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(A) Each employer, agent of an employer or other payer located or doing business in the city shall withhold an income tax from the qualifying wages earned and/or received by each employee in the city. Except for qualifying wages for which withholding is not required under § 39.03 or division (B)(4) or (B)(6) below, the tax shall be withheld at the rate specified in § 39.03 of 1%. An employer, agent of an employer or other payer shall 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.
(B) (1) Except as provided in division (B)(2) below, an employer, agent of an employer or other payer shall remit to the city’s 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 according to the following schedule.
(a) Taxes required to be deducted and withheld shall 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 city in the preceding calendar year exceeded $2,399, or if the total amount of taxes deducted and withheld or required to be deducted and withheld on behalf of the city in any month of the preceding calendar quarter exceeded $200. Payment under this division (B)(1)(a) shall be made so that the payment is received by the Tax Administrator not later than 15 days after the last day of each month for which the tax was withheld.
(b) Any employer, agent of an employer or other payer not required to make payments under division (B)(1)(a) above of taxes required to be deducted and withheld shall make quarterly payments to the Tax Administrator not later than the fifteenth day of the month following the end of each calendar quarter.
(2) 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 § 6302 of the Internal Revenue Code, being 26 U.S.C. § 6302, 26 C.F.R. § 31.6302-1 or any other federal statute or regulation, the payment shall be made by electronic funds transfer to the Tax Administrator of all taxes deducted and withheld on behalf of the city. The payment of tax by electronic funds transfer under this division does not affect an employer’s agents or other payers obligation to file any return as required under this section.
(3) An employer, agent of an employer or other payor 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 shall be accepted by the Tax Administrator and the city as the return required of a nonresident 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.
(4) An employer, agent of an employer or other payer is not required to withhold city 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.
(5) (a) 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.
(b) The failure of an employer, agent of an employer or other payer to remit to the city 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.
(6) Compensation deferred before June 26, 2003, is not subject to a city 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.
(7) 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 city until such time as the withheld amount is remitted to the Tax Administrator.
(8) On or before the last day of February of each year, an employer shall file a withholding reconciliation return with the Tax Administrator, listing:
(a) The names, addresses and Social Security numbers of all employees from whose qualifying wages tax was withheld or should have been withheld for the city during the preceding calendar year;
(b) The amount of tax withheld, if any, from each such employee, the total amount of qualifying wages paid to such employee during the preceding calendar year;
(c) 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;
(d) 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
(e) Other information as may be required by the Tax Administrator.
(9) 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, shall be 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.
(10) An employer is required to deduct and withhold city income tax on tips and gratuities received by the employer’s employees and constituting qualifying wages, but 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.
(11) 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.
(C) (1) For the purpose of this division (C), the following definitions shall apply unless the context clearly indicates or requires a different meaning.
EMPLOYER. Includes a person that is a related member to or of an employer.
FIXED LOCATION. A permanent place of doing business in this state, such as an office, warehouse, storefront or similar location owned or controlled by an employer.
PRINCIPAL PLACE OF WORK.
1. 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.
2. 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 (C)(2)(a)1. below 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.
3. For the purposes of this division, the location at which an employee spends a particular day shall be determined in accordance with division (C)(2)(b) below, except that “location” shall be substituted for “municipal corporation” wherever “municipal corporation” appears in that division.
PROFESSIONAL ATHLETE. An athlete who performs services in a professional athletic event for wages or other remuneration.
PROFESSIONAL ENTERTAINER. A person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.
PUBLIC FIGURE. 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.
WORKSITE LOCATION. 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.
(2) (a) Subject to divisions (C)(3), (C)(5), (C)(6) and (C)(7) below, an employer is not required to withhold city income tax on qualifying wages paid to an employee for the performance of personal services in the city if the employee performed such services in the city on 20 or fewer days in a calendar year, unless one of the following conditions applies:
1. The employee’s principal place of work is located in the city; or
2. The employee performed services at one or more presumed worksite locations in the city. For the purposes of this division, PRESUMED WORKSITE LOCATION means a construction site or other temporary worksite in the city at which the employer provides or provided services that can reasonably be, or would have been, 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:
a. The nature of the services are such that it will require more than 20 days of the services to complete the services;
b. The agreement between the employer and its customer to perform services at a location requires the employer to perform the services at the location for more than 20 days;
c. The employee is a resident of the city and has requested that the employer withhold tax from the employee’s qualifying wages as provided in this section; or
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.
(b) For the purposes of division (C)(2)(a) above, an employee shall be considered to have spent a day performing services in the city only if the employee spent more time performing services for or on behalf of the employer in the city 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:
1. Traveling to the location at which the employee will first perform services for the employer for the day;
2. Traveling from a location at which the employee was performing services for the employer to any other location;
3. 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, re-manufactured or improved by the employee’s employer;
4. Transporting or delivering property described in division (C)(2)(b)3. above, 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; and/or
5. 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.
(3) If the principal place of work of an employee is located in another state municipal corporation that imposes an income tax, the exception from withholding requirements described in division (C)(2)(a) above 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 that municipal corporation.
(4) (a) Except as provided in division (C)(4)(b) below, if, during a calendar year, the number of days an employee spends performing personal services in the city exceeds the 20-day threshold, the employer shall withhold and remit tax to the city for any subsequent days in that calendar year on which the employer pays qualifying wages to the employee for personal services performed in the city.
(b) An employer required to begin withholding tax for the city under division (C)(4)(a) above may elect to withhold tax for the city for the first 20 days on which the employer paid qualifying wages to the employee for personal services performed in the city.
(5) If an employer’s fixed location is the city and the employer qualifies as a small employer as defined in § 39.02, the 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 city, regardless of the number of days which the employee worked outside the corporate boundaries of the city. To determine whether an employer qualifies as a small employer for a taxable year, the employer will be required to provide the Tax Administrator with the employer’s federal income tax return for the preceding taxable year.
(6) Divisions (C)(2)(a) and (C)(4) above shall not apply to the extent that a Tax Administrator and an employer enter into an agreement regarding the manner in which the employer shall comply with the requirements of this section.
(Ord. 2015-082, passed 10-15-2015)