(A) Duty of withholding and payment of tax withheld by employer.
(1) Each employer within or doing business within this municipality shall deduct at the time of the payment of such salary, wage, commission or other compensation, the tax of 1% of the gross salaries, wages, commissions or other compensation due by the said employer to said employee or the tips or gratuities reported to said employer by each said employee for social security or federal income tax purposes and shall on or before the last day of the month following the close of each calendar quarter make a return and pay to the Tax Administrator the amount of taxes so deducted. Said returns shall be on a form or forms prescribed by or acceptable to the Tax Administrator and shall be subject to the rules and regulations prescribed therefore by the Tax Administrator.
(2) The Tax Administrator shall have the authority to require monthly payments from employers who withhold greater than $ 300 dollars a month. The employer shall on or before the last day of the month following the close of each month make a return and pay to the Tax Administrator the amount of taxes so deducted. The return shall be on a form or forms prescribed by or acceptable to the Tax Administrator and shall be subject to the rules and regulations prescribed by the Tax Administrator. Nothing in this section prohibits an employer from withholding tax on a basis greater than qualifying wages.
(3) Such employer shall be liable for the payment of the tax required to be deducted and withheld, whether or not such taxes have in fact been withheld.
(4) An employer is not required to make any withholding with respect to an individual's disqualifying disposition of an incentive stock option if, at the time of the disqualifying disposition, the individual is not an employee of the corporation with respect to whose stock the option has been issued
(5) (a) An employee is not relieved from liability for a tax by the failure of the employer to withhold the tax as required by a municipal corporation or by the employer's exemption from the requirement to withhold the tax.
(b) The failure of an employer to remit to the municipal corporation the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer in connection with the failure to remit the tax withheld.
(6) Compensation deferred before the effective date of this amendment is not subject to any municipal corporation income tax or municipal income tax withholding requirement to the extent the deferred compensation does not constitute qualifying wages at the time the deferred compensation is paid or distributed.
(7) Such employer in collecting said tax shall be deemed to hold the same, until payment is made by such employer to this municipality, as a Trustee for the benefit of this municipality and any such tax collected by such employer from his employees, shall, until the same is paid to this municipality, be deemed a trust fund in the hands of such employer.
(B) Withholding return. List of employees.
(1) Each employer shall file a withholding tax reconciliation W-3 form showing the sum total of all compensation paid all employees, the portion of which, if any, was not subject to withholding along with an explanation for same, and the portion of which was subject to withholding, together with the amount of such withholdings remitted. Such reconciliation shall include Form W-2 for each employee or a list of employees containing W-2 information concerning each employee from whom the village tax was withheld, showing the name, address, zip code and social security number of each such employee, the total amount of compensation paid during the year and the amount of village tax withheld. If the total tax withheld from any employee included tax withheld and remitted to another taxing municipality, the amount of same shall be separately shown on the return of information to the village concerning each employee. The withholding tax reconciliation shall be filed by each employer on or before February 28 following the end of such calendar year.
(2) If more than the amount of tax required to be deducted by this chapter is withheld from the employee's pay, the excess shall be refunded by the employer to the employee. If less than the amount of tax required to be deducted is deducted and withheld by the employer in any pay period or pay periods, the deficiency shall be deducted in subsequent pay periods.
(3) When an employer has withheld the tax from all wages of a nonresident of the village and such nonresident has been employed outside the village for all or a part of the time and has been withheld for or has paid taxes due another municipality as a result of that employment, such employee shall file a claim with the Tax Administrator covering such erroneous withholding and the Tax Administrator shall, upon verification thereof by the employer, refund to the employee the amount of such withholding paid to another municipality, subject to the requirements and limitations contained in § 35.12.
(C) Form 1099 Reporting. In addition to the wage reporting of this section, any person required by the Internal Revenue Service to report on Form 1099-Misc. payments to individuals not treated as employees for services performed shall also report such payment to the village when the services were performed in the village. The information may be submitted on a listing, and shall include the name, address and social security number (or federal identification number), and the amount of the payments made. Federal Form(s) 1099 may be submitted in lieu of such listing. The information shall be filed annually on or before February 28.
(D) Domestic servants. However, no person shall be required to withhold the tax on the qualifying wages, commissions, other compensation and other taxable income paid to domestic servants employed exclusively in or about such person's residence. However, such domestic servants shall be responsible for filing and paying their own returns and taxes.
(E) Fractional parts of cents. In deducting and withholding tax at the source and in payment of any tax due under this chapter, a fractional part of a cent shall be disregarded unless it amounts to $0.005 or more in which case it shall be increased to $0.01.
(Ord. 31-2007, passed 12-18-07)