194.061 DETERMINING MUNICIPAL TAXABLE INCOME FOR TAXPAYERS WHO ARE NOT INDIVIDUALS; LOSSES.

   "Municipal Taxable Income" for a taxpayer who is not an individual for the Municipality is calculated as follows:

   (A)   "Income" reduced by "Exempt Income" to the extent otherwise included in income, multiplied by apportionment, further reduced by any "Pre-2017 Net Operating Loss Carryforward" equals "Municipal Taxable Income".

      (1)   "Income" for a taxpayer that is not an individual means the "Net Profit" of the taxpayer.

         (i)   "Net Profit" for a person other than an individual is defined in Section 194.03(23).

         (ii)   "Adjusted Federal Taxable Income" is defined in Section 194.03(1) of this Chapter.

      (2)   "Exempt Income" is defined in Section 194.03(11) of this Chapter.

      (3)   "Apportionment" means the apportionment as determined by Section 194.062 of this Chapter.   

      (4)   Losses.

         (a)   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 years allocable to the City 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.

         (b)   The net profits and losses sustained by a taxpayer from business activities subject to the City tax, other than from the taxpayer's principal source of income, 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 the 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 years and may be used against an aggregate net profit for any of these five succeeding tax years.

         (c)   In a taxable year beginning on or after January 1, 2017, the amount of such net operating loss shall be deducted from net profit that is reduced by exempt income to the extent necessary to reduce municipal taxable income to zero, with any remaining unused portion of the net operating loss carried forward to not more than five consecutive taxable years following the taxable year in which the loss was incurred, but in no case for more years than necessary for the deduction to be fully utilized.

            (1)   No person shall use the deduction allowed to offset qualifying wages.

            (2)   For taxable years beginning in 2018, 2019, 2020, 2021, or 2022, a person may not deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, more than fifty percent (50%) of the amount of the deduction.

            (3)   For taxable years beginning in 2023 or thereafter, a person may deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, the full amount allowed.

            (4)   Any pre-2017 net operating loss carryforward deduction that is available must be utilized before a taxpayer may deduct any amount.
(Ord. 053-15. Passed 11-16-15.)