(a) Date and Requirements for Filing.
(1) On or before April 15 of each year, every person 18 years of age or older, subject to the provisions of the Income Tax Ordinance shall, without assessment or notice or demand, make and file a return with the Superintendent whether or not a tax is due.Such return must be on a form prescribed by and obtainable upon request from the Superintendent. The Superintendent shall accept a generic form of any return, report or document required to be filed if the generic form once completed and filed, contains all the information required to be submitted with the City prescribed returns reports or documents, and if the taxpayer or return preparer filing the generic form otherwise complies with the rules and regulations and ordinances of Union.
(2) If the return is for a fiscal year or any period less than a year, said return shall be made within three and one-half months from the end of the fiscal year or other period.
(3) The fact that a person subject to City filing requirements is not required to file a Federal tax return does not relieve such person from filing a City tax return.
(4) Individuals who are permanently retired and who have no income subject to taxation by the City must file a return for the year following the year in which they become permanently retired. Subsequent filings will not be required of those retirees receiving no income subject to taxation.However, such retirees may, when deemed necessary by the Superintendent, be required to verify their Federal tax status. Such verification will be no more than once every three years in frequency.
A. Individuals that are permanently retired are required to file annual returns until an exemption is granted, in writing, by the Superintendent.
B. Anyone, including retirees, receiving a pre-printed return from the tax office has an active account and must file a return.
(5) Every person subject to the provisions of the Income Tax Ordinance shall, without assessment or notice or demand, file a return setting forth the aggregate amount of qualifying salaries, wages, commissions and other compensation earned, received, accrued or in any other way set apart, and net profits from business or other activities including the rental of real estate and other personal property, and any other income subject to taxation under the Income Tax Ordinance earned, received, accrued or set apart for the period covered by the return, and such other facts and information as the Superintendent may require.
(6) All returns required to be filed shall set forth the aggregate amount of qualifying wages, salaries, bonuses, incentive payments, commissions, fees and other compensation earned, received, accrued or in any other way set apart and subject to the tax from each employer, taxable net profits and other pertinent information as the Tax Superintendent may require.In lieu of the above, a taxpayer may submit an affidavit from the tax office of any City in which the taxpayer worked, stating that the taxpayer has met the obligation to file and pay the tax in that City. This alternative is available to those taxpayers that have income that is fully withheld upon at a rate equal to or higher than the Union rate.
(7) Trustees of active trusts are required to file returns and pay the tax on the taxable income thereof.
(8) Fiduciaries are liable for the payment of any taxes due by a deceased person from the estate of such deceased person.
(9) Nonresident employees need not file a return when their entire earnings subject to taxation by the City of Union for the tax period are paid by an employer or employers and said employer or employers have withheld and remitted the full and proper amount of Union income tax.
(10) An employee who is permitted to deduct employee business expenses from gross wages, salaries or other compensation for Federal tax purposes through Federal Form 2106 and Federal Schedule A must file a City return in order to claim such deductions.
(11) Anyone actually or constructively receiving income subject to City taxation but not fully withheld upon must file a City return.
(12) Taxpayers having income, wages, salaries or other compensation for which a return must be filed, and also having net profits subject to taxation from an individually owned business that is not required to file on an entity basis, are required to file only one return including all income subject to taxation.
(13) Except as provided for herein, the tax is upon the partnership or association as an entity, whether resident or nonresident, and a return is required from the entity disclosing the net profits allocable to the City and the tax paid thereon. However, any resident partner or resident member of an unincorporated entity is required to make a return and pay the tax in accordance with the Income Tax Ordinance.
(14) All returns shall set forth the amount of tax imposed by the Income Tax Ordinance on all income subject to taxation.Any credits that may be applicable may not be set forth until after the full and proper amount of tax is determined and reported on said return.
(15) A husband and wife may file returns either individually or jointly.
(16) All returns filed must clearly indicate how taxable income was determined.Applicable schedules must be attached. The Superintendent of Taxation may require additional information to verify the accuracy of any return and to provide documentation or verification of any items or amounts shown on the return.
(17) Where amounts of total income, deductions and net profits are included, as shown on a Federal return, any items of income that are not subject to City tax and any unallowable expenses shall be eliminated in determining net taxable income.
(18) A corporation, partnership, association, trust or other organization required to file returns on an entity basis must show a reconciliation of net income reported on the Federal income tax return with the income reported on the City return.
(19) Operating losses (except any portion of a loss separately reportable for municipal tax purposes to another city) from business or professional activities, the profits of which would be subject to the tax under the Income Tax Ordinance, may be offset against salaries, wages or other compensation or against net profits from other business or professional activities.Such losses may only be deducted in the year in which they occur.There is no carry forward or backward of operating losses.
(20) If a change in Federal income tax liability made by the Internal Revenue Service or by a judicial decision results in an additional amount of tax payable to the City, a report of such change shall be filed within three months after receipt of the notice from the Internal Revenue Service or court decision.If such change results in a reduction of taxes owed and paid to the City, a claim for refund may be filed with the Superintendent as prescribed by the Income Tax Ordinance.
(b) Extensions.
(1) Upon written request received on or before the due date for filing the return, and for good cause shown, the Superintendent may, when it is deemed to be in the best interest of the City, extend the time for filing such return for a period not beyond the last day of the month following the month in which the federal income tax return has been extended.
