CHAPTER 191 Income Tax

As used in this chapter, the following words shall have the meaning ascribed to them in this section, except as, and if, the context clearly indicates or requires a different meaning.

(a) “Adjusted federal taxable income” means a C corporation’s federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:

(1) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in trade or business or assets held for the production of income;

(2) Add an amount equal to five percent (5%) of intangible income deducted under division (a)(1) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code;

(3) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code;

(4) A. Except as provided in division (a)(4)B. of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code;

B. Division (a)(4)A. of this section does not apply to the extent the income or gain is income or gain described in section 1245 or 1250 of the Internal Revenue Code.

(5) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;

(6) In the case of a real estate investment trust and regulated investment company, add all amounts with respect to dividends to investors, distributions to investors, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income;

(7) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute adjusted federal taxable income as if the taxpayer were a C corporation, except:

A. Guaranteed payments and other similar amounts paid or accrued to a partner, former partner, member, or former member shall not be allowed as a deductible expense; and

B. Amounts paid or accrued to a qualified self-employed retirement plan with respect to an owner or owner-employee of the taxpayer, amounts paid or accrued to or for health insurance for an owner or owner-employee, and amounts paid or accrued to for life insurance for an owner or owner-employee shall not be allowed as a deduction.

Nothing in division (a) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.

Nothing in this chapter shall be construed as limiting or removing the ability of any municipal corporation to administer, audit, and enforce the provisions of its municipal income tax.

(b) "Association" means a partnership, limited partnership, S-corporation or any other form of unincorporated enterprise, owned by two or more persons.

(c) "Business" means an enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, limited partnership, corporation, association or any other entity.

(d) "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.

(e) "Employee" means an individual whose earnings are subject to the withholding of Federal Income Tax or Social Security Tax.

(f) "Employer" means an individual, partnership, limited partnership, association, corporation, governmental body, unit or agency, or any other entity which employs one or more persons on a salary, wage, third party sick pay, commission or other compensation basis.

(g) “Intangible income” means income of any of the following types: income yield, interest, capital gains, dividends or other income arising from the ownership, sale, exchange or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in Chapter 5701 of the Ohio Revised Code, and patents, copyrights, trademarks, trade names, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation. “Intangible income” does not include prizes, awards, or other income associated with any lottery winnings or other similar games of chance.

(h) “In the City” as used in Section 191.02 shall include all City owned lands not situated within the boundaries of another municipality.

(i) "Net profit" for a taxpayer other than an individual means adjusted federal taxable income and “net profit” for a taxpayer who is an individual means the individual’s profit required to be reported on schedule C, schedule E, or schedule F.

(j) "Nonresident" means an individual, partnership, limited partnership, corporation, association or other entity domiciled outside the City of Mansfield.

(k) "Other compensation" as used in Section 191.02 shall include tips, gratuities and all types of deferred income, that is, insurance paid by the employer over fifty thousand dollars ($50,000), 401K, PERS, etc.

(l) "Other entity" means any person or unincorporated body not previously named or defined and includes, inter alia, fiduciaries located within the City of Mansfield.

(m) "Person" means every natural person, partnership, limited partnership, corporation, fiduciary or association. Whenever used in any clause prescribing and imposing a penalty, the term "person" as applied to an association, shall mean the partners or members thereof, and as applied to corporations, the officers thereof.

(n) “Qualifying wages” means wages, as defined in section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted in accordance with section 718.03(A) of the Ohio Revised Code.

(o) "Resident" means an individual, partnership, limited partnership, corporation, association or other entity domiciled in the City of Mansfield.

(p) “Taxable income” as used in Section 191.02 shall include: qualifying wages, salaries and other compensation paid by an employer or employers before any deduction; and net profits from the operation of a business, profession or other enterprise or activity; and income derived or received from gaming, wagering, schemes of chance or lotteries, including the Ohio State Lottery, totaling $600 or more in a taxable year as adjusted in accordance with the provisions of this chapter.

(q) “Taxpayer” means a person, whether an individual, partnership, limited partnership, corporation, association or other entity, required hereunder to file a return or to pay a tax hereunder.

(r) The singular shall include the plural and the masculine shall include the feminine and the neuter.

(Ord. 13-082. Passed 4-2-13.)

191.02 LEVY.

To provide funds for the purpose of general municipal operations and other municipal purposes of the City of Mansfield, there is hereby levied a tax upon earnings at the rate of one percent (1%), upon the following:

(a) (1) On all salaries, qualifying wages, third party sick pay, commissions and other compensation earned on and after January 1, 1971, by resident individuals of the City of Mansfield.

(2) On income from all lottery, gambling, and sports winnings, and games of chance received by resident individuals of the City of Mansfield.

A. If taxpayer is considered a professional gambler under the Internal Revenue Code, then deductions for gambling losses shall be permitted according to the Internal Revenue Code for a professional gambler.

