(1) On all income earned and/or received during the effective period of this Chapter by residents of the City of Tallmadge. For further clarification “income” includes, but is not limited to, lottery, gambling winnings, sports winnings, games of skill, and games of chance. No deductions shall be permitted against income from lottery, gambling winnings, sports winnings, games of skill, and games of chance.
(2) On all income earned and/or received during the effective period of this Chapter by nonresident individuals for work done or services performed in the City of Tallmadge. Income earned and/or received as holiday, sick, and/or vacation pay is taxable to the City of Tallmadge. 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 of Tallmadge. However, the City of Tallmadge shall not tax the compensation of an individual if all of the following apply:
A. The individual does not reside in the City of Tallmadge.
B. The compensation is paid for personal services performed by the individual in the City of Tallmadge on twelve or fewer days during the calendar year. A day is a full day or any fractional part of a day.
C. 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 of Tallmadge and the individual pays tax on compensation described in subsection (b) hereof to the City, if any, in which the employer’s principal place of business is located, and no portion of that tax is refunded to the individual.
D. 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 of Tallmadge.
(3) On the portion attributable to the City of Tallmadge of the net profits earned during the effective period of this Chapter of all resident and nonresident corporations, unincorporated businesses, professions, or other entities, derived from sales made, work done, services performed or rendered, and business or other activities conducted in the City of Tallmadge, whether or not such corporations have an office or place of business in the City of Tallmadge.
(4) On the portion of the distributive share of the net profits earned and/or received during the effective period of this Chapter of resident partners, resident S-corporation shareholders or owners of resident and nonresident unincorporated business entities and S-corporations not attributable to the City of Tallmadge and not levied against such business entity. Provided, however, that the liability of an individual partner or owner taxable hereunder shall be subject to the provisions of Section 181.15 hereof.
(5) On all income received by a taxpayer from a royalty interest in the production of an oil and/or gas well, whether managed, extracted or operated by the taxpayer individually or through an agent or to his or her representative, shall be included in the computation of net profits from a business activity under this code only if and to the extent such royalty interest constitutes a business activity of the taxpayer. Where the gross income received by a taxpayer from royalty interest in the production of an oil and/or gas well in a taxable year exceeds three thousand dollars ($3,000) it shall be prima-facie evidence that the income was derived from a business activity of such taxpayer and the net income from such royalty interest shall be subject to tax.
(Ord. 58-2012. Passed 6-28-12.)
(Ord. 58-2012. Passed 6-28-12.)
(b) The portion of the net profits attributable to the City of Tallmadge of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the City of Tallmadge shall be determined as provided in Section 718.02 of the Revised Code of Ohio and in accordance with the rules and regulations adopted by the Tax Administrator pursuant to this Chapter.
(c) Business or Rental Loss.
(1) A business or rental loss is not allowed as an offset against Federal Form W-2 income.
(2) A business or rental loss may only be applied in the year in which it is incurred.
(3) Excluding rentals, a taxpayer’s net profits and losses from businesses operating within Tallmadge may be combined to determine the profit or loss attributable to operations within Tallmadge.
(4) A taxpayer’s net profits and losses from rentals within Tallmadge may be combined to determine the profit or loss attributable to rental operations within Tallmadge.
(d) Consolidated Returns.
(1) Any affiliated group which files a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the City of Tallmadge. However, once the affiliated group has elected to file a consolidated return or a separate return with the City of Tallmadge, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the City of Tallmadge.
(2) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates or some other method, the Tax Administrator shall require such information, in addition to the return hereinafter provided for, as he may deem necessary to ascertain whether net profits are properly allocated to the City of Tallmadge. If the Tax Administrator finds net profits are not properly allocated to the City of Tallmadge by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates or some other method, he may require the filing of a consolidated return or adjust such transactions so as to produce a fair and proper allocation of net profits to the City of Tallmadge.
(e) Exemptions.
(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 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 tax exempt activities and only to the extent that the said income is exempt from federal income tax.
(3) 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.
(4) Social security benefits, unemployment compensation (excluding supplemental unemployment compensation), payments from pension plans or similar payments, including disability payments received from private industry, or local, state, or federal governments, or from charitable, religious or educational organizations, and the proceeds of sick, accident, or liability insurance policies. The disability benefits excludable must be a permanent nature as determined by a physician or government entity.
(5) Proceeds of insurance paid by reason of the death of the insured; pensions, annuities or gratuities not in the nature of compensation for services rendered, from whatever sources derived.
(6) 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.
(7) Gains from involuntary conversions, cancellation of indebtedness, items of income already taxed by the State of Ohio from which the Municipality is specifically prohibited from taxing and income of a decedent’s estate during the period of administration (except such income from the operation of a business).
(8) Compensation paid to a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000) annually.
(9) Income of all individuals under eighteen years of age, whether residents or nonresidents.
(10) Alimony received.
(11) 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.
(12) 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. 13-2007. Passed 1-25-07.)