880.03 IMPOSITION OF TAX.

To provide funds for the purposes of general municipal operations of the City, there is hereby levied a tax on gross income, including salaries, wages, commissions and other compensation, and on net profits, as hereinafter provided.

(Ord. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28-04.)

880.02 DEFINITIONS.

For the purpose of this chapter the following definitions shall apply unless the context clearly indicates or requires a different meaning.

(a) “Administrator” means the individual designated by ordinance to administer and enforce the provisions of this chapter.

(b) “Association” means any partnership, limited partnership, limited liability corporations and limited liability partnerships, Sub Chapter S Corporation as defined in the Federal Tax Code or any other form of unincorporated business or enterprise, owned by one or more persons. The term association and unincorporated business are interchangeable items.

(d) “Business” means an enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, partnership, association, corporation or any other entity.

(e) “Corporation” means a corporation or joint stock association organized under the laws of the United States, the State of Ohio or any other state, territory or foreign country or dependency, but not including Chapter S Corporations.

(f) “Domicile” means the permanent legal residence of a taxpayer. A taxpayer may have more than one residence but not more than one domicile.

(g) “Employee” means one who works for wages or a salary, commission or other type of compensation in the service of an employer.

(h) “Employer” means an individual, partnership, association, corporation, governmental body, unit or agency, or any other entity, whether or not organized for profit, who, or that employs one or more persons on a salary, wage, commission or other compensation basis.

(i) “Fiscal year” means an accounting period of twelve months or less ending on any day other than December 31.

(j) “Generic form” means a paper form designed for reporting estimated municipal income taxes and annual municipal income tax liability that is not prescribed by a particular municipal corporation for the reporting of that municipal corporation's tax of income which conforms to Section 880.05(b).

(k) “Gross income” shall include all monies derived from any source whatsoever, including:

(1) All salaries, wages, commissions, other compensation and other income from whatever source received by residents of the city, including distributive shares of an unincorporated business entity or association against which Ravenna municipal income tax is not already levied.

(2) All salaries, wages, commissions, other compensation and other income from whatsoever source received by nonresidents for work done or services performed or rendered or activities conducted in the City.

(3) The portion attributable to the City of the net profits of all unincorporated businesses, associations, professions, corporations, or other entities, from sales made, work done, services performed or rendered, and business or other activities conducted in the City. Such portion shall be determined as provided in Section 880.03 and in accordance with the regulations adopted by the Board of Review pursuant to this chapter.

(1) “Gross receipts” means the total revenue derived from sales, work done, or service rendered, before any deductions, exceptions, or credits are claimed.

(m) “Joint Economic Development District (JEDD)” means a district created under Ohio R.C. Sections 715.70 and 715.71, as amended from time to time.

(n) “Net profits” means a net gain from the operation of a business, profession, enterprise or other activity after provision is made for all ordinary and necessary expenses which are either paid or accrued in accordance with the accounting system used by the taxpayer for Federal income tax purposes, without the deduction of taxes imposed by this chapter and Federal, State and other taxes based on income, and, in the case of an association, without the deduction of salaries paid to partners and other owners, and otherwise adjusted to the requirements of this chapter.

(o) “Nonresident” means an individual domiciled outside the City or who does not reside within the City for thirty days or more within any ninety-day period.

(p) “Nonresident unincorporated business entity” means an unincorporated business entity not having an office or place of business within the City.

(q) “Other compensation” includes all forms of earned income, including but not limited to tips, gifts of any type for services rendered, vacation and holiday pay, severance pay, director's fees, jury duty fees, sick pay and third party sick pay, bonuses, incentive payments in whatever form, company closing benefits, earnings designated as deferred compensation or compensation paid by an employer in whatever form for services rendered, employer paid premiums for group-term insurance in excess of fifty thousand dollars ($50,000), strike benefits, ordinary income shown on federal form 4797, and a resident partner's or stockholder's distributive share of a nonresident partnership or S Corporation net profits (whether received as wages paid or a draw from a drawing or capital account and whether received or accrued). The term “other compensation” shall also include income reported on federal tax returns as earned or derived from gaming, wagering, lotteries (including the Ohio or any other state lottery or combined state lotteries), schemes of chance effective during the tax year in which such income from gaming, wagering, lotteries or schemes of chance is received.

