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As used in this chapter, the following words shall have the meanings ascribed to them in this section, except as and if the context clearly indicates or requires a different meaning. The singular shall include the plural and the masculine shall include the feminine and the neuter:
(a) Adjusted federal taxable income: means a C corporation’s federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:
(1) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
(2) Add an amount equal to five percent (5%) of intangible income deducted.
(3) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in Section 1221 or 1231 of the Internal Revenue Code.
(4) Add taxes on, or measured by, net income allowed as a deduction in the computation of federal taxable income.
(5) In the case of real estate investment trust and regulated investment company, add all amounts with respect to dividends to, distributions to, or amount set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income.
(6) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute adjusted federal taxable income as if the taxpayer were a C corporation, except:
A. Guaranteed payments and other similar amounts paid or accrued to a partner, former partner, member, or former member shall not be allowed as a deductible expense; and
B. Amounts paid or accrued to a qualified self-employed retirement plan with respect to an owner or owner-employee of the taxpayer, amounts paid or accrued to or for health insurance for an owner or owner-employee, and amounts paid or accrued to or for life insurance for an owner or owner-employee shall not be allowed as a deduction.
(b) “Association” means a partnership, limited partnership, or any other form of unincorporated enterprise, owned by two or more persons.
(c) “Board of Review” means the Board created by and constituted as provided in Section 181.12 hereof.
(d) “Business” means an enterprise, activity, profession, or undertaking of any nature conducted for profit or ordinarily conducted for profit whether by an individual, partnership, association, corporation, or any other activity, including but not limited to the renting or leasing of property, real, personal, or mixed.
(e) “Business allocation apportionment” means the portion of net profits to be allocated to St. Marys as having been made therein pursuant to Section 181.03 hereof.
(f) “City” means the City of St. Marys.
(g) “Corporation” mean a corporation or joint stock association organized under the laws of the United States, the State of Ohio, or any other state, territory or foreign country or dependency.
(h) “Domicile” means a principal residence that the taxpayer intends to use and whenever he is absent intends to return. A taxpayer has only one domicile even though he may have more than one residence.
(i) “Employee” means one who works for wages, salary, commission, or other types of compensation in the service of an employer. Any person upon whom an employer is required to withhold for either federal income or social security, or on whose account payments are made under the Workers’ Compensation Law, shall prima facie be an employee.
(j) “Employer” means an individual, partnership, association, corporation, governmental body, unit or agency, or any other entity, whether or not organized for profit, who or that employs one or more persons on a salary, wage, commission, or other compensation basis.
(k) “Fiscal year” means an accounting period of twelve months ending on any day other than December 31.
(l) “Form 2106" means Internal Revenue Service Form 2106 filed by a taxpayer pursuant to the Internal Revenue Code.
(m) “Generic form” means an electronic or paper form designed for reporting estimated municipal income taxes and annual municipal income tax liability or for filing a refund claim that is not prescribed by a particular municipal corporation for the reporting of that municipal corporation’s tax on income.
(n) “Gross receipts” means income from any source whatsoever excepting from intangible and capital gains from the sale of property used in the trade or business as defined in Section (1231-b) Internal Revenue Code.
(o) “Income from a pass-through entity” means partnership income of partners, membership interest of members of a limited liability company, distributive shares of shareholders of an S corporation, or other distributive or proportionate ownership shares of income from other pass-through entities.
(p) “Intangible income” means income of any of the following types: income yield, interest, capital gains, dividends, or other income arising from the ownership, sale, exchange, or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in Chapter 5701 of the Ohio Revised Code, and patents, copyrights, trademarks, trade names, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation. “Intangible income” does not include prizes, awards, or other similar games of chance.
(q) “Internal Revenue Code” means the Internal Revenue Code of 1986, 100 stat, 2085, 26 U.S.C.1, as amended.
(r) “Internet” means the international computer network of both Federal and nonfederal interoperable packet switched data networks, including the graphical subnetwork known as the world wide web.
(s) “Limited liability company” means a limited liability company formed under Chapter 1705 of the Ohio Revised Code or under the laws of another state.
