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For the purpose of this chapter, the following words and phrases shall have the following meanings ascribed to them respectively.
(a) “Adjusted Federal Taxable Income” means a Corporation’s federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, but including subsequent adjustments from the required additions and deductions set forth in Ohio R.C. 718.01(A)(1)(a) - (f). A pass-through entity must compute “Adjusted Federal Taxable Income” as if the pass-through entity was a Corporation, with the adjustments set forth in Ohio R.C. 718.01(A)(1)(g). This definition does not apply to any taxpayer required to file a return under Ohio R.C. 5745.03 or to the net profits from a sole proprietorship. This definition is effective for Taxable Years beginning on or after January 1, 2004.
(b) “Administrator” means the individual designated by the provisions of this Chapter to administer and enforce the provisions of this Chapter, as well as the administrator of a municipal income tax agency of which the City is a member, including, but not limited to, the Regional Income Tax Agency or the Central Collection Agency.
(c) “Assignment” means the assignment made by a resident of the City of a claim for a refund due from another Taxing Municipality granting credit to nonresidents thereof.
(d) “Association” means an unincorporated enterprise owned by two or more persons or in which two or more persons have a beneficial interest, other than a Pass-Through Entity.
(e) “Board” means the Board of Review established by and constituted as provided in Section 109.08.
(f) “Business” means an enterprise, activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit by any Person.
(g) “Chapter” means Chapter 191 of the Codified Ordinances of the City.
(h) “City” means the City of Sandusky, Ohio.
(j) “Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference to a section of the Code includes all rulings, regulations, notices, announcements, decisions, orders and other pronouncements that are issued by the United States Department of the Treasury, the Internal Revenue Service, or any Court of competent jurisdiction that is lawful and pertinent to the interpretation, application or effectiveness of such Section of the Code.
(k) “Compensation” means, for Taxable Years beginning on or after January 1, 2004, Qualifying Wages. For Taxable Years beginning before January 1, 2004, Compensation means wages, salary, commissions and/or other types of compensation paid or provided by an Employer to an individual for services rendered, whether paid in cash or in kind, on an hourly, daily, weekly, monthly, annual, or other basis, to the extent that such amounts are considered to be “wages” under Code Section 3121(a). The determination of what shall be considered “wages” under Code Section 3121(a) shall be made without regard to the limitation on wages contained in Code Section 3121(a)(1), without regard to any provisions in Code Section 3121(b) or other Code provisions that may exclude such amounts from federal employment tax based upon the nature of the services being performed, the identity of the Employer or other reasons, and with regard to the provisions of Code Section 3121(v). In addition to the foregoing, Compensation shall include all of the following types of income in the service of an Employer, even if it is not considered to be wages under Code Section 3121(a):
(1) All elective deferrals (as defined in Code Section 402(g)(3)) and all amounts contributed or deferred by the Employer at the election of the employee and which are not currently includible in gross income by reason of Code Section 125 (cafeteria plans), Code Section 129 (dependent care assistance plans), Code Section 132(f)(4) (tax-free parking) or Code Section 457 (deferred compensation of tax-exempt organizations), to the extent that such amount(s), but for the election or deferral, would be included in Compensation;
(2) Wage continuation payments made as a result of sickness or temporary disability and whether paid by the recipient’s Employer or by a third party;
(3) Group term insurance premiums paid on an Employee’s behalf to the extent included or includible in the Employee’s wages under Code Section 3401(a) or 3402;
(4) Compensation attributable to stock options or employee stock purchase plans to the extent that it is considered ordinary income for Federal Income Tax purposes; and
(5) Supplemental unemployment benefits (SUB Pay).
(l) “Contractor” means a Person who, in connection with the construction of improvements to real or personal property, contracts to supply materials or perform work for a stipulated sum.
(m) “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. The term “Corporation” also includes an entity treated as a corporation for Federal Income Tax purposes, including, but not limited to, publicly traded partnerships, regulated investment companies, real estate investment trusts, and certain Limited Liability Companies. The term “Corporation” does not include either an S Corporation or a Limited Liability Company that is treated as a partnership for Federal Income Tax purposes.
(n) “Employee” means one who works for Compensation.
(o) “Employer” means a Person, governmental body, unit, agency or any other entity, whether or not organized for profit, who or that employs one or more Persons.
(p) “Federal Income Tax” means the tax imposed by Sections 1 and 11 of the Code.
(q) “Fiduciary” means a guardian, trustee, executor, administrator, or any other person acting in any fiduciary capacity for any individual, trust, estate, or business.
(r) “Fiscal year” means an accounting period of 12 months or less ending on any day other than December 31. Only fiscal years accepted for Federal Income Tax purposes may be used for City Income Tax purposes.
(s) “Generic Form” means an electronic or paper form designed for reporting estimated City Income Taxes, and/or annual City Income Tax liability, and/or request for refunds, that contains all the information required on the City’s regular tax return, estimated payment forms, and request for refund forms, and that is in a similar format that will allow processing of the generic form without altering the City’s procedures for processing forms.
(t) “Gross receipts” means the total income from any source whatsoever.
(u) “Limited Liability Company” means a limited liability company formed under Ohio R.C. Chapter 1705 or under the laws of any other state.
