1905.011 Declaration of purpose and levying of tax for improvements to the city's system of roads, streets and bridges and for the imposition, crediting, allocation and use of the proceeds of that tax.

   (A)    In addition to the income taxes levied pursuant to Section 1905.01, for a period commencing January 1, 2025 and ending December 31, 2028, there shall be and is hereby levied an annual tax at the uniform rate of one-quarter percent (0.25%) per year on the income of every person residing in or earning or receiving income in the Municipality in order to provide funds necessary to pay costs of improving the City's system of roads, streets and bridges, including related debt charges.

   (B)    That tax shall be imposed on the municipal taxable income of every person who resides in or who earns or receives income in the Municipality measured in the same manner as set forth in Section 1905.03 with respect to the City's municipal income taxes levied pursuant to Section 1905.01; and as provided in Section 1905.01 (C) and (D) shall be levied in accordance with the provisions of Chapter 718 of the Ohio Revised Code, the provisions of which are thereby and hereby incorporated by reference.

   (C)    Notwithstanding any other provision of this Chapter 1905, all of the funds collected under the provisions of this Section 1905.011 shall be credited to a separate Road Improvements Fund and allocated and used for the following purposes and in the following order:

   (1)    Administration. Such part thereof as shall be necessary to defray all costs of collecting, administering and enforcing the provisions of this Chapter 1905, as the same would relate to the income tax levied pursuant to this Section, shall be appropriated by Council to the Income Tax Division.

   (2)    Allocation of Net Proceeds. The balance of funds resulting from that income tax, being the net proceeds thereof, shall be available for appropriation, as deemed necessary by the Council of the Municipality, solely to pay costs of improving the City's system of roads, streets and bridges, including related debt charges, that are costs of capital improvements as defined in Section 1905.14(E).

   From those net proceeds of that income tax, there shall be appropriated each year into a debt service fund or funds such sum or sums as may be determined by Council to be required to meet principal and interest charges on indebtedness for capital improvements to the City's system of roads, streets and bridges.

   The transfer or use of any such net proceeds for any other purpose is prohibited.

(Ord. 283-20. Passed 11-17-20; Ord. 246-24. Passed 5-22-24.)

1905.02. Definitions and Usage.

   (A)    Any term used in this Chapter 1905 that is not otherwise defined in this Chapter 1905 has the same meaning as when used in a comparable context in laws of the United States relating to federal income taxation or in Title LVII of the Ohio Revised Code, unless a different meaning is clearly required. If a term used in this Chapter that is not otherwise defined in this Chapter is used in a comparable context in both the laws of the United States relating to federal income tax and in Title LVII of the ORC and the use is not consistent, then the use of the term in the laws of the United States relating to federal income tax shall control over the use of the term in Title LVII of the ORC.

   (B)    The singular shall include the plural, and the masculine shall include the feminine and the gender-neutral.

   (C)    As used in this Chapter:

      (1)    "Adjusted federal taxable income," for a person required to file as a C corporation, or for a person that has elected to be taxed as a C corporation under (C)(24)(d) of this division, 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:

         (a)    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.

         (b)    Add an amount equal to five percent (5%) of intangible income deducted under division (C)(1)(a) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in Section 1221 of the Internal Revenue Code;

         (c)    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;

         (d)    (i)    Except as provided in (C)(1)(d)(ii) of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in Section 1221 or 1231 of the Internal Revenue Code;

            (ii)    Division (C)(1)(d)(i) of this Section does not apply to the extent the income or gain is income or gain described in Section 1245 or 1250 of the Internal Revenue Code.

         (e)    Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;

         (f)    In the case of a real estate investment trust or regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income;

         (g)    Deduct, to the extent not otherwise deducted or excluded in computing federal taxable income, any income derived from a transfer agreement or from the enterprise transferred under that agreement under Section 4313.02 of the ORC;

         (h)    Deduct exempt income to the extent not otherwise deducted or excluded in computing adjusted federal taxable income.

(Ord. 81-18. Passed 2-27-18.)

         (i)    Deduct any net profit of a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that net profit in the group's federal taxable income in accordance with division (V)(3)(b) of Toledo Municipal Code Section 1905.05.

         (j)    Add any loss incurred by a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that loss in the group's federal taxable income in accordance with division (V)(3)(b) of Toledo Municipal Code Section 1905.05. If the taxpayer is not a C corporation, is not a disregarded entity that has made an election described in division (C)(48)(b) of this Section, is not a publicly traded partnership that has made the election described in division (C)(24)(d) of this Section, and is not an individual, the taxpayer shall compute adjusted federal taxable income under this Section as if the taxpayer were a C corporation, except guaranteed payments and other similar amounts paid or accrued to a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deductible expense unless such payments are in consideration for the use of capital and treated as payment of interest under Section 469 of the Internal Revenue Code or United States treasury regulations. Amounts paid or accrued to a qualified self-employed retirement plan with respect to a partner, former partner, shareholder, former shareholder, member, or former member of the taxpayer, amounts paid or accrued to or for health insurance for a partner, former partner, shareholder, former shareholder, member, or former member, and amounts paid or accrued to or for life insurance for a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deduction.

Nothing in division (C)(1) of this Section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.

   (2)    (a)    "Assessment" means a written finding by the Tax Administrator that a person has underpaid municipal income tax, or owes penalty and interest, or any combination of tax, penalty, or interest, to the municipal corporation that commences the person's time limitation for making an appeal to the Board of Review pursuant to Toledo Municipal Code Section 1905.13 , and has "ASSESSMENT" written in all capital letters at the top of such finding.

      (b)    "Assessment" does not include a notice denying a request for refund issued under division (C)(3) of Toledo Municipal Code Section 1905.063, a billing statement notifying a taxpayer of current or past-due balances owed to the municipal corporation, the Tax Administrator's request for additional information, a notification to the taxpayer of mathematical errors, or the Tax Administrator's other written correspondence to a person or taxpayer that does not meet the criteria prescribed by division (C)(2)(a) of this Section.

   (3)    "Audit" means the examination of a person or the inspection of the books, records, memoranda, or accounts of a person, ordered to appear before the Tax Administrator, for the purpose of determining liability for a municipal income tax.

   (4)    "Board of Review" means the entity, created under Section 1905.13, to hear appeals of municipal income tax matters.

   (5)    "Calendar quarter" means the three-month period ending on the last day of March, June, September, or December.

   (6)    "Casino operator" and "casino facility" have the same meanings as in Section 3772.01 of the ORC.

   (7)    "Certified mail," "express mail," "United States mail," "postal service," and similar terms include any delivery service authorized pursuant to Section 5703.056 of the ORC.

   (8)    "Disregarded entity" means a single member limited liability company, a qualifying subchapter S subsidiary, or another entity if the company, subsidiary, or entity is a disregarded entity for federal income tax purposes.

   (9)    "Domicile" means the true, fixed, and permanent home of a taxpayer and to which, whenever absent, the taxpayer intends to return. A taxpayer may have more than one residence but not more than one domicile.

   (10)   "Employee" means an individual who is an employee for federal income tax purposes.

   (11)   "Employer" means a person that is an employer for federal income tax purposes.

   (12)   "Exempt income" means all of the following:

      (a)   The military pay or allowances of members of the armed forces of the United States or members of their reserve components, including the national guard of any state.

      (b)   Intangible income.

      (c)   Social security benefits, railroad retirement benefits, unemployment compensation, pensions, retirement benefit payments, payments from annuities, and similar payments made to an employee or to the beneficiary of an employee under a retirement program or plan, disability payments received from private industry or local, state, or federal governments or from charitable, religious or educational organizations, and the proceeds of sickness, accident, or liability insurance policies. As used in division (C)(12)(c) of this section, "unemployment compensation" does not include supplemental unemployment compensation described in Section 3402(o)(2) of the Internal Revenue Code.

      (d)   The income of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent such income is derived from tax-exempt real estate, tax-exempt tangible or intangible property, or tax-exempt activities.

      (e)   Compensation paid under Section 3501.28 or 3501.36 of the ORC to a person serving as a precinct election official to the extent that such compensation does not exceed $1,000 for the taxable year. Such compensation in excess of $1,000 for the taxable year may be subject to taxation by a municipal corporation. A municipal corporation shall not require the payer of such compensation to withhold any tax from that compensation.

      (f)   Dues, contributions, and similar payments received by charitable, religious, educational, or literary organizations or labor unions, lodges, and similar organizations.

      (g)   Alimony and child support received.

      (h)   Compensation for personal injuries or for damages to property from insurance proceeds or otherwise, excluding compensation paid for lost salaries or wages or compensation from punitive damages.

      (i)   Income of a public utility when that public utility is subject to the tax levied under Section 5727.24 or 5727.30 of the ORC. Division (C)(12)(i) of this section does not apply for purposes of Chapter 5745 of the ORC.

      (j)   Gains from involuntary conversions, interest on federal obligations, items of income subject to a tax levied by the state and that a municipal corporation is specifically prohibited by law from taxing, and income of a decedent's estate during the period of administration except such income from the operation of a trade or business.

      (k)   Compensation or allowances excluded from federal gross income under Section 107 of the Internal Revenue Code.

      (l)   Employee compensation that is not qualifying wages as defined in division (C)(35) of this section.

      (m)   Compensation paid to a person employed within the boundaries of a United States air force base under the jurisdiction of the United States air force that is used for the housing of members of the United States air force and is a center for air force operations, unless the person is subject to taxation because of residence or domicile. If the compensation is subject to taxation because of residence or domicile, tax on such income shall be payable only to the municipal corporation of residence or domicile.

      (n)   An S corporation shareholder's distributive share of net profits of the S corporation, other than any part of such distributive share of net profits that represents wages as defined in Section 3121(a) of the Internal Revenue Code or net earnings from self-employment as defined in Section 1402(a) of the Internal Revenue Code.

      (o)   (i)   Except as provided in divisions (C)(12)(o)(ii), (iii), and (iv) of this section, qualifying wages described in division (C)(2) or (5) of Section 1905.06 to the extent the qualifying wages are not subject to withholding for the Municipality under either of those divisions.

         (ii)   The exemption provided in division (C)(12)(o)(i) of this section does not apply with respect to the municipal corporation in which the employee resided at the time the employee earned the qualifying wages.

         (iii)   The exemption provided in division (C)(12)(o)(i) of this section does not apply to qualifying wages that an employer elects to withhold under division (C)(4)(b) of Section 1905.06.

         (iv)   The exemption provided in division (C)(12)(o)(i) of this section does not apply to qualifying wages if both of the following conditions apply:

            (a)   For qualifying wages described in division (C)(2) of Section 1905.06, the employee's employer withholds and remits tax on the qualifying wages to the municipal corporation in which the employee's principal place of work is situated, or, for qualifying wages described in division (C)(5) of Section 1905.06, the employee's employer withholds and remits tax on the qualifying wages to the municipal corporation in which the employer's fixed location is located;

            (b)   The employee receives a refund of the tax described in division (C)(12)(o)(iv)(a) of this Section on the basis of the employee not performing services in that municipal corporation.

      (p)   For tax years 2024 and after, the income of individuals under 18 years of age.

      (q)   (i)   Except as provided in division (C)(12)(o)(ii) or (iii) of this Section, compensation that is not qualifying wages paid to a nonresident individual for personal services performed in the Municipality on not more than 20 days in a taxable year.

         (ii)   The exemption provided in division (C)(12)(o)(i) of this Section does not apply under either of the following circumstances:

            (a)   The individual's base of operation is located in the municipal corporation.

            (b)   The individual is a professional athlete, professional entertainer, or public figure, and the compensation is paid for the performance of services in the individual's capacity as a professional athlete, professional entertainer, or public figure. For purposes of division (C)(12)(q)(ii)(b) of this Section, "professional athlete," "professional entertainer," and "public figure" have the same meanings as in division (C) of Section 1905.06.

         (iii)   Compensation to which division (C)(12)(o) of this Section applies shall be treated as earned or received at the individual's base of operation. If the individual does not have a base of operation, the compensation shall be treated as earned or received where the individual is domiciled.