(t) “Net profits” for a taxpayer other than an individual means adjusted federal taxable income and “net profit” for a taxpayer who is an individual means the individual’s profit, other than amounts described in Section 181.03(d), required to be reported on Schedule C. Schedule E, or Schedule F.
(u) “Non-qualified deferred compensation plan” means a compensation plan described in Section 3121(v)(2)(C) of the Internal Revenue Code.
(v) “Nonresident” means a person, whether an individual, association, corporation, or other entity, domiciled outside the City.
(w) “Nonresident unincorporated business entity” means an unincorporated business entity not having an office or place of business within the City.
(x) “Other entity” means a person or unincorporated body not previously named or defined, and includes inter alia fiduciaries.
(y) “Other payer” means any person, other than an individual’s employer or the employer’s agent that pays an individual any amount included in the federal gross income of the individual.
(z) “Owner” means a partner of a partnership, a member of a limited liability company, a shareholder of a S corporation, or other person with an ownership interest in a pass-through entity.
(aa) “Pass-through entity” means a partnership, limited liability company, S corporation, or any other class of entity the income or profits from which are given pass-through treatment under the Internal Revenue Code.
(bb) “Person” means individuals, firms, companies, business trusts, estates, trusts, partnerships, limited liability companies, associations, corporations, governmental entities, and any other entity.
(cc) “Place of business” means any bona-fide office, other than a mere statutory office, factory, warehouse, or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more employees regularly in attendance.
A taxpayer does not have a regular place of business outside St. Marys solely by consigning goods to an independent factor or other contractor outside of the City for sale.
(dd) “Principal place of business” means in the case of an employer having headquarters’ activities at a place of business within a taxing municipality, the place of business at which the headquarters is situated. In the case of any employer not having its headquarters’ activities at a place of business within a taxing municipality, the term means the largest place of business located in a taxing municipality.
(ee) “Qualified plan” means wages, as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted in accordance with Section 718.03(A) of the Ohio Revised Code.
(ff) “Qualifying wages” means wages, as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted in accordance with Section 718.03(A) of the Ohio Revised Code.
(gg) “Resident” means a person, whether an individual, association, corporation, or other entity, domiciled in the City of St. Marys.
(hh) “Tax Commissioner” means the person appointed to administer the City’s Income Tax Ordinance and to direct the operation of the Tax Department or the person executing the duties of the Tax Commissioner.
(ii) “Taxable income” means qualifying wages paid by an employer or employers, compensation for personal services, other income defined by statute as taxable, and/or adjusted federal taxable income from the operation of a business, profession, or other enterprise or activity adjusted in accordance with the provisions of this chapter.
(jj) “Taxable year” means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net profits are to be computed under this chapter and, in the case of a return for a fractional part of year, the period for which such return is made. Unless approved by the Income Tax Commissioner, the taxable year of an individual shall be a calendar year.
(kk) “Taxpayer” means an association, business, corporation, employer, person, or other entity required by this chapter to file a return on earnings or net profits or to pay a tax thereon.
(Ord. 2004-02. Passed 2-23-04.)
(1) On all qualifying, wages, commissions, rentals, and other compensation earned or received on and after April 1, 1968, by residents of the City.
(2) On all qualifying, wages, commissions, rentals, and other compensation earned or received on and after April 1, 1968, by nonresidents for work done or services performed or rendered in the City.
(3) A. On the portion attributable to the City of the net profits earned on and after April 1, 1968, of all resident associations, unincorporated businesses, pass-through entities, professions, or other activities derived from work done or services performed or rendered, and business conducted in the City.
B. On a resident partner’s or owner’s share of the net profits of a resident association or other unincorporated business entity not attributable to the City and not levied against such association or other unincorporated business entity.
(4) A. On the portion attributable to the City of St. Marys, the net profits earned on and after April 1, 1968, of all nonresident associations, unincorporated business, professions, or other activities, derived from sales made, work done, or services performed or rendered, and business or other activities conducted in the City, whether or not such association or unincorporated business entity has an office or place of business in the City.
B. On a resident partner’s or owner’s share of the net profits of a nonresident association or other business entity not attributable to the City and not levied against such association or other business entity.
