(1) On all qualifying wages, commissions, other compensation and other taxable income earned or received during the effective period of this chapter by residents of this municipality.
(2) On all qualifying wages, commissions, other compensation and other taxable income earned or received during the effective period of this chapter by non-residents for work done or services performed or rendered in this municipality.
(3) On the portion attributable to this municipality of the net profits earned during the effective period of this chapter of all resident unincorporated businesses; professions; pass-through entities including partnerships, S corporations, limited liability companies taxed as partnerships and trusts; or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in this municipality.
(4) On the portion of distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to this municipality and not levied against such unincorporated business entity by this municipality.
(5) On the portion attributable to this municipality of the net profits earned during the effective period of this chapter of all non-resident unincorporated businesses; professions; pass-through entities including partnerships, S corporations, limited liability companies taxed as partnerships and trusts; or other entities, derived from sales made, work done, or services performed or rendered and businesses or other activities conducted in this municipality, whether or not such unincorporated business entity has an office or place of business in this municipality.
(6) On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a non- resident unincorporated business entity not attributable to this municipality and not levied against such unincorporated business entity by this municipality.
(7) On the portion attributable to this municipality, of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in this municipality, whether or not such corporations have an office or place of business in this municipality.
(8) On all income received from gaming, wagering, lotteries or schemes of chance, including the purchase of lottery tickets, as reported on IRS Form W-2G, Form 5754 and/or any other Form required by the Internal Revenue Service that reports winnings from gambling, prizes and lottery winnings.
** Every taxpayer shall retain all record necessary to compute his/her tax liability for a period of five (5) years from the date his/her return is filed, or the withholding taxes are paid.
(b) Net Profit. The 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 situs in such municipal corporation for purposes of municipal income taxation in the same proportion as the average ratio to 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 the business or profession in such municipal corporation during the taxable period to the average original cost of all of 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 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 profession for salaries, and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed, excluding compensation that is not taxable by the municipal corporation under Section 718.011 of the Ohio Revised Code.
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.
D. Adding together the percentages determined in accordance with the preceding subsections A., B., and C. hereof, or such of the aforesaid percentages as are applicable to the particular taxpayer, and dividing that total by the number of percentages used in deriving such total.
1. A factor is applicable even though it may be apportioned entirely inside or outside the municipality.
2. In the event a just and equitable result cannot be obtained under the formula provided for herein, the Administrator, upon application of the taxpayer, shall have the authority to substitute other factors or methods calculated to effect a fair and proper apportionment.
(2) As used in subsection (b) hereof, “sales made in municipal corporation” means:
A. All sales of tangible personal property delivered within such municipal corporation regardless of where title passes if it is shipped or delivered from a stock of goods within such municipal corporation;
B. All sales of tangible personal property 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.
(3) Except as otherwise provided, net profits from rental activity not constituting a business or profession shall be subject to tax only by the municipal corporation in which the property generating the net profit is located.
(4) If a resident of the municipal corporation operates a business, including rentals or leasing, in another taxing municipality in Ohio and the business or businesses incur a loss, the amount of the loss is deemed primarily subject to the jurisdiction of the other taxing municipality to the same extent that profits would have been allocated had there been a profit.
(c) Operating Loss Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to 1983 allocable to this municipality may be applied against the portion of the profit of succeeding year(s) allocable to this municipality, until exhausted but in no event for more than three (3) 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 this municipality in the same manner as provided herein for allocating net profits to this municipality.
(3) The net operating loss of a business or profession that loses its legal identity by any means, such as merger or consolidation, shall not be allowed as a carry forward loss deduction to the surviving or new business or profession.
(4) The net operating loss sustained by a business or profession is not deductible from employee earnings, but may be carried forward three (3) years as provided in this section. However, if a taxpayer is engaged in two or more taxable business activities to be included in the same return, the net loss of one unincorporated business activity may be used to offset the profits of another for purposes of arriving at overall net profits.
(d) Consolidated Returns.
(1) A consolidated return may be filed by a group of corporations who are affiliated through stock ownership if that affiliated group filed for the same tax period a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code. A consolidated return must include all companies that are so affiliated.
(2) In the case of a corporation that carried on transactions with its stockbrokers 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 this municipality constituting a portion only of its total business, the Administrator shall require additional information as s/he may deem necessary to ascertain whether net profits are properly allocated to this municipality 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, s/he make such allocation as s/he deems appropriated to produce a fair and proper allocation of net profits to this municipality.