         (iv)   For purposes of division (C)(12)(o) of this Section, "base of operation" means the location where an individual owns or rents an office, storefront, or similar facility to which the individual regularly reports and at which the individual regularly performs personal services for compensation.

      (r)   Compensation paid to a person for personal services performed for a political subdivision on property owned by the political subdivision, regardless of whether the compensation is received by an employee of the subdivision or another person performing services for the subdivision under a contract with the subdivision, if the property on which services are performed is annexed to a municipal corporation pursuant to Section 709.023 of the ORC on or after March 27, 2013, unless the person is subject to such taxation because of residence. If the compensation is subject to taxation because of residence, municipal income tax shall be payable only to the municipal corporation of residence.

      (s)   Income the taxation of which is prohibited by the constitution or laws of the United States.

Any item of income that is exempt income of a pass-through entity under division (C) of this Section is exempt income of each owner of the pass-through entity to the extent of that owner's distributive or proportionate share of that item of the entity's income.

(Ord. 650-23. Passed 12-19-23.)

   (13)   "Form 2106" means internal revenue service form 2106 filed by a taxpayer pursuant to the Internal Revenue Code.

   (14)   "Generic form" means an electronic or paper form that is not prescribed by a particular municipal corporation and that is designed for reporting taxes withheld by an employer, agent of an employer, or other payer, estimated municipal income taxes, or annual municipal income tax liability or for filing a refund claim.

   (15)    "Gross receipts" means the total revenue derived from sales, work done, or service rendered.

   (16)   "Income" means the following:

      (a)    (i)    For residents, all income, salaries, qualifying wages, commissions, and other compensation from whatever source earned or received by the resident, including the resident's distributive share of the net profit of pass-through entities owned directly or indirectly by the resident and any net profit of the resident, except as provided in division (C)(24)(d) of this Section.

         (ii)    For the purposes of division (C)(16)(a)(i) of this Section:

            (a)    Any net operating loss of the resident incurred in the taxable year and the resident's distributive share of any net operating loss generated in the same taxable year and attributable to the resident's ownership interest in a pass-through entity shall be allowed as a deduction, for that taxable year and the following five taxable years, against any other net profit of the resident or the resident's distributive share of any net profit attributable to the resident's ownership interest in a pass-through entity until fully utilized, subject to division (C)(16)(a)(iii) of this Section;

            (b)    The resident's distributive share of the net profit of each pass-through entity owned directly or indirectly by the resident shall be calculated without regard to any net operating loss that is carried forward by that entity from a prior taxable year and applied to reduce the entity's net profit for the current taxable year.

         (iii) Any amount of a net operating loss used to reduce a taxpayer's net profit for a taxable year shall reduce the amount of net operating loss that may be carried forward to any subsequent year for use by that taxpayer. In no event shall the cumulative deductions for all taxable years with respect to a taxpayer's net operating loss exceed the original amount of that net operating loss available to that taxpayer.

      (b)    In the case of nonresidents, all income, salaries, qualifying wages, commissions, and other compensation from whatever source earned or received by the nonresident for work done, services performed or rendered, or activities conducted in the municipal corporation, including any net profit of the nonresident, but excluding the nonresident's distributive share of the net profit or loss of only pass-through entities owned directly or indirectly by the nonresident.

      (c)    For taxpayers that are not individuals, net profit of the taxpayer;

      (d)    Lottery, sweepstakes, gambling and sports winnings, winnings from games of chance, and prizes and awards. If the taxpayer is a professional gambler for federal income tax purposes, the taxpayer may deduct related wagering losses and expenses to the extent authorized under the Internal Revenue Code and claimed against such winnings.

   (17)   "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 ORC, and patents, copyrights, trademarks, tradenames, 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 income associated with any lottery winnings, gambling winnings, or other similar games of chance.

   (18)   "Internal Revenue Code" has the same meaning as in Section 5747.01 of the ORC.

   (19)   "Limited liability company" means a limited liability company formed under chapter 1705. of the ORC or under the laws of another state.

   (20)   "Municipal corporation" includes a joint economic development district or joint economic development zone that levies an income tax under Section 715.691, 715.70, 715.71, or 715.74 of the ORC.

   (21)   (a)   "Municipal taxable income" means the following:

         (i)    For a person other than an individual, income apportioned or sitused to the Municipality under Section 1905.03, as applicable, reduced by any pre-2017 net operating loss carryforward available to the person for the Municipality.

(Ord. 81-18. Passed 2-27-18.)

         (ii)    (a)    For an individual who is a resident of the Municipality, income reduced by exempt income to the extent otherwise included in income, then reduced as provided in division (C)(21)(b) of this Section, and further reduced by any pre-2017 net operating loss carryforward available to the individual for the municipal corporation.

            (b)    For an individual who is a nonresident of the Municipality, income reduced by exempt income to the extent otherwise included in income and then, as applicable, apportioned or sitused to the municipal corporation under Section 1905.03, then reduced as provided in division (C)(21)(b) of this Section, and further reduced by any pre-2017 net operating loss carryforward available to the individual for the income tax levied by the Municipality.

   (b)    In computing the municipal taxable income of a taxpayer who is an individual, the taxpayer may subtract, as provided in division (C)(21)(a)(ii)(a) or (C)(21)(b) of this Section, the amount of the individual's employee business expenses reported on the individual's form 2106 that the individual deducted for federal income tax purposes for the taxable year, subject to the limitation imposed by Section 67 of the Internal Revenue Code. For the municipal corporation in which the taxpayer is a resident, the taxpayer may deduct all such expenses allowed for federal income tax purposes, but only to the extent the expenses do not relate to exempt income. For a municipal corporation in which the taxpayer is not a resident, the taxpayer may deduct such expenses only to the extent the expenses are related to the taxpayer's performance of personal services in that nonresident municipal corporation and are not related to exempt income. Employee business expenses on Form 2106 shall be allocated to municipalities in the same manner that the related income has been allocated.

(Ord. 354-16. Passed 9-27-16.)

   (22)   "Municipality" or "City" means the City of Toledo. If the term "municipality" is not capitalized, it refers to a municipal corporation other than the City of Toledo.

   (23)   "Net operating loss" means a loss incurred by a person in the operation of a trade or business. "Net operating loss" does not include unutilized losses resulting from basis limitations, at-risk limitations, or passive activity loss limitations.

   (24)   (a)    "Net profit" for a person who is an individual means the individual's net profit required to be reported on schedule C, schedule E, or schedule F reduced by any net operating loss carried forward. For the purposes of division (C)(24)(a) of this Section, the net operating loss carried forward shall be calculated and deducted in the same manner as provided in division (C)(24)(c) of this Section.

      (b)    "Net profit" for a person other than an individual means adjusted federal taxable income reduced by any net operating loss incurred by the person in a taxable year beginning on or after January 1, 2017, subject to the limitations of division (C)(24)(c) of this section.

      (c)    (i)    The amount of such operating loss shall be deducted from net profit to the extent necessary to reduce municipal taxable income to zero, with any remaining unused portion of the net operating loss carried forward to not more than five (5) consecutive taxable years following the taxable year in which the loss was incurred, but in no case for more years than necessary for the deduction to be fully utilized.

         (ii)    No person shall use the deduction allowed by division (C)(24)(c) of this section to offset qualifying wages.

         (iii)   (a)    For taxable years beginning in 2018, 2019, 2020, 2021, or 2022, a person may not deduct more than fifty percent (50%) of the amount of the deduction otherwise allowed by division (C)(24)(c) of this section.

            (b)    For taxable years beginning in 2023 or thereafter, a person may deduct the full amount allowed by (C)(24)(c) of this section without regard to the limitation of division (C)(24)(c)(iii)(a) of this section.

         (iv)    Any pre-2017 net operating loss carryforward deduction that is available may be utilized before a taxpayer may deduct any amount pursuant to (C)(24)(c) of this section.

         (v)    Nothing in division (C)(24)(c)(iii)(a) of this section precludes a person from carrying forward, for use with respect to any return filed for a taxable year beginning after 2018, any amount of net operating loss that was not fully utilized by operation of division (C)(24)(c)(iii)(a) of this section. To the extent that an amount of net operating loss that was not fully utilized in one or more taxable years by operation of division (C)(24)(c)(iii)(a) of this section is carried forward for use with respect to a return filed for a taxable year beginning in 2019, 2020, 2021, or 2022, the limitation described in division (C)(24)(c)(iii)(a) of this section shall apply to the amount carried forward.

      (d)    For the purposes of this Chapter, and notwithstanding division (C)(24)(b) of this Section, net profit of a disregarded entity shall not be taxable as against that disregarded entity, but shall instead be included in the net profit of the owner of the disregarded entity.

      (e)    A publicly traded partnership that is treated as a partnership for federal income tax purposes, and that is subject to tax on its net profits by the Municipality, may elect to be treated as a C corporation for purposes of the income tax levied by the Municipality. The election shall be made on the annual return for the Municipality. The Municipality will treat the publicly traded partnership as a C corporation if the election is so made.

(Ord. 81-18. Passed 2-27-18.)

   (25)   "Nonresident" means an individual that is not a resident of the Municipality.

   (26)   "Ohio Business Gateway" means the online computer network system, created under Section 125.30 of the ORC, that allows persons to electronically file business reply forms with state agencies and includes any successor electronic filing and payment system.

   (27)   "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. "Other payer" includes casino operators and video lottery terminal sales agents.

   (28)   "Pass-through entity" means a partnership not treated as an association taxable as a C corporation for federal income tax purposes, a limited liability company not treated as an association taxable as a C corporation for federal income tax purposes, an S corporation, or any other class of entity from which the income or profits of the entity are given pass-through treatment for federal income tax purposes. "Pass-through entity" does not include a trust, estate, grantor of a grantor trust, or disregarded entity.

   (29) "Pension" means the following:

   (a)    Any amount paid to an employee or former employee that is reported to the recipient on an IRS form 1099-R, or successor form. Pension does not include deferred compensation, or amounts attributable to nonqualified deferred compensation plans, reported as FICA/Medicare wages on an IRS Form W-2, Wage and Tax Statement, or successor form. (Effective for tax years before January 1, 2020.)

   (b)   A retirement benefit plan, regardless of whether the plan satisfies the qualifications described under section 401(a) of the Internal Revenue code, including amounts that are taxable under the "Federal Insurance Contributions Act," Chapter 21 of the Internal Revenue Code, excluding employee contributions and elective deferrals, and regardless of whether such amounts are paid in the same taxable year in which the amounts are included in the employee's wages, as defined by section 3121(a) of the Internal Revenue Code. (Effective for tax years after January 1, 2020.)

   (c)   "Retirement Benefit Plan" means an arrangement whereby an entity provides benefits to individuals either on or after their termination of service because of retirement or disability. Retirement benefit plan does not include wage continuation payments, severance payments, or payments made for accrued personal or vacation time. (Effective for tax years beginning on or after January 1, 2020)

(Ord. 605-19. Passed 12-10-19)

   (30)   "Person" includes individuals, firms, companies, joint stock companies, business trusts, estates, trusts, partnerships, limited liability partnerships, limited liability companies, associations, C corporations, S corporations, governmental entities, and any other entity.

   (31)   "Postal service" means the United States postal service.

   (32)   "Postmark date," "date of postmark," and similar terms include the date recorded and marked in the manner described in division (B)(3) of Section 5703.056 of the ORC.

   (33)   (a)    "Pre-2017 net operating loss carryforward" means any net operating loss incurred in a taxable year beginning before January 1, 2017, to the extent such loss was permitted, by a resolution or ordinance of the Municipality that was adopted by the Municipality before January 1, 2016, to be carried forward and utilized to offset income or net profit generated in the Municipality in future taxable years.

      (b)    For the purpose of calculating municipal taxable income, any pre-2017 net operating loss carryforward may be carried forward to any taxable year, including taxable years beginning in 2017 or thereafter, for the number of taxable years provided in the resolution or ordinance or until fully utilized, whichever is earlier.

