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(a) Method of Determination. In the taxation of income which is subject to the tax levied in Section 890.03
, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of the City disclose with reasonable accuracy what portion of his net profits is attributable to that part of the business or profession conducted within the boundaries of the City, then only such portion shall be considered as having a taxable situs in the City for the purposes of Municipal income taxation. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City, in the absence of actual records thereof, shall be determined by multiplying the entire net profits by a business allocation percentage to be determined by a three-factor formula of property, payroll and sales, each of which shall be given equal weight, as follows:
(1) The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City 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 the business or profession during the same period, wherever situated; as used in this paragraph, "real property" includes property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereon by eight.
(2) Wages, salaries and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the City, to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed; and
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the City, 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 result.
(b) sales Made in the City. As used in paragraph (a)(3) hereof, "sales made in the City" mean:
(1) All sales of tangible personal property which is delivered within the City, regardless of where title passes, if shipped or delivered from a stock of goods within the City;
(2) All sales of tangible personal property which is delivered within the City, regardless of where title passes, even though transported from a point outside the City if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion; and
(3) All sales of tangible personal property which is shipped from a place within the City to purchasers outside of the City, 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) Total Allocation.Add together the percentages determined in accordance with paragraphs (a)(1), (2) and (3) hereof or those of such percentages as are applicable to the particular taxpayer, and divide the total so obtained by the number of percentages used in deriving such total in order to obtain the business allocation percentage referred to in subsection (a) hereof. A factor is applicable even though it may be allocable entirely in or outside the City.
(d) Rentals.
(1) Rental income received by a taxpayer shall be included in the computation of net profits from business activities under Section 890.03(a) (3) through (7) only if and to the extent that the rental ownership, management or operation of the real estate from which such rentals are derived (whether so rented, managed or operated by a taxpayer individually or through agents or other representatives) constitutes a business activity of the taxpayer in whole or in part.
(2) Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of one hundred twenty-five dollars ($125.00) per month, it shall be prima-facie evidence that the rental, ownership, management or operation of such properties is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax, provided that in the case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits of the lessee, whether or not such rental exceeds one hundred twenty-five dollars ($125.00) per month. In the case of farm property, the owner shall be considered engaged in a business activity when he shares in crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds such one hundred twenty-five dollars ($125.00) per month. The person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds such one hundred twenty-five dollars ($125.00) per month.
(e) Operating Loss Carry-Forward.
(1) The portion of a net operating loss sustained in any taxable year allocable to the City may be applied against the portion of the profit of succeeding tax years allocable to the City until exhausted, but in no event for more than five taxable years immediately following the year in which the loss occurred. 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 in this chapter for allocating net profits to the City.
(3) The Administrator shall provide by rules and regulations the manner in which such net operating loss carry forward shall be determined.
(Ord.68-27. Passed 7-23-68.)
The tax levied in Section 890.03 shall not be levied on any of the following:
(a) Pay or allowance of active members of the Armed Forces of the United States or the income of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities;
(b) Poor relief, unemployment insurance benefits, old age pensions or similar payments including disability benefits received from local or state governments or the Federal government, or charitable, religious or educational organizations;
(c) Proceeds of insurance paid by reason of the death of the insured, pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived;
(d) Receipts from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations; (e) Alimony received;
(f) Personal earnings of any natural person under 18 years of age;
(g) Compensation for personal injuries or for damages to property by way of insurance or otherwise;
(h) Interest, dividends and other revenues from intangible property;
(i) Gains from involuntary conversion, 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 a decedent's estate during the period of administration (except such income from the operation of a business);
(j) 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; or
(k) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State or any act of the Ohio General Assembly limiting the power of the City to impose net income taxes.
(Ord.68-27. Passed 7-23-68.)
(a) Return Required.Each taxpayer, except as provided in this section, shall, whether or not a tax is due thereon, make and file a return on or before April 30 of every year. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within four months from the end of such fiscal year or period. The Administrator is hereby authorized to provide by regulation that the return of an employer, showing the amount of tax deducted by such employer from the salary, wages, commissions or other compensation of an employee and paid by him to the Administrator, shall be accepted as the return required of any employee whose sole income, subject to tax levied in Section 890.03
, is such salary, wages, commissions or other compensation.
(b) Form and Content of Return. The return shall be filed with the Administrator on a form furnished by or obtainable upon request from such Administrator, setting forth:
(1) The aggregate amounts of salaries, wages, commissions, lottery winnings, other gambling winnings, and other compensation earned, and gross income, income from business, profession, other enterprise or activity, less allowable expenses incurred in the acquisition of such gross income earned during the preceding year and subject to such tax;
(2) The amount of the tax imposed by this chapter on such earnings and profits; and
(3) Such other pertinent statements, information returns or other information as the Administrator may require.
(c) Extension of Time for Filing Returns,. The Administrator may extend the time for filing the annual return upon the request of the taxpayer for a period of not to exceed six months, or one month beyond any extension requested of or granted by the Internal Revenue Service for the filing of the Federal Income Tax return. The Administrator may require a tentative return, accompanied by payment of the amount of tax shown to be due thereon by the date the return is normally due. No penalty or interest shall be assessed in those cases in which the return is filed and the final tax paid within the period as extended.
