(a) Rate. Commencing July 1, 2010 and thereafter, an annual tax for the purposes specified in Section 197.01 hereof shall be levied, imposed, collected and paid at the rate of one percent (1%) per annum upon the following:
(1) On all salaries, wages, commissions and other compensation (including tips, gratuities and taxable rental income as set forth below, income derived from gaming, wagering, lotteries or schemes of chance) earned or received by resident individuals of the Village of Milan from any source during the effective period of this chapter.
(2) On all salaries, wages, commissions and other compensation (including tips, gratuities and taxable rental income as set forth below, income derived from gaming, wagering, lotteries or schemes of chance) earned or received by nonresident individuals of the Village, for work done or services performed or rendered in the Village of Milan during the effective period of this chapter.
(3) On the net profits earned, accrued, or received by resident unincorporated businesses located in Milan; on the net profits earned, accrued, or received by nonresident unincorporated businesses doing business in Milan; on the net profits of unincorporated businesses located outside of Milan which are owned by a resident of Milan, all during the effective period of this chapter. The net profits attributable to Milan shall be computed using the formula or separate accounting method as applicable.
(4) On the net profits earned, accrued or received, attributable to Milan under the formula or separate accounting method provided for herein, of all corporations derived from work done or services performed or rendered and business or other activities conducted in the Village of Milan, whether or not such corporations have an office or place of business in the Village during the effective period of this chapter.
(Ord. 526-06-10. Passed 6-2-10.)
(b) Rental Income. For the purpose of determining whether or not rental or leased property is subject to the tax, the following test will apply:
(1) Where the gross monthly rental of all real properties exceeds an average of five hundred dollars ($500.00) per month, it shall be prima facie evidence that the rental, ownership, management or operation of such property or properties shall be subject to the tax.
(2) The average monthly rental shall be determined by dividing the number of months (or portion thereof) that the property or properties are actually rented into the total rents received for the period actually rented.
(3) The five hundred dollars ($500.00) per month figure is attributable to the property itself, regardless of the forms of ownership or number of owners.
If a rental or leased property is determined to be subject to the tax based on the test provided in subsection (1), (2), and (3) hereof, and the property or properties are owned by two or more taxpayers, the profits or losses from such rental or lease activity shall be included with other sources of income of the owners in proportion to their ownership interests.
Residents of Milan are subject to taxation upon the net income from rentals (to the extent above specified), regardless of the location of the real property owned.
Nonresidents of Milan are subject to such taxation only if the real property is situated within the Village of Milan. Nonresidents, in determining whether gross monthly rentals exceed five hundred dollars ($500.00), shall take into consideration only real estate situated within Milan.
(c) Allocation of Net Profits.
(1) In the taxation of income which is subject to the tax, if the books and records of a taxpayers conducting a business or profession both within and without the boundaries of the Village shall 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 Village, then only such portion shall be considered as having a taxable situs in the Village for purposes of the tax. In the absence of such records, net profits from a business or profession conducted both within and without the boundaries of the Village shall be considered as having a taxable situs in the Village for purposes of the tax in the same proportion as the average ratio of:
A. 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 Village during the taxable period to the average net book value of all of the real tangible personal property owned or used by the taxpayer in the 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, and other compensation paid during the taxable period to persons employed in the business or professions for services performed in the Village, to wages, salaries, and other compensation paid during the same period to persons employed in the business or 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 the Village to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
(2) In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations be substituted by the Tax Administrator so as to produce such result.
(3) As used in subsection (c)(1) hereof, sales made in the Village means:
A. All sales of tangible personal property which is delivered within the Village regardless of where title passes if shipped or delivered from a stock of goods within the Village.
B. All sales of tangible personal property which is delivered within the Village regardless of where title passes even though transported from a point outside the Village if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village and the sale result from such solicitation or promotion.
C. All sales of tangible personal property which is shipped from a place within the Village to purchasers outside the Village 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.
(d) Lossess Against Other Income. Beginning with tax years commencing after July 31, 1990, the net profits and losses sustained by a taxpayer from business activities or investments otherwise subject to the tax, other than from the taxpayer's principal source of income, subject to Milan tax, shall be aggregated for each of the taxpayer's tax years. If the result of such aggregation is a net profit, tax will be imposed and paid on that net profit. If the result of such aggregation is a net loss, the net loss may be carried forward to any of the succeeding five tax years to be used against an aggregate net profit, but shall not be used to offset any other income.
(e) Consolidated Returns. Filing of consolidated returns may be permitted or required in accordance with Rules and Regulations prescribed by the Tax Administrator.
(f) Operating Loss Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to the effective date of this chapter allocable to Milan may be applied against the portion of the profit of succeeding years allocable to Milan, 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 a net operating loss sustained shall be allocated to Milan in the same manner as provided herein for allocating net profits to Milan.
(3) The Tax Administrator shall provide by Rules and Regulations the manner in which such net operating loss carry forward shall be determined.
(g) Lotteries and Games of Chance. The proceeds of lotteries and games of chance are subject to Milan Tax to the same extent as includable on the recipient's federal tax return.
(Ord. 844-7-90. Passed 7-10-90)