(r) “Person” means every natural person, partnership, fiduciary, association or corporation. Whenever used in any clause prescribing and imposing a penalty, the term “person,” as applied to an unincorporated entity, means the partners or members thereof, and, as applied to corporations, the officers thereof.

(s) “Place of business” means any bona fide office, other than a mere statutory office, factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his or her regular employees regularly in attendance.

(t) “Resident” means an individual domiciled in the City, or who resides within the City for thirty days or more within any ninety-day period.

(u) “Resident unincorporated business entity” means an unincorporated business entity having an office or place of business within the City.

(v) “Taxable income” means wages, salaries, commissions, and other compensation paid by an employer or employers before any deductions and/or the net profits from the operation of a business, profession or other enterprise or activity adjusted in accordance with the provisions of this chapter.

(w) “Taxable year” means the calendar year, or the fiscal year on the basis of which the taxable income is to be computed under this chapter, and in the case of a return for a fractional part of a year, the period for which such return is required to be made.

(x) “Taxpayer” means a person, whether an individual, partnership, association, corporation or other entity, required hereunder to file a return or pay a tax.

(Ord. 1970-67. Passed 12-7-70; Ord. 1990-146. Passed 12-3-90; Ord. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28-04.)

880.03 IMPOSITION OF TAX.

(a) An annual tax for the purposes specified in Section 880.01 is imposed on and after January 3, 1958, at the rates indicated, during the years indicated:

(1) 0.50% - per year during each calendar years 1958 to 1965, inclusive;

(2) 1.00% - per year during each calendar years 1966 to 1974, inclusive;

(3) 1.10% - per year during each calendar years 1975 to 1978 inclusive, and the months of January 1, 1979 to June 30,1979;

(4) 1.35 % - per the months of July 1, 1979 to December 31, 1979;

(5) 1.25 % - per the months of January 1, 1980 to March 31, 1980;

(6) 1.35 % - per the months of April 1, 1980 to July 31, 1980;

(7) 1.43% - per the months of August 1, 1980 to December 31, 1980, and per the year during each calendar years 1981 to 1984, inclusive, and the months of January and February 1985;

(8) 1.75 % - per the months of March 1, 1985 to December 31, 1985, and per the year during each calendar years 1986 to 1989, inclusive;

(9) 1.80% - per year during each calendar years 1990 to 1994, inclusive;

(10) 1.75% - per the calendar year of 1995, and the months of January 1, 1996 to June 30, 1996;

(11) 1.80% - per the months of July 1, 1996 to December 31, 1996.

(12) 2.0% - per March 1, 2005 until December 31, 2009.

(13) 2.0% per calendar year of 2010 until modified by ordinance on all taxable income, and such tax to be distributed as set forth in Section 880.18, upon the following: (Ord. 2009-024. Passed 2-2-09.)

A. On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by residents of the City.

B. On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the City.

C. 1. On the portion attributable to the City of the net profits earned during the effective period of this chapter 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 City;

2. On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner, or owner of a resident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.

D. 1. On the portion attributable to the City of the net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered and businesses or other activities conducted in the City, whether or not such unincorporated business entity has an office or place of business in the City;

2. On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.

E. On the portion attributable to the City 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 the City, whether or not such corporations have an office or place of business in the City.

F. 1. Rental income received by a taxpayer, all of which shall be included in the computation of net profits from business activities under division (a)(12)D. through F. of this section, only if and to the extent that the rental, ownership, management or operations of the real estate from which such rentals are derived (whether so rented, managed or operated by a 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 and all real properties, regardless of number and value, aggregates in excess of one hundred dollars ($100.00) per month, 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 property shall be subject to tax; provided that in case of commercial property, the owner 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, whether or not such rental exceeds one hundred dollars ($100.00) per month; 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 one hundred dollars ($100.00) per month; and provided further that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds one hundred dollars ($100.00) per month.

3. In determining the taxable income from rentals, the deductible expenses shall be of the same nature, extent and amount as are allowed by the Internal Revenue Service for Federal income tax purposes.

4. All persons engaged in the rental of real property shall, in filing their annual return, provide a copy of the Schedule E of the Federal income tax return, and shall provide such other information relative to the rental activities as the Administrator may request, if known.

(b) Attribution of Net Profits. The portion of net profits attributable to the City of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the City shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.

(1) The portion of a net operating loss sustained in any taxable year subsequent to January 1, 1991, allocable to the City, may be applied against the portion of the profit of succeeding years 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 years.

