(1) On all income, qualifying wages, commissions and other compensation earned or received during the effective period of this chapter by residents of this Municipality, including lottery income in the amount of five thousand dollars ($5,000.00) or more.
(2) On all income, qualifying wages, commissions and other compensation earned or received during the effective period of this chapter by nonresidents for work done or services performed or rendered in this Municipality.
(3) A. On the portion attributable to this Municipality of the net profits earned or received during the effective period of this chapter of all resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in this Municipality.
B. On the portion of the distributive share of the net profits earned or received during the effective period of this chapter of a resident partner, member or owner of a resident association or unincorporated business entity, if such distributive share was not attributable to this Municipality and on which the tax was not paid by the entity. If tax was paid by the entity, credit for tax paid shall be given in accordance with the provisions of Section 882.17.
C. For the purposes of paragraphs (a)(3)A. and B. hereof, an association shall be taxed as an entity on the net profits of the association derived from sales made, work done or services performed or rendered and business or other activities conducted in the City, whether or not such association has its principal or any place of business located in the City, effective for all accounting periods commencing on or after January 1, 1999.
D. For the purposes of paragraph (a)(3)A. hereof, a resident of the City who is a member of an association is taxed individually on that resident's entire share, whether distributed or not, of the annual net profits of the association which are not subject to entity filing under paragraph (a) (3)A. hereof.
E. On the net profits of all corporations, estates and trusts derived from work done or services performed or rendered and business or other activities conducted in the City, whether or not such corporations, estates and trusts have their principal or any place of business located in the City.
(4) A. On the portion attributable to this Municipality of the net profits earned during the effective period of this chapter of all nonresident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in this Municipality, whether or not such associations, unincorporated businesses, professions or other entities have an office or place of business in this Municipality.
B. On the portion of the distributive share of the net profits earned or received during the effective period of this chapter of a resident partner, member, or owner of a nonresident association or unincorporated business entity, if such distributive share was not attributable to this Municipality and on which the tax was not paid aby the entity. If tax was paid by the entity, credit for tax paid shall be given in accordance with the provisions of Section 882.17.
(5) Effective for tax years 2004 and later, the distributive share of income paid to an S Corporation shareholder shall be taxable in the following manner:
A. If no portion of the net profits of the S Corporation are allocated or apportioned to the State of Ohio, the distributive share is taxable only to the extent that it represents wages or net earnings from self-employment.
B. If any portion of the net profits of the S Corporation are allocated or apportioned to the State of Ohio, the full amount of the distributive share is taxable.
(6) On the portion attributable to this Municipality of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in this Municipality, whether or not such corporations have an office or place of business in this Municipality.
(7) Occasional entrant.
A. Effective January 1, 2001, Pickerington shall not tax the compensation paid to a nonresident individual for personal services or work performed by the individual in the Municipality on 12 or fewer days in a calendar year (which hereby classifies the individual as an "occasional entrant") unless one of the following applies:
1. The individual is the employee of another person, the principal place of business in which the employee normally works is located in another municipal corporation in this State that imposes a tax applying to compensation paid to the individual for services performed on those days, and the individual is not liable to that other municipal corporation for tax on the compensation paid for such services.
2. The individual is a professional athlete, the promoter of a professional entertainment or sports event, or an employee of such promoter, all as may be reasonably defined by the Municipality.
B. For purposes of the 12-day calculation, any portion of a day worked in the Municipality shall be counted as one day worked in the Municipality.
C. Beginning with the 13th day, the employer of said individual shall begin withholding the Municipality income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the Municipality in accordance with Section 882.07 of the income tax ordinance. 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 Municipality by the individual for the first 12 days. If the individual is self-employed or an independent contractor, it shall be the responsibility of the individual to remit the appropriate income tax to the Municipality.
D. Any tax withheld for the Municipality under Section 882.03(a)(6) is subject to being refunded only to the Municipality in which the employer's principal place of business is located, and only after that municipality has established that the individual employee has a liability to them.