(d) Consolidated Return$.
(1) Filing of consolidated returns may be permitted or required in accordance with rules and regulations prescribed by the Administrator.
(2) 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 the City constituting a portion only of its total business, the Administrator shall require such additional information as he deems necessary to ascertain whether net profits are 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) Amended Returns.
(1) Where necessary, an amended return shall 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, limitations, or both, contained in Sections 890.08 and 890.09. Such amended return shall be on a form obtainable on request from the Administrator. A taxpayer may not change the method of accounting or apportionment of net profits after the due date for filing the original return.
(2) Within three months from the final determination of any Federal tax liability affecting the taxpayer's City tax liability, such taxpayer shall make and file an amended City return showing income subject to the City tax based upon such final determination of Federal tax liability and pay any additional tax shown due thereon or make claim for refund of any overpayment.
(Ord.68-27. Passed 7-23-68; Ord.2004-0-01. Passed 1-27-04.)
(a) Payment of Tax on Filing of Return.
(1) The taxpayer making a return shall, at the time of the filing thereof, pay to the Administrator the amount of taxes shown as due thereon, provided that where any portion of the tax so due has been deducted at the source pursuant to the provisions of subsection (b) hereof or where any portion of such tax has been paid by the taxpayer pursuant to the provisions of subsection (c) hereof or whether an income tax has been paid to another municipality, credit for the amount so paid in accordance with Section 890.09 shall be deducted from the amount shown to be due and only the balance, if any, shall be due and payable at the time of filing such return.
(2) A taxpayer who has overpaid the amount of tax to which the City is entitled under the provisions of this chapter may have such overpayment applied against any subsequent liability hereunder or, at his election indicated on the return, such overpayment (or part thereof) shall be refunded, provided that no additional taxes or refunds of less than one dollar ($1.00) shall be collected or refunded.
(Ord. 68-27. Passed 7-23-68.)
(b) Collection at Source.
(1) In accordance with rules and regulations prescribed by the Administrator, each employer within or doing business within the City shall deduct at the time of the payment of such salary, wages, wages, commission or other compensation, the tax of 2% per year of the gross salary, wages, commissions or other compensation due by the employer to each employee and shall, on or before the twentieth day of the month following the close of each calendar quarter, make a return and pay to the Administrator the amount of taxes so deducted, subject to the provisions of subsections (c), (d) and (e) hereof. Such returns shall be on a form prescribed by or acceptable to the Administrator and shall be subject to the rules and regulations prescribed therefor by the Administrator. 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.
(Ord. 82-O-8. Passed 6-22-82.)
(2) Such employer in collecting such tax shall be deemed to hold the same, until payment is made by such employer to the City, as a trustee for the benefit of 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.
(Ord. 68-27. Passed 7-23-68.)
(3) Such employer who deducts the tax in an amount of one hundred dollars ($100.00) or more per month shall, on or before the twentieth day of the following month, pay to the Administrator the amount of taxes so deducted on a monthly basis, beginning with the first month the employer exceeds one hundred dollars ($100.00) in taxes withheld.
(Ord. 82-O-8. Passed 6-22-82.)
(4) Such employer who makes such payments on a monthly basis for the first two months of a calendar quarter shall pay such tax deducted for the third month of a calendar quarter at the regular time for filing the employer's quarterly return of income tax withheld.
(5) Such payments shall be on a form furnished by or obtainable from the Administrator upon request, setting forth the amount of tax deducted for the month. A receipted copy of such form shall be returned to the employer to be attached to and filed with the employer's quarterly return of income tax withheld.
(6) No person shall be required to withhold the tax on wages or other compensation paid domestic servants employed by him exclusively in or about such person's residence, even though such residence is in the City, but such employee shall be subject to all of the requirements of this chapter.
(7) Any business or employer that subcontracts any portion of work on a construction project (the "contractor") to another individual or entity (the "subcontractor") which fails to pay all taxes imposed or forward all taxes required to be withheld under the provisions of this chapter shall pay to the City the full amount of taxes owed plus interest as outlined in Section 890.13(a). Any subcontractor which fails to pay all taxes imposed or forward all taxes required to be withheld under the provisions of this chapter shall also be liable under this section. The individual or entity that retained the contractor shall also be liable under this section, and so forth up to the owner or developer of the construction project.
(8) The City shall not issue any type of permit to a business or employer that has not completed a Withholding and Business Registration Form and a Registration of Contractor's Form as prescribed by the Administrator.
(9) As part of the registration process, contractors shall complete a notarized statement, as provided by the City, setting forth: (1) the names of all individuals to be employed on the project; (2) the names of all independent contractors/subcontractors to be used on the project; (3) the number of days estimated that each independent contractor/ subcontractor will work on the project; and (4) all steps taken to ensure that all employees, or subcontractors that are sole proprietorships or partnerships, have the legal right to work in the United States of America.
