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(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.)
(a) As used in this section:
(1) "Nonqualified deferred compensation plan" means a compensation plan described in Section 3121(v)(2)(C) of the Internal Revenue Code.
(2) A. Except as provided in division (a)(2)B. of this section, "qualifying loss" means the excess, if any, of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan over the total amount of income the taxpayer has recognized for Federal income tax purposes for all taxable years on a cumulative basis as compensation with respect to the taxpayer's receipt of money and property attributable to distributions in connection with the nonqualified deferred compensation plan.
B. If, for one or more taxable years, the taxpayer has not paid to one or more municipal corporations income tax imposed on the entire amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan, then the "qualifying loss" is the product of the amount resulting from the calculation described in division (a)(2)A. of this section computed without regard to division (a)(2)B. of this section and a fraction the numerator of which is the portion of such compensation on which the taxpayer has paid income tax to one or more municipal corporations and the denominator of which is the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.
C. With respect to a nonqualified deferred compensation plan, the taxpayer sustains a qualifying loss only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.
(3) "Qualifying tax rate" means the applicable tax rate for the taxable year for the which the taxpayer paid income tax to a municipal corporation with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan. If different tax rates applied for different taxable years, then the "qualifying tax rate" is a weighted average of those different tax rates. The weighted average will be based upon the tax paid to the municipal corporation each year with respect to the nonqualified deferred compensation plan.
(b) (1) Except as provided in division (d) of this section, a refundable credit is allowed against the income tax imposed by the Village for each qualifying loss sustained by a taxpayer during the taxable year. The amount of the credit will be equal to the product of the qualifying loss and the qualifying tax rate.
(2) A taxpayer may claim the credit allowed under this section from each municipal corporation, including the Village to which the taxpayer paid municipal income tax with respect to the nonqualified deferred compensation plan in one or more taxable years.
(3) If a taxpayer has paid tax to more than one municipal corporation with respect to the nonqualified deferred compensation plan, the amount of the credit that a taxpayer may claim from each municipal corporation will be calculated on the basis of each municipal corporation's proportionate share of the total municipal corporation income tax paid by the taxpayer to all municipal corporations with respect to the nonqualified deferred compensation plan.
(4) In no case may the amount of the credit allowed under this section exceed the cumulative income tax that a taxpayer has paid to a municipal corporation for all taxable years with respect to the nonqualified deferred compensation plan.
(c) (1) For purposes of this section, municipal income tax that has been withheld with respect to a nonqualified deferred compensation plan will be considered to have been paid by the taxpayer with respect to the nonqualified deferred compensation plan.
(2) Any municipal income tax that has been refunded or otherwise credited for the benefit of the taxpayer with respect to a nonqualified deferred compensation plan will not be considered to have been paid to the municipal corporation by the taxpayer.
(d) The credit allowed under this section is allowed only to the extent the taxpayer's qualifying loss is attributable to:
(1) The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or
(2) The employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified deferred compensation.
(Ord. 2015-6. Passed 11-17-15.)
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