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For the purpose of these Regulations (Chapter 193) the following terms shall have the definitions hereafter given:
(a) The definitions of the terms "taxpayer", "association", "business", "corporation", "employee", "employer", "net profits", "nonresident", "person", "resident", "other entity" shall be the same as set forth in Section 191.01 of the preceding chapter.
(b) "Place of business" means any bona fide office other than a mere statutory office, factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his regular employees regularly in attendance.
A taxpayer does not have a regular place of business outside Wauseon, solely by consigning goods to an independent factor or contractor outside the Municipality of Wauseon for sale.
(c) "Business allocation percentage" means the average percentage arrived at by applying the formula set forth in Section 191.02(a)(8) and (b) of the Ordinance. "Business allocation percentage" is the percentage which may be applied to determine the portion of the entire net profits of a taxpayer to be allocated as having been made within the Municipality of Wauseon, within the meaning of the provisions of such section.
(d) "The Ordinance" means Ordinance 1970-14, passed August 24, 1970, as amended, and codified as Chapter 191 of these Codified Ordinances.
(e) The singular shall include the plural and the masculine shall include the feminine and the neuter.
(Res. 1970-14. Passed 8-24-70.)
(a) The tax imposed by the Ordinance (Chapter 191) is effective as to income and profits earned or accruing on and after October 1, 1970, and payroll deductions must be made against all salaries, wages, commissions, bonuses and other compensation earned or accruing on and after that date.
(b) The Ordinance continues effective insofar as the levy of taxes is concerned until repealed.
(Res. 1973-18. Passed 12-3-73.)
(a) In the case of the residents of the Municipality of Wauseon, an annual tax of one and one-half percent is imposed on all salaries, wages, commissions and other compensation earned or accrued on or after October 1, 1970. For the purpose of determining the tax on the earnings of the resident taxpayers, tax under Section 191.02
(a), the source of the earnings and the place or places in or at which the services were rendered are immaterial. All such earnings, wherever earned or paid, are taxable. (Ord. 2015-18. Passed 12-21-15.)
(b) The following items which are subject to the tax:
(Res. 1970-14. Passed 8-24-70.)
(1) Salaries, wages, bonuses or incentive payments received by an individual, whether directly or through an agent and whether in cash or in property, for services rendered on and after October 1, 1970, and for all deferred or accrued benefits received on and after January 1, 1974.
(Res. 1973-18. Passed 12-3-73.)
A. As an officer, director or employee of a corporation, including charitable and other nonprofit corporations, joint stock association or joint stock company;
B. As an employee, as distinguished from a partner or member, of a partnership, limited partnership or any other form of unincorporated enterprise owned by one or more persons;
C. As an employee, as distinguished from the proprietor, of a business, trade or profession conducted by an individual owner;
D. As an officer or employee, whether elected, appointed or commissioned, of a governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, subdivision, section or unit of the State of Ohio or any of the political subdivision thereof;
E. As an officer or employee, whether elected, appointed or commissioned, of a governmental administration, agency, arm, authority, board, body, branch, bureau, department, division, subdivision, section or unit of the United States Government or of a corporation created and owned or controlled by the United States Government or any of its agencies;
F. As an employee of any other entity or person.
(2) Wages, bonuses, or incentive payments received by an individual whether directly or through an agent and whether in cash or in property, for services rendered on and after October 1, 1970.
A. Whether based upon hourly, daily, weekly, semimonthly, monthly, annual unit of production or piecework rates; and
B. Whether paid by an individual, limited partnership, partnership, association, corporation, including charitable and other nonprofit corporations, governmental administration, agency, arm, authority, board, body, branch, department, division, subdivision, section or unit, or any other entity.
(Res. 1970-14. Passed 8-24-70.)
C. The ordinary income portion of a stock option or employee stock purchase plan is subject to the tax as a salary, wage, commission, or other compensation to the extent to which it is included upon the taxpayer's federal tax return.
(3) Commissions received by a taxpayer directly or through an agent and whether in cash or in property including commissions of every real estate sales person whose license is registered with a broker whose business is located within the City of Wauseon, Ohio, for services rendered on and after October 1, 1970, regardless of how computed by whom or wheresoever paid.
A. If amounts received as a drawing account exceed the commissions earned, the tax is payable on the gross amounts received.
