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(a) Collection of unpaid taxes.
(1) All taxes imposed by this chapter remaining unpaid when the same have become due, together with all interest and penalties thereon, become a debt due the city from the taxpayer, and are recoverable as other debts in suits instituted by the Director of Law.
(2) Employers who or which, although obligated under this chapter to withhold and remit to the Finance Director the taxes required to be withheld at the source, as set forth in § 880.07(c), shall fail to so withhold and/or remit, become liable to the city in an action in a court of law to enforce the payment of the debt created by the failure.
(3) When a final return is filed as prescribed in § 880.07 and a deficiency is determined to be due to the city, action to collect the same must be brought within three years after the tax was due or the return was filed, whichever is later. However, in the case of fraud, failure to file a return, or the omission of 25% or more of income required to be reported, prosecution may be commenced within six years after the commission of the offense.
(b) Refunds.
(1) Should it appear that any taxpayer has paid more than the amount of the tax to which the city is entitled under the provisions of this chapter, a refund of the amount so overpaid shall be made, provided a proper claim for refund of the overpayment of tax has been filed by the taxpayer, or the same may be applied toward the declaration of tax due for the ensuing year. Claims for refunds shall be made on forms prescribed by and obtainable from the Finance Director, or on a generic form approved by the Finance Director. Refunds for days worked out of the city are available only to nonresidents, and refunds shall be computed by dividing total wages by total days worked in order to determine an average daily wage. The work year shall be considered 260 days. Saturdays and Sundays shall not normally be considered work days. Wage continuation plans of any type, including but not limited to vacation days, holidays, personal days, and sick days, are deemed to be days spent in the city for purposes of a refund calculation. Additions, deletions or other changes to the method for calculating refunds shall be at the discretion of the Finance Director.
(2) All applications for refunds shall be made within three years of the due date of a final return, or three months after the determination of the federal income tax liability, whichever is later. However, the following shall apply regarding refunds of tax withheld from non-qualified deferred compensation plans (NDCP):
A. A taxpayer may be eligible for a refund if the taxpayer has suffered a loss from an NDCP. The loss will be considered sustained only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to the NDCP. Full loss is sustained if no distribution of money and property will be made by the NDCP.
B. A taxpayer who receives income as a result of payments from an NDCP, and that income is less than the amount of income deferred to the NDCP and upon which municipal tax was withheld, then a refund will be issued on the amount representing the difference between the deferred income that was taxed and the income received from the NDCP. If different tax rates applied to the tax years in which deferrals, a weighted average of the different tax rates will be used to compute the refund amount.
C. Refunds shall be allowed only if the loss is attributable to the bankruptcy of the employer who had established the NDCP, or the employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the non-qualified compensation.
(3) Refunds for days worked out of the city are available only to nonresidents, and refunds shall be computed by dividing total wages by total days worked in order to determine an average daily wage. The work year shall be considered 260 days. Saturdays and Sundays shall not normally be considered work days. Wage continuation plans of any type, including but not limited to vacation days, holidays, personal days and sick days, are deemed to be days spent in the city for purposes of the refund calculation. Additions, deletions or other changes to the method for calculating refunds shall be at the discretion of the Finance Director.
(4) No refund will be made for an amount less than $5.
(5) Income tax that has been deposited with the city but should have been deposited with another municipality is allowable by the city as a refund but is subject to the three-year limitation on refunds. Income tax that should have been deposited with the city but was deposited with another municipality shall be subject to recovery by the city. The city will allow a non-refundable credit for any amount owed the city that is in excess of the amount to be refunded by the other municipality, as long as the tax rate of the other municipality is the same or higher than the city's tax rate. If the city's tax rate is higher, the tax representing the net difference of the rates is also subject to collection by the city.
(6) The Finance Director may sue for recovery of an erroneous refund, provided the suit is begun three years after making the refund, except that the suit may be brought within six years if any of the refund was induced by fraud or misrepresentation of material fact.
(c) Application of delinquent payments. Payments received for delinquent liabilities shall first be applied to unpaid penalty and interest assessments, beginning with the oldest year for which they are due, and then shall be applied sequentially to each subsequent year for which penalty and interest delinquencies exist. When penalty and interest delinquencies no longer remain, payments will be applied to delinquent taxes owed for any previous year(s), and will be applied in the order in which the taxes became due.