B. If taxpayer is not considered a professional gambler under the Internal Revenue Code, a deduction equal to the amount of up to $2,500 of income combined from lottery gambling and sports winnings, and games of chance, or a deduction of $2,500 whichever is less, shall be allowed, provided that in case shall the deduction exceed the amount of combined income from lottery, gambling and sports winnings, and games of chance. If any of the said income is paid out over a period of more than one year, the deduction shall apply only to the first year.

(b) On all salaries, qualifying wages, third party sick pay, commissions and other compensation earned on and after January 1, 1971, by nonresident individuals of the City of Mansfield, for work done or services performed or rendered in the City of Mansfield.

(c) On the net profits attributed to City of Mansfield, earned on and after January 1, 1971, of all resident unincorporated businesses, professions and other activities derived from work done or services rendered or performed and business or other activities conducted in the City of Mansfield.

(d) On the portion of the distributive share of the net profit earned on and after January 1, 1971, of a resident individual, partner or owner of a resident unincorporated business entity attributable to the City of Mansfield and not levied against such unincorporated business entity.

(e) On the net profits attributable to the City of Mansfield earned on and after January 1, 1971, 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 of Mansfield.

(f) On that portion of the distributive share of the net profits earned on and after January 1, 1971, of a resident individual, partner or owner of a non-resident unincorporated business entity not attributable to the City of Mansfield and not levied against such unincorporated business entity.

(g) On the net profits earned on and after January 1, 1971, of all corporations derived from work done or services performed or rendered and business or other activities conducted in the City of Mansfield.

(h) Business Apportionment Percentage Formula. ( Ohio R.C. 718.02)

(1) In the taxation of income which is subject to municipal income taxes, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of a municipal corporation shall separately disclose with reasonable accuracy what portion of its net profit is attributable to that part of the business or profession conducted within the boundaries of the municipal corporation, then only such portion shall be considered as having a taxable situs in such municipal corporation for purposes of municipal income taxation. In the absence of such records, net profits from a business or profession conducted both within and without the boundaries of a municipal corporation shall be considered as having a taxable status in such municipal corporation for purposes of municipal income taxation in the same proportion as the average ratio of:

A. The average original cost of property of the real and tangible personal property owned or used by the taxpayer in the business or profession in such municipal corporation during the taxable period to the average net book value of all the real and tangible personal property owned or used by the taxpayer in business or profession during the same period, wherever situated.

As used in the preceding paragraph, 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, third party sick pay, commissions and other compensation paid during the taxable period to persons employed in the business or profession for services performed in such municipal corporation to wages, salaries, third party sick pay and other compensation paid during the same period to persons employed in the profession, wherever their services are performed.

C. Gross receipts of the business or profession from sales made and services performed during the taxable period in such municipal corporation 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 may, under uniform regulations, be substituted so as to produce such results.

(2) As used in subsection (h)(1) hereof, "sales made in a municipal corporation" means:

A. All sales of tangible personal property which is delivered within such municipal corporation regardless of where title passes if shipped or delivered from a stock of goods within such municipal corporation.

B. All sales of tangible personal property which is delivered within such municipal corporation regardless of where title passes even though transported from a point outside such municipal corporation if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within such municipal corporation and the sales result from such solicitation or promotion.

C. All sales of tangible personal property which is shipped from a place within such municipal corporation to purchasers outside such municipal corporation 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.

(i) In the computation of any tax due under this chapter, a business loss of a previous tax year shall not be allowed or carried forward to reduce the tax due in any subsequent tax year.

(j) In the event a just and equitable result cannot be obtained under the formula provided for herein, the Finance Director, upon application of the taxpayer, shall have the authority to substitute other factors or methods calculated to effect a fair and proper apportionment.

(Ord. 04-253. Passed 12-21-04.)

191.021 LEVY OF ADDITIONAL TAX.

In addition to the income tax levied pursuant to Section 191.02, there is hereby levied, to provide funds for the purpose of expenses and salaries in the Police and Fire Departments, a tax upon earnings at the additional rate of one-half of one percent (½ %) upon those items enumerated in Section 191.02.

(Ord. 04-253. Passed 12-21-04.)

Disclaimer: This Code of Ordinances and/or any other documents that appear on this site may not reflect the most current legislation adopted by the Municipality. American Legal Publishing provides these documents for informational purposes only. These documents should not be relied upon as the definitive authority for local legislation. Additionally, the formatting and pagination of the posted documents varies from the formatting and pagination of the official copy. The official printed copy of a Code of Ordinances should be consulted prior to any action being taken. For further information regarding the official version of any of this Code of Ordinances or other documents posted on this site, please contact the Municipality directly or contact American Legal Publishing toll-free at 800-445-5588.

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