CHAPTER 880
Earned Income Tax Effective for Tax Years 2015 and Prior
   EDITOR’S NOTE: Ordinance 11-79, passed May 14, 1979, adopted rules and regulations for the enforcement of this chapter, the same having been promulgated by the Administrator pursuant to Section 880.08. Copies of such rules and regulations may be obtained, at cost, at the Municipal Building. Ordinance 15-53E, passed December 7, 2015, amended the title of Chapter 880 from "Earned Income Tax" to "Earned Income Tax Effective for Tax Years 2015 and Prior".
880.01   Purpose.
880.02   Effective period.
880.03   Definitions.
880.04   Imposition and rate of tax; taxable income; consolidated returns.
880.05   Mandatory filing of return; payment of tax.
880.06   Collection at source.
880.07   Declarations of income.
880.08   Duties of Administrator.
880.09   Investigative powers of the Administrator; confidential information.
880.10   Interest and penalties on unpaid tax.
880.11   Collection of unpaid taxes; refunds.
880.12   Board of Review.
880.13   Collection of tax after effective period.
880.14   Separability.
880.15   Violations.
880.99   Penalty.
   CROSS REFERENCES
   Authority to tax - see Ohio Const. Art. XVIII, Sec. 3
   Payroll deductions - see Ohio R.C. 9.42
   Municipal income taxes - see Ohio R.C. Ch. 718
   Income Tax Administrator - see ADM. Ch. 224
880.01   PURPOSE.
   The purpose of the tax imposed by this chapter is to provide funds for general Municipal operations, maintenance, new equipment, extension and enlargement of Municipal services and facilities and capital improvements for this Municipality.
(Ord. 86-06. Passed 3-20-86.)
880.02   EFFECTIVE PERIOD.
   This chapter, which imposes a tax on salaries, wages, commissions and other compensation and on net profits, shall be in force and shall be applicable to all such salaries, wages, commissions and other compensation and on net profits earned from and after July 1, 1979.
(Ord. 86-06. Passed 3-20-86.)
880.03   DEFINITIONS.
   As used in this chapter, unless the context clearly indicates or requires a different meaning
   (a)   “Administrator” means the individual designated by this chapter, whether appointed or elected, to administer and enforce this chapter.
   (b)   “Association” means a partnership, limited partnership or any other form of unincorporated enterprise, owned by two or more persons.
   (c)   “Board of Review” means the Board established by and constituted as provided in Section 880.12.
   (d)   “Business” means an enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association, corporation or other entity, including, but not limited to, the renting or leasing of property whether real, personal or mixed.
   (e)   “Corporation” means a corporation or joint stock association organized under the laws of the United States, the State, or any other state, territory or foreign country or dependency.
   (f)   “Employee” means a person who works for wages, salary, commission or another type of compensation in the service of an employer.
   (g)   “Employer” means an individual, partnership, association, corporation, governmental body, unit or organization or any other entity, whether or not organized for profit, who or that employs one or more persons on the basis of salary, wage, commission or another type compensation.
   (h)   “Fiscal year” means an accounting period of twelve months or less ending on any day other than December 31.
   (i)   “Gross receipts” means the total income from any source.
   (j)   “Net profits” means a net gain from the operation of a business, profession, enterprise or other activity after provision for all ordinary, reasonable and necessary expenses either paid or accrued in accordance with the accounting system used by the taxpayer for Federal Income Tax purposes, without deduction of the tax imposed by this chapter and Federal, State and other taxes based on income exclusive of the amount of the State franchise tax computed on the net worth basis, and, in the case of an association, without deduction of salaries paid to partners and other owners, and otherwise adjusted to conform to this chapter.
   (k)   “Nonresident” means an individual domiciled outside the Municipality.
   (l)   “Nonresident unincorporated business entity” means an unincorporated business entity not having an office or place of business in the Municipality.
   (m)   “Person” means a natural person, partnership, fiduciary, association or corporation. Whenever used in a clause prescribing and imposing a penalty, “person,” as applied to an unincorporated entity, means the partners or members thereof and, as applied to a corporation, means the officers thereof.
   (n)   “Place of business” means a bona fide office (other than a mere statutory office), factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his or her regular employees regularly in attendance.
   (o)   “Resident” means an individual domiciled in the Municipality.
   (p)   “Resident unincorporated business entity” means an unincorporated business entity having an office or place of business in the Municipality.
