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(A) (1) In cases where compensation is earned as a result of work done or services performed both within and without the City, the license fee required under this subchapter shall be computed by determining that percentage of the compensation earned from the proportion of the work which was done or performed within the City.
(2) It is the responsibility of the individual employer to furnish appropriate documentation with specific information as to hours/days spent working outside the City. All such information must be on forms provided by the Chief Financial Officer.
(B) In those cases where it is impossible for a business located outside the City to apportion accurately the compensation provided above, because of either the peculiar nature of the services provided by the employee or because the usual basis of employment in the City is on a frequent basis of short duration, apportionment may be made in accordance with the following guidelines:
(1) For a period of 3 consecutive months, all employees of a business shall keep a written log of the amount of time worked in the City and the amount of compensation earned while working here.
(2) The total compensation calculated in division (B)(1) above shall be subject to the withholding rate of 2.5%. The resulting amount will be paid by the employer as a quarterly flat fee for a period of 2 years. At the end of this 2-year period, this agreement shall be reviewed for adjustments.
(3) Any such agreement shall be in writing and attested to by the owner of the business and the Chief Financial Officer.
(4) Any such agreement shall not apply to any compensation earned by any employee while working 2 or more consecutive 8-hour periods in the City.
(1995 Code, § 3.16.030) (Am. Ord. O-2012-019, passed 9-24-2012)
(A) Each employer who employs 1 or more persons within the City shall deduct from the pay due any employee the amount of the license fee measured by the salary, wage, commission or other compensation due each employee by the employer at the time of payment thereof. The payments required to be made on account of the deductions by employers shall be made quarterly to the Chief Financial Officer, for the quarterly periods ending September 30, December 31, March 31 and June 30 of each year, on or before the last day of the month next following the end of each quarterly period and each employer shall, at the same time, make a return on a form furnished by the City; provided, however, that, the failure or omission by an employer to deduct the license fee shall not relieve an employee from the payment of the license fee and compliance with the requirements for making returns as provided in this subchapter or with any regulations promulgated under this subchapter.
(B) (1) An employer shall be liable for the payment of the fee required to be deducted and withheld.
(2) The president, vice president, secretary, treasurer and any other person holding an equivalent corporate office of any business entity shall be personally and individually liable, both jointly and severally, for any fee required to be withheld from compensation paid to 1 or more employees of any business entity, and neither the corporate dissolution or withdrawal of the business entity from the City nor the cessation of holding any corporate office shall discharge that liability of any person; provided that the personal and individual liability shall apply to each or every person holding the corporate office at the time the fee becomes or became obligated. No person shall be personally and individually liable under this division who had no authority to collect, truthfully account for, or pay over any fee imposed at the time that the fees imposed become or became due.
(3) Every employer who fails to withhold or pay to the City any sums required to be withheld and paid shall be personally and individually liable to the City for any sum or sums withheld or required to be withheld.
(4) The City shall have a lien upon all the property of any employer who fails to withhold or pay over to the City sums required to be withheld. If the employer withholds but fails to pay the amounts withheld to the City, the lien shall commence as of the date the amounts withheld were required to be paid to the City. If the employer fails to withhold, the lien shall commence at the time the liability of the employer is assessed by the City.
(5) Every fee imposed by this section and all increases, interest and penalties thereon, shall become, from the time it is due and payable, a personal debt to the City from the business entity or other person liable therefor.
(6) If any business entity dissolves or withdraws from the City during any taxable year, or if any business entity in any manner surrenders or loses its charter during any taxable year, the dissolution, withdrawal, or loss or surrender of charter shall not defeat the filing of returns and the assessment and collection of fee withheld for the period of that taxable year during which the business entity had fees withheld in the City.
(C) (1) The license fee is imposed on both residents and non-residents of the City at the rate of 2.5% of all salaries, wages, commissions and other compensation, including deferred compensation, earned for work done or services performed or rendered in the City.
