(a) Authority to Levy Tax.
(1) The tax on income and the withholding tax established by this Chapter 891 are authorized by Article XVIII, Section 3 of the Ohio Constitution. The tax on income and the withholding tax established by this Chapter 891 are deemed to be levied in accordance with, and to be consistent with, the provisions and limitations of Ohio R.C. Chapter 718. This chapter is deemed to incorporate the provisions of Ohio R.C. Chapter 718.
(2) The tax is an annual tax levied on the income of every person residing in or earning or receiving income in the municipal corporation, and shall be measured by municipal taxable income. The municipality shall tax income at a uniform rate. The tax is levied on municipal taxable income, as defined herein.
(b) Purposes of Tax; Rate. To provide funds for the purpose of general municipal operations, maintenance, new equipment, extension and enlargement of municipal services and facilities and capital improvements of the city, there is hereby levied a tax on salaries, wages, commissions and other compensation and on net profits as hereinafter provided. The rate of tax shall be imposed at the rate of 1.5% per annum.
(c) Allocation of Funds. The funds collected pursuant to this chapter shall be allocated to the General Fund or as otherwise determined by City Council for the purposes provided in Section 891.01(b).
(d) Statement of Procedural History; State Mandated Changes to Municipal Income Tax.
(1) Significant and wide-ranging amendments to R.C. Chapter 718 were enacted by Am Sub HB 5, passed by the 130th General Assembly, and signed by Governor Kasich on December 19, 2014, and H.B. 5 required municipal corporations to conform to and adopt the provisions of R.C. Chapter 718 in order to have the authority to impose, enforce, administer and collect a municipal income tax.
(2) As mandated by H.B. 5, municipal income tax Ordinance 13-2015, effective January 1, 2016, comprehensively creates a new Chapter 891 with tax years beginning 2016 in accordance with the provisions of R.C. Chapter 718 to allow the Municipality to continue the income tax and withholding tax administration and collection efforts on behalf of the Municipality. Chapter 890 will remain in full force and effect for the years 2015 and prior.
(Ord. 13-2015. Passed 12-17-15.)
Statutory reference:
Authority for tax on income and withholding tax, see Ohio R.C. 718.04