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(a) An annual tax for the purposes specified in Section 191.01
hereof shall be imposed on and after July 1, 1998, at the rate of one and one-half percent (1.5) per annum upon the following:
(1) On all salaries, wages, commissions and other compensation earned or derived on and after July 1, 1998, by residents of the City. The term "other compensation" includes, but is not limited to, income earned or derived from gaming, wagering, lotteries, including the Ohio State Lottery, or schemes of chance, all of which shall not be taxed as business income unless the individual subject to this tax has a federal gamblers' permit effective during the tax year in which such income from gaming, wagering, lotteries, or schemes of chance is received.
(2) On all salaries, wages, commissions and other compensation earned on and after July 1, 1998, by nonresidents of the City for work done or services performed or rendered.
(3) A. On the portion attributable to the City on the net profits earned on and after July 1, 1998, of all resident unincorporated business entities or professions or other activities derived from sales made, work done, services performed or rendered and business or other activities conducted in the City.
B. On the portion of the distributive share of the net profits earned on and after July 1, 1998, 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.
(4) A. On the portions attributable to the City of the net profits earned on and after July 1, 1998, of all nonresident unincorporated business entities, professions or other activities derived from sales made, work done, services performed or rendered and business and other activities conducted in the City whether or not such unincorporated business entity has an office or place of business in the City.
B. On the portion of the distributive share of the net profits earned on and after July 1, 1998, of a resident partner or owners of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.
(5) A. On the portion attributable to the City of the net profits earned on and after July 1, 1998, of all corporations derived from sales made, work done, services performed or rendered and business and other activities conducted in the City whether or not such corporations have an office or place of business in the City.
B. The tax shall be levied, collected, and paid with respect to the salaries, wages, commissions and other compensation, and with respect to the net profits of businesses, professions or other activities earned on and after July 1, 1998.
(Ord. 3-1998. Passed 5-12-98.)
(a) Method of Determination. In the taxation of income which is subject to the City income tax, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of the City shall disclose with reasonable accuracy what portion of its net profit is attributable to that part of the business or profession conducted within the boundaries of the City, then only such portion shall be considered as having a taxable situs in the City for the purposes of municipal income taxation. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City in absence of actual records thereof, shall be determined as follows:
Multiply the entire net profits by a business allocation percentage to be determined by a three-factor formula of property, payroll and sales, each of which shall be given equal weight as follows:
(1) The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City, during the taxable period to the average net book value of all 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 the preceding paragraph, 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.
(2) Wages, salaries and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the City to wages, salaries, and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed.
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the City to gross receipts of the business or profession during the same period from+sales and services, wherever made or performed.
In the event that the foregoing allocation formula does produce an equitable result, another basis may, under uniform regulations, be submitted so as to produce such result.
(b) Sales Made in the City. As used in subsection (a) hereof "sales made in the City" means:
(1) All sales of tangible personal property which is delivered within the City regardless of where title passes if shipped or delivered from a stock of goods within the City.
(2) All sales of tangible personal property which is delivered within the City regardless of where title passes even though transported from a point outside of the City if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion.
(3) All sales of tangible personal property which is shipped from a place within the City to purchasers outside of the City 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.
(c) Total Allocation. Add together the percentage determined in accordance with subsection (a) hereof or such of the aforesaid percentages as are applicable to the particular taxpayer and divide the total so obtained by the number of percentages used in deriving such total in order to obtain the business allocation percentage referred to in subsection (a) hereof.
A factor is applicable even though it may be allocable entirely in or outside the City.
(d) Rentals. Rental income received by a taxpayer shall be included in the computation of net profits from business activities under Section 191.03(a)(3), (4) and (5) 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.
Where a gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of two hundred fifty dollars ($250.00) 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 the 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 two hundred fifty dollars ($250.00) 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 crops or when the rental is based on a percentage of the gross or net profits derived from the farm, whether or not the gross income exceeds such two hundred fifty dollars ($250.00) per month; provided further, that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds two hundred fifty dollars ($250.00) per month.
