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(a) (1) Each employer, agent of an employer, or other payer located or doing business in the Village is required to withhold from each employee an amount equal to the qualifying wages of the employee earned by the employee in the Village multiplied by the applicable rate of the Village's income tax, except for qualifying wages for which withholding is not required under Section 891.062 or divisions (d) or (f) of this section. An employer, agent of an employer, or other payer is required to 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.
(2) In addition to withholding the amounts required under division (a)(1) of this section, an employer, agent of an employer, or other payer may also deduct and withhold, on the request of an employee, taxes for the municipal corporation in which the employee is a resident.
(b) An employer, agent of an employer, or other payer is required to remit to the Village Tax Administrator 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, along with any report required by the Tax Administrator to accompany such payment, according to the following schedule:
(1) Any employer, agent of an employer, or other payer not required to make payments under division (b)(2) of this section of taxes required to be deducted and withheld is required to make quarterly payments to the Tax Administrator not later than the last day of the month following the last day of each calendar quarter.
(2) Taxes required to be deducted and withheld are required to 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 Village in the preceding calendar year exceeded two thousand three hundred ninety-nine dollars ($2,399), or if the total amount of taxes deducted and withheld or required to be deducted and withheld on behalf of the Village in any month of the preceding calendar quarter exceeded two hundred dollars ($200.00). Payment under division (b)(2) of this section shall be made so that the payment is sent to the Tax Administrator not later than fifteen days after the last day of each month.
(3) Except as provided in division (b)(4) of this section, an employer, agent of an employer or other payer may make payment by electronic funds transfer to the Tax Administrator of all taxes deducted and withheld on behalf of the employee for remittance to the Village 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 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.
(4) An agent of an employer that is providing employee tax withholding services to employers, that provides such services to five or more employers with employees within the Village is required to make payment by electronic funds transfer to the Tax Administrator of all taxes deducted and withheld on behalf of the employee for remittance to the Village, if such agent 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 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.
(c) 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 will be accepted by the Village as the return required of an 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.
(d) An employer, agent of an employer, or other payer is not required to withhold municipal 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.
(e) (1) 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.
(2) The failure of an employer, agent of an employer, or other payer to remit to the Village 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.
(f) Compensation deferred before June 26, 2003, is not subject to the Village's income tax or income tax withholding requirement to the extent the deferred compensation does not constitute qualifying wages at the time the deferred compensation is paid or distributed.
(g) 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 Village until such time as the withheld amount is remitted to the Tax Administrator.
(h) On or before the last day of February of each year, an employer shall file a Withholding Reconciliation Return with the Tax Administrator listing the names, addresses, and social security numbers of all employees from whose qualifying wages tax was withheld or should have been withheld for the Village during the preceding calendar year, the amount of tax withheld, if any, from each such employee's qualifying wage, the total amount of qualifying wages paid to such employee during the preceding calendar year, 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, 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, and other information as may be required by the Tax Administrator.
(i) 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, is 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.
(j) An employer is required to deduct and withhold municipal income tax on tips and gratuities received by the employer's employees and constituting qualifying wages 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.
(k) 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.
(Ord. 2015-6. Passed 11-17-15; Ord. 2016-16. Passed 12-20-16.)
(a) The following terms as used in this section:
(1) "Employer" includes a person that is a related member to or of an employer.
(2) "Professional athlete" means an athlete who performs services in a professional athletic event for wages or other remuneration.
(3) "Professional entertainer" means a person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.
(4) "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.
(5) "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.
(6) "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.
(7) "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 (b)(1) 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 deemed in accordance with division (b)(2) of this section, except that "location" shall be substituted for "the Village" wherever "the Village" appears in that division.
