(A) An annual tax for the purposes specified in § 36.20 shall be imposed for the period beginning July 1, 1973, and running until this chapter is repealed, at the rate of 1% per annum on the following:
(1) On all salaries, wages, commissions, and other compensation and all other income from whatever source which is permitted by Ohio law to be taxed, which is earned, received, accrued or otherwise set apart during the effective period of this chapter by residents of the municipality.
(2) On all salaries, wages, commissions, and other compensation and all other income from whatever source which is permitted by Ohio law to be taxed, which is earned, received, accrued or otherwise set apart during the effective period of this chapter by nonresidents for work done or services performed or rendered in the municipality.
(3) (a) On the portion attributable to the municipality, of the net profits earned or accrued during the effective period of this chapter of all resident associations, unincorporated businesses, professions, or other entities, derived from sales made, work done, services performed or rendered, and business or other activities conducted in the municipality.
(b) On that portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner, member, other beneficiary or distributee, or owner of a resident unincorporated business entity, not attributable to the municipality, upon which the tax was not paid by the entity.
(4) (a) On the portion attributable to the municipality of the net profits earned and accrued or received during the effective period of this chapter, of every nonresident unincorporated business entity 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.
(b) On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter, of a resident partner, owner, member, other beneficiary or distributee or owner of a nonresident unincorporated business entity not attributable to the municipality on which the tax was not paid by the entity.
(5) On the portion attributable to the municipality of the net profits earned and accrued or received during the effective period of this chapter of all corporations derived from sales made, work done, or services performed or rendered and business or other activities conducted in the municipality, whether or not the corporations have a place of business in the municipality.
(6) If a taxpayer's taxable income includes income against which the taxpayer has taken a deduction for federal income tax purposes as reportable on the taxpayer's form 2106, the amount of the deduction for federal income tax purposes may be deducted from the municipality's income tax base.
(7) An individual taxpayer that has a net profit from a sole proprietorship he or she conducts, the Schedule C actually filed for federal purposes shall be filed by the taxpayer to determine his or her net income from that proprietorship, as part of the municipal income tax return.
(B) This § 36.22(B) does not apply to electric companies or combined companies, or to electric light companies for which an election made under R.C. § 5745.031 is in effect.
(1) In the taxation of income that is subject to the municipal income tax, if the books and records of the taxpayer conducting a business or profession both within and without the boundaries of the municipality 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 municipality, then only such portion shall be considered as having a taxable situs in the municipality for purposes of the municipal income tax. In the absence of such records, net profit from a business or profession conducted both within and without the boundaries of the municipality shall be considered as having a taxable situs in the municipality for purposes of the municipal income 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 municipality during the taxable period to the average net book value 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. As used in this division (1), 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 or accrued during the taxable period to persons employed in the business or profession for services performed in the municipality to wages, salaries, and other compensation paid or accrued 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 municipality to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
(2) If the foregoing allocation formula does not produce an equitable result, another basis may be substituted, under uniform regulations, so as to produce an equitable result.
(3) As used in division (B)(1) of this section, the phrase
SALES MADE IN THE MUNICIPALITY OF NEW LEBANON shall mean:
(a) All sales of tangible personal property delivered within the municipality regardless of where title passes, if shipped or delivered from a stock of goods within the municipality;
(b) All sales of tangible personal property delivered within the municipality, regardless of where title passes, even though transported from a point outside the municipality, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the municipality, and the sales result from this solicitation or promotion;
(c) All sales of tangible personal property shipped from a place within the municipality to purchasers outside the municipality, 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.
(C) For the purpose of this section, the taxable base shall be determined in accordance with federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for federal income taxes, adjusted to the requirements of this chapter.
(D) Consolidated returns.
(1) Filing of consolidated returns may be permitted or required in accordance with rules and regulations prescribed by the Director of Finance and Records.
(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 any person operates a division, branch, factory, office, laboratory, or activity within the municipality constituting a portion only of its total business, the Director of Finance and Records may require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the municipality. If the Director of Finance and Records finds 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, factory, 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 provided for herein shall not be levied on:
(1) The military pay or allowances of active members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard, or the income of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent that this income is derived from tax exempt real estate, tax exempt tangible or intangible property, or tax exempt activities.
(2) Poor relief, unemployment insurance benefits, old age pensions, or similar payments including disability benefits received from local, state, or federal governments or charitable, religious, or educational organizations.
(3) Proceeds of insurance paid by reason of the death of the insured, pensions, disability benefits, annuities, or gratuities not in the nature of compensation for services rendered, from whatever source derived.
(4) Receipts from seasonal or casual entertainment, amusements, sports events, and health and welfare activities when they are conducted by bona fide charitable, religious, or educational organizations and associations.
(5) Earnings and income of all persons under 16 years of age.
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the State of Ohio from which the municipality is specifically prohibited from taxing, and income of a decedent's estate during the period of administration (except such income from the operation of a business).
(7) Salaries, wages, commissions, and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or political subdivisions to impose net income taxes on income derived from interstate commerce.
(8) Salaries, wages, commissions, and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio, or any act of the Ohio General Assembly limiting the power of the municipality to impose net income taxes.
(9) Intangible income as defined by R.C. § 718.01(A)(4).
(10) On and after January 1, 2003, items excluded from federal gross income pursuant to Section 107 of the Internal Revenue Code.
(11) On and after January 1, 2001, compensation paid to a nonresident individual to the extent prohibited under R.C. § 718.011.
(12) Except as provided in R.C. § 718.01(H), an S corporation shareholder's distributive share of net profits of the S corporation, other than any part of the distributive share of net profits that represents wages as defined in Section 3121(a) of the Internal Revenue Code or net earnings from self-employment as defined in Section 1402(a) of the Internal Revenue Code, to the extent such distributive share would not be allocated or apportioned to this state under R.C. § 5733.05(B)(1) or (2) if the S corporation were a corporation subject to the taxes imposed under R.C. Chapter 5733.
(13) Employee compensation that is not “qualifying wages” as defined in R.C. § 718.03.
(14) On and after January 1, 2001, compensation paid to a nonresident individual for personal services performed by the individual in the municipal corporation on 12 or fewer days in a calendar year unless one of the following applies:
(a) The individual is an employee of another person; the principal place of business of the individual's employer is located in another municipal corporation in this state that imposes a tax applying to compensation paid to the individual for services performed on those days; and the individual is not liable to that other municipal corporation for tax on the compensation paid for such purposes.
(b) The individual is a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by the municipal corporation.
('80 Code, § 93.03) (Ord. 741, passed 4-3-73; Am. Ord. 813, passed 5-18-76; Am. Ord. 2004-15, passed 10-19-04) Penalty, see § 36.99
Statutory reference:
Determination of income subject to tax, see R.C. § 718.02
Items not subject to tax, see R.C. §§ 718.01 and 718.03
Municipal income tax, rate limitation without vote, see R.C. § 718.01