(e) Operating Loss-Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to August 1, 1972, allocable to the City may be applied against the portion of the profit of succeeding tax taxable years allocable to the City until exhausted but in no event for more than five years immediately following the year in which the loss occurred. No portion of a net operating loss shall be carried back against net profits of any prior year.
(2) The portion of net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
(3) The Administrator shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined. (1978 Code Sec. 281.04)
(a) The tax provided for herein shall not be levied on the following:
(1) Pay or allowance of active members of the Armed Forces of the United States or in the income 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.
(2) Poor relief, unemployment insurance benefits, old age pensions or similar payments including disability benefits received from local, State or Federal governments or charitable, religious or educational organizations.
(3) Proceeds of insurance paid by reason of the death of the insured, pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived.
(4) Receipts from seasonal or casual entertainment, amusements, sport events and health and welfare activities when such are conducted by bona fide charitable, religious or educational organizations and associations.
(5) Alimony received.
(6) Personal earnings of any natural person under eighteen years of age.
(7) Compensation for personal injuries or for damages to property by way of insurance or otherwise.
(8) Interest, dividends and other revenue from intangible property.
(9) 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.
(10) 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.
(11) Salaries, wages, commissions and other compensation and net profits, the taxation of which prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of the City to impose net income taxes.
(1978 Code Sec. 281.05)
(a) When Returns Required to be Made. Each taxpayer, except as herein provided shall whether or not a tax be due thereon, make and file a return on or before April 30 of the year following the effective date of this chapter, and on or before April 30 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 four months from the end of such fiscal year or period. The Administrator is hereby authorized to provide by regulation that the return of an employer or employers, showing the amount of tax deducted by such employer or employers from the salaries, wages, commission or other compensation of an employee, and paid by him or them to the Administrator shall be accepted as the return required of any employee whose sole income, subject to tax under this chapter, is such salary, wages, commissions or other compensation. (EDITOR'S NOTE: Subsection (a) hereof was amended by Ordinance 3-1991 which extended the filing deadline for those serving in the Middle East.)
(b) Form and Content. The return shall be filed with the Administrator on a form or forms furnished by or obtainable upon request from such Administrator setting forth:
(1) The aggregate amounts of salaries, wages, commissions and other compensation earned and gross income from business, profession, or other activity, less allowable expenses incurred in the acquisition of such gross income earned during the preceding year and subject to such tax.
(2) The amount of the tax imposed by this chapter on such earnings and profits, and
(3) Such other pertinent statements, information returns, or other information as the Administrator may require.
(c) Extension of Time for Filing. The Administrator may extend the time for filing of the annual return upon the request of the taxpayer for a period of not to exceed 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 paid within the period as extended.
(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 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 City constituting a portion only of its total business, the Administrator shall require such additional information as he may deem 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.
(e) Amended Returns.
(1) Where necessary an amended return must be filed in order to report additional income and pay any additional tax due, or claim a refund of tax overpaid, subject to the requirements, limitations, or both, contained in Sections 191.04
and 191.05
. Such amended return shall be 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 the filing of 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 pay any additional tax shown due thereon or make claim for refund of any overpayment.
(1978 Code Sec. 281.06)
(a) Payment of Tax on Filing of Return.
(1) The taxpayer making a return shall, at the time of the filing thereof, pay to the Administrator the amount of taxes shown as due thereon; provided, however, that where any portion of the tax so due shall have been deducted at the source pursuant to the provisions of subsection (b) hereof, or where any portion of such tax shall have been paid by the taxpayer pursuant to the provisions of subsection (c) hereof, or whether an income tax has been paid to another municipality, credit for the amount so paid in accordance with Section 191.03
, 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 such return.
(2) A taxpayer who has overpaid the amount of tax to which the City is entitled under the provisions of this chapter may have such overpayment applied against any subsequent liability hereunder or, at his election, indicated on the return, such overpayment or part thereof shall be refunded, provided that no additional taxes or refunds of less than one dollar ($1.00) shall be collected or refunded.
(b) Collection at Source.