B. Amounts received from an employer by way of expenses and not by way of compensation, and used as such by the individual receiving them, are not deemed to be compensation if the employer deducts such expense advances as such from his gross income for the purpose of determining his net profits taxable under the income tax ordinance.
C. If such commissions are included in the net earnings of a trade, business, profession, enterprise or activity regularly carried on by such individual and therefore subject to tax under Section 191.02(a)(3), they shall not again be separately taxed. In such case, such net earnings shall be taxed as provided in Section 193.11.
(Ord. 1988-74. Passed 10-17-88.)
(4) The receipt of fees and other compensation for personal services rendered shall be deemed to be subject to taxation under the Ordinance.
(5) Domestic servants are subject to Wauseon tax under the Ordinance but are not subject to withholding provisions. That is to say, the domestic will report earnings and pay the tax directly to the Wauseon Income Tax Department.
(Res. 1970-14. Passed 8-24-70.)
(a) In the case of individuals who are nonresidents of Wauseon, there is imposed under the Ordinance an annual tax of one and one-half percent on all salaries, wages, commissions and other compensation, earned or accruing on and after October 1, 1970, for work done or services performed or rendered within the Municipality of Wauseon, whether such compensation or remuneration is received or earned directly or through an agent and whether paid in cash or in property.
(b) The items subject to tax under this section are the same as those listed and defined in Section 193.03(b). For methods of computing the extent of such work or services performed within the Municipality, and cases involving compensation for personal services partly within and partly outside the Municipality of Wauseon, see Section 193.14.
(Res. 1970-14. Passed 8-24-70.)
(a) In the case of trades, businesses, professions, other activities, enterprise or undertakings conducted, operated, engaged in, prosecuted or carried on by residents of the Municipality of Wauseon, there is imposed an annual tax of one and one half percent on the net profits earned or accruing on and after October 1, 1970.
(b) For the purpose of construing Section 191.02(a)(3), and (4) of the Ordinance, the term "residents" in the phrase "conducted by residents of the Municipality of Wauseon", will ordinarily be construed to have reference to the business entity itself, as distinguished from the partners, proprietors or other participants in its profits.
(c) Generally, a partnership, association or other unincorporated enterprise owned by two or more persons will be taxed as an entity. However, in the case of a nonresident partnership, association or unincorporated enterprise which cannot be reached or taxed directly by the Municipality of Wauseon, or if only part of its earnings may be directly taxed, the in either such case, resident partners, co-owners, proprietors or other participants in the profits thereof must include in their declarations and tax returns their distributive shares of such profits or portion thereof not taxed to the business enterprise as an entity, and must pay the tax thereon.
(d) The tax imposed under Section 191.02(a)(3) of the Ordinance is levied upon the entire net profits of the resident trade, business, profession, other activity, enterprise or undertaking, wherever earned, paid or accrued and regardless of the fact that any part of such business or professional activity may have been conducted at or through a place or places of business located outside the Municipality.
(Res. 1970-14. Passed 8-24-70.)
(a) In the case of a nonresident individual, partnership, association, fiduciary or other entity, other than a corporation, engaged in the conduct, operation or prosecution of any trade, business, profession, enterprise, undertaking or other activity, there is imposed an annual tax of one and one-half percent on the net profits, earned or accruing on and after October 1, 1970, of such trade, business, profession, enterprise, undertaking or other activity if, and to the extent, conducted in or derived from activity in the Municipality.
(b) A nonresident entity within the meaning of Section 191.02(a)(5) of the Ordinance which has a branch or branches, office or offices and/or store or stores, warehouse, or other place or places in which the entity's business is transacted, located in the Municipality of Wauseon, shall be considered to be conducting, operating, prosecuting or carrying on a trade, business, profession, enterprise, undertaking or other activity to the full extent of the sum total of all transactions originating or consummated in, by or through such Wauseon branch, office, store, warehouse or other place of business including:
(1) Billings made on such transactions;
(2) Services rendered;
(3) Shipments made;
(4) Goods, chattels, merchandise, etc., sold; or
(5) Commissions, fees or other remuneration or payments earned.
(c) In the case of the partnership, association or other unincorporated business owned by one or more persons the tax, generally, shall be upon the partnership, association or business enterprise as an entity and not ordinarily upon the partners or members thereof. However, the provisions of Section 193.05 are applicable to render taxable against such resident partners or members their distributive share of any profits of such nonresident entity not taxable under this Ordinance.
