year.
(g) In addition to the wage reporting requirements of this section, any person who compensates a nonemployee individual, contractor or subcontractor shall report such payment. The information required shall include the name, address and social security number or federal identification number, the amount of compensation paid to each such nonemployee, individual, contractor or subcontractor. Federal form 1099 MISC may be submitted in lieu of such listing. This information shall be filed annually with the City, on or before February 28.
(h) Subcontractors shall be responsible for all income tax withholding requirements under this chapter.
(Ord. 2004-84. Passed 12-17-04.)
(i) No person shall be required to withhold the tax on the wages or other compensation paid domestic servants employed exclusively in or about such person's residence. However, such domestic servants shall file their own returns and pay any tax required.
(Ord. 2000-64. Passed 11-28-00.)
(Ord. 2002-73. Passed 12-7-02.)