(a) Any term used in this chapter that is not otherwise defined in this chapter has the same meaning as when used in a comparable context in laws of the United States relating to Federal income taxation or in Ohio R.C. Title LVII, unless the context clearly requires or indicates a different meaning. 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 Ohio R.C. Title LVII, 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 Ohio R.C. Title LVII.
(b) For purposes of this section, 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 division (c)(23)D. of this section, 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 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 Sections 1221 or 1231 of the Internal Revenue Code;
D. 1. Except as provided in Division (c)(1)D.2. 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 Sections 1221 or 1231 of the Internal Revenue Code;
2. Division (c)(1)D.1. of this section does not apply to the extent the income or gain is income or gain described in Sections 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 Ohio R.C. 4313.02;
H. 1. Except as limited by Divisions (c)(1)H.2., 3., 4., and 5. of this section, deduct any net operating loss incurred by the person in a taxable year beginning on or after January 1, 2017. The amount of such net operating loss shall be deducted from net profit that is reduced by exempt income 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 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.
2. No person may use the deduction allowed by division (c)(1)H. of this section to offset qualifying wages.
3. a. For taxable years beginning in 2018, 2019, 2020, 2021, or 2022, a person may not deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, more than 50% of the amount of the deduction otherwise allowed by division (c)(1)H.1. of this section.
b. For taxable years beginning in 2023 or thereafter, a person may deduct, for purposes of an income tax levied by a municipal corporation that levies an income tax before January 1, 2016, the full amount allowed by division (c)(1)H.1. of this section.
4. Any pre-2017 net operating loss carry-forward deduction that is available must be utilized before a taxpayer may deduct any amount pursuant to division (c)(1)H. of this section.
5. Nothing in division (c)(1)H.3.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)(1)H.3.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)(1)H.3.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)(1)H.3.a. of this section shall apply to the amount carried forward.
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 Section 891.073(e)(3)B.
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 Section 891.073(e)(3)B.
If the taxpayer is not a C corporation, is not a disregarded entity that has made the election described in division (c)(47)B. of this section, is not a publicly traded partnership that has made the election described in division (c)(23)D. of this section, and is not an individual, the taxpayer is required to 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 are not 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 is not be allowed as a deduction.
Nothing in division (c)(1) of this section permits a taxpayer to add or deduct any amount more than once or permits a taxpayer to deduct any amount paid to or accrued for purposes of Federal self-employment tax.
(2) A. "Assessment" means any of the following:
1. 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 Village;
2. A full or partial denial of a refund request issued under Section 891.106(b)(2);
3. The Tax Administrator's denial of a taxpayer's request for use of an alternative apportionment method, issued under Section 891.072(b)(2); or
4. The Tax Administrator's requirement for a taxpayer to use an alternative apportionment method, issued under Section 891.072(b)(3).
5. For purposes of division (c)(2)A.1., 2., 3., and 4. of this section, an assessment will commence the person's time limitation for making an appeal to the Board of Tax Review pursuant to Section 891.24, and must have "ASSESSMENT" written in all capital letters at the top of such finding.
B. "Assessment" does not include notice(s) denying a request for refund issued under Section 891.106(b)(3), a billing statement notifying a taxpayer of current or past-due balances owed to the Village, 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 the Village income tax.
(5) "Calendar quarter" means the three-month period ending on the last day of March, June, September, or December.
(6) "Employer" means a person that is an employer for Federal tax purposes.
(7) "Certified Mail," "Express Mail," "United States Mail," "Postal Service," and similar terms include any delivery service authorized pursuant to Ohio R.C. 5703.056.
(8) "Compensation" means any form of remuneration paid to an employee for personal services.
(9) "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.
(10) "Domicile" means the true, fixed and permanent home of the taxpayer to which, whenever absent, the taxpayer intends to return. A taxpayer, even if having more than one residence, may have only one domicile. This term is further defined in Section 891.052.
(11) "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, welfare benefits, 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)(11)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 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) for the taxable year. Such compensation in excess of one thousand dollars ($1,000) for the taxable year will be subject to taxation by the Village. The Village may 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. Awards for personal injuries or for damages to property from insurance proceeds or otherwise, excluding compensation paid for lost salaries or wages or awards for punitive damages, and further excluding compensation for loss of business income;
I. Income of a public utility when that public utility is subject to the tax levied under Ohio R.C. 5727.24 or 5727.30. This division (c)(11)I. does not apply for purposes of Ohio R.C. Chapter 5745.