C. Distributions received by an owner domiciled in the City from any pass-through entity from a non-resident pass-through entity such as a partnership, limited partnership, limited liability company or sub- chapter S corporation shall be considered as income from an association as defined in Section 181.03(a)(4)(B) of the Ordinance. A credit shall be given for any Ohio municipal income tax paid by the non-resident entity at the entity level (i.e. in the hands of the entity), where such non-resident entity is domiciled. This Division (C) codifies the interpretation of this Section as of January 1, 2003, Ref. R.C. 718.14(B).
(5) A. On the portion attributable to the City of the net profits earned on and after April 1, 1968, of all corporations derived from sales made, work done or services performed or rendered and business or other activities conducted in the City, whether or not such corporations have an office or place of business in the City.
B. The tax imposed by this chapter on corporations shall apply at the entity level to resident corporations which have elected to be taxed as a Sub-Chapter S corporation under the Internal Revenue Code. This Division (B) codifies the interpretation of this Section as of January 1, 2003. Ref: R.C. 718.14(D).
(6) On all income received as gambling winnings as reported on IRS Form W- 2G, Form 5754 and or any other Form required by the Internal Revenue Service that reports winnings from gambling, prizes and lottery winnings. Provided however that a taxpayer who has a liability under this paragraph may deduct demonstrated wagering losses, notwithstanding the inability of the taxpayer to claim such losses on his federal return because taxpayer’s itemized deductions did not exceed the standard federal deduction. Such deduction shall be limited to the amount of wagering gains solely for the year in which the gains are incurred and may not be carried forward.
(b) An employee who pays his business expenses from his commissions or other compensation, without reimbursement from his employer, may deduct from his gross commissions or other compensation business expenses allowed by the Internal Revenue Service for federal income tax purposes, but only to the extent such expenses are incurred in earning commissions or other compensation subject to the tax imposed by this chapter.
(c) Net profit from a business or profession conducted both within and without the boundaries of the municipal corporation shall be considered as having a taxable situs in the municipal corporation for purposes of municipal income taxation in the same proportion as the average ratio of the following:
(1) Multiply the entire net profits of the business by a business apportionment percentage to be determined by:
A. The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in such municipal corporation 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.
B. Ascertaining the percentage which the gross receipts of the business from sales made and services performed in the City, during the period covered by the return, are of the total gross receipts from all sales and services, wherever made or performed, during such period.
1. Sales made within the City shall be deemed to include all sales of tangible personal property which is delivered within the City regardless of where title passes if shipped or delivered from a stock of goods within the City.
2. All sales of tangible personal property which is delivered within the City, regardless of where title passes, even though transported from a point outside the City, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion.
3. All sales of tangible personal property which is shipped from a place within the City to purchasers outside the City, regardless of where title passes, if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
C. Ascertaining the percentage which the total wages, salaries qualifying, and other compensation paid during the period covered by the return, to employees for services performed in the City is of the total wages, commissions, and other compensation paid, during such period, to all employees within and outside the City.
D. Adding together the percentage determined in accordance with subsections A., B., and C. hereof, or such of the aforesaid percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in deriving such total. A factor is applicable even though it may be allocable entirely in or outside the City.
(2) Provided, however, that in the event a just and equitable result cannot be obtained under the formula provided for herein, the Board of Review, upon application of the Taxpayer or the Tax Commissioner, shall, under uniform regulations adopted by the Board, have the authority to substitute other factors or methods calculated to effect a fair and proper apportionment.
(d) The tax provided for herein shall not be levied on the following:
(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 Ohio National Guard.
(2) Poor relief, pensions, unemployment compensation or similar payments, including disability benefits received from local, State, or federal governments, or from charitable, religious, or education organizations;
(3) Alimony received;
(4) Income, dues, contributions, receipts from casual entertainment, amusements, sports events, and health and welfare activities received by religious, fraternal, charitable, scientific, literary, educational institutions or organizations, labor unions, lodges, and similar organizations;
(5) Any association, organization, corporation, club, or trust, which is exempt from federal taxes or income by reason of its charitable, religious, educational, literary, scientific, etc., purposes;
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the State, and income of a decedent’s estate during the period of administration, except such income from the operation of a business; or
(Ord. 2005-23. Passed 9-26-05.)