(2) The portion of net operating loss sustained shall be allocated to this City in the same manner as provided herein for allocating net profits to the City.

(3) A business or rental loss is not allowed as an offset against Federal form W-2 income from salaries, wages and other compensation.

(4) The Administrator shall provide rules and regulations for the manner in which such net operating loss carry-forward shall be determined.

(d) Consolidated Returns.

(1) Filing of consolidated returns may be permitted or required in accordance with rules and regulations prescribed by the Administrator.

(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 the City constituting only a portion of its total business, the Administrator shall require such additional information as he deems necessary to ascertain whether net profits are properly allocated to the City. If the Administrator finds that net profits are not 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 shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to the City.

(Ord. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28- 04;Ord. 2006-156. Passed 9-5-06.)

880.04 EXEMPTIONS.

The tax provided for herein shall not be levied upon:

(a) Military pay or allowance of active member of the Armed Forces of the United States;

(b) Unemployment insurance benefits, welfare benefits, pensions paid as a result of retirement or similar payments including disability benefits received from local, state or federal governments or charitable, religious or educational organizations;

(c) The income of religious, charitable, fraternal, 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;

(d) Retirement disability benefits, annuities, or gratuities not in the nature of compensation for services rendered from whatever source derived;

(e) Pensions, income from intangibles (e.g., interest, royalties, and dividends from stocks and bonds), proceeds of insurance except for loss of business income, annuities, government allotments;

(f) 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;

(g) Alimony or child support received;

(h) The income of individuals under sixteen years of age;

(i) 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);

(j) 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

(k) Salaries, wages, commissions, other compensation, other income and net profits 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. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28-04.)

(l) The tax provided for herein shall not be levied upon the military pay or allowances of members of the Armed Forces of the United States, any person under sixteen years of age, upon the net profits of any civic, charitable, religious, fraternal or other organization specified in Ohio R.C. 718.01 to the extent that such net profits are exempted from municipal income taxes under that section or developmentally disabled employees of government sponsored workshops.

(Ord. 2015-019. Passed 2-2-15.)

880.05 RETURN AND PAYMENT OF TAX, AMENDED RETURNS.

(a) Filing Date. Each taxpayer except as herein provided, shall, whether or not a tax is due thereon, make and file a return on or before April 15 of the year following the effective date of this chapter, and on or before April 15 of each year thereafter. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within 105 days from the end of such fiscal year or period.
(Ord. 1986-132. Passed 12-1-86.)

(b) Form and Content.

(1) The return shall be filed with the Administrator on a form furnished by or obtainable upon request from the Administrator, or a generic form, setting forth the following:

A. The aggregate amount of salaries, wages, commissions, and other compensation earned, and the gross income from a business, profession, or other activity, less allowable expenses incurred in the acquisition of such gross income earned during the preceding year and subject to the tax;

B. The amount of tax imposed by this chapter on such earnings and profits; and

C. Such other pertinent statements, information returns or other information as the Administrator may require.

(Ord. 1970-67. Passed 12-7-70.)

D. Any business, profession, association, or corporation reporting a net loss is subject to the filing requirements of this chapter.

(c) Extension of Time for Filing. Any taxpayer that has requested an extension for filing a federal income tax return may request an extension for the filing of a municipal income tax return. The taxpayer shall make the request by filing a copy of the taxpayer's request for a federal filing extension with the City Income Tax Department. Provided that a request for an extension of time to file an annual income tax return is made prior to April 16, the Administrator may extend the time for filing of the annual return, upon the request of the taxpayer, for a period of not more than six months, or one month beyond any extension requested of or granted by the Internal Revenue Service for the filing of the Federal Income Tax Return. The Administrator may require a tentative return, accompanied by payment of the amount of tax shown to be due thereon, by the date the return is normally due. No penalty or interest shall be assessed in those cases in which the return is filed and the final tax is paid within the period as extended.

(Ord. 1999-146. Passed 12-3-90.)

(d) Payment on Filing the Return.

(1) The taxpayer making a return, shall, at the time of filing, pay to the Administrator the amount of taxes shown as due thereon. However, where any portion of the tax so due has been deducted at the source pursuant to Section 880.06, where any portion of the tax has been paid by the taxpayer pursuant to Section 880.08, or where an income tax has been paid to another municipality, credit for the amount so paid, in accordance with Section 880.15, shall be deducted from the amount shown to be due, and only the balance, if any, shall be due and payable at the time of filing the return.

