(a) Municipal taxable income for a resident of the Municipality is calculated as follows:
(1) Income reduced by exempt income to the extent such exempt income is otherwise included in income, reduced by allowable employee business expense deduction as found in Section 142.03(c)(20)B., further reduced by any pre-2017 net operating loss carryforward equals Municipal taxable income.
A. "Income" is defined in Section 142.03(c)(14).
1. "Qualifying wages" is defined in Section 142.03(c)(33).
2. "Net profit" is included in "income", and is defined in Section 142.03(c)(23). This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in Section 142.03(c)(1)H. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 142.062(e).
3. Section 142.03(c)(14) provides the following: offsetting and net operating loss carryforward treatment in Section 142.03(c)(14)A.2.a.; resident's distributive share of net profit from pass through entity treatment in Section 142.03(c)(14)A.2.b.; treatment of S Corporation distributive share of net profit in the hands of the shareholder in Section 142.03(c)(14)A.3.; restriction of amount of loss permitted to be carried forward for use by taxpayer in a subsequent taxable year in Section 142.03(c)(14)A.4.
4. "Pass through entity" is defined in Section 142.03(c)(27).
B. "Exempt income" is defined in Section 142.03(c)(11).
C. Allowable employee business expense deduction is described in Section 142.03(c)(20)B., and is subject to the limitations provided in that section.
D. "Pre-2017 net operating loss carryforward" is defined in Section 142.03(c)(32).
(b) "Municipal taxable income" for a nonresident of the Municipality is calculated as follows:
(1) "Income" reduced by "exempt income" to the extent such exempt income is otherwise included in income, as applicable, apportioned or sitused to the Municipality as provided in Section 142.062, reduced by allowable employee business expense deduction as found in Section 142.03(c)(20)B., further reduced by any pre-2017 net operating loss carryforward equals Municipal taxable income.
A. "Income" is defined in Section 142.03(c)(14).
1. "Qualifying wages" is defined in Section 142.03(c)(33).
2. "Net profit" is included in "income", and is defined in Section 142.03(c)(23). This section also provides that the net operating loss carryforward shall be calculated and deducted in the same manner as provided in Section 142.03(c)(1)H. "Net profit" for a nonresident individual includes any net profit of the nonresident, but excludes the distributive share of net profit or loss of only pass through entity owned directly or indirectly by the nonresident.
3. "Pass through entity" is defined in Section 142.03(c)(27).
B. "Exempt income" is defined in Section 142.03(c)(11).
C. "Apportioned or sitused to the Municipality as provided in Section 142.062" includes the apportionment of net profit income attributable to work done or services performed in the Municipality. Treatment of net profits received by an individual taxpayer from rental real estate is provided in Section 142.062(e).
D. "Allowable employee business expense deduction" as described in Section 142.03(c)(20)B., is subject to the limitations provided in that section. For a nonresident of the Municipality, the deduction is limited to the extent the expenses are related to the performance of personal services by the nonresident in the Municipality.
E. "Pre-2017 net operating loss carryforward" is defined in Section 142.03(c)(32).
(Ord. A-2833. Passed 10-26-15.)