(e) Unreimbursed Employee Business Expenses. An employee may reduce income subject to this municipality’s tax by deducting unreimbursed employee business expenses (Federal 2106 or 2106 EZ expenses) which the employee deducted as an itemized deduction before reduction by two percent (2%) of the employee’s AGI on his federal tax return. The taxpayer must furnish a copy of the Form 2106 or 2106 EZ and Schedule A of Form 1040 as filed with the IRS. Further, the 2106 or 2106 EZ expenses must be first allocable to the municipality where the employment occurred.
(f) Exceptions. The provisions of this Chapter shall not be construed as levying a tax upon the following:
(1) Proceeds from welfare benefits, social security benefits, and qualified retirement plans as defined by the Internal Revenue Service.
(2) Proceeds of insurance paid by reason of death of the insured, annuities, workers’ compensation insurance, permanent disability benefits, and compensation for damages for personal injury and like reimbursements, not including damages for loss of profits and wages.
(3) Receipts from bona fide charitable, religious and educational organizations and associations, when those receipts are from seasonal or casual entertainment, amusement, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations and only to the extent that the said income is exempt from Federal Income Tax.
(4) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations and income of a decedent’s estate during the period of administration (except income from the operation of a business.)
(5) Spousal support received. Spousal support is not deductible by the payer.
(6) Compensation for personal injuries or for damages to property by way of insurance or otherwise, but this inclusion does not apply to compensation paid for lost salaries or wages.
(7) Interest, dividends and other revenue from intangible property as set forth in Ohio Revised Code Section 718.01.
(8) 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.
(9) Income of any charitable, educational, fraternal or other type of nonprofit association or organization enumerated in Ohio Revised Code Section 718.01 to the extent that such income is derived from tax-exempt real estate, tax-exempt tangible or intangible property, or tax-exempt activities.
(10) Any association or organization falling in the category listed in the preceding paragraph receiving income from non-exempt real estate, tangible or intangible personal property, or business activities of a type ordinarily conducted for profit by taxpayers operating for profit shall not be excluded hereunder.
(11) In the event any association or organization receives taxable income as provided in the preceding paragraph from real or personal property ownership or income producing business located both within and without the corporate limits of the municipality, it shall calculate its income apportioned to the municipality under the method or methods provided hereof.
(12) If exempt for federal income tax purposes, fellowship and scholarship grants are excluded from municipal income tax.
(13) The rental value of a home furnished to an ordained minister of the gospel as part of his compensation or the rental allowance paid to an ordained minister of the gospel as part of his compensation, to the extent used by him to rent or provide a home pursuant to Section 107 of the Internal Revenue Code.
(14) Compensation paid under Section 3501.28 or 3501.36 of the Ohio Revised Code to a person serving as a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000) annually. Such compensation in excess of one thousand dollars may be subjected to taxation. The payer of such compensation is not required to withhold municipal tax from that compensation.
(15) Compensation paid to an employee of a transit authority, regional transit authority, or a regional transit commission created under Chapter 306 of the Ohio Revised Code for operating a transit bus or other motor vehicle for the authority or commission in or through the municipality, unless the bus or vehicle is operated on a regularly scheduled route, the operator is subject to such tax by reason of residence or domicile in the municipality, or the headquarters of the authority or commission is located within the municipality.
(16) The municipality shall not tax the compensation paid to an individual for personal services performed within this municipality if the individual does not reside in this municipality and performs such personal services in this municipality on twelve or fewer days in the calendar year, and, if the individual is an employee, the principal place of business of the individual’s employer is located outside this municipality. This exemption does not apply to professional entertainers or professional athletes or to promoters of professional entertainment or sports events and their employees, as reasonably defined by this municipality.
(17) The income of a public utility, when that public utility is subject to the tax levied under Section 5727.24 or 5727.30 of the Ohio Revised Code, except a municipal corporation may tax the following, subject to Chapter 5745 of the Ohio Revised Code:
A. The income of an electric company or combined company;
B. The income of a telephone company.
As used in subsection (f)(17) hereof, “combined company”, “electric company”, and “telephone company” have the same meanings as in Section 5727.01 of the Ohio Revised Code.
(18) An S corporation shareholder’s distributive share of net profits or losses of an S corporation except as provided for in section C with regard to a resident owner.
(19) The income, qualifying wages, and other compensation of individuals under sixteen (16) years of age. The taxable portion of the year in which an individual turns sixteen (16) shall be determined by the birth date of the individual. Proof of age must be provided.
(Ord. 2008-30. Passed 11-11-08.)