(1) On all income, defined in Section 191.02, qualifying wages, commissions and other compensation earned and/or received by residents of the Village.
(2) On all income, qualifying wages, commissions and other compensation earned and/or received by nonresidents for work done or services performed or rendered in the Village. This includes separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer located in the Village.
A. The Village shall not, however, tax the compensation of a non-resident individual who will be deemed to be an occasional entrant if all of the following apply:
1. The compensation is paid for personal services performed by the individual in the Village on twelve or fewer days during the calendar year, in which case the individual shall be considered an occasional entrant for purposes of the Village income tax. A day is a full day or any fractional part of a day.
2. In the case of an individual who is an employee, the principal place of business of the individual's employer is located outside the Village and the individual pays tax on compensation described in Section 191.03(a)(2) to the municipality, if any, in which the employer's principal place of business is located, and no portion of that tax is refunded to the individual.
3. The individual is not 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 Village.
B. Beginning with the thirteenth day, if an individual deemed to have been an occasional entrant to the Village performs services within the Village, the employer of said individual shall begin withholding the Village income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the Village in accordance with the requirements of this chapter. Since the individual can no longer be considered to have been an occasional entrant, the employer is further required to remit taxes on income earned in the Village by the individual for the first twelve days.
C. If the individual is self-employed, it shall be the responsibility of the individual to remit the appropriate income tax to the Village.
(3) A. On the portion attributable to the Village of the net profits earned of all resident unincorporated businesses, professions, associations or other activities, derived from work done or 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 and/or received by a resident partner and/or owner of a resident unincorporated business entity, including associations, not attributable to the Village, and not levied against such unincorporated business entity.
(4) A. On the portion attributable to the Village of the net profits earned by all nonresident unincorporated businesses, professions, associations or other activities, derived from work done or 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 share of the net profits earned and/or received by a resident partner and/or owner of a nonresident unincorporated business entity, including associations, not attributable to the Village and not levied against such unincorporated business entity.
(5) On the portion attributable to the Village of the net profits of all corporations derived from work done or 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) Effective for tax years 2004 and later, the distributive share of income paid to an S corporation shareholder shall be taxable only to the extent of the portion, if any, that represents wages, or net earnings from self-employment.
(b) Rentals from Real Property.
(1) Rentals received by the taxpayer are to be included in the computation of net profit from business activities only if, and to the extent that, the rental, ownership, management or operation of the real estate from which such rentals are derived (whether so rented, managed or operated by the taxpayer individually or through agents or other representatives) constitutes a business activity of the taxpayer in whole or in part.
(2) Where the gross monthly rental of any real properties, regardless of number and value, aggregate in excess of two hundred fifty dollars ($250.00) in this Village, it shall be prima facie evidence that the rental, ownership, management or operation of such properties is a business activity of such taxpayer and the net income of such rental properties shall be subject to tax; provided that in the case of commercial property, the owners shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits of the lessee, fluctuating percentage of gross or net sales, receipts or profits of the lessee, whether or not such rental exceeds the rental rate of this Village; provided further that in the case of farm property, the owner shall be considered engaged in a business activity when he shares in the crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds the rental rate of this Village; and provided further that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds the rental rate of this Village.
(3) Rental income received by a taxpayer engaged in the business of buying or selling real estate shall always be considered as part of business income.
(4) Owners of rental property who are non-residents of this Village, whether individuals or business entities, are subject to tax only on other income from real property located in this Village. In determining whether gross monthly rentals exceed the rental rate of this Village, only the income from such properties located within this Village shall be considered. Net losses may be offset against net profits only between rental properties located in this Village.
(5) Owners of rental property who are residents of this Village are subject to tax on the net income from rentals (to the extent above specified), regardless of the location of the real property owned, excepting that if any such property is located and subject to a municipal income tax by another taxing municipality, credit shall be claimed in accordance with Section 191.14.
(6) Corporations owning or managing real estate are taxable only on the portion of income derived from property located in this Village.
(7) Reporting of tenant occupancies shall be prepared in accordance with the provisions in Section 191.15.
(c) Determination of Allocation of Tax (Method of Determination).