(Ord. 43-2004, passed 12-20-2004)
(a) Interest and penalties. All taxes imposed by this chapter, including taxes withheld or required to be withheld from wages by an employer and remaining unpaid after they have become due, shall bear interest on the amount of the unpaid tax at the rate of 1% of the amount of the unpaid tax for each month or fraction of a month, and the taxpayers upon whom the taxes are imposed, and the employers required by this chapter to deduct, withhold and pay taxes imposed by this chapter shall be liable, in addition thereto, to a penalty of 1% of the amount of the unpaid tax for each month or fraction of a month of nonpayment, or $50, whichever is the greater. Any business which fails to withhold taxes and/or file a completed return with the proper tax due shall be assessed an additional $200. The Finance Director may abate interest or penalties or both, and upon refusal to abate interest or penalties, or both, by the Finance Director, the Board of Review may nevertheless abate interest or penalties or both.
(b) Underpaying estimated taxes. There is a charge for underpaying the tax. When estimate tax payments are required, the penalty will attach when the amount actually paid and the amount that should have been paid of the estimated tax was less than 90% of the amount shown on the final return and did not equal at least 100% of the previous year's liability. Failure to pay 80% of tax due by February 28 of the following year will result in a penalty and interest charge on the entire remaining tax balance.
(c) Returned check fee. In addition to any other charges for interest and/or penalties which may be applicable, a charge of up to $50 shall be added to the tax due when any check in payment of taxes is returned unpaid by the bank. This charge is to offset the cost of additional bookkeeping and processing and is made irrespective of any charge which may be levied against the maker by his or her bank. Notice by the Finance Director to the taxpayer that a check has been returned unpaid is not required, nor is notice of the above charge required. The tender of payment shall not be considered as received as long as this charge has not been paid. Failure to replace the dishonored check by a valid payment within 30 days from the date the city received the unpaid check from the bank shall be considered cause for prosecution.
(d) Exceptions.
(1) No penalty shall be assessed on additional taxes found during an audit to be due when a return was timely filed in good faith and the tax paid thereon within 30 days of notification.
(2) In the absence of fraud neither a penalty nor interest shall be assessed on any additional taxes resulting from a federal audit for federal income tax purposes, provided an amended return is filed and the additional tax paid within three months after final determination of the federal tax liability. Such amended returns shall be on a form obtainable on request from the Administrator. A taxpayer may not change the method of accounting (i.e., cash or accrual) or apportionment of net profits after the due date for filing the original return.
(3) A taxpayer may not change the method of accounting (i.e., cash or accrual) or apportionment of net profits after the due date for filing the original return.
(4) A taxpayer or employer shall have 30 days after receipt of notice of any proposed imposition of interest and penalties within which to file a written protest or explanation with the Finance Director. If no protest or explanation is filed within the prescribed time, the proposed imposition of interest and penalties shall become and be the final assessment. Upon filing of a written protest or explanation the Finance Director shall determine the assessment, which may or may not be the same as the proposed assessment.
(e) Abatement. Upon recommendation of the Finance Director, the Board of Review may abate interest or penalties, or both, and upon appeal from the refusal of the Finance Director to so recommend, the Board of Review may nevertheless abate interest or penalty or both.
(f) Violations.
(1) The following shall be considered violations of this chapter:
A. Failing, neglecting or refusing to make any return or declaration required by this chapter;
B. Making any incomplete, false or fraudulent return;
C. Failing, neglecting or refusing to pay the tax, penalties or interest imposed by this chapter;
D. Failing, neglecting or refusing to withhold the tax from employees or to remit the withholding to the Finance Director;
E. Refusing to permit the Finance Director or any duly authorized agent or employee to examine books, records, papers and federal and state income tax returns relating to the income or net profits of a taxpayer;
F. Failing to appear before the Finance Director and to produce books, records, federal and state income tax returns, and papers relating to the income or net profits of a taxpayer under order or subpoena of the Finance Director;
G. Refusing to disclose to the Finance Director any information with respect to the income or net profits of a taxpayer;
H. Failing to comply with the provisions of this chapter or any order or subpoena of the Finance Director authorized hereby;
I. Attempting to do anything whatever to avoid the payment of the whole or any part of the tax, penalties or interest imposed by this chapter;
J. Giving to an employer false information as to his or her true name, correct Social Security number and residence address, or failing to promptly notify an employer of any change in residence address and the date thereof;
K. Failing to use ordinary diligence in maintaining proper records of employees' residence addresses, total wages paid and municipal tax withheld, or to knowingly give the Finance Director false information.