   (34)   "Publicly traded partnership" means any partnership, an interest in which is regularly traded on an established securities market. A "publicly traded partnership" may have any number of partners.

   (35)   "Qualifying wages" means wages, as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted as follows:

      (a)    Deduct the following amounts:

         (i)    Any amount included in wages if the amount constitutes compensation attributable to a plan or program described in Section 125 of the Internal Revenue Code.

         (ii)    Any amount included in wages if the amount constitutes payment on account of a disability related to sickness or an accident paid by a party unrelated to the employer, agent of an employer, or other payer.

         (iii)   Any amount included in wages that is exempt income.

      (b)    Add the following amounts:

         (i)    Any amount not included in wages solely because the employee was employed by the employer before April 1, 1986.

         (ii)    Any amount not included in wages because the amount arises from the sale, exchange, or other disposition of a stock option, the exercise of a stock option, or the sale, exchange, or other disposition of stock purchased under a stock option. Division (C)(35)(b)(ii) of this Section applies only to those amounts constituting ordinary income.

         (iii) Any amount not included in wages if the amount is an amount described in section 401(k), 403(b), or 457 of the Internal Revenue Code. Division (C)(35)(b)(iii) of this Section applies only to employee contributions and employee deferrals.

         (iv)    Any amount that is supplemental unemployment compensation benefits described in Section 3402(o)(2) of the Internal Revenue Code and not included in wages.

         (v)    Any amount received that is treated as self-employment income for federal tax purposes in accordance with Section 1402(a)(8) of the Internal Revenue Code.

         (vi)    Any amount not included in wages if all of the following apply:

            (a)    For the taxable year the amount is employee compensation that is earned outside the United States and that either is included in the taxpayer's gross income for federal income tax purposes or would have been included in the taxpayer's gross income for such purposes if the taxpayer did not elect to exclude the income under Section 911 of the Internal Revenue Code;

            (b)    For no preceding taxable year did the amount constitute wages as defined in Section 3121(a) of the Internal Revenue Code;

            (c)    For no succeeding taxable year will the amount constitute wages; and

            (d)    For any taxable year the amount has not otherwise been added to wages pursuant to either division (C)(35)(b) of this Section or ORC Section 718.03, as that Section existed before the effective date of H.B. 5 of the 130th General Assembly, March 23, 2015.

   (36)   "Related entity" means any of the following:

   (a)    An individual stockholder, or a member of the stockholder's family enumerated in Section 318 of the Internal Revenue Code, if the stockholder and the members of the stockholder's family own directly, indirectly, beneficially, or constructively, in the aggregate, at least fifty percent (50%) of the value of the taxpayer's outstanding stock;

(Ord. 354-16. Passed 9-27-16.)

      (b)    A stockholder, or a stockholder's partnership, estate, trust, or corporation, if the stockholder and the stockholder's partnerships, estates, trusts, or corporations own directly, indirectly, beneficially, or constructively, in the aggregate, at least fifty percent (50%) of the value of the taxpayer's outstanding stock;

      (c)    A corporation, or a party related to the corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under division (C)(36)(d) of this section, provided the taxpayer owns directly, indirectly, beneficially, or constructively, at least fifty percent of the value of the corporation's outstanding stock;

      (d)    The attribution rules described in Section 318 of the Internal Revenue Code apply for the purpose of determining whether the ownership requirements in divisions (C)(36)(a) to (c) of this Section have been met.

   (37)   "Related member" means a person that, with respect to the taxpayer during all or any portion of the taxable year, is either a related entity, a component member as defined in Section 1563(b) of the Internal Revenue Code, or a person to or from whom there is attribution of stock ownership in accordance with Section 1563(e) of the Internal Revenue Code except, for purposes of determining whether a person is a related member under this division, " twenty percent (20%)" shall be substituted for "five percent (5%)" wherever "five percent (5%)" appears in Section 1563(e) of the Internal Revenue Code.

   (38)   "Resident" means an individual who is domiciled in the municipal corporation as determined under division (E) of Section 1905.03 .

   (39)   "S corporation" means a person that has made an election under subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code for its taxable year.

   (40)   "Schedule C" means internal revenue service schedule C (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

   (41)   "Schedule E" means internal revenue service schedule E (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

   (42)   "Schedule F" means internal revenue service schedule F (form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.

   (43)   "Single member limited liability company" means a limited liability company that has one direct member.

   (44)   "Small employer" means any employer that had total revenue of less than $500,000 during the preceding taxable year. For purposes of this division, "total revenue" means receipts of any type or kind, including, but not limited to, sales receipts; payments; rents; profits; gains, dividends, and other investment income; compensation; commissions; premiums; money; property; grants; contributions; donations; gifts; program service revenue; patient service revenue; premiums; fees, including premium fees and service fees; tuition payments; unrelated business revenue; reimbursements; any type of payment from a governmental unit, including grants and other allocations; and any other similar receipts reported for federal income tax purposes or under generally accepted accounting principles. "Small employer" does not include the federal government; any state government, including any state agency or instrumentality; any political subdivision; or any entity treated as a government for financial accounting and reporting purposes.

   (45a)   "Tax Administrator" means the Commissioner of Taxation, which is the person so designated and appointed by the Mayor and approved by Council, or the person executing the duties of the "Tax Administrator" for administration of the income tax levied by the Municipality in accordance with this Chapter.

   (45b)   "Tax commissioner" means the tax commissioner appointed under section 121.03 of the Revised Code.

(Ord. 81-18. Passed 2-27-18.)

   (46)   "Tax return preparer" means any individual described in Section 7701(a)(36) of the Internal Revenue Code and 26 C.F.R. 301.7701-15 .

   (47)   "Taxable year" means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code.

   (48) (a)    "Taxpayer" means a person subject to the tax levied on municipal taxable income by the Municipality in accordance with this Chapter. "Taxpayer" does not include a grantor trust or, except as provided in division (C)(48)(b)(i) of this Section, a disregarded entity. No business entity is subject to Section 1905.02 (C)(48)(b)(i).

(Ord. 354-16. Passed 9-27-16.)

      (b)    (i)    A single member limited liability company that is a disregarded entity for federal tax purposes may be a separate taxpayer from its single member in all Ohio municipal corporations in which it either filed as a separate taxpayer or did not file for its taxable year ending in 2003, if all of the following conditions are met:

            (a)    The limited liability company's single member is also a limited liability company.

            (b)    The limited liability company and its single member were formed and doing business in one or more Ohio municipal corporations for at least five years before January 1, 2004.

            (c)    Not later than December 31, 2004, the limited liability company and its single member each made an election to be treated as a separate taxpayer under division (L) of ORC 718.01 as that section existed on December 31, 2004.

            (d)    The limited liability company was not formed for the purpose of evading or reducing Ohio municipal corporation income tax liability of the limited liability company or its single member.

            (e)    The Ohio municipal corporation that was the primary place of business of the sole member of the limited liability company consented to the election.

         (ii)    For purposes of division (C)(48)(b)(i)(e) of this Section, a municipal corporation was the primary place of business of a limited liability company if, for the limited liability company's taxable year ending in 2003, its income tax liability was greater in that municipal corporation than in any other municipal corporation in Ohio, and that tax liability to that municipal corporation for its taxable year ending in 2003 was at least $400,000.

   (49)   "Taxpayers' rights and responsibilities" means the rights provided to taxpayers in Sections 1905.063 , 1905.066 , 1905.067 , 1905.09 (B), 1905.091 , 1905.13 , and Sections 5717.011 and 5717.03 of the ORC, and the responsibilities of taxpayers to file, report, withhold, remit, and pay municipal income tax and otherwise comply with Chapter 718 of the ORC and resolutions, ordinances, and rules and regulations adopted by the Municipality for the imposition and administration of a municipal income tax.

   (50)   "Video lottery terminal" has the same meaning as in Section 3770.21 of the ORC.

   (51)   "Video lottery terminal sales agent" means a lottery sales agent licensed under Chapter 3770 of the ORC to conduct video lottery terminals on behalf of the state pursuant to Section 3770.21 of the ORC.

(Ord. 576-15. Passed 12-8-15.)

1905.03. Imposition of Tax.

   The income taxes provided for in Section 1905.01 shall be levied on the municipal taxable income of every person who resides in or who earns or receives income in the Municipality.

Individuals.

   (A)    For residents of the Municipality, the income tax levied herein shall be on all municipal taxable income, as set forth in Section 1905.02(C)(21)(a)(ii)(a).

   (B)    For nonresidents, the income tax levied herein shall be on all municipal taxable income, as set forth in Section 1905.02(C)(21)(a)(ii)(b).

   (C)    For a person other than an individual, the income tax levied herein shall be on all municipal taxable income, as set forth in Section 1905.02(C)(21)(a)(i).

Refundable credit for Nonqualified Deferred Compensation Plan.

   (D)    (1)    As used in this division:

         (a)    "Nonqualified deferred compensation plan" means a compensation plan described in Section 3121(v)(2)(C) of the Internal Revenue Code.

         (b)    "Qualifying loss" means the amount of compensation attributable to a taxpayer's nonqualified deferred compensation plan, less the receipt of money and property attributable to distributions from the nonqualified deferred compensation plan. Full loss is sustained if no distribution of money and property is made by the nonqualified deferred compensation plan. The taxpayer sustains a qualifying loss only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.

         (c)    (i)    "Qualifying tax rate" means the applicable tax rate for the taxable year for the which the taxpayer paid income tax to the Municipality with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.

            (ii)    If different tax rates applied for different taxable years, then the "qualifying tax rate" is a weighted average of those different tax rates. The weighted average shall be based upon the tax paid to the Municipality each year with respect to the nonqualified deferred compensation plan.

         (d)    "Refundable credit" means the amount of the Municipality's income tax that was paid on the non-distributed portion, if any, of a nonqualified deferred compensation plan.

      (2)    If, in addition to the income tax levied by the Municipality, a taxpayer has paid tax to other municipal corporations with respect to the nonqualified deferred compensation plan, the amount of the credit that a taxpayer may claim from each municipal corporation shall be calculated on the basis of each municipal corporation's proportionate share of the total municipal corporation income tax paid by the taxpayer to all municipal corporations with respect to the nonqualified deferred compensation plan.

      (3)    In no case shall the amount of the credit allowed under this section exceed the cumulative income tax that a taxpayer has paid to the Municipality for all taxable years with respect to the nonqualified deferred compensation plan.

      (4)    The credit allowed under this division is allowed only to the extent the taxpayer's qualifying loss is attributable to:

         (a)    The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or

         (b)    The employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified deferred compensation.

Domicile.

   (E)    (1)    (a)    An individual is presumed to be domiciled in the Municipality for all or part of a taxable year if the individual was domiciled in the Municipality on the last day of the immediately preceding taxable year or if the Tax Administrator reasonably concludes that the individual is domiciled in the Municipality for all or part of the taxable year.

         (b)    An individual may rebut the presumption of domicile described in division (E)(1)(a) of this section if the individual establishes by a preponderance of the evidence that the individual was not domiciled in the Municipality for all or part of the taxable year.

      (2)    For the purpose of determining whether an individual is domiciled in the Municipality for all or part of a taxable year, factors that may be considered include, but are not limited to, the following:

         (a)    The individual's domicile in other taxable years;

         (b)    The location at which the individual is registered to vote;

         (c)    The address on the individual's driver's license;

         (d)    The location of real estate for which the individual claimed a property tax exemption or reduction allowed on the basis of the individual's residence or domicile;

         (e)    The location and value of abodes owned or leased by the individual;

         (f)    Declarations, written or oral, made by the individual regarding the individual's residency;

         (g)    The primary location at which the individual is employed;

         (h)    The location of educational institutions attended by the individual's dependents as defined in Section 152 of the Internal Revenue Code, to the extent that tuition paid to such educational institution is based on the residency of the individual or the individual's spouse in the municipal corporation where the educational institution is located;

         (i)    The number of contact periods the individual has with the Municipality. For the purposes of this division, an individual has one "contact period" with the Municipality if the individual is away overnight from the individual's abode located outside of the Municipality and while away overnight from that abode spends at least some portion, however minimal, of each of two consecutive days in the Municipality.

