(1) On all qualifying salaries, wages, commissions and other compensation and all other income from whatever source which is permitted by Ohio law to be taxed, which is earned, received, accrued or otherwise set apart during the effective period of this chapter by residents of the City of Vandalia.
(2) On all qualifying salaries, wages, commissions and other compensation and all other income from whatever source which is permitted by Ohio law to be taxed, which is earned, received, accrued or otherwise set apart during the effective period of this chapter by nonresidents for work done or services performed or rendered in the City of Vandalia.
(3) On the portion attributable to the City of Vandalia of the net profits earned and accrued or received during the effective period of this chapter of all resident associations, unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the City of Vandalia.
(4) On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner, member, other beneficiary or distributee, or owner of a resident unincorporated business entity, not attributable to the City of Vandalia upon which the tax was not paid by the entity.
(5) On the portion attributable to the City of Vandalia of the net profits earned and accrued or received during the effective period of this chapter of every non-resident unincorporated business entity derived from sales made, work done or services performed or rendered and business or other activities conducted in the City of Vandalia, whether or not such unincorporated business entity has an office or place of business in the City of Vandalia.
(6) On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner, owner, member, other beneficiary or distributee or owner of a non-resident unincorporated business entity not attributable to the City of Vandalia on which the tax was not paid by the entity.
(7) On the portion attributable to the City of Vandalia of the net profits earned and accrued or received during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the City of Vandalia, whether or not such corporations have a place of business in the City of Vandalia.
(8) If a taxpayer's taxable income includes income against which the taxpayer has taken a deduction for federal income tax purposes as reportable on the taxpayer's form 2106, the amount of the deduction for federal income tax purposes may be deducted from the taxpayer's net income in determining taxable income for the City of Vandalia income tax base.
(9) An individual taxpayer that has a net profit from a sole proprietorship he or she conducts, the schedule C actually filed for federal purposes shall be filed by the taxpayer to determine his or her net income from that proprietorship, as part of the City of Vandalia income tax return.
(Res. 05-R-17. Passed by voters 11-8-05; Res. 10-R-07. Passed by voters 5-4-10.)
(b) Determination of Profits Derived From City. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City of Vandalia, shall be determined by the books and records of the taxpayer, if such books and records of the taxpayer shall disclose with reasonable accuracy what portion of its net profit is attributable to that part of the business or profession conducted within the boundaries of Vandalia. In the absence of such records, the said portion shall be determined as follows:
(1) Multiply the entire net profits by a business allocation percentage to be the average ratio of:
A. The original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City of Vandalia during the taxable period to the original cost of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.
As used in the preceding paragraph, 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 or accrued during the taxable period to persons employed in the business or profession for services performed in the City of Vandalia to wages, salaries, and other compensation paid or accrued during the same period to persons employed in the business or profession, wherever their services are performed;
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in the City of Vandalia to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such a result.
(2) As used in paragraph (b)(1)C. of this section, "sales made in the City of Vandalia" means:
A. All sales of tangible personal property which is delivered within the City of Vandalia regardless of where title passes if shipped or delivered from a stock of goods within the City of Vandalia;
B. All sales of tangible personal property which is delivered within the City of Vandalia regardless of where title passes even though transported from a point outside the City of Vandalia if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City of Vandalia and the sales result from such solicitation or promotion;
C. All sales of tangible personal property which is shipped from a place within the City of Vandalia to purchasers outside the City of Vandalia regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) Determination of Taxable Base. For the purpose of this section, the taxable base shall be determined in accordance with Federal tax interpretations, when applicable, and with the accounting method used by the taxpayer for Federal income taxes adjusted to the requirements of this chapter.
(d) Consolidated Returns.
(1) Filing of consolidated returns may be permitted or required in accordance with the City of Vandalia Income Tax Rules and Regulations.
(2) In the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the City of Vandalia constituting only a portion of its total business, the Superintendent may require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the City of Vandalia. If the Superintendent finds net profits are not properly allocated to the City of Vandalia by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory or activity, or by some other method, he or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the City of Vandalia.
(e) Exceptions. The tax provided for herein shall not be levied upon:
(1) The military pay or allowances of active members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard;
(2) The income of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities;
(3) Compensation paid under Ohio R.C. 3501.28 or 3501.36 to a person serving as a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000.00) annually. Such compensation in excess of one thousand dollars ($1,000.00) shall be taxable, but the payer of such compensation shall not be required to withhold any tax from such compensation, notwithstanding the provisions of Section 880.06;
(4) Compensation paid to an employee of a transit authority, regional transit authority, or regional transit commission created under Ohio R.C. Chapter 306 for operating a transit bus or other motor vehicle for the authority or commission in or through the City of Vandalia, unless the bus or vehicle is operated on a scheduled route, the operator is subject to such a tax by reason of residence or domicile in the City of Vandalia, or the headquarters of the authority or commission is located within the City of Vandalia;
(5) The income of a public utility when that public utility is subject to the tax levied under Ohio R.C. 5727.24 or 5727.30, except starting January 1, 2002, the income of an electric company or combined company, as defined in Ohio R.C. 5727.01, computed by taking into account the adjustments provided by Ohio R.C. 5733.04(I)(16);
(6) The income of an individual if all of the following apply:
A. The individual does not reside in the City of Vandalia;
B. The compensation is paid for personal services performed by the individual in the City of Vandalia on twelve or fewer days during the calendar year;
C. In the case of an individual who is an employee, the principal place of business of the individual's employer is located outside the City of Vandalia and the individual pays tax on compensation described in paragraph B. of this subsection (6) to the city or village, if any, in which the employer's principal place of business is located, and no portion of that tax is refunded to the individual; and
D. The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by the Superintendent;
(7) Poor relief, unemployment insurance benefits, old age pensions or similar payments including disability benefits received from local, State or Federal governments or charitable, religious or educational organizations;
(8) Proceeds of insurance paid by reason of the death of the insured, pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived;
(9) Receipts from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations.
(10) Earnings and income of all persons under eighteen years of age, whether residents or non-residents.
(11) Alimony received.
(12) Gains from involuntary conversion, interest on Federal obligations, items of income already taxed by the State of Ohio from which the City of Vandalia is specifically prohibited from taxing, and income of a decedent's estate during the period of administration (except such income from the operation of a business).
(13) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any Act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce.
(14) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio or any Act of the Ohio General Assembly limiting the power of the City of Vandalia to impose net income taxes.
(15) Interest, dividends and other revenue from intangible property;
(16) On and after January 1, 2003, items excluded from income pursuant to Section 107 of the Internal Revenue Code.
(17) Distributions or dividends from the income of an S corporation to its shareholders.
(Ord. 67-26. Passed 12-4-67; Ord. 83-12. Passed 4-18-83; Res. 93-R-04. Passed 2-1-93; Ord. 02-24. Passed 12-23-02; Ord. 05-03. Passed 2-7-05; Ord. 09-11. Passed 6-15-09.)