(2) Any person who violates any of the provisions of this section shall be subject to the penalty provided in § 880.99.
(g) Limitations on prosecution.
(1) Civil actions to recover municipal income taxes and penalties and interest on municipal income taxes shall be brought within three years after the tax was due or the return was filed, whichever is later.
(2) Prosecutions under this chapter shall be commenced within three years after the commission of the offense, provided that in the case of fraud, failure to file a return, or the omission of 25% or more of income required to be reported, prosecutions may be commenced within six years after the commission of the offense.
(h) Failure to receive forms no excuse. The failure of any employer or person to receive or procure a return, declaration or other required form shall not excuse him or her from making any informational return, return or declaration, filing a form or paying the tax.
(Ord. 43-2004, passed 12-20-2004; Ord. 49-2005, passed 12-5-2005)
Every individual taxpayer who resides in the city but who receives income, wages, salaries, commissions or other compensation for work done or services performed or rendered outside of the city, if it be made to appear that he or she has paid a municipal income tax on the income, wages, salaries, commissions or other compensation to another municipality, shall be allowed a credit against the tax imposed by this chapter of the amount so paid by him or her or in his or her behalf to the other municipality. For the tax year 2015 and forward, the credit shall not exceed 67% of the tax assessed by this chapter.
(Ord. 43-2004, passed 12-20-2004; Ord. 22-2014, passed 12-15-2014)
(a) Records to be kept by taxpayers. Employers and other taxpayers subject to the tax under this chapter are required to keep such records as will enable the filing of true and accurate returns, whether of taxes withheld at the source or of taxes payable upon income or net profits, or both, and such records are to be preserved to enable the Finance Director, or any agent or employee of the Finance Director, to verify the correctness of the returns filed. Such records shall be kept for a period of six years.
(b) Allocation of funds; 1.25% income tax.
A. Generally. The allocation of funds collected by virtue of the municipal income tax of the city shall be as follows.
B. One and one quarter percent income tax. The funds collected under the provisions of this chapter shall be deposited in the City Income Tax Fund, and the funds shall be disbursed in the following order, to wit:
1. Such part thereof as shall be necessary to defray all costs of collecting the taxes at the cost of administering and enforcing the provisions thereof shall be kept within the Income Tax Fund for the costs.
2. Not more than 95% of the net available income tax received annually may be transferred from time to time to the General Fund and be used to defray operating expenses of the city.
3. At least 5% of net available income tax receipts received annually from time to time shall be transferred to the Capital Improvements Fund and used for capital improvements for the city, including but not limited to development and construction of sewers and street improvements, street materials (for repair or replacement), for all city-owned buildings, parks, playgrounds, and for equipment necessary for the Police, Fire, Safety, Street and Traffic Departments. A one-time exception shall be for fiscal year 2014 reducing the percent of transfer to zero percent (0%).
(c) Identification required. Agents and employees charged with the duty of inspection or auditing of reports of employers and taxpayers will carry proper identification, which shall be subject to examination by any person whose records are sought to be examined.
(d) Savings clause. If any sentence, clause, section or part of this chapter, or any tax against any individual or any of the several groups specified herein, is found to be unconstitutional, illegal or invalid, the unconstitutionality, illegality or invalidity shall affect only the sentence, clause, section or part of this chapter and shall not affect or impair any of the remaining provisions, sentences, clauses, sections or other parts of this chapter. It is hereby declared to be the intention of the Council of the city that this chapter would have been adopted had the unconstitutional, illegal or invalid sentence, clause, section or part thereof not been included herein.
(e) Offsets.