      (3)    All additional applicable factors are provided in the Rules and Regulations.

Businesses.

   (F)    This division applies to any taxpayer engaged in a business or profession in the Municipality, unless the taxpayer is a resident or the taxpayer is an electric company, combined company, or telephone company that is subject to and required to file reports under Chapter 5745 of the ORC.

      (1)    Except as otherwise provided in division (F)(2) and (G) of this Section, net profit from a business or profession conducted both within and without the boundaries of the Municipality shall be considered as having a taxable situs in the Municipality for purposes of municipal income taxation in the same proportion as the average ratio of the following:

         (a)    The average original cost of the real property and tangible personal property owned or used by the taxpayer in the business or profession in the Municipality 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.

         As used in the preceding paragraph, tangible personal or 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 individuals employed in the business or profession for services performed in the Municipality to wages, salaries, and other compensation paid during the same period to individuals employed in the business or profession, wherever the individual's services are performed, excluding compensation from which taxes are not required to be withheld under division (C) of Section 1905.06;

         (c)    Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the Municipality to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.

      (2)    (a)    If the apportionment factors described in division (F)(1) of this Section do not fairly represent the extent of a taxpayer's business activity in the Municipality, the taxpayer may request, or the Tax Administrator of the Municipality may require, that the taxpayer use, with respect to all or any portion of the income of the taxpayer, an alternative apportionment method involving one or more of the following:

            (i)    Separate accounting;

            (ii)    The exclusion of one or more of the factors;

            (iii)    The inclusion of one or more additional factors that would provide for a more fair apportionment of the income of the taxpayer to the municipal corporation;

            (iv)    A modification of one or more of the factors.

         (b)    A taxpayer request to use an alternative apportionment method shall be in writing and shall accompany a tax return, timely filed appeal of an assessment, or timely filed amended tax return. The taxpayer may use the requested alternative method unless the Tax Administrator denies the request in an assessment issued within the period prescribed by division (A) of Section 1905.066.

         (c)    The Tax Administrator may require a taxpayer to use an alternative apportionment method as described in division (F)(2)(a) of this Section, but only by issuing an assessment to the taxpayer within the period prescribed by division (A) of Section 1905.066.

         (d)    Nothing in division (F)(2) of this section nullifies or otherwise affects any alternative apportionment arrangement approved by the Tax Administrator or otherwise agreed upon by both the Tax Administrator and taxpayer before January 1, 2016.

      (3)    As used in division (F)(1)(b) of this Section, "wages, salaries, and other compensation" includes only wages, salaries, or other compensation paid to an employee for services performed at any of the following locations:

         (a)    A location that is owned, controlled, or used by, rented to, or under the possession of one of the following:

            (i)    The employer;

            (ii)    A vendor, customer, client, or patient of the employer, or a related member of such a vendor, customer, client, or patient;

            (iii)    A vendor, customer, client, or patient of a person described in (F)(3)(a)(ii) of this Section, or a related member of such a vendor, customer, client, or patient.

         (b)    Any location at which a trial, appeal, hearing, investigation, inquiry, review, court-martial, or similar administrative, judicial, or legislative matter or proceeding is being conducted, provided that the compensation is paid for services performed for, or on behalf of, the employer or that the employee's presence at the location directly or indirectly benefits the employer;

         (c)    Any other location, if the Tax Administrator determines that the employer directed the employee to perform the services at the other location in lieu of a location described in division (F)(3)(a) or (b) of this Section solely in order to avoid or reduce the employer's municipal income tax liability. If the Tax Administrator makes such a determination, the employer may dispute the determination by establishing, by a preponderance of the evidence, that the Tax Administrator's determination was unreasonable.

      (4)    For the purposes of division (F)(1)(c) of this Section, receipts from sales and rentals made and services performed shall be sitused to a municipal corporation as follows:

         (a)    Gross receipts from the sale of tangible personal property shall be sitused to the municipal corporation in which the sale originated. For the purposes of this division, a sale of property originates in the Municipality if, regardless of where title passes, the property meets any of the following criteria; however, for tax years beginning on or after January 1, 2018, gross receipts from the sale of tangible personal property shall be sitused to the municipal corporation only if, regardless of where title passes, the property meets either the provisions of (F)(4)(a)(i) or (F)(4)(a)(ii):

            (i)    The property is shipped to or delivered within the Municipality from a stock of goods located within the Municipality.

            (ii)    The property is delivered within the Municipality from a location outside the Municipality, provided the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Municipality and the sales result from such solicitation or promotion.

            (iii)    The property is shipped from a place within the Municipality to purchasers outside the Municipality, provided that the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made. Division (F)(4)(a)(iii) applies only to tax years prior to the taxable year beginning January 1, 2018.

(Ord. 81-18. Passed 2-27-18.)

         (b)    Gross receipts from the sale of services shall be sitused to the Municipality to the extent that such services are performed in the Municipality.

         (c)    To the extent included in income, gross receipts from the sale of real property located in the Municipality shall be sitused to the Municipality.

         (d)    To the extent included in income, gross receipts from rents and royalties from real property located in the Municipality shall be sitused to the Municipality.

         (e)    Gross receipts from rents and royalties from tangible personal property shall be sitused to the Municipality based upon the extent to which the tangible personal property is used in the Municipality.

      (5)    The net profit received by an individual taxpayer from the rental of real estate owned directly by the individual, or by a disregarded entity owned by the individual, shall be subject to the Municipality's tax only if the property generating the net profit is located in the Municipality or if the individual taxpayer that receives the net profit is a resident of the Municipality. The Municipality shall allow such taxpayers to elect to use separate accounting for the purpose of calculating net profit sitused under this division to the municipal corporation in which the property is located.

      (6)    (a)    Commissions received by a real estate agent or broker relating to the sale, purchase, or lease of real estate shall be sitused to the municipal corporation in which the real estate is located. Net profit reported by the real estate agent or broker shall be allocated to the Municipality, if applicable, based upon the ratio of the commissions the agent or broker received from the sale, purchase, or lease of real estate located in the Municipality to the commissions received from the sale, purchase, or lease of real estate everywhere in the taxable year.

         (b)    An individual who is a resident of the Municipality shall report the individual's net profit from all real estate activity on the individual's annual income tax return filed with the Municipality. The individual may claim a credit for taxes the individual paid on such net profit to another municipal corporation to the extent that such a credit is allowed under this Chapter.

      (7)    When calculating the ratios described in division (F)(1) of this Section for the purposes of that division or division (F)(2) of this Section, the owner of a disregarded entity shall include in the owner's ratios the property, payroll, and gross receipts of such disregarded entity.

   (G)    (1)    As used in this division:

         (a)    "Qualifying remote employee or owner" means an individual who is an employee of a taxpayer or who is a partner or member holding an ownership interest in a taxpayer that is treated as a partnership for federal income tax purposes, provided that the individual meets both of the following criteria:

            (i)    The taxpayer has assigned the individual to a qualifying reporting location.

            (ii)    The individual is permitted or required to perform services for the taxpayer at a qualifying remote work location.

         (b)    "Qualifying remote work location" means a permanent or temporary location at which an employee or owner chooses or is required to perform services for the taxpayer, other than a reporting location of the taxpayer or any other location owned or controlled by a customer or client of the taxpayer. "Qualifying remote work location" may include the residence of an employee or owner and may be located outside of a municipal corporation that imposes an income tax in accordance with this chapter. An employee or owner may have more than one qualifying remote work location during a taxable year.

         (c)    "Reporting location" means either of the following:

            (i)    A permanent or temporary place of doing business, such as an office, warehouse, storefront, construction site, or similar location, that is owned or controlled directly or indirectly by the taxpayer;

            (ii)    Any location in this state owned or controlled by a customer or client of the taxpayer, provided that the taxpayer is required to withhold taxes under Section 1905.06(A) on qualifying wages paid to an employee for the performance of personal services at that location.

         (d)    "Qualifying reporting location" means one of the following:

            (i)    The reporting location in this state at which an employee or owner performs services for the taxpayer on a regular or periodic basis during the taxable year;

            (ii)    If no reporting location exists in this state for an employee or owner under division (G)(1)(d)(i) of this section, the reporting location in this state at which the employee's or owner's supervisor regularly or periodically reports during the taxable year;

            (iii)    If no reporting location exists in this state for an employee or owner under division (G)(1)(d)(i) or (ii) of this section, the location that the taxpayer otherwise assigns as the employee's or owner's qualifying reporting location, provided the assignment is made in good faith and is recorded and maintained in the taxpayer's business records. A taxpayer may change the qualifying reporting location designated for an employee or owner under this division at any time.

      (2)    For tax years ending on or after December 31, 2023, a taxpayer may elect to apply the provisions of this division to the apportionment of its net profit from a business or profession. For taxpayers that make this election, the provisions of division (F) of this section apply to such apportionment except as otherwise provided in this division.

   A taxpayer shall make the election allowed under this division in writing on or with the taxpayer's net profit return or, if applicable, a timely filed amended net profit return or a timely filed appeal of an assessment. The election applies to the taxable year for which that return or appeal is filed and for all subsequent taxable years, until the taxpayer revokes the election.

   The taxpayer shall make the initial election with the tax administrator of each municipal corporation with which, after applying the apportionment provisions authorized in this division, the taxpayer is required to file a net profit tax return for that taxable year. A taxpayer shall not be required to notify the tax administrator of a municipal corporation in which a qualifying remote employee's or owner's qualifying remote work location is located, unless the taxpayer is otherwise required to file a net profit return with that municipal corporation due to business operations that are unrelated to the employee's or owner's activity at the qualifying remote work location.

   After the taxpayer makes the initial election, the election applies to every municipal corporation in which the taxpayer conducts business. The taxpayer shall not be required to file a net profit return with a municipal corporation solely because a qualifying remote employee's or owner's qualifying remote work location is located in such municipal corporation.

   Nothing in this division prohibits a taxpayer from making a new election under this division after properly revoking a prior election.

      (3)    For the purpose of calculating the ratios described in division (F)(1) of this section, all of the following apply to a taxpayer that has made the election described in division (G)(2):

         (a)    For the purpose of division (F)(1)(a) of this section, the average original cost of any tangible personal property used by a qualifying remote employee or owner at that individual's qualifying remote work location shall be sitused to that individual's qualifying reporting location.

         (b)    For the purpose of division (F)(1)(b) of this section, any wages, salaries, and other compensation paid during the taxable period to a qualifying remote employee or owner for services performed at that individual's qualifying remote work location shall be sitused to that individual's qualifying reporting location.

         (c)    For the purpose of division (F)(1)(c) of this section, and notwithstanding division (F)(4) of this section, any gross receipts of the business or profession from services performed during the taxable period by a qualifying remote employee or owner for services performed at that individual's qualifying remote work location shall be sitused to that individual's qualifying reporting location.

      (4)    Nothing in this division prevents a taxpayer from requesting, or a tax administrator from requiring, that the taxpayer use, with respect to all or a portion of the income of the taxpayer, an alternative apportionment method as described in division (F)(2) of this section. However, a tax administrator shall not require an alternative apportionment method in such a manner that it would require a taxpayer to file a net profit return with a municipal corporation solely because a qualifying remote employee's or owner's qualifying remote work location is located in that municipal corporation.

      (5)    Except as otherwise provided in this division, nothing in this division is intended to affect the withholding of taxes on qualifying wages pursuant to Section 1905.06(A).

(Ord. 576-15. Passed 12-8-15; Ord. 650-23. Passed 12-19- 23.)

1905.05. Return and payment of tax.

   (A)    (1)    An annual income tax return shall be completed and filed with the Municipality by every taxpayer for any taxable year for which the taxpayer is subject to the tax, unless exempted under division (A)(2) of this Section.

