181.03 IMPOSITION OF TAX.

   (a)   Rate. Subject to the provisions of Section 181.14, an annual tax for the purposes specified in Section 181.01 shall be imposed on and after July 1, 1997 through December 31, 2010, at the rate of two percent (2%); on and after January 1, 2011 through December 31, 2013 at the rate of two and one-quarter percent (2 1/4%); on and after January 1, 2014 at the rate of two percent (2%); and on and after July 1, 2017, at the rate of one and three-quarters percent (1-3/4%) per annum upon the following:

(Ord. 64-2010. Passed 7-22-10.)

      (1)   On all taxable income received during the effective period of this chapter by residents of the Municipality, including but not limited to bonuses, incentives and profit sharing payments, vacation pay, payments received under a wage continuation plan from an employer or third party during periods of disability or sickness, and contributions made by or on behalf of an employee to a tax deferred annuity plan, (401K, 403B, IRA, KEOGH and other similar plans).

      (2)   On all taxable income received during the effective period of this chapter by non-residents for work done or services performed or rendered in this Municipality, including but not limited to bonuses incentive and profit sharing payments, vacation pay, payments received under a wage continuation plan from an employer or third party during periods of disability or sickness, and contributions made by or on behalf of an employee to a tax deferred annuity plan (401K, 403B, IRA, KEOGH and other similar plans).

      (3)   A.   On the portion attributable to the City of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions or other entities, derived from sales made, work done, 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 during the effective period of this chapter 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 by the City.

      (4)   A.   On the portion attributable to the City of net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions or other entities, derived from sales made, 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 the City.

         B.   On the portion of the distributive share of the net profits earned during the effective period of this chapter 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 by the City.

      (5)   On the portion attributable to the City of net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, 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 the City.

      (6)   A.   The rental of real estate is ordinarily a business activity, and the income from such rentals are taxable, provided, however, where the taxpayer's entire rental activity produces gross rentals of three thousand dollars ($3,000) per year or less, it will be prima facie evidence that such rentals are not a business activity. If gross rentals of any and all real properties in the aggregate exceed three thousand dollars ($3,000) per year, the entire net income from rentals is taxable and shall be included in the computation of net profits from business activities under subsections (a)(3) through (5) hereof.

         B.   Rentals received by a taxpayer engaged in the business of buying and selling real estate shall be considered as part of business income.

         C.   Real property, as the term is used in this chapter, shall include commercial property, residential property, farm property and any and all other types of real estate with the exception of farm property located outside the corporate limits of the City.

         D.   In determining the taxable income from rentals, the deductible expenses shall be of the same nature, extent and amount as are allowed by the Internal Revenue Service for Federal Income tax purposes.

         E.   Residents of this City are subject to taxation upon the net income from rentals (to the extent specified above), regardless of the location of the real property owned.

         F.   Nonresidents of this City are subject to such taxation only if the real property is situated within the City limits.

   (b)   Attribution of Net Profits. The portion of the net profits attributable to the city of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the City shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.

   (c)   Operating Loss Carry-Forward.

      (1)   The portion of a net operating loss sustained in any taxable year subsequent to July 1, 1980 allocable to the city may be applied against the portion of the profit of succeeding year(s) allocable to the City, until exhausted but in no event for more than five taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year.

      (2)   The portion of net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City except that no portion of net operating loss may be used to reduce taxable income from wages, salaries and other compensation paid by an employer or employees.

      (3)   The Administrator shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined.

   (d)   Consolidated Returns.

      (1)   Any affiliated group which files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the City. However, once the affiliated group has elected to file a consolidated return or a separate return with the City, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the City.

      (2)   Filing of consolidated Income Tax returns will be accepted from any corporation subject to Macedonia Net Profit Tax, provided that the affiliated group incorporated in the consolidated filing, filed a consolidated Federal Income Tax return for the same period, pursuant to Section 1501 of the Internal Revenue Code.

      (3)   In the case of a corporation that carries 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 the City 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 the City. If the Administrator finds net profits are not properly allocated to the City 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 to the City.

   (e)   Exception.  The tax provided for herein shall not be levied upon income from intangible personal property, financial institutional income, social security benefits, public assistance benefit payments from a general welfare fund, accident and health benefits, the military pay or allowances of members of the armed forces of the United States, or 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. Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained minister’s compensation. The ordained minister must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination, and must have authority to perform all sacraments of the church.

(Ord. 94-2002. Passed 1-9-03; Ord. 14-2005. Passed 1-27-05.)