(d) In determining the proportion or amount of the taxable net profits of a nonresident business entity having a place or places of business within and outside Wauseon, such business entity may at its option use and apply the Business Allocation Percentage Formula set forth in Section 191.02(a)(8) of the Ordinance. For explanation of the formula see Section 193.08 below.
(Res. 1970-14. Passed 8-24-70.)
(a) In the case of a corporation doing business in Wauseon, whether domestic or foreign, and whether domiciled in the Municipality, or elsewhere, there is imposed an annual tax of one and one-half percent on that part of the net profits, earned or accruing on and after October 1, 1970, of such corporations, which is earned by such corporations as a result of work done or services performed or rendered and business or other activities conducted in the Municipality.
(b) The provisions of Section 193.06(b) of these Regulations are applicable to such corporations.
(c) A corporation doing business both within and outside the Municipality of Wauseon may, in determining the part of the net profits which are taxable under the Ordinance, at its option:
(1) Use the usual accounting system of the taxpayer corporation, so long as the usual accounting system is one acceptable to the Federal Internal Revenue Department as evidenced by acceptance and approval of income tax returns filed therein; or
(2) Use the Business Allocation Percentage Formula set forth in Section 191.02(a)(8) of the Ordinance.
(Res. 1970-14. Passed 8-24-70.)
(a) Allocation Application. At the option of a corporate taxpayer or of a nonresident business entity, such taxpayers may, but are not obliged to use the formula set forth in Section 191.02
of the Ordinance to compute the percentage of their entire net profits, derived from activities both within and outside the Municipality of Wauseon, which is taxable under the Ordinance, and to determine the tax payable to the Municipality thereunder.
If the taxpayer did not have a place of business outside Wauseon during the period covered by any declaration and/or return required under the Ordinance, its business allocation percentage is 100 percent; in other words, the taxpayer is required to pay a tax of one percent on the entire net profit of the business.
If the taxpayer had a place or places of business outside Wauseon, Ohio, and was doing business in Wauseon, Ohio during such period, the business allocation percentage shall be computed on the basis as set forth in Section 191.02(a)(8) of the Ordinance.
The business allocation percentage is computed by determining the percentages:
(1) Which Wauseon real and tangible personal property bears to all real and tangible personal property, including that situated in Wauseon, of the taxpayer wheresoever situated;
(2) Which Wauseon business sales bear to the taxpayer's entire business sales wheresoever derived, including those derived from Wauseon; and
(3) Which payrolls paid by the taxpayer within Wauseon bear to the taxpayer's entire payroll wheresoever paid, including Wauseon payrolls;
adding together the three percentages so arrived at, and dividing the total by three.
However, if one of the factors, property, sales or payrolls, is missing, the other two percentages are added and the sum is divided by two, and if two of the factors are missing, the remaining percentage is the business allocation percentage.
EXAMPLE 1.
Corporations having places of business in Wauseon, Ohio, Detroit and Cleveland. Wauseon, Ohio, real and tangible personal property at $10,000. All real and personal property (Wauseon, Ohio, Detroit and Cleveland) $100,000. Percentage: 10%. Wauseon, Ohio, sales $15,000. All sales $75,000. Percentage: 20%. Wauseon, Ohio, payroll $6,000. All payroll $20,000. Percentage: 30%. Business Allocation Percentage:
10% plus 20% plus 30%
3 equals 20%
EXAMPLE 2.
Same corporation owning no real or tangible personal property anywhere. Wauseon, Ohio, sales $15,000. All sales $75,000. Percentage 20%
Wauseon, Ohio payroll $6,000. All payroll $20,000. Percentage: 30%
Business Allocation Percentage:
20% plus 30%
2 equals 25%
EXAMPLE 3
Same corporation owning real and tangible personal property in Wauseon, Ohio, valued at $10,000 and owning no real or tangible personal property outside Wauseon, Ohio. Other factors same as in Examples 1 and 2.
Business Allocation Percentage:
100% plus 20% plus 30%
3 equals 50%
After determining such business allocation percentage, the tax shall be determined by applying that percentage to the entire net profits of the taxpayer, wherever derived, thus arriving at the taxable net profit, and computing one percent of the resultant taxable net profit.
