(a) It is required of each employer within the Village of New London (as defined in Section 181.01(f)) who employs one or more persons on a salary, wage, commission or other compensation basis, to deduct from compensation paid to such employee subject to this chapter at the time of such payment, the tax imposed in Section 181.02 on such salary, wage, bonus, incentive payment, commission or other compensation due by said employer to said employee.
(b) Notwithstanding the provisions of subsection (a) hereof, when, an employer within the Village of New London employs a Village of New London resident in another taxing municipality which requires the employer to deduct the tax from such taxing municipality from the New London resident employed there, such employer shall withhold and remit to the Village of New London the difference, if any, between the tax imposed by such other taxing municipality and the tax imposed by this chapter or shall withhold New London tax on one hundred percent (100%) of the income subject to New London tax if the New London resident/employee is employed in a location which does not impose municipal tax.
(Ord. 2017-29. Passed 11-27-17.)
(c) (1) Each employer shall make and file a withholding tax return with the Income Tax Clerk and pay to the Income Tax Clerk the taxes deducted and withheld on the fifteenth day of the month following the end of each calendar quarter, i.e., April 30, July 31, October 31 and January 31.
(2) Notwithstanding the foregoing, if the total taxes deducted and withheld or required to be deducted and withheld by the employer, agent, or other payer on behalf of the municipal corporation in the preceding calendar year exceeded two thousand three hundred ninety-nine dollars, or if the total amount of taxes deducted and withheld or required to be deducted and withheld on behalf of the municipal corporation in any month of the preceding calendar quarter exceeded two hundred dollars, Taxes required to be deducted and withheld shall be remitted monthly to the tax administrator. Payment shall be made to the tax administrator not later than fifteen days after the last day of each month.
(Ord. 2020-12. Passed 6-8-20.)
(d) Such return shall be on a form or forms prescribed by and obtainable from the Income Tax Clerk and shall be deemed filed when postmarked by the United States Post Office or delivered to the Tax office during normal business hours. Such employer, in collecting the tax, shall be deemed to hold the same as Trustee for the benefit of the City until payment is made by such employer to the City and any such tax collected by such employer from his employees shall, until the same is paid to the City, be deemed a trust fund in the hands of such employer.
(e) The officer or employee having control or supervision or charged with the responsibility of filing the return and making the payment, shall be personally liable for failure to file the return and making the payment, or pay the taxes, penalty and interest due as required herein. The dissolution, bankruptcy or reorganization of any such employer does not discharge an officer's or employee's liability for a prior failure of such business to file a return or pay taxes and penalty and interest due.
(f) On or before the last day of February of each year, an employer shall file a withholding reconciliation return with the Income Tax Clerk listing the names, addresses, and social security numbers of all employees from whose qualifying wages tax was withheld or should have been withheld for the municipal corporation during the preceding calendar year, the amount of tax withheld, if any, from each such employee, the total amount of qualifying wages paid to such employee during the preceding calendar year, the name of every other municipal corporation for which tax was withheld or should have been withheld from such employee during the preceding calendar year, any other information required for federal income tax reporting purposes on Internal Revenue Service form W-2 or its equivalent form with respect to such employee, and other information as may be required by the Income Tax Clerk. At the time of filing this return, the employer shall pay over any amount deducted or which should have been deducted or withheld during the preceding year but which was not remitted.
(g) All individuals, businesses, employers, brokers or others who are required under the Internal Revenue Code to furnish forms 1099 to IRS for individuals or businesses to whom or which they have paid nonemployee compensation, shall furnish copies of the said form 1099s to the Income Tax Clerk or in lieu thereof, a listing containing the same information as required by IRS on the 1099s on or before the due date for such forms 1099 as established by IRS. Failure to provide the foregoing information will result in any deduction for payment by the taxpayer taken on the taxpayer's tax return to be disallowed.
(1) The deducting and withholding of personal service compensation of all other employees (including officers of corporations) shall attach to the portion of the personal service compensation of such employee which the total number of working days employed within the Village bears to the total number of working days employed within and outside the Village.
(2) If it is impossible to apportion the earnings as provided above, because of the peculiar nature of the service of the employee, or the unusual basis of compensation, apportionment shall be made in accordance with the facts and the tax deducted and withheld accordingly.
(3) The occasional entry into the Village of a nonresident employee who performs the duties for which he is employed entirely outside the Village, but enters the Village for the purpose of reporting, receiving instructions, accounting, etc., incidental to his duties outside the Village, shall not be deemed to take such employee out of the class of those rendering their service entirely outside the Village.
(h) An employer is required to deduct and withhold the Village of New London income tax on tips and gratuities received by the employer's employees and constituting qualifying wages, but only to the extent that the tips and gratuities are under the employer's control. For the purposes of this division, a tip or gratuity is under the employer's control if the tip or gratuity is paid by the customer to the employer for subsequent remittance to the employee, or if the customer pays the tip or gratuity by credit card, debit card, or other electronic means.
(i) The tax clerk shall consider any tax withheld by an employer at the request of an employee, when such tax is not otherwise required to be withheld by this ordinance, to be tax required to be withheld and remitted for the purposes of this section
(j) An employer shall withhold the tax on the full amount of any advance made to an employee on account of commissions where such advances are in excess of commissions earned.
(k) An employer, required to withhold the tax on compensation paid to an employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid by the employer to the employee for expense necessarily and actually incurred by the employee in the actual performance of his services, provided, that such expense must be of the kind and in the amount recognized and allowed as deductible expense for Federal income tax purposes.
(l) The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation received. However, if the tax has been withheld but has not been paid over to the Village, the employee is relieved of responsibility to the extent of the taxes withheld, unless the employee colluded with the employer in connection with the failure to remit payment.
(m) Commissions and fees paid to professional men, brokers, and others who are independent contractors and not employees of the payor, are not subject to withholding or collection of the tax at the source. Such taxpayers must in all instances file returns and pay the tax pursuant to the provisions of Section 181.02.
(n) The failure of any employer, residing either within or outside the Village, to collect the tax and to make any return prescribed herein, shall not relieve the employee from the payment of such tax in compliance with this chapter respecting the making of returns and the payment of taxes.
(o) The requirements of this section shall apply to any nonresident employer, or to the agent of such a nonresident employer, or to any other nonresident payer, who pays an individual any item included in the taxable income of that individual employee or payee, if the total amount of tax required to be deducted and withheld for the Village on account of all of the employer's employees or payer's payees exceeds one hundred fifty dollars ($150.00) for the calendar year.
(p) For tax years 2004 and thereafter, the obligations to withhold taxes described herein shall extend only to qualifying wages as defined in this chapter.
(Ord. 2017-29. Passed 11-27-17.)