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)(34) of this section;
M. 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)(11) 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.
N. [Left intentionally blank]
O. All of the Village taxable income earned by individuals while they are under 18 years of age.
P. 1. Except as provided in divisions (c)(11)P.2., 3., and 4. of this section, qualifying wages described in Section 891.062(b)(1) or (e) to the extent the qualifying wages are not subject to withholding for the Village under either of those divisions.
2. The exemption provided in division (c)(11)P.1. 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.
3. The exemption provided in division (c)(11)P.1. of this section does not apply to qualifying wages that an employer elects to withhold under Section 891.062(d)(2).
4. The exemption provided in division (c)(11)P.1. of this section does not apply to qualifying wages if both of the following conditions apply:
a. For qualifying wages described in Section 891.062(b)(1), 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 Section 891.062(e), 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)(11)P.4.a. of this section on the basis of the employee not performing services in that municipal corporation.
Q. 1. Except as provided in division (c)(11)Q.2. and 3. of this section, compensation that is not qualifying wages paid to a nonresident individual for personal services performed in the Village on not more than 20 days in a taxable year.
2. The exemption provided in division (c)(11)Q.1. of this section does not apply under either of the following circumstances:
a. The individual's base of operation is located in the Village.
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)(11)Q.2.b. of this section, "professional athlete," "professional entertainer," and "public figure" have the same meanings as in Section 891.062.
3. Compensation to which division (c)(11)Q. of this section applies will 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 will be treated as earned or received where the individual is domiciled.
4. For purposes of division (c)(11)Q. 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 Ohio R.C. 709.023 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 is be payable only to the municipal corporation of residence.
S. 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.
T. Salaries of the mentally retarded or developmentally disabled while working in a government funded workshop for less than the minimum wage.
(12) "Form 2106" means Internal Revenue Service Form 2106 filed by a taxpayer pursuant to the Internal Revenue Code.
(13) "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, including a request for refund.
(14) "Income" means the following:
A. 1. For residents, all income, salaries, qualifying wages, commissions, tips, and other compensation from whatever source earned or received by the resident, including but not limited to bonuses, incentive and profit-sharing payments, vacation pay, payments received under a wage continuation plan from an employer or third party during the period of disability or sickness, and contributions made by or on behalf of an employee from the employee's gross wages to a tax deferred plan such as a 401k, 403b, IRA, Keogh, SEP or other similar plans, separation pay of any kind, and 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)(23)D. of this section.
2. For the purposes of division (c)(14)A.1. 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)(14)A.4. 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 must 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.
3. Division (c)(14)A.2. of this section applies with respect to any net profit or net operating loss attributable to an ownership interest in an S corporation as shareholders' distributive shares of net profits from S corporations are subject to tax in the Village as provided in division (c)(14)E. of this section.
4. Any amount of a net operating loss used to reduce a taxpayer's net profit for a taxable year will reduce the amount of net operating loss that may be carried forward to any subsequent year for use by that taxpayer. In no event will 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 Village, including but not limited to bonuses, incentive and profit-sharing payments, vacation pay, payments received under a wage continuation plan from an employer or third party during the period of disability or sickness, and contributions made by or on behalf of an employee from the employee's gross wages to a tax deferred plan such as a 401k, 403b, IRA, Keogh, SEP, or other similar plans, and separation pay of any kind, and 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. Income derived from prizes, awards, gambling, wagering, lotteries, sports winnings or other similar games of chance by residents or nonresidents of the Village within the Village in an amount in excess of ten thousand dollars ($10,000) or on the basis of activities conducted within the Village. If the taxpayer is considered a professional gambler for Federal income tax purposes, related deductions as permitted by the Internal Revenue Code are allowed against gambling and sports winnings; otherwise no such deductions are allowed.
E. For residents, an S corporation shareholder's distributive share of net profits of an S corporation.
(15) "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 other than stock options including, but not limited to, investments, deposits, money, or credits as those terms are defined in Ohio R.C. Chapter 5701, 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.
(16) "Internal Revenue Code" means the "Internal Revenue Code of 1986," 100 Sta. 2085, 26 U.S.C.A. 1, as amended.
(17) "Limited liability company" means a limited liability company formed under Ohio R.C. Chapter 1705 or under the laws of another state.