(2) The following are subject to the license fee:
(a) Salaries bonuses or incentive payments received by an individual, whether directly or through an agent and whether in cash or in property, for services rendered:
1. As an officer, agent or employee, or both, of a corporation (including a corporation of the first or non-profit class), joint stock association or joint stock company;
2. As an officer, agent or employee (as distinguished from a partner or member) of a partnership, limited partnership or any other form of unincorporated enterprise owned by 1 or more persons; and
3. As an agent employee (as distinguished from the proprietor) of a business, trade or profession conducted by an individual owner.
(b) Wages, bonuses or incentive payments received by an individual, whether directly or through an agent and whether in cash or property, for services rendered:
1. Whether based upon hourly, daily, weekly, semi-monthly, monthly, annual, unit-of-production or piece-work rates; and
2. Whether paid by an individual, copartnership, association, corporation (including a corporation of the first or non-profit class), governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, section or unit or any entity.
(c) Commissions received by an employee, whether directly or through an agent and whether in cash or in property, for services rendered, regardless of how computed or by whom paid;
(d) Fees paid to a director or officer of a corporation are subject under this subchapter as in the case of any other employee;
(e) Tips received by waiters and other employees over $20 per month, per employee or third party employee, are subject to the license fee and will be reported in the same manner as regular earnings. Any business which provides food and beverages for on premises consumption shall adhere to the following guidelines:
1. The amount of tips over $20 per month per employee reported to the City by a business shall not be less than 8% of the total sales of food and beverage for that business.
2. By February 28 of each year, each business covered by this section shall file with the Chief Financial Officer a report on the amount of tips received by each employee during the year. This report shall be on forms provided by the City.
3. If the amount of tips over $20 per month per employee reported is less than 8% of the annual total sales of food and beverage for this business, each employer is required to allocate the difference to each employee who receives tips.
4. Each employer shall withhold 2.5% of the allocated amounts and forward the payment of same to the City by January 31 of each year.
5. All reports shall be based on calendar year receipts.
6. If an employee terminates employment during the year, it is the responsibility of each employer to estimate the amount of tip income to be allocated and withhold the required amount at the time of termination.
7. If this estimation proves to be incorrect by more than 5%, the employer shall take the following actions:
a. If the estimate is higher than the amount actually due, the City will either refund this amount or permit its use as a credit against any future license fees which may be due under this subchapter.
b. If the estimate is lower than the actual amount due, the employer shall forward the difference to the City.
8. a. Within 5 working days after the end of each calendar month the employer or the third party employer shall report to the Chief Financial Officer the following information on each employee or third party employee who have received tips under $20, per month, during the quarter:
i. Full name;
ii. Social security number; and
iii. Full mailing address.
b. Each individual employee or third party employee earning under $20 per month during the quarter in tip income will be responsible for forwarding the amount of fee due to the Chief Financial Officer within 30 days from the date of notification. Any payments received after that date will be subject to an assessment for penalty and interest pursuant to § 37.054.
(f) Payments made to employees by an employer as vacation, holiday or sick day wages are subject to the license fee;
(g) Payments made to employees by an employer at the time of a voluntary or involuntary separation (dismissal) of the employee from the service of the employer shall be subject to the license fee; and
(h) Payments made to deferred compensation funds are subject to 2.5% license fee of payment into the fund.
(D) (1) Each such employer shall file in the office of the Chief Financial Officer on forms to be furnished by the City, on or before February 28 of each year, a return showing the gross amount of salary, wage, commission or other compensation of each employee and the amount of the license fees deducted and paid by the employer during all or any part of the preceding calendar year. The returns shall include a copy of each employee’s federal W-2 or any other pertinent information the Chief Financial Officer may require.