(2) A taxpayer who has overpaid the amount of tax to which the City is entitled under this chapter may have such overpayment applied against any subsequent liability hereunder, or, at his or her election indicated on the return, such overpayment shall be refunded, provided that no taxes or refunds of less than one dollar ($1.00) shall be collected or refunded.

(e) Amended Returns.

(1) Where necessary, an amended return shall be filed in order to report additional income and pay and additional tax due, or to claim a refund of tax overpaid, subject to the requirements and/or limitations contained in Sections 880.12 and 880.13. Amended returns shall be made on a form obtainable on request from the Administrator. A taxpayer may not change the method of accounting or apportionment of net profits after the due date for filing the original return.

(2) Within three months from the final determination of any Federal tax liability affecting the taxpayer's City tax liability, such taxpayer shall make and file an amended City return showing income subject to the City tax based upon such final determination of Federal tax liability, and shall pay any additional tax shown due thereon or shall make a claim for a refund of any overpayment.

(3) Where a taxpayer, as a consequence of moving out of the corporate limits, or in any other manner, terminates his or her liability to file and pay any taxes that may be imposed by this chapter, shall within sixty days of the date of such termination of liability, file a final return covering the portion of the taxable year he or she is liable for and pay any taxes shown due thereon.

(Ord. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28-04.)

880.06 COLLECTION AT SOURCE, EMPLOYEE WITHHOLDING.

(a) Liability of Employer. Each employer within, or doing business within the City, shall, at the time of the payment of any salary, income, wage, commission, or other compensation, deduct the tax at its then applicable percentage (Section 880.03) on salaries, wages, commissions, other compensation and other income due by the employer to his employees who are subject to the provisions of this chapter.

(1) Liability for Payment. The 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.
(Ord. 1984-124. Passed 12-3-84.)

(2) Employer as Trustee. The employer, in collecting the tax, shall be deemed to hold the tax as a trustee for the benefit of the City, and any such tax collected shall be deemed a trust fund in the hands of the employer until the collected tax is paid by the employer to the City.
(Ord.1970-67. Passed 12-7- 70.)

(3) Domestic Labor. No person shall be required to withhold the tax on salaries, wages, commissions, other compensation and other income paid domestic workers employed by such person exclusively in or about such person’s residence, even though the residence is in the City, but such employee shall be subject to all of the requirements of this chapter.

(b) Filing and Payment. Each employer shall, on or before the last day of the month, make a return and pay to the Administrator the tax withheld during the preceding month. However, the Administrator shall have the authority to approve the filing of returns and payment of the tax withheld on a quarterly basis, provided that monthly employer withholdings do not exceed the sum of two hundred dollars ($200.00) in any monthly collection period. In such case, the employer shall make a return and pay to the Administrator the tax withheld on a quarterly basis as follows:

(1) Calendar quarters ending March 31, on or before April 30;

(2) Calendar quarters ending June 30, on or before July 31;

(3) Calendar quarters ending September 30, on or before October 31;

(4) Calendar quarters ending December 31, on or before January 31.

(1) Such 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 therefore by the Tax Administrator.

(2) On or before January 31 of each year, each employer shall file a withholding return setting forth the names, addresses and Social Security numbers of all employees from whose compensation the tax was withheld during the preceding calendar year and the amount of tax withheld from his employees and such other information as may be required by the Administrator.

(d) Managers Obligation. The officer or employee of any business entity, including, but not limited to sole proprietor, partnership, LLC, corporation, or any entity functioning as a pass-through entity, having control or supervision of, or charged with the responsibility of filing any return or declaration required by this chapter and making payment, or any officer of the above mentioned entities who is responsible for execution of said entities fiscal responsibilities, shall be personally liable for failure to file any return or declaration, or pay the tax or employer withholding due by the provisions of this chapter. The dissolution, termination or bankruptcy of a business entity does not discharge the responsible officer, employees, members or partner's liability for a failure of the sole proprietorship, partnership, LLC, corporation, or entity functioning as a pass-through entity, to file returns or declarations or pay tax or employer withholding due.

(Ord. 2001-010. Passed 2-5-01; Ord. 2004-167. Passed 2-28-04.)

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