(A) Imposition of tax. Subject to the provisions of § 10.07 of this Code of Ordinances, an annual tax for the purposes specified in § 38A.01 shall be imposed at the rate of 1% per annum upon the following:
(1) On all income, salaries, wages, commissions and other compensation and net profits from unincorporated business entities and professions earned or received during the effective period of this subchapter by residents of the village.
(2) On all income salaries, wages, commissions and other compensation earned during the effective period of this subchapter by non-residents for work done or services performed or rendered in the village.
(3) (a) On the portion attributable to the village of the net profits earned during the effective period of this subchapter of all resident unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the village.
(b) On the portion of the distributive share of the net profits earned during the effective period of this subchapter of a resident partner or owner of a resident unincorporated business entity not attributable to the village and not levied against such unincorporated business entity; provided, however, that the liability of an individual partner or owner taxable hereunder on income attributable to another taxing municipality shall be subject to the provisions of this chapter.
(4) (a) On the portion attributable to the village of the net profits earned during the effective period of this subchapter of all non- resident unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the village, whether or not such unincorporated business entity has an office or place of business in the village.
(b) On the portion of the distributive shares of the net profits earned during the effective period of this subchapter by a resident partner or owner of a non- resident unincorporated business entity not attributable to the village and not levied against such unincorporated business entity; provided, however, that the liability of an individual partner or owner taxable hereunder on income attributable to another taxing municipality shall be subject to the provisions of this chapter.
(5) On the portion attributable to the village of the net profits earned during the effective period of this subchapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the village, whether or not such corporations have an office or place of business in the village.
(6) On lottery, gambling and sports winnings, and games of chance. No deductions shall be allowed against income from lottery, gambling and sports winnings, and games of chance unless, for federal income tax purposes, the taxpayer is considered a professional gambler, and then deductions as specified for federal tax purposes shall be allowed for gambling and sports winnings.
(B) Determination of portion attributable to the village. The portion of the net profits attributable to the village of a taxpayer conducting a business, profession, or other activity both within and without the boundaries of the village shall be determined as provided in R.C. § 718.02, and in accordance with the rules and regulations adopted by the Administrator pursuant to this subchapter.
(C) Operating loss carry- forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to November 4, 1971 allocable to the village may be applied against the portion of the profit of succeeding year(s) allocable to the village, 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.
(2) The portion of a net operating loss sustained shall be allocated to the village in the same manner as provided herein for allocating net profits to the village.
(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) Any affiliated group which files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the village. However, once the affiliated group has elected to file a consolidated return or a separate return with the village, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the Tax Administrator.
(2) In the case of a corporation that carried 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 village 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 net profits are properly allocated to the village. If the Administrator finds net profits are not properly allocated to the village 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 other activity or by some other method, he or she shall make such allocations as he or she deems appropriate to produce a fair and proper allocation of net profits to the village.
(E) Exceptions. The tax provided for herein shall not be levied on:
(1) Military pay or allowances of members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard;
(2) The gross income and gross receipts of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property, or tax exempt activities;
(3) Unemployment insurance benefits, welfare benefits, and pensions paid as a result of retirement;
(4) Proceeds of insurance paid by reason of death of the insured; retirement disability benefits, annuities, or gratuities not in the nature of compensation for services rendered from whatever source derived;
(5) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained minister’s compensation;
(6) Receipts from seasonal or casual entertainment, amusements, fund raising, sports events, and health and welfare activities when conducted by bona fide charitable, religious, or educational organizations and associations;
(7) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the state from which the village 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);
(8) Expenses deductible in accordance with federal guidelines on Federal Form 2106, subject to audit and approval by the Tax Administrator;
(9) Compensation paid under R.C. § 3501.28 or 3501.36 to a person serving as a precinct election official, to the extent that such compensation does not exceed $1,000 annually;
(10) Gross income of any individual under the age of 16 on January 1 of the tax year in question;
(11) Salaries, income, wages, commissions, other compensation, other income 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 their political subdivisions to impose net income taxes on income derived from interstate commerce; and
(12) Salaries, wages, commissions, other compensation, other income and net profits, including interest and dividends as provided in R.C. § 718.01, the taxation of which is prohibited by the Constitution of the State or any act of the Ohio General Assembly limiting the power of the village to impose net income taxes.
(Ord. 623, passed 11-16-71; Am. Ord. 4-91, passed 7-1-91; Am. Ord. 1-92, passed 2-18-92; Am. Ord. 13-2001, passed 5-21-01; Am. Ord. 22-02, passed 9-3-02; Am. Ord. 09-2012, passed 8-6-12) Penalty, see § 10.99