(1) On all qualifying wages, commissions, rentals, and other compensation earned or received on and after January 1, 1978, by the residents of the village.
(2) On all qualifying wages, commissions, rentals and other compensation earned or received on and after January 1, 1978, by non-residents for works done or services performed or rendered in the village.
(3) For the total amount of lottery winnings, when those winnings are in excess of $5,000,000 and are received as winnings from the Ohio Lottery and/or any other lottery of any other state or country as reported on IRS Form W-2G, Form 5754 and/or any other form required by the Internal Revenue Service that reports winnings from lottery winnings. The village income tax shall begin taxation on the first dollar but will only be imposed when the winnings exceed $5,000,000. This applies to winnings income received by residents and winnings income received by non-residents derived from lottery purchases made within the village.
(4) On the portion attributable to the village of net profits earned on and after January 1, 1978, of all resident associations, unincorporated businesses, pass-through entities, professions, or other activities derived from work done or services performed or rendered, and business conducted in the village.
(5) On a resident partner's or owner's share of the net profits of a resident association or other unincorporated business entity not attributable to the village and not levied against such association or other unincorporated business entity.
(6) On the portion attributable to the village of the net profits earned on and after January 1, 1978, of all non-resident associations, unincorporated businesses, professions or other activities, derived from sales made, work done, or services performed or rendered or business or other activities derived from work done or services performed or rendered, and business or other activities conducted in the village, whether or not such association or unincorporated business entity has an office or place of business in the village.
(7) On a resident partner's or owner's share of the net profits of a non-resident association or other business entity not attributable to the village and not levied against such association or other business entity.
(8) Distributions received by an owner domiciled in the village from any such pass-through entity from a non-resident pass-through entity such as a partnership, limited partnership, limited liability company or Subchapter S corporation shall be considered as income from an association as defined in division (A)(7) of this section. A credit shall be given for any Ohio municipal income tax paid by the non-resident entity at the entity level, (i.e. in the hands of the entity), where such non-resident entity is domiciled. This division (A)(8) codifies the interpretation of this section as of January 1, 2003.
(9) On the portion attributable to the village of the net profits earned on and after January 1, 1978, of all corporations derived from sales made, work done or services performed or rendered and business or other activities conducted in the village, whether or not such corporations have an office or place of business in the village.
(10) The tax imposed by this chapter on corporations shall apply at the entity level to resident corporations which have elected to be taxed as a Subchapter S corporation under the Internal Revenue Code. This division (A)(10) codifies the interpretation as of January 1, 2003.
(B) An employee who pays his or her business expenses from his or her commissions or other compensation, without reimbursement from his or her employer, may deduct from his or her gross commissions or other compensation business expenses allowed by the Internal Revenue Service for federal income tax purposes but only to the extent that said expenses are incurred in earning commissions or other compensation subject to the tax imposed by this chapter.
(C) Net profit from a business or profession conducted both within and without the boundaries of the municipal corporation shall be considered as having a taxable situs in the municipal corporation for purposes of municipal income taxation in the same proportions as the average ratio of the following:
(1) Multiply the entire net profits of the business by a business apportionment percentage to be determined by:
(a) The average original cost of the real and tangible personal property owned or used by the taxpayer in business or profession in such municipal corporation during the taxable period to the average original cost 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.
(b) Ascertaining the percentage which the gross receipts of the business from sales made and services performed in the village, during the period covered by the return, are of the total gross receipts from all sales and services, wherever made or performed, during such period.
1. Sales made within the village shall be deemed to include 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.
2. 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 sales result from such solicitation or promotion.
3. 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 employee, regularly engaged in the solicitation and promotion of sales at the place where the delivery is made.
(c) Ascertaining the percentage which the total wages, salaries, qualifying and other compensation paid during the period covered by the return, to employees for services performed in the village is of the total qualifying wages, commissions and other compensation paid, during such period, to all employees within and outside the village.
(d) Adding together the percentage determined in accordance with divisions (a), (b) and (c) above or such of the aforesaid percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in deriving said total. A factor is applicable even though it may be allocable entirely in or outside the village.
(2) Provided, however, that in the event a just and equitable result cannot be obtained under the formula provided for herein, the Board of Review, upon application of the taxpayer or the Tax Commissioner, shall, under uniform regulations adopted by the Board, have the authority to substitute other factors or methods calculated to effect a fair and proper apportionment.
(D) The tax provided for herein shall not be levied upon the following:
(1) The military pay or allowances of members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard;
(2) Poor relief, pensions, unemployment compensation or similar payments, including disability benefits received from local, state or federal governments or from charitable, religious or education organizations;
(3) Alimony received;
(4) Income, dues, contributions, receipts from casual entertainment, amusements, sports events and health and welfare activities received by religious, fraternal, charitable, scientific, literary, educational institutions or organizations, labor unions, lodges and similar organizations;
(5) Any association, organization, corporation, club or trust, which is exempt from federal taxes or income by reason of its charitable, religious, educational, literary, scientific, etc. purposes;
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the state, and income of a decedent's estate during the period of administration, except such income from the operation of a business;
(7) Earnings and income of all persons under 18 years of age whether residents or non- residents;
(8) Compensation paid under R.C. §§ 3501.28 or 3501.36 to a person serving as a precinct election official, to the extent that such compensation does not exceed $1,000 annually;
(9) Parsonage allowance pursuant to Section 107 of the Internal Revenue Code;
(10) Compensation paid to an employee of a transit authority for operating a transit bus in or through the municipal corporation, unless the bus is operated on a regularly scheduled route, the operator is a resident or domiciled in the village, or the headquarters of the authority or commission is located within the village; and
(11) Intangible income.
(Ord. 04-05-01, passed 6-29-04; Am. Ord. 05-11-02, passed 11-1-05)
Statutory reference:
Income on or of pass-through entities, See R.C. § 718.14