   (q)   “Taxable income” means wages, salaries and other compensation paid by an employer before any deduction and/or the net profits from the operation of a business, profession or other enterprise or activity adjusted in accordance with this chapter.
   (r)   “Taxable year” means the calendar year or the fiscal year upon the basis of which net profits are to be computed under this chapter and, in the case of a return for a fractional part of a year, the period for which such return is required to be made.
   (s)   “Taxpayer” means a person, whether an individual, partnership, association, corporation or other entity, required by this chapter to file a return or pay a tax.
(Ord. 11-79. Passed 5-14-79.)
880.04   IMPOSITION AND RATE OF TAX; TAXABLE INCOME; CONSOLIDATED RETURNS.
   (EDITOR'S NOTE: This section was amended to conform to Section 4.13 of the City Charter, as amended by the voters on November 3, 1998.)
   (a)   Taxable Income. Subject to Section 880.14 , an income tax for the purposes specified in Section 880.01 , is hereby imposed on and after January 1, 1999, at the rate of one percent, and an income tax for police expenses, is hereby imposed on and after July 1, 2015 through June 30, 2020, at an additional rate of one-half percent, for a total income tax of one and a half percent, upon the following:
      (1)   All salaries, wages, commissions and other compensation earned during the effective' period of this chapter by residents of the Municipality;
      (2)   All wages, salaries, commissions and other compensation earned during such effective period by nonresidents for work done or services performed or rendered in the Municipality;
      (3)   The portion attributable to the Municipality of the net profits earned during such effective period of all resident unincorporated businesses, professions or other entities, such net profits derived from sales made, work done, services performed or rendered and business or other activities conducted in the Municipality;
      (4)   The portion of the distributive share of the net profits earned during such effective period of a resident partner or owner of a nonresident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity by the Municipality;
      (5)   The portion attributable to the Municipality of the net profits earned during such effective period of all nonresident unincorporated businesses, professions or other entities, such net profits derived from sales made, work done or services performed or rendered and business or other activities conducted in the Municipality, whether or not such unincorporated business entity has an office or place of business in the Municipality; and
      (6)   The portion of the distributive share of the net profits earned during such effective period of a resident partner or owner of a nonresident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity by the Municipality; and
      (7)   The portion attributable to the Municipality of the net profits earned during such effective period of all corporations, such net profits derived from sales made, work done, services performed or rendered and business or other activities conducted in the Municipality, whether or not such corporations have an office or place of business in the Municipality.
   (b)   Net Profits Attributable to the Municipality. The portion of the net profits attributable to the Municipality of a taxpayer conducting a business, profession or other activity both in and outside the Municipality shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
   (c)   Operating Loss Carry-Forward.
      (1)   The portion of a new operating loss sustained in any taxable year subsequent to July 1, 1979, allocable to the Municipality may be applied against the portion of the profit of succeeding years, allocable to the Municipality until exhausted but in no event for more than five taxable years. No portion of a net operating loss shall be carried back against the net profits of any prior year.
      (2)   The portion of a net operating loss sustained shall be allocated to the Municipality in the same manner as provided in this section for allocating net profits to the Municipality.
      (3)   The Administrator shall provide, by rules and regulations, the manner in which such net operating loss carry-forward shall be determined.
   (d)   Consolidated Returns.
      (1)   The filing of consolidated returns will be permitted, provided that a consolidated return is filed for the same tax period for Federal Income Tax purposes in accordance with rules and regulations prescribed by the Administrator.
      (2)   In the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates or some other method, or in case zny person operates a division, branch, factory, office, laboratory or activity within the Municipality constituting a portion only of its total business, the Administrator shall require such additional information as he or she may deem necessary to ascertain whether or not net profits are properly allocated to the Municipality. If the Administrator finds that net profits are not properly allocated to the Municipality by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates or transactions with such division, branch, factor, office, laboratory or activity or by some other method, he or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the Municipality.
   (e)   Exceptions. The tax imposed by this chapter shall not be imposed upon the military pay or allowance of members of the Armed Forces of the United States or upon the net profits of any civic, charitable, religious, fraternal or other organization specified in Ohio R.C. 718.01 to the extent that such net profits are exempted from Municipal income taxes under such section.
(Ord. 11-79. Passed 5-14-79; Ord. 04-42. Passed 8-16-04; Ord. 15-24. Passed 6-15-15.)
