(A) Subject to the provisions of this chapter, an annual tax for the purposes specified in § 36.01 shall be imposed at the rate of 1.25% per annum upon the following:
(1) On all income, qualifying wages, commissions, and other compensation earned and/or received during the effective period of this chapter by residents of the city.
(2) On all income, qualifying wages, commissions, and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the city. Separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer shall be allocable only to the city.
(a) The city shall not, however, tax the compensation of a non-resident individual who will be deemed to be an occasional entrant if all of the following apply:
1. The compensation is paid for personal services performed by the individual in the city on 12 or fewer days during the calendar year, in which case the individual shall be considered an occasional entrant for purposes of the city income tax. A day is a full day or any fractional part of a day.
2. In the case of an individual who is an employee, the principal place of business of the individual's employer is located outside the city and the individual pays tax on compensation described in division (A)(2) of this section, to the municipality, if any, in which the employer's principal place of business is located, and no portion of that tax is refunded to the individual.
3. The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably-defined by the city.
(b) Beginning with the thirteenth day an individual deemed to have been an occasional entrant to the city performs services within the city, the employer of said individual shall begin withholding the city income tax from remuneration paid by the employer to the individual, and shall remit the withheld income tax to the city in accordance with the requirements of this chapter. Since the individual can no longer be considered to have been an occasional entrant, the employer is further required to remit taxes on income earned in the city by the individual for the first 12 days.
(c) If the individual is self-employed, it shall be the responsibility of the individual to remit the appropriate income tax to the city.
(3) On the portion attributable to the city of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions, associations, or other entities, derived from sales made, work done, services performed or rendered, and business or other activities conducted in the city.
(4) On the portion of the distributive share of the net profits earned and/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 city and not levied against an unincorporated business entity by the city.
(5) (a) On the portion attributable to the city of the net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions, associations, or other entities, derived from sales made, work done, or services performed or rendered, and business or other activities conducted in the city, whether or not an unincorporated business entity has an office or place of business in the city.
(b) On the portion of the distributive share of the net profits earned and/or received during the effective period of this chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the city and not levied against an unincorporated business entity by the city.
(6) On the portion attributable to the city 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 city, whether or not those corporations have an office or place of business in the city.
(7) Lottery, games of chance, gambling and sports winnings are taxable, and in no circumstances shall deductions be allowed against these winnings. However, deductions shall be allowed against gambling and sports winnings if the taxpayer is considered a professional gambler for federal income tax purposes.
(B) Allocation and apportionment of net profits. Net profits from a business or profession conducted both within and without the boundaries of the city shall be considered as having a taxable status in the same proportion as the average ratio of:
(1) The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the city during the taxable period to the average original cost of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. Real property shall include property rented or leased by the taxpayer, and the value of that property shall be determined by multiplying the annual rental thereon by eight.
(2) Wages, salaries, and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the city to wages, salaries, and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed. Persons employed shall not be construed to mean any subcontractor or independent contractor. For tax year 2004 and subsequent tax years, wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages.
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the city to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
(4) In the event the foregoing allocation formula in division (B)(1) of this section does not produce an equitable result, the Board of Review, upon application of the taxpayer, or the Tax Commissioner, shall, under uniform regulations adopted by the Board of Review, have the authority to substitute other factors (including the books and records method) or methods calculated to effect a fair and proper allocation.
(C) Operating loss carry-forward. Effective with tax year 2009, a net operating loss shall not be carried forward or backward to any other taxable year.
(D) Exemptions. The tax provided for herein shall not be levied upon:
(1) The military pay or allowances of members of the armed forces of the United States and of members of their reserve components, including the National Guard.
(2) The net profits of any civic, charitable, religious, fraternal or other organization specified in R.C. § 718.01 to the extent that such net profits are exempted from municipal income taxes under such section.
(3) Poor relief, unemployment benefits, payments from retirement pensions, including permanent disability benefits, received from local, state or federal governments or charitable, religious or educational organizations.
(4) Proceeds or insurance paid by reason of the death of the insured, pensions, permanent disability benefits, annuities or gratuities not in the nature of compensation for service rendered from whatever source derived.
(5) The income 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 has tax-exempt activities. This exemption does not include unrelated income that is subject to federal tax.
(6) 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 bona fide charitable, religious or educational organizations and associations and only to the extent that the said income is exempt from federal income tax.
(7) Compensation for personal injuries or for damages to property by way of insurance or otherwise, but this exclusion does not apply to compensation paid for lost salaries or wages or to compensation from punitive damages.
(8) Gains from involuntary conversion, cancellation of indebtedness, items of income already taxed by the state from which the city is specifically prohibited from taxing and interest on federal obligations and income of a decedent's estate during the period of administration.
(9) Compensation paid to a precinct election official, to the extent that such compensation does not exceed $1,000 annually.
(10) Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained clergy's compensation. The clergy must be duly ordained, commissioned, or licensed by a religious body constituting a religious denomination, and must have authority to perform all sacraments of the religious body.
(11) Interest, dividends and other revenue from intangible property.
(12) Unreimbursed employee business expenses deductible on federal form 2106. The amount deducted for the city shall initially be the same as the federal deduction, but shall be subject to adjustment after review and audit by the city. The expenses must be allocated proportionate to the related income.
(13) Income, salaries, wages, commissions and other compensation 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/or 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.
(Ord. 09-3301, passed 8-20-09)