(B) (1) Subject to divisions (c), (e), and (f) of this section, an employer is not required to withhold municipal income tax on qualifying wages paid to an employee for the performance of personal services in the Village if the employee performed such services in the Village on 20 or fewer days in a calendar year, unless one of the following conditions applies:
A. The employee's principal place of work is located in the Village.
B. The employee performed services at one or more presumed worksite locations in the Village. For the purposes of this division, "presumed worksite location" means a construction site or other temporary worksite in this State at which the employer provides services that can reasonably be 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:
1. The nature of the services are such that it will require more than 20 days of actual services to complete the services;
2. The agreement between the employer and its customer to perform services at a location requires the employer to perform actual services at the location for more than 20 days.
C. The employee is a resident of the Village and has requested that the employer withhold tax from the employee's qualifying wages as provided in Section 891.061.
(d) 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 within the Village.
(2) For the purposes of division (b)(1) of this section, an employee shall be considered to have spent a day performing services in the Village only if the employee spent more time performing services for or on behalf of the employer in the Village 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:
A. Traveling to the location at which the employee will first perform services for the employer for the day;
B. Traveling from a location at which the employee was performing services for the employer to any other location;
C. 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;
D. Transporting or delivering property described in division (b)(2)C. 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;
E. 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.
(c) If the principal place of work of an employee is located in another municipal corporation that imposes an income tax, the exception from withholding requirements described in division (b)(1) 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 other municipal corporation.
(d) (1) Except as provided in division (d)(2) of this section, if, during a calendar year, the number of days an employee spends performing personal services in the Village exceeds the 20-day threshold described in division (b)(1) of this section, the employer shall withhold and remit tax to the Village for any subsequent days in that calendar year on which the employer pays qualifying wages to the employee for personal services performed in the Village.
(2) An employer required to begin withholding tax for the Village under division (d)(1) of this section may elect to withhold tax for the Village for the first 20 days on which the employer paid qualifying wages to the employee for personal services performed in the Village.
(3) If an employer makes the election described in division (d)(2) of this section, the taxes withheld and paid by such an employer during those first 20 days to the Village are refundable to the employee.
(e) Without regard to the number of days in a calendar year on which an employee performs personal services in the Village, an employer shall withhold municipal income tax on all of the employee's qualifying wages for a taxable year and remit that tax only to the municipal corporation in which the employer's fixed location is located if the employer qualifies as a small employer as defined in Section 891.04. To determine whether an employer qualifies as a small employer for a taxable year, the Tax Administrator may require the employer to provide the Tax Administrator with the employer's Federal income tax return for the preceding taxable year.
(f) Divisions (b)(1) and (d) 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 Section 891.061.
(Ord. 2015-6. Passed 11-17-15.)
(a) A casino facility or a casino operator, as defined in Section 6(C)(9) of Article XV, Ohio Constitution, and Ohio R.C. 3772.01, respectively, located within the Village, or a lottery sales agent conducting video lottery terminals sales on behalf of the State located within the Village, must withhold and remit municipal income tax to the Tax Administrator with respect to amounts other than qualifying wages as provided in this section.
(b) If a person's winnings at such 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 must deduct and withhold municipal income tax from the person's winnings at the rate of the tax imposed by the Village.
(c) Amounts deducted and withheld by a casino operator hereunder are held in trust for the benefit of the Village.
(1) On or before the tenth day of each month, the casino operator shall file a return electronically with the Tax Administrator, 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 Tax Administrator all amounts deducted and withheld during the preceding month.
(2) Annually, on or before the thirty-first day of January, a casino operator located in the Village must shall file an annual return electronically with the Tax Administrator, 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, that 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 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 municipal income tax with respect to those winnings.
(d) 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 municipal income tax from the person's prize award at the rate of the tax imposed by the municipal corporation in which the video lottery terminal facility is located.
(e) Amounts deducted and withheld by a video lottery sales agent are held in trust for the benefit of the municipal corporation to which the tax is owed.
(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 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 (e) of this section and shall make those records available to the Tax Administrator upon request. Such records shall be maintained in accordance with Ohio R.C. 5747.17 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 municipal corporation 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 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 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.
(f) 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; or
(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.
(g) 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 municipal income tax with respect to that prize award.