(18) "Division," unless the context clearly indicates otherwise, means part of a section of this chapter.
(19) "Municipal corporation" means, in general terms, a status conferred upon a local government unit, by State law giving the unit certain autonomous operating authority such as the power of taxation, power of eminent domain, police power and regulatory power, and includes a joint economic development district or joint economic development zone that levies an income tax or net profit tax under Ohio R.C. 718.691, 715.70, 715.71, or 715.74. The Village is a municipal corporation for purposes of this chapter.
(20) A. "Municipal taxable income" means the following:
1. For a person other than an individual, income reduced by exempt income to the extent otherwise included in income and then, as applicable, apportioned or sitused to the Village under Section 891.072, and further reduced by any pre-2017 net operating loss carry-forward available to the person for the Village.
2. For an individual who is a resident of the Village, income reduced by exempt income to the extent otherwise included in income, then reduced as provided in division (c)(20)B. of this section, and further reduced by any pre-2017 net operating loss carry- forward available to the individual for the Village.
3. For an individual who is a nonresident of the Village, income reduced by exempt income to the extent otherwise included in income and then, as applicable, apportioned or sitused to the Village under Section 891.072, then reduced as provided in division (c)(20)B. of this section, and further reduced by any pre-2017 net operating loss carry- forward available to the individual for the Village.
B. In computing the municipal taxable income of a taxpayer who is an individual, the taxpayer may subtract, as provided in division (c)(20)A.2. or 3. 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. 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.
(21) "Municipality" means the Village of Walton Hills, and includes any joint economic development district or joint economic development zone that levies an income tax or net profit tax under Ohio R.C. 718.691, 715.70, 715.71, or 715.74 or within which the Village levies an income tax or net profit tax pursuant to said sections of the Ohio Revised Code, including but not limited to the Village of Walton Hills - Sagamore Hills Township Joint Economic Development District.
(22) "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.
(23) A. "Net profit" for a person other than an individual means adjusted Federal taxable income. For the purposes of this division (c)(23)A. the net operating loss carried forward will be calculated and deducted in the same manner as provided in division (c)(1)H. of this section.
B. "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.
C. For the purposes of this chapter, and notwithstanding division (c)(23)A. of this section, net profit of a disregarded entity is not taxable as against that disregarded entity, but will instead be included in the net profit of the owner of the disregarded entity.
D. 1. For purposes of this chapter, "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.
2. For the purposes of this chapter, and notwithstanding any other provision of this chapter, the net profit of a publicly traded partnership that makes the election described in division (c)(23)D. of this section will be taxed as if the partnership were a C corporation, and will not be treated as the net profit or income of any owner of the partnership.
3. 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 in one or more municipal corporations in this State may elect to be treated as a C corporation for municipal income tax purposes. The publicly traded partnership must make the election in every municipal corporation in which the partnership is subject to taxation on its net profits. The election must be made on the annual tax return filed in each such municipal corporation. Once the election is made, the election is binding for a five-year period beginning with the first taxable year of the initial election. The election continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing municipal income tax returns as a C corporation under division (c)(23)D.4. of this section.
4. An election to discontinue filing as a C corporation must be made in the first year following the last year of a five-year election period in effect under division (c)(23)D.3. of this section. The election to discontinue filing as a C corporation is binding for a five-year period beginning with the first taxable year of the election and continues to be binding for each subsequent five-year period unless the taxpayer elects to discontinue filing municipal income tax returns as a partnership. An election to discontinue filing as a partnership must be made in the first year following the last year of a five-year election period.
5. The publicly traded partnership is not required to file the election with any municipal corporation in which the partnership is not subject to taxation on its net profits, but division (c)(23)D. of this section applies to all municipal corporations in which an individual owner of the partnership resides.
6. The individual owners of the partnership not filing as a C corporation are required to file with their municipal corporation of residence, and report partnership distribution of net profit.
(24) "Nonresident" means an individual that is not a resident of the Village, or other applicable municipal corporation.
(25) "Ohio Business Gateway" means the online computer network system, created under Ohio R.C. 125.30, that allows persons to electronically file business reply forms with State agencies and includes any successor electronic filing and payment system.
(26) "Other payer" means any person, other than an individual's employer or the employer's agent, who pays an individual any amount included in the Federal gross income of the individual.
(27) "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.