(1) Business losses cannot be offset against income, salaries, wages and other compensation that represent employee income and/or other non-business income.
A. If an individual operated more than one business, the profits of which were subject to city income tax, the individual may offset profits from one business with the net loss from another business, and report the resulting net profit or loss for city income tax purposes.
B. In any event, the net loss on a business used to offset net income from another business must exactly agree with the net loss as reported on federal income tax return Form 1040, as filed with the federal government.
(2) If a net operating loss has been sustained in any taxable year, such losses may not be carried forward or backward for any other taxable year.
(Ord. 43-2004, passed 12-20-2004; Ord. 8-2014, passed 5-19-2014)
(a) Duties and authority of the Finance Director.
(1) It shall be the duty of the Finance Director to receive the tax imposed by this chapter in the manner prescribed herein from the taxpayers; to keep an accurate record thereof; and to report all moneys so received. All cashiers handling tax moneys shall be subject directly to the Finance Director and shall give daily accountings to the Finance Director.
(2) It shall be the duty of the Finance Director to enforce payment of all taxes owing the city, to keep accurate records for a minimum of six years showing the amount due from each taxpayer required to file a declaration and/or make any return, including taxes withheld, and to show the dates and amounts of payments thereof.
(3) The Finance Director is hereby charged with the enforcement of the provisions of this chapter and the enforcement of the rules and regulations of the Council of the city relating to any matter or thing pertaining to the collection of the city income taxes and the administration and enforcement of the provisions of this chapter, including provisions for the examination and correction of returns and payments.
(4) In any case where a taxpayer has failed to file a return or has filed a return which does not show the proper amount of tax due, the Finance Director may determine the amount of tax appearing to be due the city from the taxpayer and shall send to the taxpayer a written statement showing the amount of tax so determined, together with interest and penalties thereon, if any. A taxpayer shall have 30 days after receipt of notice of any proposed imposition of tax, interest and/or penalties within which to file a written protest or explanation with the Finance Director. If no protest or explanation is filed within the prescribed time, the proposed imposition of tax, interest and/or penalties shall become and be the final assessment. Upon filing of a written protest or explanation, the Finance Director shall determine the assessment, which may or may not be the same as the proposed assessment.
(5) Subject to the consent of the Board of Review or pursuant to regulations approved by the Council of the city, the Finance Director shall have the power to compromise any interest or penalty, or both, imposed by this chapter.
(6) A Department of Taxation is hereby created within the office of the Finance Director. Such Department of Taxation shall have such deputies, clerks and other employees as may from time to time be determined to be necessary by the Council of the city, and shall receive such salary as may be determined by City Council. The Finance Director shall appoint personnel and purchase all equipment, supplies and material for the Department of Taxation. The Department of Taxation shall be charged with the administration and operation of this chapter, under the direction of the Finance Director. The Finance Director shall prescribe the form and method of accounts and reports for that Department, as well as the forms for taxpayer's returns and declarations, and shall be charged with the internal examination and audit of all such accounts, and shall exhibit accurate records showing the amount received from each taxpayer and the date of the receipt. The Finance Director shall also make written report to Council annually of all moneys collected hereunder during the preceding year.
(b) Investigative powers of the Finance Director; penalty for divulging confidential information.
(1) The Finance Director or his or her duly authorized agent or employee, is hereby authorized to examine the books, papers, records, and federal and state income tax returns of any employer, or of any taxpayer or person subject to the tax, or believed to be subject to the provisions of this chapter, for the purpose of verifying the accuracy of any return made, or, if no return was made, to ascertain the tax due. Every such employer, supposed employer, taxpayer or supposed taxpayer, is hereby directed and required to furnish to the Finance Director or his or her duly authorized agent or employee, within 30 days following a written request by the Finance Director or his or her duly authorized agent or employee, the means, facilities, and opportunity for making the examination and investigations as are hereby authorized.
(2) The Finance Director, or his or her duly authorized agent or employee, is hereby authorized to examine any person, employer or employee under oath, concerning any income which was or should have been returned for taxation, and for this purpose may compel the production of books, federal and state income tax records, papers and records and the attendance of all persons before him or her, whether as parties or witnesses, wherever he or she believes the persons have knowledge of that income.