(h) 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 50% of the tax deducted and withheld; or
(2) For the failure to file, or the late filing of, a monthly or annual return, a penalty of five hundred dollars ($500.00) for each return not filed or filed late. Interest shall accrue on past due amounts deducted and withheld at the rate prescribed in Ohio R.C. 5703.47.
(i) Amounts deducted and withheld on behalf of the Village shall be allowed as a credit against payment of the tax imposed by the Village 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.
(j) The Tax Administrator shall prescribe the forms of the receipts and returns required under this section.
(Ord. 2015-6. Passed 11-17-15.)
"Municipal Taxable Income" for a taxpayer, who is not an individual, for the Village is calculated as follows:
(a) "Income" reduced by "exempt income" to the extent otherwise included in income, multiplied by apportionment, further reduced by any "Pre-2017 net operating loss carry- forward" equals "municipal taxable income".
(1) "Income" for a taxpayer that is not an individual means the "net profit" of the taxpayer.
A. "Net profit" for a person other than an individual is defined in Section 891.04(c)(23).
B. "Adjusted Federal taxable income" is defined in Section 891.04(c)(1).
(2) "Exempt income" is defined in Section 891.04(c)(11).
(3) "Apportionment" means the apportionment as determined by Section 891.072.
(4) "Pre-2017 net operating loss carry-forward" is defined in Section 891.04(c)(32).
(Ord. 2015-6. Passed 11-17-15.)
This section applies to any taxpayer engaged in a business or profession in the Village, unless the taxpayer is an individual who resides in the Village or the taxpayer is an electric company, combined company, or telephone company that is subject to and required to file reports under Ohio R.C. Chapter 5745. For purposes of this section, the Village is defined in Section 891.04(c)(49), and the net profit calculated herein shall apply as set forth in Sections 891.071 and 891.072.
(a) Net profit from a business or profession conducted both within and without the boundaries of the Village shall be considered as having a taxable situs in the Village for purposes of municipal income taxation in the same proportion as the average ratio of the following:
(1) 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 Village 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;
(2) Wages, salaries, and other compensation paid during the taxable period to individuals employed in the business or profession for services performed in the Village 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 Section 891.062;
(3) Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the Village to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.
(b) (1) If the apportionment factors described in division (a) of this section do not fairly represent the extent of a taxpayer's business activity in the Village, the taxpayer may request, or the Tax Administrator 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:
A. Separate accounting;
B. The exclusion of one or more of the factors;
C. The inclusion of one or more additional factors that would provide for a more fair apportionment of the income of the taxpayer to the Village;
D. A modification of one or more of the factors.
(2) A taxpayer request to use an alternative apportionment method must 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 Section 891.19(a).
(3) The Tax Administrator may require a taxpayer to use an alternative apportionment method as described in division (b)(1) of this section only by issuing an assessment to the taxpayer within the period prescribed by Section 891.19(a).
(4) Nothing in division (b) 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.
(c) As used in division (a)(2) 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:
(1) A location that is owned, controlled, or used by, rented to, or under the possession of one of the following:
A. The employer;
B. A vendor, customer, client, or patient of the employer, or a related member of such a vendor, customer, client, or patient;
C. A vendor, customer, client, or patient of a person described in division (c)(1)B. of this section, or a related member of such a vendor, customer, client, or patient.
(2) 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;
(3) 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 (c)(1) or (2) 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.
(d) For the purposes of division (a)(3) of this section, receipts from sales and rentals made and services performed are sitused to the Village as follows:
(1) Gross receipts from the sale of tangible personal property are sitused to the municipal corporation in which the sale originated. For the purposes of this division, a sale of property originates in the Village if, regardless of where title passes, the property meets any of the following criteria:
A. The property is shipped to or delivered within the Village from a stock of goods located within the Village.
B. The property is delivered within the Village from a location outside the Village, provided the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village and the sales result from such solicitation or promotion.
C. The property is shipped from a place within the Village to purchasers outside the Village, 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.
(2) Gross receipts from the sale of services are sitused to the Village to the extent that such services are performed in the Village.
(3) To the extent included in income, gross receipts from the sale of real property located in the Village are sitused to the Village.
