(1) All salaries, wages, commissions and other compensation, including tips and gratuities, as defined at Section 880.02(v),earned or received from any source during the effective period of this chapter by residents of the City.
(2) All salaries, wages, commissions and other compensation, including tips and gratuities, as defined at Section 880.02(v), earned or received from any source during the effective period of this chapter by nonresidents for work done or services performed or rendered in the City.
(3) On all income derived anywhere in excess of $10,000 annually from gaming, wagering, lotteries, or schemes of chance by residents of the City or by non-residents when the income derived is won or received as a result of transactions or activities conducted in the City.
(4) Net profits earned, accrued or received by resident unincorporated businesses located in the City; net profits earned, accrued or received by nonresident unincorporated businesses with an office or place of business in the City; and net profits of unincorporated businesses located outside the City, including the distributive share of a partnership in which a resident of the City has an ownership interest, all during the effective period of this chapter. Net profits attributable to the City shall be computed using the formula or the separate accounting method provided for herein.
(5) On the portion of the distributive share of the net profits earned by a resident individual from a Sub-S corporation, limited liability company or corporation, or a similar business entity provided that such income is subject to the Relief and Reciprocity provisions of Section 880.15 and to the exemption provided by Ohio RC 718.01(F)(9).
(6) The distributive share of the net profits attributable to a resident of the City from a partnership located outside the City, subject to the relief provisions of Section 880.15.
(7) Net profits earned, accrued or received and attributable to the City, under the formula or the separate accounting method provided for herein, of all corporations derived from work done or services performed or rendered and business or other activities conducted in the City, whether or not such corporations have an office or place of business in the City during the effective period of this chapter.
(b) The portion of the net profits attributable to the City of a taxpayer conducting a business, profession or other activities, both within and outside the boundaries of the City, shall be determined in accordance with the rules and regulations adopted by the Commissioner of Taxation pursuant to this chapter, not inconsistent with the conditions of Ohio R.C. 718.02, which follows:
(1) In the taxation of income which is subject to the tax imposed by this chapter, if the books and records of a taxpayer conducting a business or profession, both within and outside the boundaries of the City, 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 City, then only such portion shall be considered as having a taxable situs in the City for purposes of the tax. In the absence of such records, the net profit from a business or profession conducted both within and outside the boundaries of the City shall be considered as having a taxable situs in the City for purposes of the 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 City during the taxable period to the average net book value of all of 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 paragraph, “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 during the taxable period to persons employed in the business or profession for services performed in the City to wages, salaries and other compensation paid 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 City to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
(2) In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(3) As used in this subsection, “sales made in the City” means:
A. All sales of tangible personal property which is delivered within the City, regardless of where title passes, if shipped or delivered from a stock of goods within the City.
B. All sales of tangible personal property which is delivered within the City, regardless of where title passes, even though the property is transported from a point outside the City, if the taxpayer is regularly engaged, through its own employment, in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion.
C. All sales of tangible personal property which is shipped from a place within the City to purchasers outside the City, 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) The portion of a net operating loss sustained in any taxable year subsequent to July 1, 1966, allocable to the City, may be applied against the portion of the profit of succeeding year(s) 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. For the purposes of this subsection, the portion of a net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
The Commission of Taxation shall provide, by rules and regulations, the manner in which such net operating loss carry-forward shall be determined.
(d) Consolidated returns from affiliated groups or corporations that file consolidated returns with IRS for the same reporting period will be accepted in accordance with rules and regulations prescribed by the Commissioner.
(ORC 718.06)
(e) 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 City constituting a portion only of its total business, the Commissioner shall require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the City 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 City.
(Ord. 94-58. Passed 11-22-94; Ord. 2004-5. Passed 2-12-04.)