Loading...
"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.
The Village, by ordinance, may grant a refundable or non-refundable credit against its tax on income to a taxpayer to foster job creation in the Village. If a credit is granted under this Section, it will be measured as a percentage of the new income tax revenue the Village derives from new employees of the taxpayer and shall be for a term not exceeding fifteen years. Before the Village passes an ordinance granting a credit, the Village and the taxpayer must enter into an agreement specifying all the conditions of the credit.
(Ord. 2015-6. Passed 11-17-15.)
The Village, by ordinance, may grant a refundable or nonrefundable credit against its tax on income to a taxpayer for the purpose of fostering job retention in the Village. If a credit is granted under this section, it will be measured as a percentage of the income tax revenue the Village derives from the retained employees of the taxpayer, and may not be for a term exceeding 15 years. Before the Village passes an ordinance allowing such a credit, the Village and the taxpayer must enter into an agreement specifying all the conditions of the credit.
(Ord. 2015-6. Passed 11-17-15.)
(a) As used in this section:
(1) "Estimated taxes" means the amount a taxpayer reasonably estimates to be the taxpayer's income tax liability to the Village for the current taxable year.
(2) "Tax liability" means the total taxes due to the Village for the taxable year, after allowing any credit to which the taxpayer is entitled, and after applying any estimated tax payment, withholding payment, or credit from another taxable year.
(b) (1) Every taxpayer must make a declaration of estimated taxes for the current taxable year, on the form prescribed by the Tax Administrator, if the amount payable as estimated taxes is at least two hundred dollars ($200.00). For the purposes of this section:
A. Taxes withheld from qualifying wages will be considered as paid to the Village when such taxes were withheld in equal amounts on each payment date. If the taxpayer establishes the dates on which all amounts were actually withheld, the amounts withheld will be considered as paid on the dates on which the amounts were actually withheld.
B. An overpayment of tax applied as a credit to a subsequent taxable year is deemed to be paid on the date of the postmark stamped on the cover in which the payment is mailed or, if the payment is made by electronic funds transfer, the date the payment is submitted. As used in this division, "date of the postmark" means, in the event there is more than one date on the cover, the earliest date imprinted on the cover by the Postal Service.
C. A taxpayer having a taxable year of less than 12 months must make a declaration under rules prescribed by the Tax Administrator.
(2) Taxpayers filing joint returns must file joint declarations of estimated taxes.
(3) The declaration of estimated taxes must be filed on or before the date prescribed for the filing of municipal income tax returns under Section 891.101(g) or on or before the fifteenth day of the fourth month of the first taxable year after the taxpayer becomes subject to tax for the first time.
(4) Taxpayers reporting on a fiscal year basis must file a declaration on or before the fifteenth day of the fourth month after the beginning of each fiscal year or period.
(5) The original declaration or any subsequent amendment may be increased or decreased on or before any subsequent quarterly payment day as provided in this section.
(c) (1) The required portion of the tax liability for the taxable year that is payable through estimated taxes made payable to the Village or Tax Administrator, including the application of tax refunds to estimated taxes and withholding on or before the applicable payment date, is as follows:
A. On or before the fifteenth day of the fourth month after the beginning of the taxable year, 22.5% of the tax liability for the taxable year;
B. On or before the fifteenth day of the sixth month after the beginning of the taxable year, 45% of the tax liability for the taxable year;
C. On or before the fifteenth day of the ninth month after the beginning of the taxable year, 67.5% of the tax liability for the taxable year;
D. On or before the fifteenth day of the first month of the following taxable year, 90% of the tax liability for the taxable year.
(2) A taxpayer may amend a declaration under rules prescribed by the Tax Administrator, as provided in Section 891.20. When an amended declaration has been filed, the unpaid balance shown due on the amended declaration must be paid in equal installments on or before the remaining payment dates. The amended declaration must be filed on the next applicable due date as outlined in (c)(1)A. through D. of this section.
(3) On or before the fifteenth day of the fourth month of the year following that for which the declaration or amended declaration was filed, an annual return is required to be filed and any balance which may be due must be paid with the return in accordance with Section 891.101.
A. For taxpayers who are individuals, or who are not individuals and are reporting and filing on a calendar year basis, the annual tax return is due on the same date as the filing of the Federal tax return, unless extended pursuant to Ohio R.C. 5747.08(G).
B. For taxpayers who are not individuals, and are reporting and filing on a fiscal year basis or any period other than a calendar year, the annual return is due on the fifteenth day of the fourth month following the end of the taxable year or period.
(4) An amended declaration is required whenever the taxpayer's estimated tax liability changes during the taxable year. A change in estimated tax liability may either increase or decrease the estimated tax liability for the taxable year.
(d) (1) In the case of any underpayment of any portion of a tax liability, a penalty and interest may be imposed pursuant to Section 891.11 of this chapter upon the amount of underpayment for the period of underpayment, unless the underpayment is due to reasonable cause as described in division (e) of this section. The amount of the underpayment shall be determined as follows:
A. For the first payment of estimated taxes each year, 22.5% of the tax liability, less the amount of taxes paid by the date prescribed for that payment;
B. For the second payment of estimated taxes each year, 45% of the tax liability, less the amount of taxes paid by the date prescribed for that payment;
C. For the third payment of estimated taxes each year, 67.5% of the tax liability, less the amount of taxes paid by the date prescribed for that payment;
D. For the fourth payment of estimated taxes each year, 90% of the tax liability, less the amount of taxes paid by the date prescribed for that payment.
(2) The period of the underpayment shall run from the day the estimated payment was required to be made to the date on which the payment is made. For purposes of this section, a payment of estimated taxes on or before any payment date shall be considered a payment of any previous underpayment only to the extent the payment of estimated taxes exceeds the amount of the payment presently required to be paid to avoid any penalty.
(e) An underpayment of any portion of tax liability determined under division (d) of this section will be deemed to be due to reasonable cause and the penalty imposed by this section will not be added to the taxes for the taxable year if any of the following apply:
(1) The amount of estimated taxes that were paid equals at least 90% of the tax liability for the current taxable year, determined by annualizing the income received during the year up to the end of the month immediately preceding the month in which the payment is due.
(2) The amount of estimated taxes that were paid equals at least 100% of the tax liability shown on the return of the taxpayer for the preceding taxable year, provided that the immediately preceding taxable year reflected a period of 12 months and the taxpayer filed a return with the Village under Section 891.101 for that year.
(3) The taxpayer is an individual who resides in the Village but was not domiciled there on the first day of January of the calendar year that includes the first day of the taxable year.
(f) The Tax Administrator may waive the requirement for filing a declaration of estimated taxes for any class of taxpayers after finding that the waiver is reasonable and proper in view of administrative costs and other factors.
(Ord. 2015-6. Passed 11-17-15; Ord. 2018-1. Passed 1-16-18.)
(a) Where a resident of the Village is subject to a municipal income tax in another municipality, that resident may not be required to pay a total municipal income tax on the same income greater than the tax imposed at the higher rate.
(b) Every individual taxpayer who resides in the Village but who receives net profits, salaries, wages, commissions, or other personal service compensation for work done outside the Village, if it is made to appear that the taxpayer has paid a municipal income tax on the same income taxable under this chapter to another municipality, will be allowed a credit against the tax imposed by this chapter of the amount so paid by the taxpayer or on the taxpayer's behalf to such other municipality. The credit may not exceed the tax assessed by this chapter on such income earned in such other municipality or municipalities where that tax is paid.
(c) A claim for refund or credit under this section shall be made as provided elsewhere in this chapter.
(Ord. 2015-6. Passed 11-17-15.)
Loading...