(a) On all income, qualifying wages, commissions, other compensation and other income received during the effective period of this chapter by residents of the Municipality. The term “other income” includes but is not limited to income earned, received, 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 income from gaming, wagering, lotteries or schemes of change is received.
(Ord. 42-06. Passed 11-13-06.)
(b) On all income, qualifying wages, commissions, other compensation and other income received during the effective period of this chapter by nonresidents for work done or services performed or rendered in the Municipality.
(1) For nonresidents of the Municipality of Sebring, other income includes all income from gaming, wagering, lotteries including the Ohio Lottery, or schemes of chance where the point of sale for lottery tickets, raffle tickets, tickets for any scheme of chance was the Municipality of Sebring or a wager was made in the Municipality of Sebring.
(Ord. 56-2021. Passed 10-25-21.)
(c) (1) On the portion attributable to the Municipality 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 Municipality.
(2) 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 or owner of a resident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity.
(d) (1) On the portion attributable to the Municipality of the net profits earned during the effective period of this chapter of all nonresident unincorporated business, professions or other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in the Municipality whether or not such unincorporated business entity has an office or place of business in the Municipality.
(2) On the portion of the distributive share of the net profits earned or received during the effective period of the chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity.
(e) (1) On the portion attributable to the 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 the Municipality whether or not such corporations have an office or place of business in the Municipality.
(2) The portion of the net profits attributable to the Municipality of a taxpayer conducting business, profession or other activity both within and without boundaries of the Municipality shall be determined as provided in Ohio R.C. 718.02 in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
(3) 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 on 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.
(4) Operating loss carry-forward.
A. The portion of a net operating loss sustained in any taxable year subsequent to January 1, 1983, allocable to the Municipality may be applied against the portion of the profit of succeeding year(s) allocable to the Municipality until exhausted but in no event for mor than five taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year, or applied against salaries or wages in any year.
B. The portion of a net operating loss sustained shall be allocated to the Municipality in the same manner as provided herein for allocating net profits to the Municipality.
C. The Administrator shall provide by rules and regulations the manner in which such net operating carry-forward shall be determined.
(5) Consolidated returns.
A. Any affiliated group which files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the Municipality of Sebring. 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 of Sebring.
B. 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 Municipality 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 Municipality. If the Administrator finds that the net profits are not properly allocated to the 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 shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to the Municipality.
(f) The tax provided for herein shall not be levied on:
(1) Military pay or allowances of members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard;
(2) 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;
(3) Unemployment insurance benefits, welfare benefits, and pensions paid as a result of retirement.
(4) Proceeds of insurance paid by reason of death of the insured; retirement disability benefits, annuities, or gratuities not in the nature of compensation for services rendered from whatever source derived;
(5) 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, and have authority to perform all sacraments of the church.
(6) Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are 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;
(7) The income of individuals under eighteen years of age;
(8) 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);
(9) Expenses deductible in accordance with federal guidelines on Federal Form 2106, subject to audit and approval by the Tax Administrator;
(10) 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) annually;
(11) 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
(12) Salaries, 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. 42-06. Passed 11-13-06.)