(A) An annual tax for the purposes specified in § 39.50(A) shall be imposed beginning January 1, 1973 at the rate of 00.7% per annum, and beginning October 1, 1981, an additional annual tax at the rate of 00.1% per annum for the purposes specified in § 39.50(A) shall be imposed. Beginning October 1, 1981, an additional tax for the purpose specified in § 39.50(B) shall be imposed at the rate of 00.2% per annum. Beginning July 1, 2011 and ending June 30, 2021, an additional tax for the purpose specified in § 39.50(B) shall be imposed at the rate of 00.25% per annum. Beginning January 1, 2013 and ending December 31, 2022, an additional tax for the purpose specified in § 39.50(B) shall be imposed at the rate of 00.25% per annum. All taxes herein shall be combined with the combined rate being 1.50% per annum, and levied upon the following:
(1) On all qualifying salaries, wages, commissions and other compensation received during the effective period of the chapter by residents of the city.
(2) On all qualifying salaries, wages, commissions and other compensation received during the effective period of the subchapter by non-residents 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, and accrued or received during the effective period of the subchapter of all resident associations, 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.
(b) On the portion of the distributive share of the net profits earned, and accrued or received during the effective period of this subchapter of a resident partner or owner of a resident unincorporated business entity not attributable to the city upon which the tax was not paid by the entity.
(4) (a) On the portion attributable to the city of the net profits earned, and accrued or received during the effective period of this subchapter of all non-resident association, unincorporated businesses, professions 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 such association or other 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 accrued or received during the effective period of this subchapter of a resident partner or owner of a non-resident association or other unincorporated business entity not attributable to the city on which the tax was not paid by the entity.
(5) On the portion attributable to the city of the net profits earned, and accrued or received during the effective period of this subchapter 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 such corporations have a place of business in the city.
(B) The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the city, in the absence of actual records, thereof, shall be determined as follows:
(1) Multiply the entire net profits by a business allocation percentage to be the average ratio of:
(a) 1. The average net book value of the real and tangible personal property owned or by the taxpayer in the business or profession in the city during the taxable period to the average net book value of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.
2. As used in division (B)(1)(a)1. above, real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereon by eight.
(b) 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.
(c) 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.
(2) In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(3) As used in division (B)(1)(c) of this section, SALES MADE IN THE CITY OF TIPP CITY mean:
(a) 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.
(b) 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.
(c) All sales of tangible personal property which is shipped from a place within the city to purchasers outside of 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) For the purpose of this section, the taxable base shall be determined in accordance with federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for federal income taxes adjusted to the requirements of this subchapter.
(D) Consolidated returns.
(1) Filing of consolidated returns may be permitted or required in accordance with Rules and Regulations by the Administrator.
(2) Allocation of income and deductions between related taxpayers; in the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division branch factory, office, laboratory or activity with the city constituting a portion only of its total business, the Administrator may require such additional information as is deemed necessary to ascertain whether net profits are properly allocated to the city. If the Administrator finds net profits are not properly allocated to the city by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates or transactions with such division, branch, factory, office, laboratory or activity or by some other method, they shall make such allocation as is deemed appropriate to produce a fair and proper allocation of net profits to the city.
(E) Exceptions. The tax provided for herein shall not be levied upon:
(1) Pay or allowances of active members of the Armed Forces of the United States, or 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.
(2) Poor relief, unemployment insurance benefits, old age pensions or similar payments including disability benefits received from local, state or federal governments or charitable, religious or educational organizations.
(3) Proceeds of insurance paid by reason of the death of the insured; pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived.
(4) Receipts from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations.
(5) Personal earnings of all persons under 16 years of age.
(6) Compensation paid under R.C. § 3501.28 or 3501.36 to a person serving as a precinct official, to the extent that such compensation does not exceed $1,000 annually. Such compensation in excess of $1,000 may be subject to taxation. The payer of such compensation is not required to withhold city income tax from that compensation.
(7) The income of a public utility when that public utility is subject to the tax levied under R.C. § 5727.24 or 5727.30, except starting January 1, 2002, the income of an electric company or combined company, as defined in R.C. § 5727.01, may be taxed by a municipal corporation subject to R.C. Chapter 5745.
(8) On and after January 1, 2001, compensation paid to a nonresident individual for personal services performed within the city, performs such personal services in the city on 12 or fewer calendar days in which salary, wage, or compensation is earned in the calendar year, and if the individual is an employee, the principal place of business of the individual's employer is located outside the city, shall be exempt from the Tipp City income tax. This does not apply to professional entertainers or professional athletes or to promoters of professional entertainment or sports events and their employers, as reasonably defined by the city.
(9) Gains from involuntary conversion, cancellation of indebtedness, interest on federal obligations, items of income already taxed by the state from which the city 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).
(10) Alimony received.
(Ord. 4-13, passed 2-4-2013)