      (2)    (a)    Any resident or nonresident taxpayer whose sole income subject to tax by the Municipality is qualifying wages, and tax has been fully withheld on those wages, is exempt from filing an annual income tax return with the Municipality or a nonresident who has gambling income from which the City of Toledo tax has been fully withheld is exempt from filing an annual income tax return with the Municipality.

(Ord. 354-16. Passed 9-27-16.)

         (b)    The Tax Administrator shall accept a return filed by an employer, agent of an employer, or other payer located in the Municipality for all residents and nonresidents that meet the exemption in division (2)(a).

   (B)    If an individual is deceased, any return or notice required of that individual shall be completed and filed by that decedent's executor, administrator, or other person charged with the property of that decedent.

   (C)    If an individual is unable to complete and file a return or notice required by the Municipality, the return or notice required of that individual shall be completed and filed by the individual's duly authorized agent, guardian, conservator, fiduciary, or other person charged with the care of the person or property of that individual. Such duly authorized agent, guardian, conservator, fiduciary, or other person charged with the care of the person or property of that individual shall provide, with the filing of the return, appropriate documentation to support that they are authorized to file a return or notice on behalf of the taxpayer. This notice shall include any legally binding authorizations, and contact information including name, address, and phone number of the duly authorized agent, guardian, conservator, fiduciary, or other person.

   (D)    Returns or notices required of an estate or a trust shall be completed and filed by the fiduciary of the estate or trust.

   (E)    The Municipality shall permit spouses to file a joint return.

   (F)    (1)    Each return required to be filed under this division shall contain the signature of the taxpayer or the taxpayer's duly authorized agent and of the person who prepared the return for the taxpayer. The return shall include the taxpayer's social security number or taxpayer identification number. Each return shall be verified by a declaration under penalty of perjury.

      (2)    The Tax Administrator shall require a taxpayer who is an individual to include, with each annual return, and amended return, copies of the following documents: all of the taxpayer's Internal Revenue Service form W-2, "Wage and Tax Statements," including all information reported on the taxpayer's federal W-2, as well as taxable wages reported or withheld for any municipal corporation; the taxpayer's Internal Revenue Service form 1040 or, in the case of a return or request required by a qualified municipal corporation, Ohio form IT-1040; and, with respect to an amended tax return, any other documentation necessary to support the adjustments made in the amended return. An individual taxpayer who files the annual return required by this section electronically is not required to provide paper copies of any of the foregoing to the Tax Administrator unless the Tax Administrator requests such copies after the return has been filed.

(Ord. 81-18. Passed 2-27-18.)

      (3)    The Tax Administrator may require a taxpayer that is not an individual to include, with each annual net profit return, amended net profit return, or request for refund required under this section, copies of only the following documents: the taxpayer's Internal Revenue Service form 1041, form 1065, form 1120, form 1120-REIT, form 1120F, or form 1120S, and, with respect to an amended tax return or refund request, any other documentation necessary to support the refund request or the adjustments made in the amended return.

      A taxpayer that is not an individual and that files an annual net profit return electronically through the Ohio Business Gateway or in some other manner shall either mail the documents required under this division to the Tax Administrator at the time of filing or, if electronic submission is available, submit the documents electronically through the Ohio Business Gateway.

      (4)    After a taxpayer files a tax return, the Tax Administrator may request, and the taxpayer shall provide, any information, statements, or documents required by the Municipality to determine and verify the taxpayer's municipal income tax liability. The requirements imposed under division (F) of this Section apply regardless of whether the taxpayer files on a generic form or on a form prescribed by the Tax Administrator.

   (G)    (1)    (a)    Except as otherwise provided in this chapter, each individual income tax return required to be filed under this Section shall be completed and filed as required by the Tax Administrator on or before the date prescribed for the filing of state individual income tax returns under division (G) of Section 5747.08 of the ORC. The taxpayer shall complete and file the return or notice on forms prescribed by the Tax Administrator or on generic forms, together with remittance made payable to the Municipality. No remittance is required if the net amount due is ten dollars or less.

         (b)    Except as otherwise provided in this Chapter, each annual net profit return required to be filed under this Section by a taxpayer that is not an individual shall be completed and filed as required by the Tax Administrator on or before the fifteenth day (15th) of the fourth month following the end of the taxpayer's taxable year. The taxpayer shall complete and file the return or notice on forms prescribed by the Tax Administrator or on generic forms, together with remittance made payable to the Municipality. No remittance is required if the net amount due is ten dollars or less.

      (2)    Any taxpayer that has duly requested an automatic six- month extension for filing the taxpayer's federal income tax return shall automatically receive an extension for the filing of the income tax return required under this Chapter. The extended due date of the income tax return required under this Chapter shall be the 15th day of the tenth month after the last day of the taxable year to which the return relates. For tax years ending on or after January 1, 2023, the extended due date of the Municipality's income tax return for a taxpayer that is not an individual shall be the 15th day of the eleventh month after the last day of the taxable year to which the return relates. An extension of time to file under this division is not an extension of the time to pay any tax due unless the Tax Administrator grants an extension of that date.

         (a)    A copy of the federal extension request shall be included with the filing of the income tax return required under this Chapter.

         (b)    A taxpayer that has not requested or received a six-month extension for filing the taxpayer's federal income tax return may submit a written request that the Tax Administrator grant the taxpayer a six-month extension of the date for filing the taxpayer's income tax return required under this Chapter. If the request is received by the Tax Administrator on or before the date the income tax return required under this Chapter is due, the Tax Administrator shall grant the taxpayer's requested extension.

      (3)    If the Ohio tax commissioner extends for all taxpayers the date for filing state income tax returns under division (G) of Section 5747.08 of the ORC, a taxpayer shall automatically receive an extension of the due date for the filing of the income tax return required under this Chapter. The extended due date of the return required under this Chapter shall be the same as the extended due date of the state income tax return.

      (4)    If the Tax Administrator considers it necessary in order to ensure the payment of the tax imposed by this Chapter, the Tax Administrator may require taxpayers to file returns and make payments otherwise than as provided in this division, including taxpayers not otherwise required to file annual returns.

      (5)    If a taxpayer receives an extension for the filing of a municipal income tax return under division (G)(2), (3), or (4) of this section, the tax administrator shall not make any inquiry or send any notice to the taxpayer with regard to the return on or before the date the taxpayer files the return or on or before the extended due date to file the return, whichever occurs first.

      If a tax administrator violates division (G)(5) of this section, the municipal corporation shall reimburse the taxpayer for any reasonable costs incurred to respond to such inquiry or notice, up to $150.

      Division (G)(5) of this section does not apply to an extension received under division (G)(2) of this section if the tax administrator has actual knowledge that the taxpayer failed to file for a federal extension as required to receive the extension under division (G)(2) of this section or failed to file for an extension under division (G)(2)(b) of this section.

      (6)    To the extent that any provision in this division (G) of this Section conflicts with any provision in divisions (N), (O), (P), or (Q) of this section, the provisions in divisions (N), (O), (P), or (Q) prevail.

(Ord. 650-23. Passed 12-19-23.)

   (H)    (1)    For taxable years beginning after 2015, the Municipality shall not require a taxpayer to remit tax with respect to net profits if the net amount due is ten dollars or less.

      (2)    Any taxpayer not required to remit tax to the Municipality for a taxable year pursuant to division (H)(1) of this Section shall file with the Municipality an annual net profit return under division (F)(3) of this Section, unless the provisions of division (H)(3) apply.

      (3)    (a)    A person may notify the Tax Administrator that the person does not expect to be a taxpayer subject to The Municipality's income tax ordinance for a taxable year if both the following apply:

            (i)    The person was required to file a tax return with the Municipality for the immediately preceding taxable year because the person performed services at a worksite location (as defined in Section 4(C)(1)(g)) within the Municipality.

            (ii)    The person no longer provides services in the Municipality and does not expect to be subject to the Municipality's income tax for the taxable year.

         (b)    The person shall provide the notice in a signed affidavit that briefly explains the person's circumstances, including the location of the previous worksite location and the last date on which the person performed services or made any sales within the Municipality. The affidavit shall also include the following statement: "The affiant has no plans to perform any services within the Municipality, make any sales in the Municipality, or otherwise become subject to the tax levied by the Municipality during the taxable year. If the affiant does become subject to the tax levied by the Municipality for the taxable year, the affiant agrees to be considered a taxpayer and to properly comply as a taxpayer with the Municipality's income tax ordinance and rules and regulations." The person shall sign the affidavit under penalty of perjury.

         (c)    If a person submits an affidavit described in division (H)(3)(b) the Tax Administrator shall not require the person to file a tax return for the taxable year unless the Tax Administrator possesses information that conflicts with the affidavit or if the circumstances described in the affidavit change.

         (d)    Nothing in division (H)(3) of this section prohibits the Tax Administrator from performing an audit of the person.

(Ord. 81-18. Passed 2-27-18.)

   (I)    If a payment under this Chapter is made by electronic funds transfer, the payment shall be considered to be made on the date of the timestamp assigned by the first electronic system receiving that payment.

(Ord. 354-16. Passed 9-27-16.)

   (J)    Taxes withheld for the Municipality by an employer, the agent of an employer, or other payer as described in Section 1905.06 shall be allowed to the taxpayer as credits against payment of the tax imposed on the taxpayer by the Municipality, unless the amounts withheld were not remitted to the Municipality and the recipient colluded with the employer, agent, or other payer in connection with the failure to remit the amounts withheld.

   (K)    Each return required by the Municipality to be filed in accordance with this division shall include a box that the taxpayer may check to authorize another person, including a tax return preparer who prepared the return, to communicate with the Tax Administrator about matters pertaining to the return.

   (L)    The Tax Administrator shall accept for filing a generic form of any income tax return, report, or document required by the Municipality, provided that the generic form, once completed and filed, contains all of the information required by ordinance, resolution, or rules and regulations adopted by the Municipality or the Tax Administrator, and provided that the taxpayer or tax return preparer filing the generic form otherwise complies with the provisions of this Chapter and of the Municipality's ordinance, resolution, or rules and regulations governing the filing of returns, reports, or documents.

Filing via Ohio Business Gateway.

   (M)   (1)    Any taxpayer subject to the taxes imposed by this Chapter with respect to the taxpayer's net profit from a business or profession may file the income tax return required by this Chapter, the estimated municipal income tax return, or extension for filing the municipal income tax return, and may make payment of amounts shown to be due on such returns, by using the Ohio Business Gateway.

      (2)    Any employer, agent of an employer, or other payer may report the amount of municipal income tax withheld from qualifying wages, and may make remittance of such amounts, by using the Ohio Business Gateway.

      (3)    Nothing in this section affects the due dates for filing employer withholding tax returns.

Extension for service in or for the armed forces.

   (N)    Each member of the national guard of any state and each member of a reserve component of the armed forces of the United States called to active duty pursuant to an executive order issued by the president of the United States or an act of the congress of the United States, and each civilian serving as support personnel in a combat zone or contingency operation in support of the armed forces, may apply to the Tax Administrator of the Municipality for both an extension of time for filing of the return and an extension of time for payment of taxes required by the Municipality during the period of the member's or civilian's duty service, and for 180 days thereafter. The application shall be filed on or before the one hundred eightieth day after the member's or civilian's duty terminates. An applicant shall provide such evidence as the Tax Administrator considers necessary to demonstrate eligibility for the extension.

   (O)    (1)    If the Tax Administrator ascertains that an applicant is qualified for an extension under this section, the Tax Administrator shall enter into a contract with the applicant for the payment of the tax in installments that begin on the 181st day after the applicant's active duty or service terminates. The Tax Administrator may prescribe such contract terms as the Tax Administrator considers appropriate.

      (2)    If the Tax Administrator determines that an applicant is qualified for an extension under this section, the applicant shall neither be required to file any return, report, or other tax document nor be required to pay any tax otherwise due to the Municipality before the 181st day after the applicant's active duty or service terminates.

      (3)    Taxes paid pursuant to a contract entered into under division (O)(1) of this Section are not delinquent. The Tax Administrator shall not require any payments of penalties or interest in connection with those taxes for the extension period.

   (P)    (1)    Nothing in this division denies to any person described in this division the application of divisions (N) and (O) of this Section.