(7) Earnings and income of all persons under eighteen years of age whether residents or nonresidents. (Ord. 2023-32. Passed 9-25-23.)
(8) Compensation paid under Section 3501.28 or 3501.36 of the Revised Code to a person serving as a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000) annually.
(9) Parsonage allowance pursuant to Section 107 of the Internal Revenue Code.
(10) Compensation paid to an employee of a transit authority for operating a transit bus in or through the municipal corporation, unless the bus is operated on a regularly schedule route, the operator is a resident or domiciled in the municipal corporation, or the headquarters of the authority or commission is located within the municipal corporation.
(11) Intangible income.
(Ord. 2005-23. Passed 9-26-05.)
(Ord. 2005-23. Passed 9-26-05.)
(a) Purpose. To provide funds for the purposes of providing funds for capital improvements, equipment and facilities in the City of St. Marys, including but not limited to the following:
(1) Purchase of fire, police and safety facilities, equipment and vehicles;
(2) Construction of streets, bridges, railroad crossings and storm sewers;
(3) Providing for parks and recreational facilities.
(b) Imposition of Tax. An annual income tax for the purposes specified in subsection (a) hereof shall be imposed at the rate of five-tenths of one percent per annum in addition to the one percent currently being levied and collected.
(c) Levy, Collection and Payment of Tax. Said tax shall be levied, collected and paid with respect to the salaries, wages, commissions and other compensation on and after July 1, 2015, and with respect to the net profits of businesses, professions or other activities earned on or after July 1, 2015. Provided, however, that where the fiscal year of the business, profession or other activity differs from the calendar year, the tax shall be applied to that part of the net profits for the fiscal year as shall be earned on or after July 1, 2015, to the close of the taxpayer’s fiscal year. Thereafter, the taxpayer shall report on its fiscal year basis.
(d) Allocation of Funds. The funds collected under the provisions of this section shall be applied for the following purposes and in the following order, to-wit:
(1) Such part thereof as shall be necessary to defray all cost and expenses of collecting the taxes levied by this section and the cost of administering and enforcing the provisions hereof.
(2) The remaining revenue, after the cost and expenses of collecting, administering and enforcing the taxes levied under this section shall provide funds for the purpose of providing funds for capital improvements, equipment and facilities in the City of St. Marys, including but not limited to the following:
A. Purchase of fire, police and safety facilities, equipment and vehicles;
B. Construction of streets, bridges, railroad crossings and storm sewers;
C. Providing for parks and recreational facilities.
(e) Scope. Except for the allocation of funds for this tax as set forth above, all of the sections of Chapter 181 of the Code of Ordinances of the City of St. Marys pertaining to the Income Tax shall apply to the tax levied under this section.
(f) Income Tax Rules and Regulations. The income tax rules and regulations adopted by the Tax Commissioner pursuant to Chapter 181 of the St. Marys Code of Ordinances shall apply to the income tax levied under this section.
(g) Duration. This section shall continue to be effective insofar as the levy of taxes is concerned through June 30, 2025, and insofar as the collection of taxes levied in the aforesaid period and action or proceedings for collection of any tax so levied or enforcing any provisions of this section are concerned and shall continue effective until all said taxes levied in the aforesaid period are fully paid and any and all suits and transactions for the collection of said taxes or for the punishment of violations of this section shall have been terminated. Provided, however, that annual returns for the year ending December 31, 2025, shall be filed on or before April 30th of the following year and any tax shown due thereon for part of the year ending December 31, 2025, which is unpaid and collected under the provisions hereof, shall be paid on said date except in those cases in which the time for filing returns and/or payment of the tax due has been extended in accordance with the rules and regulations.
(Ord. 2015-09. Passed 5-26-15.)
The tax shall be levied, collected and paid with respect to the qualifying, wages, commissions and other compensation earned on and after April 1, 1968, and with respect to the net profits of businesses, professions or other activities earned on and after April 1, 1968.
(Ord. 2004-02. Passed 2-23-04.)
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