In case it appears to the Finance Director that any income or capital of the taxpayer is improperly or inaccurately reflected, the Finance Director may adjust items of income, expense deduction and capital, and disregard assets in computing any allocation percentage, provided any income directly traceable thereto is also excluded from entire net income, so as equitably to determine the tax.
(b) Explanation of "Property Factor". The percentage of the taxpayer's real and tangible personal property, within Wauseon, Ohio, is determined by dividing the net book value, during the period covered by the report, of such property within Wauseon, Ohio, without deduction of any encumbrances, by the average net book value similarly computed, of all such property within and without Wauseon. Only property owned by the taxpayer is considered in determining such percentage.
(c) Explanation of Sales Factor. Receipts from the following are allocable to Wauseon, Ohio:
(1) Work done and performed or services rendered in Wauseon.
(2) Rentals from property situated in Wauseon, where the rental of such property is a usual or normal part of the taxpayer's business activity.
(3) For the purpose of determining business allocation percentage, no account shall be given to receipts, within or without the Municipality, of income derived from intangibles, including stocks, bonds, royalties and the like, the income of which is taxable under the statutes of the State of Ohio.
(4) Compensation and other receipts for work done or services performed within the Municipality, are allocable to Wauseon, and taxable under the Ordinance. All amounts so received, credited or charged by taxpayer in payment for such work or services are so allocable, irrespective of whether done or performed by employees or agents of taxpayer or by any other person. It is immaterial where such amounts were payable or where they were received.
Commissions or fees received by the taxpayer are allocated to the Municipality, if the services for which the commissions were paid were performed in Wauseon. If the taxpayer's services for which commissions or fees were paid were performed for the taxpayer by salesmen or other agents or employees attached to or working out of a Wauseon place of business of the taxpayer, the taxpayer's services will be deemed to have been performed in the Municipality.
Where a lump sum is received by the taxpayer in payment for services within and without the Municipality, the amount attributable to services within the Municipality is to be determined on the basis of the relative values of, or amounts of time spent in the performance of, such services within and without the Municipality.
(5) Receipts from sales of capital assets (property not held by the taxpayer for sale to customers in the regular course of business) are not business receipts. Receipts from the sale of real property held by the taxpayer as a dealer for sale to customers in the regular course of business are business receipts and are allocable to the Municipality, if the real property was situated in the Municipality. Receipts from sale of intangibles included in business capital, held by the taxpayer as a dealer for sale to customers in the regular course of business are business receipts and are allocable to Wauseon, if the sales were made in the Municipality, or through a regular place of business of the taxpayer in the Municipality.
(d) Payroll Factor. The percentage of the taxpayer's payroll allocable to the Municipality is determined by dividing the wages, salaries and other personal service compensation of the taxpayer's employees within Wauseon, during the period covered by the report, by the total amount of compensation of all taxpayer's employees during such period.
Wages, salaries and other compensation are computed on the cash or accrual basis in accordance with the methods of accounting used in the computation of the entire net income of the taxpayer.
Employees within Wauseon usually includes all employees regularly connected with or working out of a place of business maintained by the taxpayer in Wauseon.
However, where an employee performed services both within and without the Municipality, the amount treated as compensation for services performed within the Municipality shall be deemed to be:
(1) In the case of an employee whose compensation depends directly on the volume of business secured by him, such as a salesman on a commission basis, the amount received by him for the business attributable to his efforts within Wauseon, Ohio;
(2) In the case of an employee whose compensation depends on other results achieved, the proportion of the total compensation which the value of his services within the Municipality, bears to the value of all his services; and
(3) In the case of an employee compensated on a time basis, the proportion of the total amount received by him which the working time employed in the Municipality, bears to the total working time.
(e) Adjustment of Business Allocation Percentage Formula. Generally, the Business Allocation Percentage Formula will result in a fair apportionment of the taxpayer's net profits within and without the Municipality. However, due to the peculiar circumstances of certain businesses, the formula may work a hardship in some cases or result in a tax evasion in others, thus not do justice to the taxpayer or the Municipality. Accordingly, in such cases, the Finance Director may substitute factors calculated to bring about a fair and proper allocation in any case where the taxpayer has adopted the optional use of the business allocation percentage formula.
(Res. 1970-14. Passed 8-24-70.)
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