      (2)    (a)    A qualifying taxpayer who is eligible for an extension under the Internal Revenue Code shall receive both an extension of time in which to file any return, report, or other tax document and an extension of time in which to make any payment of taxes required by the Municipality in accordance with this chapter. The length of any extension granted under this division (P)(2)(a) shall be equal to the length of the corresponding extension that the taxpayer receives under the Internal Revenue Code. As used in this division, "qualifying taxpayer" means a member of the national guard or a member of a reserve component of the armed forces of the United States called to active duty pursuant to either an executive order issued by the president of the United States or an act of the congress of the United States, or a civilian serving as support personnel in a combat zone or contingency operation in support of the armed forces.

         (b)    Taxes whose payment is extended in accordance with division (P)(2)(a) of this Section are not delinquent during the extension period. Such taxes become delinquent on the first day after the expiration of the extension period if the taxes are not paid prior to that date. The Tax Administrator shall not require any payment of penalties or interest in connection with those taxes for the extension period. The Tax Administrator shall not include any period of extension granted under division (C)(2)(a) of this Section in calculating the penalty or interest due on any unpaid tax.

   (Q)    For each taxable year to which division (N), (O), or (P) of this Section applies to a taxpayer, the provisions of divisions (O)(2) and (3) of this Section, as applicable, apply to the spouse of that taxpayer if the filing status of the spouse and the taxpayer is married filing jointly for that year.

Consolidated municipal income tax return.

   (R)    As used in this section:

      (1)    "Affiliated group of corporations" means an affiliated group as defined in Section 1504 of the Internal Revenue Code, except that, if such a group includes at least one incumbent local exchange carrier that is primarily engaged in the business of providing local exchange telephone service in this state, the affiliated group shall not include any incumbent local exchange carrier that would otherwise be included in the group.

      (2)    "Consolidated federal income tax return" means a consolidated return filed for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code.

      (3)    "Consolidated federal taxable income" means the consolidated taxable income of an affiliated group of corporations, as computed for the purposes of filing a consolidated federal income tax return, before consideration of net operating losses or special deductions. "Consolidated federal taxable income" does not include income or loss of an incumbent local exchange carrier that is excluded from the affiliated group under division (R)(1) of this section.

      (4)    "Incumbent local exchange carrier" has the same meaning as in Section 4927.01 of the ORC.

      (5)    "Local exchange telephone service" has the same meaning as in Section 5727.01 of the ORC.

   (S)    (1)    For taxable years beginning on or after January 1, 2016, a taxpayer that is a member of an affiliated group of corporations may elect to file a consolidated municipal income tax return for a taxable year if at least one member of the affiliated group of corporations is subject to the Municipality's income tax in that taxable year, and if the affiliated group of corporations filed a consolidated federal income tax return with respect to that taxable year. The election is binding for a five-year period beginning with the first taxable year of the initial election unless a change in the reporting method is required under federal law. The election continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing consolidated municipal income tax returns under division (S)(2) of this Section or a taxpayer receives permission from the Tax Administrator. The Tax Administrator shall approve such a request for good cause shown.

      (2)    An election to discontinue filing consolidated municipal income tax returns under this section must be made in the first year following the last year of a five-year consolidated municipal income tax return election period in effect under division (S)(1) of this Section. The election to discontinue filing a consolidated municipal income tax return is binding for a five-year period beginning with the first taxable year of the election.

      (3)    An election made under division (S)(1) or (2) of this Section is binding on all members of the affiliated group of corporations subject to a municipal income tax.

      (4)    When a taxpayer makes the election allowed under section 718.80 of the Revised Code, a valid election made by the taxpayer under division (B)(1) or (2) of this section is binding upon the Tax Commissioner for the remainder of the five-year period.

      (5)    When an election made under section 718.80 of the Revised Code is terminated, a valid election made under section 718.86 of the Revised Code is binding upon the Tax Administrator for the remainder of the five-year period.

(Ord. 81-18. Passed 2-27-18.)

   (T)    A taxpayer that is a member of an affiliated group of corporations that filed a consolidated federal income tax return for a taxable year shall file the consolidated Municipality income tax return for that taxable year if the Tax Administrator determines, by a preponderance of the evidence, that intercompany transactions have not been conducted at arm's length and that there has been a distortive shifting of income or expenses with regard to allocation of net profits to the Municipality. A taxpayer that is required to file a consolidated Municipality income tax return for a taxable year shall file a consolidated Municipality income tax return for all subsequent taxable years, unless the taxpayer requests and receives written permission from the Tax Administrator to file a separate return or a taxpayer has experienced a change in circumstances.

(Ord. 354-16. Passed 9-27-16.)

   (U)    A taxpayer shall prepare a consolidated Municipality income tax return in the same manner as is required under the United States department of treasury regulations that prescribe procedures for the preparation of the consolidated federal income tax return required to be filed by the common parent of the affiliated group of which the taxpayer is a member.

   (V)    (1)    Except as otherwise provided in divisions (V)(2), (3), and (4) of this Section, corporations that file a consolidated municipal income tax return shall compute adjusted federal taxable income, as defined in Section 1905.02, by substituting "consolidated federal taxable income" for "federal taxable income" wherever "federal taxable income" appears in that division and by substituting "an affiliated group of corporation's" for "a C corporation's" wherever "a C corporation's" appears in that division.

      (2)    No corporation filing a consolidated Municipality income tax return shall make any adjustment otherwise required under division (C)(1) of Section 1905.02 to the extent that the item of income or deduction otherwise subject to the adjustment has been eliminated or consolidated in the computation of consolidated federal taxable income.

      (3)    If the net profit or loss of a pass-through entity having at least eighty percent (80%) of the value of its ownership interest owned or controlled, directly or indirectly, by an affiliated group of corporations is included in that affiliated group's consolidated federal taxable income for a taxable year, the corporation filing a consolidated Municipality income tax return shall do one of the following with respect to that pass-through entity's net profit or loss for that taxable year:

         (a)    Exclude the pass-through entity's net profit or loss from the consolidated federal taxable income of the affiliated group and, for the purpose of making the computations required in divisions (R) through (Y) of Section 1905.05, exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group's net profit sitused to the Municipality. If the entity's net profit or loss is so excluded, the entity shall be subject to taxation as a separate taxpayer on the basis of the entity's net profits that would otherwise be included in the consolidated federal taxable income of the affiliated group.

         (b)    Include the pass-through entity's net profit or loss in the consolidated federal taxable income of the affiliated group and, for the purpose of making the computations required in divisions (R) through (Y) of Section 1905.05, include the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group's net profit sitused to the Municipality. If the entity's net profit or loss is so included, the entity shall not be subject to taxation as a separate taxpayer on the basis of the entity's net profits that are included in the consolidated federal taxable income of the affiliated group.

      (4)    If the net profit or loss of a pass-through entity having less than eighty percent of the value of its ownership interest owned or controlled, directly or indirectly, by an affiliated group of corporations is included in that affiliated group's consolidated federal taxable income for a taxable year, all of the following shall apply:

         (a)    The corporation filing the consolidated municipal income tax return shall exclude the pass-through entity's net profit or loss from the consolidated federal taxable income of the affiliated group and, for the purposes of making the computations required in divisions (R) through (Y) of Section 1905.05 exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group's net profit sitused to the Municipality;

         (b)    The pass-through entity shall be subject to the Municipality income taxation as a separate taxpayer in accordance with this Chapter on the basis of the entity's net profits that would otherwise be included in the consolidated federal taxable income of the affiliated group.

   (W)   Corporations filing a consolidated Municipality income tax return shall make the computations required under divisions (R) through (Y) of Section 1905.05 by substituting "consolidated federal taxable income attributable to" for "net profit from" wherever "net profit from" appears in that section and by substituting "affiliated group of corporations" for "taxpayer" wherever "taxpayer" appears in that section.

   (X)    Each corporation filing a consolidated Municipality income tax return is jointly and severally liable for any tax, interest, penalties, fines, charges, or other amounts imposed by the Municipality in accordance with this Chapter on the corporation, an affiliated group of which the corporation is a member for any portion of the taxable year, or any one or more members of such an affiliated group.

   (Y)    Corporations and their affiliates that made an election or entered into an agreement with the Municipality before January 1, 2016, to file a consolidated or combined tax return with the Municipality may continue to file consolidated or combined tax returns in accordance with such election or agreement for taxable years beginning on and after January 1, 2016.

(Ord. 576-15. Passed 12-8-15.)

1905.051 Return and payment of tax during COVID-19 state of emergency.

   Notwithstanding anything to the contrary in this Chapter, any taxpayer who is eligible for a federal income tax extension pursuant to a notice issued by the Secretary of the Treasury of the United States under section 7508A of the Internal Revenue Code, or pursuant to an act of Congress, in response to the COVID-19 disease outbreak shall receive an equivalent extension of time in which to file any return, report, or other tax document prescribed by this Chapter and an equivalent extension of time to make any payment of taxes described in this Chapter. No penalties or interest in connection with those taxes shall accrue during the extension period.

(Ord. 137-20. Passed 4-7-20.)

1905.06. Collection at source, withholding; liability.

Withholding provisions.

   (A)    Each employer, agent of an employer, or other payer located or doing business in the Municipality shall withhold an income tax from the qualifying wages earned and/or received by each employee in the Municipality. Except for qualifying wages for which withholding is not required under Section 1905.03 or division (B)(4) or (6) of this Section, the tax shall be withheld at the rate specified in Section 1905.03. An employer, agent of an employer, or other payer shall deduct and withhold the tax from qualifying wages on the date that the employer, agent, or other payer directly, indirectly, or constructively pays the qualifying wages to, or credits the qualifying wages to the benefit of, the employee.

   (B)    (1)    Except as provided in division (B)(2) of this Section, an employer, agent of an employer, or other payer shall remit to the Tax Administrator of the Municipality the greater of the income taxes deducted and withheld or the income taxes required to be deducted and withheld by the employer, agent, or other payer according to the following schedule:

         (a)    Taxes required to be deducted and withheld shall be remitted monthly to the Tax Administrator if the total taxes deducted and withheld or required to be deducted and withheld by the employer, agent, or other payer on behalf of the Municipality in the preceding calendar year exceeded $2,399, or if the total amount of taxes deducted and withheld or required to be deducted and withheld on behalf of the Municipality in any month of the preceding calendar quarter exceeded $200.

         Payments under division (B)(1)(a) of this Section shall be made to the Tax Administrator not later than 15 days after the last day of each month for which the tax was withheld.

         (b)    Any employer, agent of an employer, or other payer not required to make payments under division (B)(1)(a) of this Section of taxes required to be deducted and withheld shall make quarterly payments to the Tax Administrator not later than the last day of the month following the last day of each calendar quarter.

(Ord. 81-18. Passed 2-27-18.)

         (c)    Notwithstanding the provisions of Section (B)(1)(a)and (b) of this Section, taxes required to be deducted and withheld may be remitted semi-monthly, based on the determination of the Commissioner of Taxation, to the Tax Administrator if the total taxes deducted and withheld or required to be deducted and withheld on behalf of the Municipality in the preceding calendar year exceeded $11,999, or if in any month of the preceding calendar year exceeded $1,000. Payment under division (B)(1)(c) of this Section shall be made to the Tax Administrator not later than one of the following: (i) if the taxes were deducted and withheld or required to be deducted and withheld during the first fifteen days of a month, the third banking day after the fifteenth day of that month; or (ii) if the taxes were deducted and withheld or required to be deducted and withheld after the fifteenth day of a month and before the first day of the immediately following month, the third banking day after the last day of the month.

(Ord. 354-16. Passed 9-27-16.)

      (2)    If the employer, agent of an employer, or other payer is required to make payments electronically for the purpose of paying federal taxes withheld on payments to employees under Section 6302 of the Internal Revenue Code, 26 C.F.R. 31.6302-1, or any other federal statute or regulation, the payment and subsequent payments, based on the Tax Administrator's determination, shall be required to be made by electronic funds transfer to the Tax Administrator of all taxes deducted and withheld on behalf of the Municipality. The payment of tax by electronic funds transfer under this division does not affect an employer's, agent's, or other payer's obligation to file any return as required under this section.

