(a) Exemptions, specific. The following income is exempt from the tax imposed by this chapter:
(1) Pay or allowance of active members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard. This exception includes not only the military pay and allowances received by the members themselves, but also military pay and allowances, such as dependency allowances, received by another person and by reason of the member's service. Any bonus or additional compensation paid to a person by the United States, State of Ohio, or any other state for active service in the Army, Navy or Air Force shall also be exempt from tax.
(2) The income of religious, fraternal, charitable, scientific, literary or educational institutions is exempt from the tax imposed by this chapter to the extent that the income is derived from tax-exempt real estate, tax-exempt tangible or intangible property or tax exempt activities, and only to the extent that the income is exempt from federal income tax. The income and profits of organizations exempt from federal income tax under § 501(a) of the Internal Revenue Code shall be exempt from taxation under this chapter.
(3) Payments for the relief of poverty, unemployment insurance benefits, old age pensions or similar payments, including permanent disability benefits received from local, state or federal government or charitable, religious or educational organizations, are exempt from the tax imposed by this chapter. The exempted benefits include all types of payments and allowances made or given by the governments or organizations for the relief or correction of poverty, unemployment, delinquency, problems of health or advanced age, lack of education and similar problems. The exempted benefits include but are not limited to: aid to dependent children and the aged; rent, food and clothing allowances or subsidies; job training allowances; Social Security and Medicare benefits; and workers' compensation benefits.
(4) Salaries and wages not considered received by the individual member but by the religious order of organization under a vow of poverty are exempt from the tax imposed by this chapter.
(5) Housing allowances for clergy to the extent that allowance is used to provide a home are exempt from the tax imposed by this chapter. The clergy must be duly ordained, commissioned or licensed by a religious body.
(6) Gratuities not in the nature of compensation for services rendered.
(7) Disability benefits (not under a wage continuation plan), including the proceeds of health and accident insurance and similar benefits received after an employee has reached the employer's minimum retirement age, and that is reported to the retired employee on federal Form 1099-R or its substantive equivalent.
(8) Inheritances.
(9) Scholarships and student grants-in-aid, but not fellowships described in § 880.03(a)(2)D.5.
(10) Death benefits, retirement benefits, payments from IRS qualified retirement plans or similar retirement plans and/or pensions, annuities and similar payments made to a retired employee or to the beneficiary of an employee under a retirement program or plan after termination of employment and retirement of the employee.
(11) Gifts not in connection with services rendered or work performed are exempt.
(12) Cash or property received under a will or under the Statute of Descent and Distribution is not taxable.
(13) Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are from seasonal or casual entertainment, amusement; sports events and health and welfare activities, when any such are conducted by charitable, religious or educational organizations or associations, are exempt from the tax imposed by this chapter. This exemption refers only to the receipts of the organization and not to the compensation of employees.
(14) Alimony received. Support payments made by one spouse for the benefit of the other spouse or children in connection with any divorce or separation, whether or not awarded by the court, shall be deemed "alimony" for purposes of this exemption.
(15) Personal earnings of any individual under 18 years of age are exempt from the tax imposed by this chapter. However, for the year in which they become 18, the individual is subject to tax from their birth date until the end of the year.
(16) Compensatory damages from personal injuries or otherwise is exempt from the tax imposed by this chapter. Punitive damages are not exempt from taxation.
(17) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the State of Ohio which the city is specifically prohibited from taxing, and income of a decedent's estate during the period of administration (exempt income from the operation of a business) are exempt from the tax imposed by this chapter.
(18) Compensation paid under R.C. § 3501.28 or § 3501.36 to a person serving as a precinct election official, to the extent that the compensation does not exceed $1,000 annually.
(19) Salaries, 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 tax derived from interstate commerce, are exempt from the tax imposed by this chapter.
(20) Salaries, wages, commissions and other compensation, other income and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of a municipality to impose net income taxes, are exempt from the tax imposed by this chapter.
(b) Exemptions, general. No person shall be exempt from the imposition of this income tax unless specifically excluded or exempted by the laws of the State of Ohio, the municipality's ordinances or these rules and regulations. Upon request of the Finance Director, any person who claims exemption from tax under this chapter shall provide detailed information to show the basis of the claim. The information shall be furnished 30 days after receipt of the request.
(Ord. 43-2004, passed 12-20-2004)