(v) “Net Profits” means for Taxable Years, beginning on or after January 1, 2004, Adjusted Federal Taxable Income in the case of a taxpayer other than an individual and, in the case of an individual, the amounts required to be reported by the individual on IRS Schedule C, Schedule E or Schedule F. For Taxable Years beginning before January 1, 2004 Net Profits means a net gain from the operation of a Business after provision for all ordinary and necessary expenses either paid or accrued in accordance with the accounting system used by the Taxpayer for Federal Income Tax purposes, or a system approved by the Administrator, without deduction of taxes imposed by this Chapter and federal, state and other taxes on or based on income and, in the case of a Pass-Through Entity, without deduction of salaries or other amounts paid to Owners, and otherwise adjusted to the requirements of this Chapter.
(w) “Nonresident” means an individual domiciled outside the City.
(x) “Nonresident Pass-Through Entity” means a Pass-Through Entity not having an office or Place of Business within the City.
(y) “Ohio R.C.” means the Ohio Revised Code; unless otherwise identified, the number following refers to a Section of the Ohio Revised Code.
(z) “Owner” means an individual, partner, shareholder, member or any other Person having an ownership interest in a Pass-Through Entity or an Association.
(aa) “Pass-Through Entity” means a partnership, S Corporation, Limited Liability Company that is treated as a partnership for Federal Income Tax purposes, or any other class of entity the income or profits from which are given pass-through treatment under the Code.
(bb) “Person” means every natural person, Pass-Through Entity, Fiduciary, Association or Corporation. Whenever used in any clause prescribing and imposing a penalty, the term “Person” as applied to a Pass-Through Entity or Association shall mean the Responsible Person within the meaning of Section 191.17(h).
(cc) “Place of Business” means any bona fide office, other than a mere statutory office, factory, warehouse or other space that is occupied and used by the Taxpayer in carrying on any Business individually or through one or more agents or Employees regularly in attendance.
(dd) “Qualifying Wages” means wages as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, but including subsequent adjustments from the required additions and deductions set forth in Ohio R.C. 718.03(A)(2). Qualifying wages represent an individual’s income from employment, including non-qualified deferred compensation and stock options, from which City Income Tax shall be deducted by the employer, and any wages not considered a part of Qualifying Wages shall not be taxed by the City. This definition is effective for Taxable Years beginning on and after January 1, 2004.
(ee) “Reciprocity Credit” means the credit granted by a Taxing Municipality to its residents for income taxes paid to another Taxing Municipality.
(ff) “Rental Income” means income received by a Taxpayer from the rental of real estate, which shall be included in the computation of Net Profits from a Business 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 a Taxpayer individually or through agents or other representatives, constitutes a Business of the Taxpayer, in whole or in part. Where the gross monthly rental of any and all real properties owned by a Taxpayer, regardless of number and value, aggregates in excess of two hundred fifty dollars ($250.00) per month, the ownership, management or operation of such properties is a Business of such Taxpayer, and the net income of such rental property shall be subject to the tax imposed by this Chapter, provided that, in the case of commercial property, the Taxpayer shall be considered engaged in a Business 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 Taxpayer shall be considered engaged in a Business when that Taxpayer shares in 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 such two hundred fifty dollars ($250.00) per month; and provided further that a licensed rooming house shall be considered a Business, whether or not the gross income exceeds two hundred fifty dollars ($250.00) per month.
(gg) “Resident” means an individual domiciled in the City.
(hh) “Resident Pass-Through Entity” means a Pass-Through Entity having an office or Place of Business in the City.
(ii) “S Corporation” means a Corporation that has made an election under subchapter S of Chapter 1 of Subtitle A of the Code for its taxable year.
(jj) “Sub-contractor” means a Person who assumes by secondary contract some of the obligations of an original Contractor.
(kk) “State” means the State of Ohio.
(ll) “State Income Tax” means the tax imposed by Ohio R.C. Chapters 5733 and 5747.
(mm) “Taxing Municipality” means any Ohio municipal corporation levying a municipal income tax on Compensation earned by individuals and on the Net Profits earned from the operation of a Business.
(nn) “Taxable Income” means the gross amount of Compensation paid by an Employer to an Employee before any deductions, the Net Profits from the operation of a Business, and any other item of income specified in Section 191.03, all subject to the exceptions set forth in Section 191.10 and as adjusted in accordance with the provisions of this Chapter.
(oo) “Taxable Year” means the calendar year or the Fiscal Year upon the basis of which the Net Profits are to be computed under this Chapter and, in the case of a return for a fractional part of a calendar year or Fiscal Year, the period for which such return is required to be made.
(pp) “Taxpayer” means a Person, whether an individual, Pass-Through Entity, or any Corporation or other entity, required hereunder to file a return or pay tax pursuant to this chapter. “Taxpayer” does not include any person that is a disregarded entity, grantor trust or a qualifying Subchapter S subsidiary for federal income tax purposes, but “Taxpayer” includes any other person who owns the disregarded entity, grantor trust or qualifying Subchapter S subsidiary.
The singular shall include the plural, and the masculine shall include the feminine and the neuter.
(Ord. 05-100. Passed 6-13-05.)