(2) All third party employers shall provide with their quarterly filing report the following information concerning all business entities within the City for which they have provided third party employees:
(a) The name and mailing address of each business;
(b) The Federal ID number of each business;
(c) The Newport address of each business if applicable;
(d) The name and social security number of each third party employee provided for each business;
(e) The amount of gross wages paid to each third party employee provided for each business;
(f) The amount of deduction taken for each third party employee for compensation earned outside the City;
(g) The amount of deduction taken for each third party employee for any compensation earned over the maximum;
(h) The amount of fee paid to the City for each third party employee;
(i) The total amount of gross wages paid for each business entity; and
(j) The total amount of fee paid to the City for each business entity.
(E) The employer shall, on or before January 31 of each year, furnish to each employee to whom a salary, wage, commission or other compensation is due in accordance herewith a statement showing the gross amount of the wage, salary, commission or other compensation and the amount deducted and paid by the employer during the previous year.
(1995 Code, § 3.16.040)
(A) (1) It is always the primary responsibility of the employer to withhold the license fees from employee compensation and file it with the Chief Financial Officer on the appropriate forms provided by the City.
(2) When a return in form and substance satisfactory to the Chief Financial Officer is not filed by an employer and the license fees are not paid to the City by the employer, the employee for whom no return has been filed and no payment has been made shall file a return with the Chief Financial Officer on or before January 31 of each year showing in the return his or her gross receipts subject to license fees during the preceding calendar year.
(3) The return may be made by completing the original copy of the statement furnished to him or her by his or her employer, if the statement shows all of the compensation earned by him or her wherever employed, during the period for which the return is made.
(4) If, for any reason, all license fees of a person subject to the provisions of this subchapter were not withheld by his or her employer from his or her gross receipts, the person shall file the return required by this section on a form obtainable at the office of the Chief Financial Officer.
(5) In addition to the gross receipts earned by him, the return shall show such other pertinent information as may be required by the Chief Financial Officer. Each person making a return required by this section shall, at the time of filing thereof, pay the Chief Financial Officer the amount of license fee due under this subchapter; provided, however, that, any portion of the license fee deducted at the source shall be deducted on the return, and only the balance if any shall be due and payable at the time of filing the return. The amount of any license fees which were due on October 31, January 31, April 30 and July 31 in each year as provided herein shall bear interest from the date the same became due at the rate of 12% per annum until paid, and the employer failing to pay the same when due shall also pay the penalty imposed under § 37.054.
(B) In those cases where federal regulations prohibit the withholding of local license fees, it then becomes the responsibility of each individual employee to withhold any fees due and forward the same to the Chief Financial Officer with all necessary documentation. The filings shall be done in accordance with those procedures outlined in § 37.048. Any payments received after the due dates shall be subject to a penalty of 10% with no minimum payment and interest at the rate of 12% per annum.
(1995 Code, § 3.16.050)
(A) It shall be the duty of the Chief Financial Officer to collect and receive all license fees imposed by this subchapter and to keep records showing the amounts received by him or her from each employer.
(B) (1) The Chief Financial Officer shall, in his or her discretion, have the authority to extend the filing of returns required by this subchapter.
(2) The extension shall be upon the written request of the licensee; provided, however, that, any balance unpaid when payment is due under the terms of this subchapter shall bear interest at the rate of 12% per annum until paid.
(1995 Code, § 3.16.060)
(A) The Chief Financial Officer or any agent or employee designated by him or her is authorized to examine the books, papers and records of any employer or supposed employer or of any licensee or supposed licensee in order to determine the accuracy of any return made, or if no return was made to ascertain the amount of license fee due under the terms of this subchapter by the examination. Each employer or supposed employer or licensee shall give to the Chief Financial Officer or to his or her duly authorized agent or employee the means, facilities and opportunity for the making of the examination and investigation.
(B) The Chief Financial Officer is authorized to examine any person under oath concerning any gross receipts which were or should have been shown in a return and to this end he or she may compel the production of books, papers, records and the attendance of all persons before him, whether as parties or as witnesses, whom he or she believes to have knowledge of the gross receipts or compensation, to the extent that any officer empowered to administer oaths in the commonwealth is permitted to so order.
(1995 Code, § 3.16.070)
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