(a) Each employer within or doing business within the Municipality who employs one or more individuals on a salary, wage, commission or other compensation basis, shall deduct at the time of payment of such salary, wage, commission or other compensation, the tax at the rate of 2.25% on the gross salaries, wages, commissions or other compensations due by the employer to such employee and shall, following the schedules as specified in this section, make a return showing the amount of taxes so deducted and a record of payment showing that all taxes deducted during the periods required have been paid to the Municipality in accordance with the payment schedule prescribed by division (e) of this section.
(b) 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. Every employer or officer of a corporation is deemed to be a trustee for this Municipality in collecting and holding the tax required under this chapter to be withheld and the funds so collected by such withholdings are deemed to be trust funds. The officer or employee having control or supervision or charged with the responsibility of filing the return and making payment is personally liable for failure to file the return or pay the tax due as required by this section. The officer or employee shall be personally liable for the tax he or she failed to return or pay as well as any related interest and penalties. The dissolution of a corporation does not discharge an officer's or employee's liability for a prior failure of the corporation to pay the tax due.
(c) 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.
(d) (1) An employee is not relieved from liability for a tax by the failure of the employer to withhold the tax as required by a municipal corporation or by the employer's exemption from the requirement to withhold the tax.
(2) The failure of an employer to remit to the municipal corporation the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer in connection with the failure to remit the tax withheld.
(e) Employers shall pay to the Municipality all income tax withheld or required to be deducted and withheld on either a semi-monthly, monthly or quarterly basis, depending on the amount of taxes involved according to the following payment schedule:
(1) Semi-monthly payments of the taxes deducted are to be made by an employer if:
A. The total taxes deducted in the prior calendar year were twelve thousand dollars ($12,000.00) or more; or
B. The amount of taxes deducted for any month in the preceding quarter exceeded one thousand dollars ($1,000.00). Such payment shall be paid to the City within five banking days after the fifteenth and the last day of each month.
(2) Monthly payments of taxes withheld shall be made by an employer if the taxes withheld in the prior calendar year were less than twelve thousand dollars ($12,000.00) but more than one thousand one hundred ninety-nine dollars ($1,199.00), or if the taxes withheld during any month for the preceding quarter exceeded one hundred dollars ($100.00). Such payments shall be paid to the City on or before the fifteenth of the month following the month subject to the withholding requirements of this chapter.
(3) All employers not required to make semi-monthly or monthly payments of taxes withheld under divisions (e)(1) and (2) of this section shall make quarterly payments no later than the last day of the month following the end of each calendar quarter, with the following exceptions:
A. Every employer doing business within the Municipality on a temporary basis shall pay to the Municipality all income taxes withheld or required to be deducted and withheld on a monthly basis. Such payment shall be paid to the Municipality on or before the fifteenth day of the month following the month subject to withholding. An employer is “doing business within the City on a temporary basis” when the employer maintains a place of business in the City or does business within the City for a period which the employer does not expect to exceed one year.
B. A 12-day occasional entry rule applies to any individual except professional entertainers and professional athletes.
(f) Employer Considered as Trustee. Each employer, in collecting such tax, shall be deemed to hold the same, until payment is made by such employer to the Municipality, as a trustee for the benefit of the Municipality, and any such tax collected by such employer from his or her employees shall, until the same is paid to the Municipality, be deemed a trust fund in the hands of such employer. Each employer shall be liable for the payment of the tax required to be deducted and withheld whether or not such tax, in fact, has been withheld.
(g) Any person who is required to withhold tax from qualifying wages shall pay all such tax to the Municipality in accordance with the provisions of this section. In the event taxes withheld from the qualifying wages of employees are not paid to the Municipality in accordance with the provisions of this section, all officers, members, managers, employees, and trustees having control or supervision of or charged with the responsibility of filing the return and making payment are jointly and severally personally liable for the tax not returned or paid to the Municipality, as well as any related interest and penalties, and are also liable under the provisions of Section 880.13. The dissolution, termination, or bankruptcy of a corporation, limited liability company, or business trust does not discharge an officer's, member's, manager's, employee's, or trustee's liability for a failure of the corporation, limited liability company, or business trust to file returns or pay said taxes.
(h) Withholding Return: List of Employees. Each employer shall file a withholding tax reconciliation showing the sum total of all compensation paid 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 the Municipal tax was withheld, showing the name, address, zip code and social security number of each such employee, the total amount of compensation paid during the year and the amount of Municipal tax withheld. If the total tax withheld from any employee included tax withheld and remitted to another Municipality, the amount of same shall be separately shown on the return of information to the Municipality concerning each employee. The withholding tax reconciliation shall be filed by each employer on or before February 28 following the end of such calendar year.
(i) In addition to the wage reporting requirements of this section, any person required by the Internal Revenue Service to report on Federal Form 1099-Misc., payments to individuals not treated as employees for services performed shall also report such payments to the Municipality when the services were performed in the Municipality. The information may be submitted on a listing, and shall include the name, address and social security number (or federal identification number), and the amount of the payments made. Federal Form(s) 1099 may be submitted in lieu of such listing. The information shall be filed annually on or before February 28 following the end of such calendar year.
(j) Failure to file any required documentation in a timely manner as prescribed by this section will be subject to late filing penalty assessment as prescribed in Section 880.11.
(k) The Finance Director may require, by regulation, that withholding tax payments be remitted by electronic funds transfer.
(l) Domestic Servants. No person shall be required to withhold the tax on the qualifying wages, commissions, other compensation, and other taxable income paid domestic servants employed exclusively in or about such person's residence. However, such domestic servants shall be responsible for filing and paying their own returns and taxes.
(Ord. 5480. Passed 11-21-00; Ord. 5744. Passed 11-18-03; Ord. 6176. Passed 2-16-10.)