(a) Withholding Provisions.
(1) 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 881.03 or division (a)(5) or (a)(7) of this section, the tax shall be withheld at the rate, specified in Section 881.01(c) of this Chapter, of two and one-quarter percent (2.25%). 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.
(2) Except as provided in division (a)(3) of this section, an employer, agent of an employer, or other payer shall remit to the Tax Administrator of 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 two thousand three hundred ninety-nine dollars ($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 two hundred dollars ($200).
B. Payments under division (a)(2)A. of this section shall be made to the Tax Administrator not later than fifteen (15) days after the last day of each month for which the tax was withheld.
C. Any employer, agent of an employer, or other payer not required to make payments under division (a)(2)A. of this section of taxes required to be deducted and withheld shall make quarterly payments to the Tax Administrator not later than the last day of the month following the last day of each calendar quarter.
(3) 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 Section 6302 of the Internal Revenue Code, 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, agent's, or other payer's obligation to file any return as required under this section.
(4) An employer, agent of an employer, or other payer 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 Tax Administrator and the City as the return required of an non-resident 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.
(5) An employer, agent of an employer, or other payer is not required to withhold the 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.
(6) 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.
(7) Compensation deferred before June 26, 2003, is not subject to the 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.
(8) 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.
(9) 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.
(10) 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.
(11) 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.
(12) 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.
(Source: ORC 718.03)
(b) Occasional Entrant - Withholding.
(1) As used in this division:
A. "Employer" includes a person that is a related member to or of an employer.
B. "Fixed location" means a permanent place of doing business in this state, such as an office, warehouse, storefront, or similar location owned or controlled by an employer.
C. "Principal place of work" means 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.
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 (2) 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 (b)(2)A.(i) of this section among those two (2) 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.
For the purposes of this division, the location at which an employee spends a particular day shall be determined in accordance with division (b)(2)B. of this section, except that "location" shall be substituted for "municipal corporation" wherever "municipal corporation" appears in that division.
D. "Professional athlete" means an athlete who performs services in a professional athletic event for wages or other remuneration.
E. "Professional entertainer" means a person who performs services in the professional performing arts for wages or other remuneration on a per-event basis.
F. "Public figure" means 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.
G. "Worksite location" means a construction site or other temporary worksite in this State at which the employer provides services for more than twenty (20) days during the calendar year. "Worksite location" does not include the home of an employee.
(2) A. Subject to divisions (b)(3), (b)(5), and (b)(6) of this section, an employer is not required to withhold the 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 twenty (20) or fewer days in a calendar year, unless one of the following conditions applies:
(i) The employee's principal place of work is located in the City.
(ii) 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 twenty (20) days in a calendar year. Services can "reasonably be expected by the employer to last more than twenty (20) days" if either of the following applies at the time the services commence:
1. The nature of the services is such that it will require more than twenty (20) days of the services to complete the services;
2. 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 twenty (20) days.
(iii) 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 Section 881.04.
(iv) 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 (b)(2)A. of this section, 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:
(i) Traveling to the location at which the employee will first perform services for the employer for the day;
(ii) Traveling from a location at which the employee was performing services for the employer to any other location;
(iii) 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, remanufactured, or improved by the employee's employer;
(iv) Transporting or delivering property described in division (b)(2)B.(iii) of this section, 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;
(v) 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 Ohio municipal corporation that imposes an income tax, the exception from withholding requirements described in division (b)(2)A. of this section 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 (b)(4)B. of this section, if, during a calendar year, the number of days an employee spends performing personal services in the City exceeds the twenty- (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 (b)(4)A. of this section may elect to withhold tax for the City for the first twenty (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 Section 881.02, 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 (b)(2)A. and (b)(4) of this section shall not apply to the extent that the Tax Administrator and an employer enter into an agreement regarding the manner in which the employer shall comply with the requirements of Section 881.04.
(Source: 718.011)
(c) Gambling Withholding. As used in this section, "sports gaming facility" and "type B sports gaming proprietor" have the same meanings as in ORC 3775.01, and "lottery sports gaming" has the same meaning as in ORC 3770.23.
