(Ord. 31-15. Passed 10-26-15.)
(1) On all salaries, wages, commissions, other compensation as defined in Section 171.02(x) earned or received and from net profits from unincorporated business entities and professions and from any transaction, venture or activity whether permanent, temporary or nonrecurring in character, earned or received on and after January 1, 1983, by residents of Waterville.
(2) On all salaries, wages, commissions, and other compensation as defined in Section 171.02 (x) earned or received on and after January 1, 1983, by nonresidents for work done or services performed or rendered in Waterville.
(3) On the portion attributable to Waterville of the net profits earned on and after January 1, 1983, of all resident unincorporated businesses, professions, and other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in Waterville.
(4) On the portion of the distributive share of the net profits earned on and after January 1, 1983, of a resident partner or owner of a resident unincorporated business entity not attributable to Waterville and not levied against such unincorporated business entity; provided that such income of such resident partner or owner shall be subject to the relief and credit provisions of Section 171.15.
(5) On the portion attributable to Waterville of the net profits earned on and after January 1, 1983, of all nonresident persons, unincorporated businesses, professions, and other entities derived from sales made, work done or services performed or rendered and business or other activities conducted in Waterville, whether or not such person, unincorporated business entity, profession or other entity has an office or place of business within Waterville.
(6) On the net profits attributable to Waterville of all nonresident unincorporated businesses, professions or other activities derived from work done or services performed or rendered and business or other activities conducted in Waterville, whether or not such businesses have an office in Waterville.
(7) On the portion of the distributive share of the net profit earned by a resident individual from a limited liability corporation or company, or a similar business entity which is located outside of the Waterville.
(8) On that portion of the distributive share of the net profits of a resident individual, partner or owner of a nonresident unincorporated business entity.
(9) On the portion attributed to Waterville of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done or services performed or rendered, and business or other activities conducted in Waterville, whether or not such corporations have an office or place of business in Waterville.
(b) On the income associated with covenants not to compete, royalties, and depreciation recapture, all to the extent subject to tax by IRS.
(c) Tax on Business Doing Business Both Within and Without the Municipality. The portion of the net profits attributable to Waterville of a taxpayer conducting a business, profession, or other activity both within and without the boundaries of Waterville shall be determined as provided in Ohio R.C. 718.02 which is reprinted at the end of the chapter and in accordance with the rules and regulations adopted by the Commissioner pursuant to this chapter.
(d) Gambling. On the gross income derived anywhere from gaming, wagering, lotteries, or schemes of chance by residents of Waterville or by nonresidents of Waterville when the income derived from gaming, wagering, lotteries or schemes of chance is won or received from Waterville sources.
(e) Operating Loss Carry-Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to January 1, 1983, allocable to Waterville, may be applied against the portion of the profit of succeeding year(s) allocable to Waterville until exhausted, but in no event for more than five taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year.
(2) For the purposes of subsection (f) (l) hereof, the portion of a net operating loss sustained shall be allocated to Waterville in the same manner as provided herein for allocating net profits to Waterville.
(3) The Commissioner of Taxation shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined.
(f) Consolidated Returns.
(1) Consolidated returns from affiliated groups or corporations that file consolidated returns with IRS for the same reporting period will be accepted in accordance with Rules and Regulations prescribed by the Commissioner.
(ORC 718.06)
(2) In the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory, or activity within Waterville constituting a portion only of its total business, the Commissioner of Taxation shall require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to Waterville. If the Commissioner of Taxation finds net profits are not properly allocated to Waterville by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory, or activity, or by some other method, he shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to Waterville.
(g) Business Losses. Operating losses from business or professional activity may not be used to reduce W-2 income subject to the tax. Said loss may be used against other sources of business or professional income subject to the tax.
(h) Exemptions - Sources of Income Not Taxed.
(1) Pay or allowance of active members of the armed forces of the United States because of active duty service or the income of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax exempt real estate; tax exempt tangible or intangible property or tax exempt activities and only to the extent that said income is exempt from federal income tax.
(2) Poor relief, social security benefits, unemployment insurance benefits, except for supplemental unemployment benefits, IRS qualified retirement plan or similar payments, disability benefits received from local, state or Federal governments or charitable, religious or educational organizations. The disability benefits excludable must be of a permanent nature as determined by a physician or government entity.
(3) Proceeds of insurance paid by reason of death of the insured, pensions, including industrial pensions which are qualified by IRS and paid as a result of retirement; disability benefits paid for total and permanent disability, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived.
(4) Receipts from seasonal or casual entertainment, amusement, sports events, and health and welfare activities when bona fide charitable, religious or educational organizations and associations conduct any such and only to the extent that said income is exempt from Federal Income Tax.
(5) Alimony received.
(6) Compensation for personal injuries or for damages to property by way of insurance or otherwise but this exclusion does not apply to compensation paid for lost salaries or wages.
(7) Interest, dividends and other revenue from intangible property as set forth in Ohio R.C. 718.01.
(8) Amounts included in an employee W-2 Form for moving expense reimbursement when the taxpayer is moving into Waterville. Taxpayer must furnish a copy of form 3903.
(9) Payments made to election workers.
(10) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce.
(11) Salaries, wages, commissions and other compensations and net profits, the taxation of which is prohibited by the Constitution of the State of Ohio or any act of the Ohio General Assembly limiting the power of a municipality to impose net irmome taxes.
(12) The amount of unreimbursed employee business expenses (2106 Expenses) which the employee deducted as an itemized deduction on his or her federal tax return. Taxpayer must furnish a copy of the form 2106 and Schedule "A" of form 1040 as filed with IRS.
(13) For non-resident employees or non-resident self-employed individuals who perform work or services in Waterville for twelve (12) or fewer days during the calendar year as set forth in Ohio RC Ch 718.011, as amended from time to time, effective January 1, 2001. This exemption does not apply to professional entertainers, professional athletes, or promoters of professional entertainment or sports events and their employees. A day is defined as a full day or any fractional part of a day.
(14) Parsonage allowances paid to "ministers of the gospel" in the form of rental allowance as part of a minister's compensation to the extent excluded from federal or Ohio tax. O.R.C. 718.01(F)(7).
(i) Expenses Not Deductible.
(1) No deduction for health insurance premiums paid by self-employed taxpayers as permitted by IRS is permitted for Waterville.
(2) No deduction for self-employment tax paid by self-employed taxpayers as permitted by IRS is permitted for Waterville.
(3) No deduction for contributions to IRA or Keogh plans made by taxpayers as permitted by IRS is permitted for Waterville.
(Ord. 11-04. Passed 10-11-04.)