880.05   MANDATORY FILING OF RETURN; PAYMENT OF TAX.
   (a)   Each resident, resident business, and nonresident business who is subject to the tax imposed by this chapter shall make and file a return on or before April 15 of each year, whether or not any tax is due from such person or business, excepting those residents under 16 years of age and excepting residents who are retired and who have no income subject to this tax and have so notified the Tax Administrator in writing. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within four months from the end of such fiscal year or period. The Administrator is hereby authorized to provide by regulation that the return of an employer, showing the amount of tax deducted by such employer from the salaries, wages, commissions or other compensation of an employee, and paid by him or her or them to the Administrator, shall be accepted, unless otherwise specified, as the return required of an employee whose sole income, subject to tax under this chapter, is such salary, wages, commission or other compensation.
   (b)   The return shall be filed with the Administrator on a form furnished by or obtained upon request from such Administrator setting forth
      (1)   The aggregate amounts of salaries, wages, commissions and other compensation earned and gross income from a business, profession or other activity, less allowable ordinary, reasonable and necessary expenses incurred in the acquisition of such gross income earned during the preceding year and subject to such tax;
      (2)   The amount of the tax imposed by this chapter on such earnings and profits; and
      (3)   Such other pertinent statements, information returns or other information as the Administrator may require.
   (c)   The Administrator may extend the time for filing the annual return, upon the request of the taxpayer, for a period of not to exceed six months, or 45 days beyond any extension requested of or granted by the Internal Revenue Service for the filing of the Federal Income Tax Return. The Administrator may require a tentative return, accompanied by payment of the amount of tax shown to be due thereon, by the date the return is normally due. No penalty shall be assessed in those cases in which the return is filed and the final tax paid within the period as extended.
   (d)   The taxpayer making a return shall, at the time of filing thereof, pay to the Administrator the amount of taxes shown as due thereon. However, where any portion of the tax so due has been deducted at the source pursuant to Section 880.06, or where any portion of such tax has been paid by the taxpayer pursuant to Section 880.07, then such portion shall be deducted from the amount shown to be due and only the balance, if any, shall be due and payable at the time of filing the return.
   (e)   A taxpayer who has overpaid the amount of tax to which the Municipality is entitled under this chapter may have such overpayment applied against any subsequent liability under this chapter or, at his or her election indicated on the return, such overpayment or part thereof shall be refunded, provided that no additional taxes or refunds of less than one dollar ($1.00) shall be collected or refunded.
   (f)   Where necessary, an amended return must be filed in order to report additional income and pay any additional tax due, or claim a refund of tax overpaid, subject to Section 880.11. Such amended return shall be on a form obtainable on request from the Administrator. A taxpayer may not change the method of accounting or apportionment of net profits after the due date for filing the original return.
   (g)   Within three months from the final determination of any Federal tax liability affecting the taxpayer's tax liability to the Municipality, such taxpayer shall make and file an amended return showing income subject to the income tax of the Municipality based upon such final determination of Federal tax liability, and pay any additional tax shown due thereon or make claim for refund of any overpayment.
(Ord. 11-79. Passed 5-14-79; Ord. 04-42. Passed 8-16-04.)
880.06   COLLECTION AT SOURCE.
   (a)   In accordance with rules and regulations prescribed by the Administrator, each employer in or doing business in the Municipality shall deduct, at the time of payment of the salary, wages, commission or other compensation due by the employer to an employee, the amount of tax imposed by Section 880.04 on the gross salaries, wages, commissions or other compensation and on the tips or gratuities reported to such employer by the employee for Social Security or Federal Income Tax purposes, and shall, on or before the last day of the month following the close of each calendar quarter, make a return and pay to the Administrator the amount of taxes so deducted. Such returns shall be on a form prescribed by or acceptable to the Administrator and shall be subject to the rules and regulations prescribed therefor by the Administrator. 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.
   (b)   Such 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 the employer.
   (c)   On or before January 31 of each year beginning with 1980, each employer shall file a withholding return setting forth the names and addresses of all employees from whose compensation the tax was withheld during the preceding calendar year, the amount of tax withheld from his or her employees and such other information as may be required by the Administrator. All payments not subject to withholding shall be reported on a form required by the Administrator.
   (d)   The Administrator may, for good cause, require immediate returns and payments to be submitted to his or her office.
(Ord. 11-79. Passed 5-14-79.)
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