(10) If, for whatever reason, a subcontractor starts to perform work for a contractor on the project that was not identified during the initial registration process, within three calendar days after the subcontractor starts performing work for the contractor, the contractor shall submit the notarized statement required in division (b)(9) with respect to the subcontractor.
(11) The City shall not give final approval, which may include withholding of any retainer amount due, for work performed on any construction project undertaken by the City to any individual or entity working on said project until presented with documentation from the City's tax authority that all City income tax due are current.
(12) If a contractor violates any part of this section, it shall be subject to a fine in the amount of one thousand dollars ($1,000.00).
(13) The determination of independent contractor/subcontractor or employee status for purposes of this section and this Chapter 890 shall be the same as those factors used by the Internal Revenue Service in its code and regulations.
(c) Declarations of Income Not Collected at Source. Every person, who anticipates any taxable income which is not subject to subsection (b) hereof or who engages in any business, profession, enterprise or activity subject to the tax levied in Section 890.03, shall file a declaration setting forth such estimated income or the estimated profit or loss from such business activity, together with the estimated tax due thereon, if any, provided that if a person's income is wholly from wages from which the tax will be withheld and remitted to the City in accordance with subsection (b) hereof, such person need not file a declaration.
(d) Filing of Declaration.
(1) The declaration required in subsection (c) hereof shall be filed on or before April 30 of each year during the effective period set forth in Section 890.03(b) or within four months of the date the taxpayer becomes subject to the tax for the first time.
(2) Those taxpayers reporting on a fiscal year basis shall file a declaration within four months after the beginning of each fiscal year or period.
(e) Form of Declaration.
(1) The declaration required in subsection (c) hereof shall be filed upon a form furnished by or obtainable from the Administrator, provided that credit shall be taken for City tax to be withheld from any portion of such income. In accordance with the provisions of Section 890.09, credit may be taken for tax to be paid or to be withheld and remitted to another taxing municipality.
(2) The original declaration (or any subsequent amendment thereof) may be increased or decreased on or before any subsequent quarterly payment date as provided in this section.
(f) Payment to Accompany Declaration. Such declaration of estimated tax to be paid to the City shall be accompanied by a payment of at least one-fourth of the estimated annual tax and at least a similar amount shall be paid on or before the last day of the sixth, ninth and twelfth months after the beginning of the taxable year, provided that if an amended declaration has been filed, the unpaid balance shown due thereon shall be paid in equal installments on or before the remaining payment dates.
(g) Annual Return. On or before the last day of the fourth month of the year following that for which such declaration or amended declaration was filed, an annual return shall be paid therewith in accordance with the provisions of subsection (a) hereof.
(h) Extensions. The Administrator may extend the time of filing any return required, of making any payment or performing any other act required by this section for a period not to exceed six months beyond the original due date.
(Ord.68-27. Passed 7-23-68; Ord. 2007-O-03. Passed 4-10-07.)
(a) Unpaid Taxes Recoverable as Other Debts. All taxes imposed by this chapter shall be collectable, together with any interest and penalties thereon, by suit as other debts of like amount are recoverable. Except in the case of fraud, omission of a substantial portion of income subject to this tax or failure to file a return, an additional assessment shall not be made after three years from the time the return was due or filed, whichever is later, provided that in those cases in which a Commissioner of Internal Revenue and the taxpayer have executed a waiver of the Federal statute of limitations, the period within which an additional assessment may be made by the Administrator shall be one year from the time of the final determination of the Federal tax liability.
(b) Refunds of Taxes Erroneously Paid. Taxes erroneously paid shall not be refunded unless a claim for refund is made within three years from the date on which such payment was made or the return was due, or within three months after the final determination of the Federal tax liability, whichever is later.
(c) Amounts of Less Than One Dollar ($1.00).Amounts of less than one dollar ($1.00) shall not be collected or refunded.
(Ord.68-27. Passed 7-23-68.)
(a) If a City resident has paid a municipal income tax on the same income to another municipality, such resident may claim a credit of the amount of income tax paid to such other municipality, but not in excess of the tax assessed by this chapter.
(b) If a City resident is entitled to a credit for taxes paid another municipality, such resident is required to file a return or form in such manner as the Administrator may prescribe. If such resident fails, neglects or refuses to file such return or form, he shall not be entitled to such credit and shall be considered in violation of this chapter for failure to file a return and make payment of taxes due under the provisions of this chapter.
(c) Any claim for credit for income taxes paid another municipality on the same income taxable under the provisions of this chapter shall be filed with the Administrator on or before December 31 of the year following that for which such credits claimed. Failure to file such claim within such time shall render such credit null and void.
The funds collected under the provisions of this chapter shall be disbursed in the following manner:
(a) First, such part thereof as is necessary to defray all expenses of collecting the tax and of administering and enforcing the provisions of this chapter shall be paid. (b) The balance remaining after payment of the expenses referred to in subsection
(a) hereof shall be deposited in the General Fund for recreation programs, road improvements, capital expenditures and other Municipal purposes set forth in Section 890.01.
(Ord.86-O-27. Passed 11-19-86.)
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