(1) The following persons are required to withhold and remit municipal income tax with respect to amounts other than qualifying wages as provided in this section:
A. A casino facility or a casino operator, as defined in Section 6(C)(9) of Article XV of the Ohio Constitution and ORC 3772.01, respectively;
B. A lottery sales agent conducting video lottery terminals on behalf of the State of Ohio; and
C. A type B sports gaming proprietor offering sports gaming at a sports gaming facility.
(2) If a person's winnings at a casino facility or sports gaming facility are an amount for which reporting to the Internal Revenue Service of the amount is required by section 6041 of the Internal Revenue Code, as amended, a casino operator or sports gaming proprietor shall deduct and withhold municipal income tax from the person's winnings at the rate of the tax imposed by the City when the casino facility or sports gaming facility is located in the City.
(3) Amounts deducted and withheld by a casino operator or sports gaming proprietor are held in trust for the benefit of the municipal corporation to which the tax is owed.
A. On or before the tenth day of each month, the casino operator or sports gaming proprietor shall file a return electronically with the Tax Administrator providing the name, address, and social security number of the person from whose winnings amount were deducted and withheld; the amount of each such deduction and withholding during the preceding calendar month; the amount of the winnings from which each such amount was withheld; the type of casino gaming or sports gaming that resulted in such winnings; and any other information required by the Tax Administrator. With this return, the casino operator or sports gaming proprietor shall remit electronically to the City all amounts deducted and withheld during the preceding month.
B. Annually, on or before the thirty-first day of January, a casino operator or sports gaming proprietor shall file an annual return electronically with the Tax Administrator if the casino facility or sports gaming facility is located in the City, indicating the total amount deducted and withheld during the preceding calendar year. The casino operator or sports gaming proprietor shall remit electronically with the annual return any amount that was deducted and withheld and that was not previously remitted. If the name, address, or social security number of a person or the amount deducted and withheld with respect to that person was omitted on a monthly return for that reporting period, that information shall be indicated on the annual return.
C. Annually, on or before the thirty-first day of January, a casino operator or sports gaming proprietor shall issue an information return to each person with respect to whom an amount has been deducted and withheld during the preceding calendar year. The information return shall show the total amount of municipal income tax deducted from the person's winnings during the preceding year. The casino operator or sports gaming proprietor shall provide to the Tax Administrator a copy of each information return issued under this division. The Tax Administrator may require that such copies be transmitted electronically.
D. A casino operator or sports gaming proprietor that fails to file a return and remit the amounts deducted and withheld shall be personally liable for the amount withheld and not remitted. Such personal liability extends to any penalty and interest imposed for the late filing of a return or the late payment of tax deducted and withheld.
E. If a casino operator or sports gaming proprietor sells the casino facility or sports gaming facility, or otherwise quits the casino or sports gaming business, the amounts deducted and withheld along with any penalties and interest thereon are immediately due and payable. The successor shall withhold an amount of the purchase money that is sufficient to cover the amounts deducted and withheld along with any penalties and interest thereon until the predecessor casino operator or sports gaming proprietor produces either of the following:
(i) A receipt from the Tax Administrator showing that the amounts deducted and withheld and penalties and interest thereon have been paid; or
(ii) A certificate from the Tax Administrator indicating that no amounts are due.
If the successor fails to withhold purchase money, the successor is personally liable for the payment of the amounts deducted and withheld and penalties and interest thereon.
F. The failure of a casino operator or sports gaming proprietor to deduct and withhold the required amount from a person's winnings does not relieve that person from liability for the municipal income tax with respect to those winnings.
(4) If a person's prize award from a video lottery terminal or from lottery sports gaming offered in a video lottery terminal facility is an amount for which reporting to the Internal Revenue Service is required by section 6041 of the Internal Revenue Code, as amended, the video lottery sales agent shall deduct and withhold municipal income tax from the person's prize award at the rate of the tax imposed by the City if the video lottery terminal facility is located in the City.
(5) Amounts deducted and withheld by a video lottery sales agent are held in trust for the benefit of the City.