      (3)    An employer, agent of an employer, or other payer shall make and file a return showing the amount of tax withheld by the employer, agent, or other payer from the qualifying wages of each employee and remitted to the Tax Administrator. A return filed by an employer, agent, or other payer under this division shall be accepted by Tax Administrator and the Municipality as the return required of an non-resident employee whose sole income subject to the tax under this Chapter is the qualifying wages reported by the employee's employer, agent of an employer, or other payer.

      (4)    An employer, agent of an employer, or other payer is not required to withhold the Municipality income tax with respect to an individual's disqualifying disposition of an incentive stock option if, at the time of the disqualifying disposition, the individual is not an employee of either the corporation with respect to whose stock the option has been issued or of such corporation's successor entity.

      (5)    (a)    An employee is not relieved from liability for a tax by the failure of the employer, agent of an employer, or other payer to withhold the tax as required under this Chapter or by the employer's, agent's, or other payer's exemption from the requirement to withhold the tax.

         (b)    The failure of an employer, agent of an employer, or other payer to remit to the Municipality the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer, agent, or other payer in connection with the failure to remit the tax withheld.

      (6)    Compensation deferred before June 26, 2003, is not subject to the income tax or income tax withholding requirement imposed by this Chapter to the extent the deferred compensation does not constitute qualifying wages at the time the deferred compensation is paid or distributed.

      (7)    Each employer, agent of an employer, or other payer required to withhold taxes is liable for the payment of that amount required to be withheld, whether or not such taxes have been withheld, and such amount shall be deemed to be held in trust for the Municipality until such time as the withheld amount is remitted to the Tax Administrator.

      (8)    On or before the last day of February of each year, an employer shall file a withholding reconciliation return with the Tax Administrator listing:

         (a)    The names, addresses, and social security numbers of all employees from whose qualifying wages the tax imposed by this Chapter was withheld or should have been withheld for the Municipality during the preceding calendar year;

         (b)    The amount of tax withheld, if any, from each such employee, the total amount of qualifying wages paid to such employee during the preceding calendar year;

         (c)    The name of every other municipal corporation for which tax was withheld or should have been withheld from such employee during the preceding calendar year;

         (d)    Any other information required for federal income tax reporting purposes on Internal Revenue Service form W-2 or its equivalent form with respect to such employee;

         (e)    Other information as may be required by the Tax Administrator.

      (9)    The officer or the employee of the employer, agent of an employer, or other payer with control or direct supervision of or charged with the responsibility for withholding the tax or filing the reports and making payments as required by this section, shall be personally liable for a failure to file a report or pay the tax due as required by this section. The dissolution of an employer, agent of an employer, or other payer does not discharge the officer's or employee's liability for a failure of the employer, agent of an employer, or other payer to file returns or pay any tax due.

      (10) An employer is required to deduct and withhold the Municipality's income tax on tips and gratuities received by the employer's employees and constituting qualifying wages, but only to the extent that the tips and gratuities are under the employer's control. For the purposes of this division, a tip or gratuity is under the employer's control if the tip or gratuity is paid by the customer to the employer for subsequent remittance to the employee, or if the customer pays the tip or gratuity by credit card, debit card, or other electronic means.

      (11) The Tax Administrator shall consider any tax withheld by an employer at the request of an employee, when such tax is not otherwise required to be withheld by this Chapter, to be tax required to be withheld and remitted for the purposes of this Section.

Occasional Entrant - Withholding.

   (C)    (1)    As used in this division:

         (a)    "Employer" includes a person that is a related member to or of an employer.

         (b)    "Fixed location" means a permanent place of doing business in this state, such as an office, warehouse, storefront, or similar location owned or controlled by an employer.

         (c)    "Principal place of work" means the fixed location to which an employee is required to report for employment duties on a regular and ordinary basis. If the employee is not required to report for employment duties on a regular and ordinary basis to a fixed location, "principal place of work" means the worksite location in this state to which the employee is required to report for employment duties on a regular and ordinary basis. If the employee is not required to report for employment duties on a regular and ordinary basis to a fixed location or worksite location, "principal place of work" means the location in this state at which the employee spends the greatest number of days in a calendar year performing services for or on behalf of the employee's employer.

      If there is not a single municipal corporation in which the employee spent the "greatest number of days in a calendar year" performing services for or on behalf of the employer, but instead there are two or more municipal corporations in which the employee spent an identical number of days that is greater than the number of days the employee spent in any other municipal corporation, the employer shall allocate any of the employee's qualifying wages subject to division (C)(2)(a)(i) of this Section among those two or more municipal corporations. The allocation shall be made using any fair and reasonable method, including, but not limited to, an equal allocation among such municipal corporations or an allocation based upon the time spent or sales made by the employee in each such municipal corporation. A municipal corporation to which qualifying wages are allocated under this division shall be the employee's "principal place of work" with respect to those qualifying wages for the purposes of this Section.

      For the purposes of this division, the location at which an employee spends a particular day shall be determined in accordance with division (C)(2)(b) of this Section, except that "location" shall be substituted for "municipal corporation" wherever "municipal corporation" appears in that division.

         (d)    "Professional athlete" means an athlete who performs services in a professional athletic event for wages or other remuneration.

         (e)    "Professional entertainer" means a person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.

         (f)    "Public figure" means a person of prominence who performs services at discrete events, such as speeches, public appearances, or similar events, for wages or other remuneration on a per-event basis.

         (g)    "Worksite location" means a construction site or other temporary worksite in this state at which the employer provides services for more than 20 days during the calendar year. "Worksite location" does not include the home of an employee.

      (2)    (a)    Subject to divisions (C)(3), (5), (6), and (7) of this section, an employer is not required to withhold the Municipality income tax on qualifying wages paid to an employee for the performance of personal services in the Municipality if the employee performed such services in the Municipality on 20 or fewer days in a calendar year, unless one of the following conditions applies:

            (i)    The employee's principal place of work is located in the Municipality.

            (ii)    The employee performed services at one or more presumed worksite locations in the Municipality. For the purposes of this division, "presumed worksite location" means a construction site or other temporary worksite in the Municipality at which the employer provides or provided services that can reasonably be, or would have been, expected by the employer to last more than 20 days in a calendar year. Services can "reasonably be expected by the employer to last more than 20 days" if either of the following applies at the time the services commence:

               (a)    The nature of the services is such that it will require more than 20 days of the services to complete the services;

               (b)    The agreement between the employer and its customer to perform services at a location requires the employer to perform the services at the location for more than 20 days.

            (iii)   The employee is a resident of the Municipality and has requested that the employer withhold tax from the employee's qualifying wages as provided in Section 1905.06.

            (iv)    The employee is a professional athlete, professional entertainer, or public figure, and the qualifying wages are paid for the performance of services in the employee's capacity as a professional athlete, professional entertainer, or public figure.

         (b)    For the purposes of division (C)(2)(a) of this Section, an employee shall be considered to have spent a day performing services in the Municipality only if the employee spent more time performing services for or on behalf of the employer in the Municipality than in any other municipal corporation on that day. For the purposes of determining the amount of time an employee spent in a particular location, the time spent performing one or more of the following activities shall be considered to have been spent at the employee's principal place of work:

            (i)    Traveling to the location at which the employee will first perform services for the employer for the day;

            (ii)    Traveling from a location at which the employee was performing services for the employer to any other location;

            (iii)   Traveling from any location to another location in order to pick up or load, for the purpose of transportation or delivery, property that has been purchased, sold, assembled, fabricated, repaired, refurbished, processed, remanufactured, or improved by the employee's employer;

            (iv)    Transporting or delivering property described in division (C)(2)(b)(iii) of this Section, provided that, upon delivery of the property, the employee does not temporarily or permanently affix the property to real estate owned, used, or controlled by a person other than the employee's employer;

            (v)    Traveling from the location at which the employee makes the employee's final delivery or pick-up for the day to either the employee's principal place of work or a location at which the employee will not perform services for the employer.

      (3)    If the principal place of work of an employee is located in another Ohio municipal corporation that imposes an income tax, the exception from withholding requirements described in division (C)(2)(a) of this Section shall apply only if, with respect to the employee's qualifying wages described in that division, the employer withholds and remits tax on such qualifying wages to the municipal corporation in which the employee's principal place of work is located.

      (4)    (a)    Except as provided in division (C)(4)(b) of this Section, if, during a calendar year, the number of days an employee spends performing personal services in the Municipality exceeds the 20-day threshold, the employer shall withhold and remit tax to the Municipality for any subsequent days in that calendar year on which the employer pays qualifying wages to the employee for personal services performed in the Municipality.

         (b)    An employer required to begin withholding tax for the Municipality under division (C)(4)(a) of this Section may elect to withhold tax for the Municipality for the first 20 days on which the employer paid qualifying wages to the employee for personal services performed in the Municipality.

      (5)    If an employer's fixed location is the Municipality and the employer qualifies as a small employer as defined in Section 1905.02, the employer shall withhold the income tax imposed under this Chapter on all of the employee's qualifying wages for a taxable year and remit that tax only to the Municipality, regardless of the number of days which the employee worked outside the corporate boundaries of the Municipality. To determine whether an employer qualifies as a small employer for a taxable year, the employer will be required to provide the Tax Administrator with the employer's federal income tax return for the preceding taxable year.

      (6)    Divisions (C)(2)(a) and (4) of this Section shall not apply to the extent that the Tax Administrator and an employer enter into an agreement regarding the manner in which the employer shall comply with the requirements of this Section 1905.06.

   (D)    In the case of a person performing personal services at a petroleum refinery located in a municipal corporation that imposes a tax on income, an employer is not required to withhold municipal income tax on the qualifying wages of such a person if the person performs those services on twelve or fewer days in a calendar year, unless the principal place of work of the employer is located in another municipal corporation in this state that imposes a tax applying to compensation paid to the person for services performed on those days and the person is not liable to that other municipal corporation for tax on the compensation paid for such services. For the purposes of this division, a petroleum refinery is a facility with a standard industrial classification code facility classification of 2911, petroleum refining.

   Notwithstanding division (C) of this Section, if, during a calendar year, the number of days an individual performs personal services at a petroleum refinery exceeds twelve, the employer shall withhold tax for the municipal corporation for the first twelve days for which the employer paid qualifying wages to the individual and for all subsequent days in the calendar year on which the individual performed services at the refinery.

Casino and VLT - Withholding.

   (E)    The Municipality shall require a casino facility or a casino operator, as defined in Section 6(C)(9) of Article XV, Ohio Constitution, and Section 3772.01 of the Ohio Revised Code, respectively, or a lottery sales agent conducting video lottery terminals sales on behalf of the state to withhold and remit Toledo municipal income tax with respect to amounts other than qualifying wages as provided in this section.

   (F)    If a person's winnings at a casino facility are an amount for which reporting to the internal revenue service of the amount is required by section 6041 of the Internal Revenue Code, as amended, the casino operator shall deduct and withhold Toledo municipal income tax from the person's winnings at the rate of the tax imposed by the Municipality.

   (G)    Amounts deducted and withheld by a casino operator are held in trust for the benefit of the Municipality to which the tax is owed.

      (1)    On or before the tenth day of each month, the casino operator shall file a return electronically with the Tax Administrator of the Municipality, providing the name, address, and social security number of the person from whose winnings amounts were deducted and withheld, the amount of each such deduction and withholding during the preceding calendar month, the amount of the winnings from which each such amount was withheld, the type of casino gaming that resulted in such winnings, and any other information required by the Tax Administrator. With this return, the casino operator shall remit electronically to the Municipality all amounts deducted and withheld during the preceding month.