(4) To the extent included in income, gross receipts from rents and royalties from real property located in the Village are sitused to the Village.
(5) Gross receipts from rents and royalties from tangible personal property are sitused to the Village based upon the extent to which the tangible personal property is used in the Village.
(e) 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 is subject to tax only by the municipal corporation in which the property generating the net profit is located and the municipal corporation in which the individual taxpayer that receives the net profit resides. The Village will 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.
(f) (1) Except as provided in division (f)(2) of this section, commissions received by a real estate agent or broker relating to the sale, purchase, or lease of real estate are sitused to the municipal corporation in which the real estate is located. Net profit reported by the real estate agent or broker will be allocated to the Village based upon the ratio of the commissions the agent or broker received from the sale, purchase, or lease of real estate located in the Village to the commissions received from the sale, purchase, or lease of real estate everywhere in the taxable year.
(2) An individual who is a resident of the Village shall report the individual's net profit from all real estate activity on the individual's annual tax return for the Village. Such an individual may claim a credit for taxes the individual paid on such net profit to another municipal corporation to the extent that such credit is allowed under Section 891.091.
(g) If, in computing a taxpayer's adjusted Federal taxable income, the taxpayer deducted any amount with respect to a stock option granted to an employee, the taxpayer shall add the amount that is exempt from taxation to the taxpayer's net profit that was apportioned to that municipal corporation. In no case shall a taxpayer be required to add to its net profit that was apportioned to the Village any amount other than the amount upon which the employee would be required to pay tax were the amount related to the stock option not exempted from taxation. This division applies solely for the purpose of making an adjustment to the amount of a taxpayer's net profit that was apportioned to the Village under this section.
(h) When calculating the ratios described in division (a) of this section for the purposes of that division or division (b) 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.
(Ord. 2015-6. Passed 11-17-15.)
(a) 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 (a)(1) of this section.
(4) "Incumbent local exchange carrier" has the same meaning as in Ohio R.C. 4927.01.
(5) "Local exchange telephone service" has the same meaning as in Ohio R.C. 5727.01.
(b) (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 municipal 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.
A. 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.
B. 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 (b)(2) of this section; or
C. A taxpayer receives permission from the Tax Administrator. The Tax Administrator will 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 (b)(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 divisions (b)(1) or (2) of this section is binding on all members of the affiliated group of corporations subject to a municipal income tax.
(c) A taxpayer that is a member of an affiliated group of corporations that filed a consolidated Federal income tax return for a taxable year is required to file a consolidated municipal 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 Village. A taxpayer that is required to file a consolidated municipal income tax return for a taxable year is also required to file a consolidated municipal 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.
(d) A taxpayer is required to prepare a consolidated municipal 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.
(e) (1) Except as otherwise provided in divisions (e)(2), (3), and (4) of this section, corporations that file a consolidated municipal income tax return must compute adjusted Federal taxable income, as defined in Section 891.04(c)(1), 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 municipal income tax return shall make any adjustment otherwise required under Section 891.04(c)(1) 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 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 municipal income tax return must 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 Section 891.072, exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group's net profit sitused to a municipal corporation. If the entity's net profit or loss is so excluded, the entity is 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 Section 891.072, 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 Village. If the entity's net profit or loss is so included, the entity is not 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 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, all of the following shall apply:
A. The corporation filing the consolidated municipal income tax return must 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 Section 891.072, exclude the property, payroll, and gross receipts of the pass-through entity in the computation of the affiliated group's net profit sitused to a municipal corporation;
B. The pass-through entity is subject to municipal 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.
(f) Corporations filing a consolidated municipal income tax return must make the computations required under Section 891.072 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.
(g) Each corporation filing a consolidated municipal income tax return is jointly and severally liable for any tax, interest, penalties, fines, charges, or other amounts imposed by a municipal corporation 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.
(h) Corporations and their affiliates that made an election or entered into an agreement with the Village before January 1, 2016, to file a consolidated or combined tax return with the Village 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.
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