A. The video lottery sales agent shall issue to a person from whose prize award an amount has been deducted and withheld a receipt for the amount deducted and withheld and shall obtain from the person receiving a prize award the person's name, address, and social security number in order to facilitate the preparation of returns required by this section.
B. On or before the tenth day of each month, the video lottery sales agent shall file a return electronically with the Tax Administrator providing the names, addresses, and social security numbers of the persons from whose prize awards amounts were deducted and withheld; the amount of each such deduction and withholding during the preceding calendar month; the amount of the prize award from which each such amount was withheld; and any other information required by the Tax Administrator. With the return, the video lottery sales agent shall remit electronically to the Tax Administrator all amounts deducted and withheld during the preceding month.
C. A video lottery sales agent shall maintain a record of all receipts issued under division (c)(5) of this section and shall make those records available to the Tax Administrator upon request. Such records shall be maintained in accordance with ORC 5747.17 and any rules adopted pursuant thereto.
D. Annually, on or before the thirty-first day of January, each video lottery terminal sales agent shall file an annual return electronically with the Tax Administrator if the facility is located in the City indicating the total amount deducted and withheld during the preceding calendar year. The video lottery sales agent shall remit electronically with the annual return any amount that was deducted and withheld and that was not previously remitted. If the name, address, or social security number of a person or the amount deducted and withheld with respect to that person was omitted on a monthly return for that reporting period, that information shall be indicated on the annual return.
E. Annually, on or before the thirty-first day of January, a video lottery sales agent shall issue an information return to each person with respect to whom an amount has been deducted and withheld during the preceding calendar year. The information return shall show the total amount of municipal income tax deducted and withheld from the person's prize award by the video lottery sales agent during the preceding year. A video lottery sales agent shall provide the Tax Administrator a copy of each information return issued under this division. The Tax Administrator may require that such copies be transmitted electronically.
F. A video lottery sales agent who fails to file a return and remit the amounts deducted and withheld is personally liable for the amount deducted and withheld and not remitted. Such personal liability extends to any penalty and interest imposed for the late filing of a return or the late payment of tax deducted and withheld.
(6) If a video lottery sales agent ceases to operate video lottery terminals, the amounts deducted and withheld along with any penalties and interest thereon are immediately due and payable. The successor of the video lottery sales agent that purchases the video lottery terminals from the agent shall withhold an amount from the purchase money that is sufficient to cover the amounts deducted and withheld and any penalties and interest thereon until the predecessor video lottery sales agent operator produces either of the following:
A. A receipt from the Tax Administrator showing that the amounts deducted and withheld and penalties and interest thereon have been paid; or
B. A certificate from the Tax Administrator indicating that no amounts are due.
If the successor fails to withhold purchase money, the successor is personally liable for the payment of the amounts deducted and withheld and penalties and interest thereon.
(7) The failure of a video lottery sales agent to deduct and withhold the required amount from a person's prize award does not relieve that person from liability for the municipal income tax with respect to that prize award.
(8) If a casino operator, sports gaming proprietor, or lottery sales agent files a return late, fails to file a return, remits amounts deducted and withheld late, or fails to remit amounts deducted and withheld as required under this section, the Tax Administrator may impose the following applicable penalty:
A. For the late remittance of, or failure to remit, tax deducted and withheld under this section, a penalty equal to fifty per cent (50%) of the tax deducted and withheld;
B. For the failure to file, or the late filing of, a monthly or annual return, a penalty of five hundred dollars ($500) for each return not filed or filed late. Interest shall accrue on past due amounts deducted and withheld at the rate prescribed in ORC 5703.47.
(9) Amounts deducted and withheld on behalf of the City shall be allowed as a credit against payment of the tax imposed by the City and shall be treated as taxes paid for purposes of Section 881.07 of this Chapter. This division applies only to the person for whom the amount is deducted and withheld.
(10) The Tax Administrator shall prescribe the forms of the receipts and returns required under this section.
(Source ORC 718.031)
(Ord. 15-33. Adopted 07/23/15; Ord. 2018-08. Adopted 02/22/18. Ord. 2020-10. Adopted 04/23/20; Ord. 2023-31. Adopted 11/21/23)