(2) All extensions shall be conditioned upon the taxpayer filing a tentative return, accompanied by payment of any tax due by the date the return is normally due, and upon the taxpayer maintaining continuing compliance with all provisions of the Income Tax Ordinance.
(3) A late filing penalty shall not be assessed in those cases in which the return is filed and the final tax paid within the period as extended provided all other filing and payment provisions of the Income Tax Ordinance have been met. However, the amount by which the actual tax found to be due exceeds the payment submitted with the tentative return shall bear late payment penalty and interest from the original due date of the return.
(4) Extensions granted by the Superintendent are done so with the understanding that the declaration, filing and payment requirements have been fulfilled. However, if upon further examination, it becomes evident that such requirements have not been met, interest and penalties shall be assessed in full and in the same manner as though no extension had been granted.
(c) Payment with Return.
(1) The taxpayer making a return shall, at the time of filing, without assessment or notice or demand, pay the amount of taxes shown to be due thereon.
(2) A taxpayer who has made and filed a complete return and who has overpaid the amount of tax due may have such overpayment refunded or applied against the next year estimated tax due at his or her election as indicated on the return.When no such election has been indicated by the taxpayer, any overpayment will be credited to the next tax year. All overpayments will be transferred first to any tax year in which there is a delinquent balance due before such overpayment will be credited forward to pay estimated taxes or be refunded.
(3) No tax shall be collected and no overpayment shall be refunded or applied against subsequent liabilities when less than one dollar ($1.00).
(d) Amended Returns.
(1) Where necessary, an amended return must be filed in order to report additional income and pay any additional tax due, or claim a refund of any tax overpaid, subject to the provisions of the Income Tax Ordinance. Such amended return shall be on a form prescribed by the Superintendent of Taxation. A taxpayer may not change the method of accounting or apportionment of net profits after the due date for filing the original return without prior approval of the Superintendent.
(2) Within three months from the final determination of any federal tax liability affecting the taxpayer's City tax liability, such taxpayer shall make and file an amended City return showing income subject to the tax based upon the final federal tax liability, and pay any additional tax due or make claim for refund of any overpayment.
(e) Consolidated Returns.
(1) Consolidated returns may be filed by a group of corporations that are affiliated through stock ownership, provided such group files consolidated returns for federal income tax purposes.
(2) For a subsidiary corporation to be included in a consolidated return, 80% or more of its stock must be owned by the other members of the affiliated group.
(3) A consolidated return must include all companies that are so affiliated.
(4) Once a consolidated return has been filed for any taxable year, the consolidated group must continue to file consolidated returns in subsequent years unless:
A. Permission, in writing, is granted by the Tax Superintendent; or
B. A new corporation, other than a corporation created or organized by a member of the group, has become a member of the group during the taxable year; or
C. A corporation member of the group is sold or exchanged.
(5) Liquidating a corporation or merging one of the corporations of the group into another member of the group will not qualify the group for filing separate returns.
(6) If a corporation becomes a member of the group during the taxable year, the consolidated return must include the income from the entire year of the parent corporation and any subsidiaries which were members of the group for the entire year, plus the income of each subsidiary that becomes a member of the group during the year for the period beginning with the date it became a member of the affiliated group.For the period prior to the time any subsidiary became a member of the group, separate returns must be filed for that subsidiary. When a subsidiary ceases to be a member of the affiliated group, the consolidated return must include the income of such subsidiary for the period during which it was a member, but for the period after it ceases to be a member of the group, separate returns must be filed. If a corporation has been a member of the affiliated group for less than a month of the taxable year of the group, it may be considered as not being part of the group. Similarly, a subsidiary may be considered as being a member of the affiliated group during the entire taxable year of the group if the period during which it was not a member does not exceed one month.
(7) If a subsidiary is a member of a consolidated group for only part of a taxable year, the income considered to be earned in such fractional part of the year shall be prorated accordingly.
(8) In determining the allocation fraction where a corporation becomes a member of the consolidated group or ceases to be a member during the taxable year, the property factor (Step 1 of the Three-Factor Business Apportionment Formula as provided in the Income Tax Ordinance and these Rules and Regulations) shall be determined on the basis of original cost of the property during the period such corporation was a member of the group. The rental portion of the factor, however, shall be calculated at eight times the annual rent.The gross receipts and wage factors shall be based on the actual amounts.
(9) All subsidiary corporations filing as a part of a consolidated group shall be liable for the tax as well as the parent corporation.
(10) In consolidating the net income, the taxable income of each corporation shall be calculated in accordance with the provisions governing the taxable income of separate corporations except that there shall be eliminated unrealized profits and loses in transactions between members of the affiliated group.
(11) In determining expenses that are not allowable because they are allocable to non- taxable income, such calculations shall be based on the consolidated net income.
(f) Operating Losses.
(1) Net losses (except any portion of a loss separately reportable for municipal tax purposes to another city) incurred during any taxable period, in a business or other activity subject to City income tax, are deductible from the taxpayer's net profits from similar business endeavors for the same period.
(2) Losses are deductible only in the taxable period in which they are incurred.There is no carry forward or backward of losses.
(Ord. 1418. Passed 6-11-07.)