(b) Determination of Portion of Net Profits Attributable to Municipality. The portion of the net profits attributable to this Municipality of taxpayers conducting a business, profession or other activity both within and without the boundaries of this Municipality shall be determined as provided in Ohio R.C. 718.01 and 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
(c) Operating Loss-Carry Forward. Notwithstanding any other provision thereof to the contrary, this division (c) shall remain in effect until December 31, 2016. This provision shall be superseded by the net operating loss provisions of the Amended Pickerington Income Tax Ordinance on January 1, 2017.
(1) If a net operating loss has been sustained in any taxable year, such losses may be carried forward for not more than one taxable year. There shall be no backward net operating loss credits to any taxable year.
A. The portion of a net operating loss sustained shall be allocated to this Municipality in the same manner as provided herein for allocating net profits to this Municipality.
B. The Administrator shall provide, by rules and regulations, the manner in which such net operating loss-carry forward shall be determined.
(2) Affiliated corporations may not deduct a loss from any other corporation having a taxable profit, and operations of any affiliated corporation having a loss may not be taken into consideration in computing net profits of business allocation percentage formula, unless the affiliated corporations file a consolidated return. (See Section 882.03(d)).
(3) A loss sustained by an individual who is engaged in a business, in addition to being a partner or member of another association or business, may not be set off against the profits of the association or business, nor against the salary, wage, other income, commission or other personal service compensation (if any) which he or she may earn in another capacity. The business loss of an association or business may not be set off against the profits of another association or business engaged in by a member or partner of such association or business, or against the salary, wage, other income, commission or other personal service compensation which a member or partner may earn in another capacity. In the case of an individual who runs two or more businesses as individual proprietorships, loss from one such business may be set off against the net profits of the other (but not against salaries, wages, other income, or other personal service compensation). The one percent tax shall be levied on the final net business income of the individual proprietor.
(4) A business or rental loss is not allowed as an offset against Federal Form W-2 income on salaries, wages and other compensation or other income.
(d) Consolidated Returns.
(1) Any affiliated group which files a consolidated return for Federal income tax purposes pursuant to IRC 1501 may file a consolidated return with the Municipality. However, once the affiliated group has elected to file a consolidated return or a separate return with the Municipality, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the Municipality.
(2) 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 this Municipality 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 this Municipality. If the Administrator finds net profits are not properly allocated to this Municipality 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 this Municipality.
(e) Exceptions. The following shall not be considered taxable:
(1) Poor relief, unemployment insurance benefits, supplemental unemployment benefits, old age pensions or similar payments received from local or State governments or the Federal government or charitable or religious organizations.
(2) Proceeds of insurance, annuities, worker's compensation insurance, social security benefits, pensions, compensation for damages for personal injuries and like reimbursements, not including damages for loss of profits.
(3) Compensation for damage to property by way of insurance or otherwise.
(4) Military pay or allowances of members of the Armed Forces of the United States and of members of their reserved components, including the Ohio National Guard.
(5) 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. Tax exempt activities shall include receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are from casual entertainment, welfare activities conducted by bona fide charitable, religious and educational organizations and associations.
A. Any association or organization falling in the category listed in this paragraph is required to file declarations and final returns and remit the taxes levied under this chapter on all net profits from activities, the income from which is not specifically exempt from taxation in Ohio R.C. 718.01.
B. Where such nonprofit association or organization conducts income-producing business both within and without the corporate limits, it shall calculate its profits allocable to this Municipality under the method or methods provided above.
(6) Personal earnings of any individual under 18 years of age.
(7) Scholarships or work study programs upon documentation from the college delineating the type of compensation and amount.
(8) Personal earnings of mentally retarded and developmentally disabled employees earnings less than the minimum hourly wage while employed at government-sponsored sheltered workshops.
(9) 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. The minister must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination.
(10) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the state from which the City 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).
(11) Expenses deductible on Federal Form 2106, subject to audit and approval by the Administrator.
(12) Compensation paid under Ohio 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 one thousand dollars ($1,000.00) annually.
(13) Income, qualifying 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 other political subdivisions to impose net income taxes on income derived from interstate commerce.
(14) Income, qualifying wages, commissions, other compensation, other income and net profits, including interest and dividends as provided in Ohio 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 City to impose net income taxes.
(Ord. 2002-141. Passed 1-7-03; Ord. 2004-25. Passed 5-4-04; Ord. 2016- 02. Passed 3-1-16.)