(1) In accordance with rules and regulations prescribed by the Administrator, each employer within or doing business within the City shall deduct at the time of the payment of such salary, wages, commissions, or other compensation, the tax at the rate currently indicated in Section 191.03 on the gross salaries, wages, commissions or other compensation due by the employer to such employee 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 Administrator the amount of taxes so deducted, subject to the provisions of subsections (b)(3), (4) and (5) hereof. The returns shall be on a form or forms prescribed by or acceptable to the Administrator and shall be subject to the rules and regulations prescribed therefor by the Administrator. Such employer shall be liable for the payment of the tax required to be deducted and withheld whether or not such taxes in fact have been withheld.
(2) Such employer in collecting such tax shall be deemed to hold the same, until payment is made by such employer to the City, as a trustee for the benefit of the City and any such tax collected by such employer from his employees, shall, until the same is paid to the City be deemed a trust fund in the hands of such employer.
(3) Such employer who deducts the tax in an amount of two hundred fifty dollars ($250.00) or more in the first or second month of a calendar quarter shall, on or before the twentieth day of the following month, pay to the Administrator the amount of taxes so deducted.
(4) Such employer who makes such payment on a monthly basis for the first two months of a calendar quarter shall pay such tax deducted for the third month of a calendar quarter at the regular time for filing the employer's quarterly return of income tax withheld.
(5) Such payment shall be on a form or forms furnished by or obtainable from the Administrator upon request, setting forth the amount of tax deducted for the month. A receipted copy of such form shall be returned to the employer to be attached to and filed with the employer's quarterly return of income tax withheld.
(6) No persons shall be required to withhold the tax on wages or other compensation paid domestic servants employed by him exclusively in or about such person's residence, even though such residence is in the City but such employee shall be subject to all of the requirements of this chapter.
(c) Declaration of Income Not Collected at Source. Except as provided in this section every person shall file a declaration setting forth taxable income including distributive shares of net profits of unincorporated business entities estimated to be earned by the taxpayer during the current tax year together with the estimated tax due thereon less tax withheld within the City less the tax credit allowed in Section 191.10
(a) and unless such taxpayer anticipates that such tax will be fully withheld within the City and any income earned outside of the City will be fully taxed at the same or higher rate of tax in another municipality. If the estimated tax for the current year less the tax to be withheld less such tax credit amounts to not more than ten dollars ($10.00) no declaration or payment of estimated tax is required.
(d) Filing of Declaration.
(1) The declaration required by subsection (c) hereof shall be filed on or before April 30 of each year during the effective period set forth in Section 191.03
(a)(5)B., or within four months of the date the taxpayer becomes subject to tax for the first time.
(2) Those taxpayers reporting on a fiscal year basis shall file a declaration within four months after the beginning of each fiscal year or period.
(e) Form of Declaration.
(1) The declaration required by subsection (c) hereof shall be filed upon a form furnished by, or obtainable from, the Administrator, provided, however, credit shall be taken for City tax to be withheld from any portion of such income. In accordance with the provisions of Section 191.10
, credit may be taken for tax to be paid or to be withheld and remitted to another tax municipality.
(2) The original declaration for any subsequent amendment thereof may be increased or decreased on or before any subsequent quarterly payment date as provided for herein.
(f) Payment to Accompany Declaration. Such declaration of estimated tax to be paid to the City shall be accompanied by a payment of at least one fourth of the estimated annual tax and a similar amount shall be paid on or before the last day of the seventh and tenth months after the beginning of the taxable year and on or before the last day of the first month of the succeeding year following the taxable year provided however that in case an amended declaration has been filed the unpaid balance shown due thereon shall be paid in equal installments on or before the remaining payment dates.
(g) Annual Return. On or before the last day of the fourth month of the year following that for which such declaration or amended declaration was filed, an annual return shall be filed and any balance which may be due the City shall be paid therewith in accordance with the provisions of subsection (a) hereof.
(h) Time for Filing. The Administrator may extend the time for filing of any return required, making of any payment, or performing any other act required by this section for a period of time not to exceed six months beyond the original required date.
(1978 Code Sec. 281.07)
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