      (2)    Annually, on or before the thirty-first day of January, a casino operator shall file an annual return electronically with the Tax Administrator of the Municipality in which the casino facility is located, indicating the total amount deducted and withheld during the preceding calendar year. The casino operator shall remit electronically with the annual return any amount that was deducted and withheld and that was not previously remitted. If the name, address, or social security number of a person or the amount deducted and withheld with respect to that person was omitted on a monthly return for that reporting period, then the information shall be indicated on the annual return.

      (3)    Annually, on or before the thirty-first day of January, a casino operator shall issue an information return to each person with respect to whom an amount has been deducted and withheld during the preceding calendar year. The information return shall show the total amount of Toledo municipal income tax deducted from the person's winnings during the preceding year. The casino operator shall provide to the Tax Administrator a copy of each information return issued under this division. The Tax Administrator may require that such copies be transmitted electronically.

      (4)    A casino operator that fails to file a return and remit the amounts deducted and withheld shall be personally liable for the amount withheld and not remitted. Such personal liability extends to any penalty and interest imposed for the late filing of a return or the late payment of tax deducted and withheld.

      (5)    If a casino operator sells the casino facility or otherwise quits the casino business, the amounts deducted and withheld along with any penalties and interest thereon are immediately due and payable. The successor shall withhold an amount of the purchase money that is sufficient to cover the amounts deducted and withheld along with any penalties and interest thereon until the predecessor casino operator produces either of the following:

         (a)    A receipt from the Tax Administrator showing that the amounts deducted and withheld and penalties and interest thereon have been paid;

         (b)    A certificate from the Tax Administrator indicating that no amounts are due. If the successor fails to withhold purchase money, the successor is personally liable for the payment of the amounts deducted and withheld and penalties and interest thereon.

      (6)    The failure of a casino operator to deduct and withhold the required amount from a person's winnings does not relieve that person from liability for the Toledo municipal income tax with respect to those winnings.

   (H)    If a person's prize award from a video lottery terminal is an amount for which reporting to the internal revenue service is required by section 6041 of the Internal Revenue Code, as amended, the video lottery sales agent shall deduct and withhold Toledo municipal income tax from the person's prize award at the rate of the tax imposed by the Municipality in which the video lottery terminal facility is located.

   (I)    Amounts deducted and withheld by a video lottery sales agent are held in trust for the benefit of the Municipality.

      (1)    The video lottery sales agent shall issue to a person from whose prize award an amount has been deducted and withheld a receipt for the amount deducted and withheld, and shall obtain from the person receiving a prize award the person's name, address, and social security number in order to facilitate the preparation of returns required by this Section.

      (2)    On or before the tenth day of each month, the video lottery sales agent shall file a return electronically with the Tax Administrator of the Municipality providing the names, addresses, and social security numbers of the persons from whose prize awards amounts were deducted and withheld, the amount of each such deduction and withholding during the preceding calendar month, the amount of the prize award from which each such amount was withheld, and any other information required by the Tax Administrator. With the return, the video lottery sales agent shall remit electronically to the Tax Administrator all amounts deducted and withheld during the preceding month.

      (3)    A video lottery sales agent shall maintain a record of all receipts issued under division (I) of this Section and shall make those records available to the Tax Administrator upon request. Such records shall be maintained in accordance with section 5747.17 of the Ohio Revised Code and any rules adopted pursuant thereto.

      (4)    Annually, on or before the thirty-first day of January, each video lottery terminal sales agent shall file an annual return electronically with the Tax Administrator of the Municipality in which the facility is located indicating the total amount deducted and withheld during the preceding calendar year. The video lottery sales agent shall remit electronically with the annual return any amount that was deducted and withheld and that was not previously remitted. If the name, address, or social security number of a person or the amount deducted and withheld with respect to that person was omitted on a monthly return for that reporting period that information shall be indicated on the annual return.

      (5)    Annually, on or before the thirty-first day of January, a video lottery sales agent shall issue an information return to each person with respect to whom an amount has been deducted and withheld during the preceding calendar year. The information return shall show the total amount of Toledo municipal income tax deducted and withheld from the person's prize award by the video lottery sales agent during the preceding year. A video lottery sales agent shall provide to the Tax Administrator of the Municipality a copy of each information return issued under this division. The Tax Administrator may require that such copies be transmitted electronically.

      (6)    A video lottery sales agent who fails to file a return and remit the amounts deducted and withheld is personally liable for the amount deducted and withheld and not remitted. Such personal liability extends to any penalty and interest imposed for the late filing of a return or the late payment of tax deducted and withheld.

   (J)    If a video lottery sales agent ceases to operate video lottery terminals, the amounts deducted and withheld along with any penalties and interest thereon are immediately due and payable. The successor of the video lottery sales agent that purchases the video lottery terminals from the agent shall withhold an amount from the purchase money that is sufficient to cover the amounts deducted and withheld and any penalties and interest thereon until the predecessor video lottery sales agent operator produces either of the following:

      (1)    A receipt from the Tax Administrator showing that the amounts deducted and withheld and penalties and interest thereon have been paid;

      (2)    A certificate from the Tax Administrator indicating that no amounts are due. If the successor fails to withhold purchase money, the successor is personally liable for the payment of the amounts deducted and withheld and penalties and interest thereon.

   (K)    The failure of a video lottery sales agent to deduct and withhold the required amount from a person's prize award does not relieve that person from liability for the Toledo municipal income tax with respect to that prize award.

   (L)    If a casino operator or lottery sales agent files a return late, fails to file a return, remits amounts deducted and withheld late, or fails to remit amounts deducted and withheld as required under this section, the Tax Administrator may impose the following applicable penalty:

      (1)    For the late remittance of, or failure to remit, tax deducted and withheld under this section, a penalty equal to fifty per cent (50%) of the tax deducted and withheld;

      (2)    For the failure to file, or the late filing of, a monthly or annual return, a penalty of five hundred dollars ($500) for each return not filed or filed late. Interest shall accrue on past due amounts deducted and withheld at the rate prescribed in section 5703.47 of the Ohio Revised Code.

   (M)   Amounts deducted and withheld on behalf of the Municipality shall be allowed as a credit against payment of the tax imposed by the Municipality and shall be treated as taxes paid for purposes of this Chapter. This division applies only to the person for whom the amount is deducted and withheld.

(Ord. 354-16. Passed 9-27-16.)

   (N)    The Tax Administrator shall prescribe the forms of the receipts and returns required under this Section.

(Ord. 576-15. Passed 12-8-15.)

1905.061 Estimated tax.

   (A)    As used in this section:

      (1)    "Estimated taxes" means the amount that the taxpayer reasonably estimates to be the taxpayer's tax liability for the income tax imposed by this Chapter for the current taxable year.

      (2)    "Tax liability" means the total taxes due to the Municipality for the taxable year, after allowing any credit to which the taxpayer is entitled, and after applying any estimated tax payment, withholding payment, or credit from another taxable year.

   (B)    (1)    Every taxpayer shall make a declaration of estimated taxes for the current taxable year, on the form prescribed by the Tax Administrator, if the amount payable as estimated taxes is at least $200. For the purposes of this Section:

         (a)    Taxes withheld for the Municipality from qualifying wages shall be considered as paid to the Municipality in equal amounts on each payment date unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case they shall be considered as paid on the dates on which the amounts were actually withheld.

         (b)    An overpayment of tax applied as a credit to a subsequent taxable year is deemed to be paid on the date of the postmark stamped on the cover in which the payment is mailed or, if the payment is made by electronic funds transfer, the date the payment is submitted. As used in this division, "date of the postmark" means, in the event there is more than one date on the cover, the earliest date imprinted on the cover by the postal service.

      (2)    Taxpayers filing joint returns shall file joint declarations of estimated taxes. A taxpayer may amend a declaration under rules prescribed by the Tax Administrator. A taxpayer having a taxable year of less than twelve months shall make a declaration under rules prescribed by the Tax Administrator.

      (3)    The declaration of estimated taxes shall be filed on or before the date prescribed for the filing of municipal income tax returns under division (G) of Section 1905.05 or on or before the fifteenth (15th) day of the fourth month after the taxpayer becomes subject to tax for the first time.

      (4)    Taxpayers reporting on a fiscal year basis shall file a declaration on or before the fifteenth (15th) day of the fourth month after the beginning of each fiscal year or period.

      (5)    The original declaration or any subsequent amendment may be increased or decreased on or before any subsequent quarterly payment day as provided in this section. A taxpayer having a taxable year of less than twelve months shall make a declaration under rules prescribed by the Tax Administrator.

   (C)    (1)    The required portion of the tax liability for the taxable year that shall be paid through estimated taxes made payable to the Municipality, including the application of tax refunds to estimated taxes and withholding on or before the applicable payment date, shall be as follows:

         (a)    On or before the fifteenth (15th) day of the fourth month after the beginning of the taxable year, twenty-two and one-half percent (22.5%) of the tax liability for the taxable year;

         (b)    On or before the fifteenth (15th) day of the sixth month after the beginning of the taxable year, forty-five percent (45%) of the tax liability for the taxable year;

         (c)    On or before the fifteenth (15th) day of the ninth month after the beginning of the taxable year, sixty-seven and one-half percent (67.5%) of the tax liability for the taxable year;

(Ord. 354-16. Passed 9-27-16.)

         (d)    On or before the fifteenth (15th) day of the twelfth month of the taxable year, ninety percent (90%) of the tax liability for the taxable year. For taxable years beginning on or after January 1, 2018, and only for an individual, on or before the fifteenth (15th) day of the first month of the following taxable year, ninety percent (90%) of the tax liability for the taxable year.

(Ord. 81-18. Passed 2-27-18.)

      (2)    When an amended declaration has been filed, the unpaid balance shown due on the amended declaration shall be paid in equal installments on or before the remaining payment dates.

      (3)    On or before the fifteenth (15th) day of the fourth month of the year following that for which the declaration or amended declaration was filed, an annual return shall be filed and any balance which may be due shall be paid with the return in accordance with Section 1905.05.

   (D)    (1)    In the case of any underpayment of any portion of a tax liability, penalty and interest may be imposed pursuant to Section 1905.11 upon the amount of underpayment for the period of underpayment, unless the underpayment is due to reasonable cause as described in division (E) of this Section. The amount of the underpayment shall be determined as follows:

         (a)    For the first payment of estimated taxes each year, twenty-two and one-half percent (22.5%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment;

         (b)    For the second payment of estimated taxes each year, forty-five percent (45%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment;

         (c)    For the third payment of estimated taxes each year, sixty-seven and one-half percent (67.5%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment;

         (d)    For the fourth payment of estimated taxes each year, ninety percent (90%) of the tax liability, less the amount of taxes paid by the date prescribed for that payment. For taxable years beginning on or after January 1, 2018, and only for an individual, on or before the fifteenth (15th) day of the first month of the following taxable year, ninety percent (90%) of the tax liability for the taxable year less the amount of taxes paid by the date prescribed for that payment.

(Ord. 81-18. Passed 2-27-18.)

      (2)    The period of the underpayment shall run from the day the estimated payment was required to be made to the date on which the payment is made. For purposes of this Section, a payment of estimated taxes on or before any payment date shall be considered a payment of any previous underpayment only to the extent the payment of estimated taxes exceeds the amount of the payment presently required to be paid to avoid any penalty.

   (E)    An underpayment of any portion of tax liability determined under division (D) of this Section shall be due to reasonable cause and the penalty imposed by this section shall not be added to the taxes for the taxable year if any of the following apply:

      (1)    The amount of estimated taxes that were paid equals at least ninety percent (90%) of the tax liability for the current taxable year, determined by annualizing the income received during the year up to the end of the month immediately preceding the month in which the payment is due.

   (2)    The amount of estimated taxes that were paid equals at least one hundred percent (100%) of the tax liability shown on the return of the taxpayer for the preceding taxable year, provided that the immediately preceding taxable year reflected a period of twelve months and the taxpayer filed a return with the Municipality under Section 1905.05 for that year.

(Ord. 354-16. Passed 9-27-16.)

      (3)    The taxpayer is an individual who resides in the Municipality but was not domiciled there on the first day of January of the calendar year that includes the first day of the taxable year.

(Ord. 576-15. Passed 12-8-15.)