(3) The refusal to produce books, papers, records and federal and state income tax returns, or the refusal to submit to the examination by any employer or persons subject or presumed to be subject to the tax by any officer, agent or employee if a person subject to the tax or required to withhold tax or the failure of any person to comply with the provisions of this chapter or with any order or subpoena of the Finance Director authorized hereby shall be deemed a violation of this chapter, punishable as provided in § 880.09(f).
(4) Tax returns, investigations, hearings and all audit papers and information connected therewith are confidential and shall be carefully preserved so that they shall not be available for inspection by anyone other than the proper agents of the city for official tax purposes.
(c) Penalty for divulging confidential information. Any information gained, as the result of the filing of any tax returns, investigations, hearings or verifications required or authorized by this chapter, shall be confidential, except for official tax purposes and except in accordance with proper judicial order. Any person divulging such information shall, upon conviction thereof, be deemed guilty of a misdemeanor and shall be subject to a fine or penalty of not more than $500 or imprisoned for not more than six months, or both. Each disclosure shall constitute a separate offense. In addition to the above penalties, any employee of the city who violates the provisions of this section relative to disclosures of confidential information shall be immediately dismissed from the service of the city.
(Ord. 43-2004, passed 12-20-2004)
(a) The Board of Review, consisting of three members, one to be appointed by the Mayor, one to be appointed by the Finance Director, and the third to be selected by the two so appointed, is created by this chapter. No member shall be appointed to the Board of Review who holds other public office or appointment with the city. All appointments are subject to confirmation by City Council. The members of the Board of Review shall serve without pay.
(b) Appointment to the Board of Review shall serve as the following:
(1) First appointed will serve a one-year term. After one year is completed, the person replacing this person will serve a term of three years.
(2) Second appointed will serve a two-year term. After the two years have been completed, the person replacing this person will serve a term of three years.
(3) Third appointed will serve a three-year term. After the three years are completed, the person replacing this person will serve a term of three years.
(c) A majority of the members of the Board of Review shall constitute a quorum. The Board of Review shall adopt its own procedural rules and the Income Tax Department will keep a record of all transactions.
(d) All hearings of the Board of Review shall be conducted privately and in conjunction with the Income Tax Personnel. The provisions of § 880.12(b) with reference to the confidential character of information to be disclosed by this chapter shall apply to such matters as may be heard before the Board of Review on appeal.
(e) Any person dissatisfied with any ruling or decision of the Finance Director which is made under the authority conferred by this chapter and the rules and regulations related thereto may appeal therefrom to the Board of Review within 30 days from the announcement of the ruling or decision by the Finance Director, provided the taxpayer making the appeal has filed with the city the required return or other documents concerning the obligation at issue. The appeal shall be in writing and shall state why the decision should be deemed incorrect or unlawful. The Board of Review shall, on hearing, have jurisdiction to affirm, reverse or modify any such ruling or decision, or any part thereof. Such hearing shall be scheduled within 45 days from the date of appeal, unless the taxpayer waives a hearing. The Board's ruling must be made within 90 days from the date of the closing of the record, shall be in writing and filed with the Finance Director, and within 15 days of its decision shall send notice of its decision by ordinary mail to the taxpayer making the appeal.
(f) Any person dissatisfied with any ruling or decision of the Board of Review may appeal therefrom to a court of competent jurisdiction within 30 days from the announcement of the ruling or decision. For matters relating to tax years beginning on or after January 1, 2004, any ruling or decision of the Board of Appeal may be appealed to a court of competent jurisdiction or to the State Board of Tax Appeals.
(Ord. 43-2004, passed 12-20-2004)
(a) Whoever violates any of the provisions of this chapter, for which no penalty is otherwise provided, is guilty of a misdemeanor of the first degree and shall be fined not more than $1,000 or imprisoned not more than six months, or both, for each offense. A separate offense shall be deemed committed each day during or on which a violation occurs or continues.
(b) In addition to the penalty provided in division (a) hereof, any employee of the city who violates § 880.12(c), relative to the disclosure of confidential information, shall be immediately dismissed from the service of the city.