(1) Net profit from a business or profession conducted both within and without the boundaries of the Village shall be considered as having a taxable situs in the Village for purposes of municipal income taxation in the same proportion as the average ratio of:
A. The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the Village during the taxable period to the average original cost 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 section, 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 Village to wages, salaries, and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed. For tax year 2004 and subsequent tax years, wages, salaries, and other compensation shall be included to the extent they represent qualifying wages.
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the Village 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 in Section 191.03(b)(1) does not produce an equitable result, another basis (including the books and records method) may, under uniform regulations of the Village, be substituted so as to produce such result.
(3) As used in subsection (b)(1) hereof, "sales made in the Village" means:
A. All sales of tangible personal property which is delivered within the Village regardless of where title passes if shipped or delivered from a stock of goods within the Village;
B. All sales of tangible personal property which is delivered within the Village regardless of where title passes even though transported from a point outside the Village if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village and the sales result from such solicitation or promotion;
C. All sales of tangible personal property which is shipped from a place within the Village to purchasers outside the Village 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.
(d) The following provisions apply with respect to the carry forward of net operating losses:
(1) The portion of a net operating loss sustained by a taxpayer in any taxable year, attributable to the Village, may be applied against the portion of the net profits of the taxpayer attributable to the Village in succeeding taxable years until exhausted, but in no event for more than five (5) taxable years immediately following the taxable year in which the loss occurred. No portion of a net operating loss sustained by a taxpayer shall be carried back against net profits of any prior taxable year.
(2) The portion of a net operating loss sustained by a taxpayer for any taxable year attributable to the Village shall be determined in the same manner as provided herein for determining net profits attributable to the Village.
(e) Exemptions. The tax provided for herein shall not be levied upon the following:
(1) Military pay or allowances of members of the armed forces of the United States and of members of their reserve components, including the National Guard.
(2) Social security benefits, unemployment compensation (excluding supplemental unemployment compensation), payments from pension plans, retirement benefits, annuities and similar payments made to an employee or to the beneficiary of an employee under a retirement program or plan (whether qualified or nonqualified), disability payments received from private industry, or local, state, or federal governments, or from charitable, religious or educational organizations to the extent they are not taxable to Medicare, and the proceeds of sick, accident, or liability insurance policies.
(3) Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are from casual entertainment, amusements, sports events and health and welfare activities conducted by bona fide charitable, religious and educational organizations and associations.
(4) The income of religious, fraternal, charitable, scientific, literary and 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, but only to the extent that the said income is exempt from federal income tax.
(5) Dues, contributions and similar payments received by charitable, religious, educational or literary organizations or labor unions, lodges and similar organizations.
(6) Alimony and child support received.
(7) Earnings and income of all individuals under eighteen years of age earning six hundred dollars ($600.00) or less per annum, whether residents or nonresidents.
(8) Compensation for personal injuries and/or for damages to property by way of insurance or otherwise, but this exemption does not apply to compensation paid for lost salaries or wages and/or to compensation from punitive damages.
(9) Compensation paid to a precinct election official, to the extent that such compensation does not exceed $1,000 annually.
(10) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained clergy's compensation. The clergy must be duly ordained, commissioned, or licensed by a religious body constituting a religious denomination, and must have authority to perform all sacraments of the religious body.
(11) Expenses deductible on Part 1 of federal form 2106 in accordance with federal guidelines, and subject to audit and approval by the Tax Commissioner. The 2106 expenses must be apportioned to municipalities in the same manner to which the related income is apportioned.
(12) The income of a public utility when that public utility is subject to the tax levied under Section 5727.24 or 5727.30 of the Ohio Revised Code. However, subject to Section 5745 of the Ohio Revised Code, starting January 1, 2002 this exemption does not apply to the income of an electric company or combined company, and starting January 1, 2004 it does not apply to the income of a telephone company, as both are defined in Section 5727.01 of the Revised code.
(13) For individual taxpayers only, gains from involuntary conversions, 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 decedent's estate during the period of administration, except such income from the operation of a business.
(14) Income, 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 their political subdivisions to impose net income taxes on income derived from interstate commerce, and/or is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of a municipality to impose net income taxes.
(Ord. 11-30. Passed 12-19-11.)