(28) "Pension" means 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.
(29) "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.
(30) "Postal Service" means the United States Postal Service, or private delivery service delivering documents and packages within an agreed upon delivery schedule, or any other carrier service delivering the item.
(31) "Postmark date," "date of postmark," and similar terms include the date recorded and marked by a delivery service and recorded electronically to a database kept in the regular course of its business and marked on the cover in which the payment or document is enclosed, the date on which the payment or document was given to the delivery service for delivery.
(32) A. "Pre-2017 net operating loss carry-forward" means any net operating loss incurred in a taxable year beginning before January 1, 2017, to be carried forward and utilized to offset income or net profit generated in a municipality in future taxable years.
B. For the purpose of calculating municipal taxable income, any pre-2017 net operating loss carry-forward 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.
(33) "Employee" means an individual who is an employee for Federal income tax purposes.
(34) "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:
1. 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.
2. 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.
3. Any amount included in wages if 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.
4. Any amount included in wages that is exempt income.
B. Add the following amounts:
1. Any amount not included in wages solely because the employee was employed by the employer before April 1, 1986.
2. Any amount not included in wages if the amount is an amount described in Sections 401(k), 403(b), or 457 of the Internal Revenue Code. Division (c)(34)B.2. of this section applies only to employee contributions and employee deferrals.
3. Any amount that is supplemental unemployment compensation benefits described in Section 3402(o)(2) of the Internal Revenue Code and not included in wages.
4. 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.
5. 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 of 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)(34)B. of this section or Ohio R.C. Section 718.03, as that section existed before March 23, 2015.
(35) "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 50% of the value of the taxpayer's outstanding stock;
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 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)(35)D. of this section, provided the taxpayer owns directly, indirectly, beneficially, or constructively, at least 50% 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)(35)A. to C. of this section have been met.
(36) "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, "20%" shall be substituted for "5%" wherever "5%" appears in Section 1563(e) of the Internal Revenue Code.
(37) "Resident" means an individual who is domiciled in the Village as determined under Section 891.052, or where the context clearly indicates, in another applicable municipal corporation.
(38) "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.
(39) "Schedule C" means Internal Revenue service Schedule C (Form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.
(40) "Schedule E" means Internal Revenue Service Schedule E (Form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.
(41) "Schedule F" means Internal Revenue Service Schedule F (Form 1040) filed by a taxpayer pursuant to the Internal Revenue Code.
(42) "Single member limited liability company" means a limited liability company that has one direct member.
(43) "Small employer" means any employer that had total revenue of less than five hundred thousand dollars ($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; 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.
(44) "Tax Administrator" means the individual charged with direct responsibility for administration of an income tax levied by the Village in accordance with this chapter, and also includes any person retained by the Village to administer taxes levied by the Village, but only if such person is not compensated in whole or in part on a contingency basis;
(45) "Tax return preparer" means any individual described in Internal Revenue Code Section 7701(a)(36) or 26 C. F. R. 301.7701-15.
(46) "Taxable year" means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code.
(47) A. "Taxpayer" means a person subject to a tax levied on income by the Village in accordance with this chapter. "Taxpayer" does not include a grantor trust or, except as provided in division (c)(47)B.1. of this section, a disregarded entity.
B. 1. 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 Ohio R.C. 718.01(L) 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.
2. For purposes of division (c)(47)B.1.e. of this section, the Village 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 the Village than in any other municipal corporation in Ohio, and that tax liability to the Village for its taxable year ending in 2003 was at least four hundred thousand dollars ($400,000).
(48) "Taxpayers' rights and responsibilities" means the rights provided to taxpayers in Ohio R.C. 718.11 , 718.12 , 718.19, 718.23, 718.36, 718.37, 718.38, 5717.011, and 5717.03 and any corresponding ordinances of the Village, and the responsibilities of taxpayers to file, report, withhold, remit, and pay municipal income tax and otherwise comply with Ohio R.C. Chapter 718 and ordinances and rules adopted by the Village for the imposition and administration of a municipal income tax.
(49) "The Village" means the Village of Walton Hills and, for all purposes in this chapter, other than where plainly stated otherwise in this chapter, a joint economic development district in which the Village is a partner or participant, including but not limited to the Village of Walton Hills - Sagamore Hills Township Joint Economic Development District.
(Ord. 2015-6. Passed 11-17-15.)