880.03  IMPOSITION OF TAX.
   (a)   Rate; Taxable Income.  Subject to the provisions of Section 880.16, an annual tax for the purposes specified in Section 880.01 shall be imposed on and after January 1, 1984, at the rate of one and one-half percent per year upon the following:
      (1)   On all income, qualifying wages, commissions and other compensation earned or received during the effective period of this chapter by residents of the Village.
         A.   For further clarification “income” includes, but is not limited to, lottery, gambling, and sports winnings, and no deductions shall be allowed against these types of income unless, for federal income tax purposes, the taxpayer is considered a professional gambler.
         B.   Also for clarification, alimony received is taxable.
      (2)   On all income, qualifying wages, commissions and other compensation earned or received during the effective period of this chapter by nonresidents for work done or services performed or rendered in the Village.
      (3)   A.   On the portion attributable to the Village of the net profits earned and accrued or received during the effective period of this chapter of all resident associations, unincorporated businesses, professions or other entities derived from sales made, work done, services performed or rendered and business or other activities conducted in the Village.
         B.   On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the Village upon which the tax was not paid by the entity.
      (4)   A.   On the portion attributable to the Village of the net profits earned and accrued or received during the effective period of this chapter of all nonresident associations, unincorporated businesses, professions or other entities derived from sales made, work done or services performed or rendered and business or other activities conducted in the Village, whether or not such association or other unincorporated business entity has an office or place of business in the Village.
         B.   On the portion of the distributive share of the net profits earned and accrued or received during the effective period of this chapter of a resident partner or owner of a nonresident association or other unincorporated business entity not attributable to the Village on which the tax was not paid by the entity.
      (5)   On the portion attributable to the Village of the net profits earned and accrued or received during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities conducted in the Village, whether or not such corporations have a place of business in the Village.
   (b)   Determination of Net Profits.  The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the Village shall be determined as follows:
      (1)   Multiply the entire net profits by a business allocation percentage to be the average ratio of:
         A.   The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the Village during the taxable period to the average original cost of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated.
         As used in the preceding paragraph, “real property” shall include property rented or leased by the taxpayer, and the value of such property shall be determined by multiplying the annual rental thereon by eight;
         B.   Wages, salaries and other compensation paid or accrued during the taxable period to persons employed in a business or profession for services performed in the Village to wages, salaries and other compensation paid or accrued during the same period to persons employed in a business or profession, wherever their services are performed. Wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages;
         C.   Gross receipts of the business or profession from sales made and services performed during the taxable period in the Village to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
   In the event that the foregoing apportionment formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
      (2)   As used in division (b)(1)C. of this section, “sales made in the Village” means:
         A.   All sales of tangible personal property which are delivered within the Village regardless of where title passes if shipped or delivered from a stock of goods within the Village;
         B.   All sales of tangible personal property which are delivered within the Village regardless of where title passes even though transported from a point outside the Village, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village and the sales result from such solicitation or promotion;
         C.   All sales of tangible personal property which are shipped from a place within the Village to purchasers outside the Village, regardless of where title passes, if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
   (c)   Consolidated Returns.
      (1)   Any affiliated group which files a consolidated return for Federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code may file a consolidated return with the Village.  However, once the affiliated group has elected to file a consolidated return or a separate return with the Village, the affiliated group may not change their method of filing in any subsequent tax year without written approval from the Superintendent.
      (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 the Village constituting a portion of its total business, the Superintendent may require such additional information as he or she may deem necessary to ascertain whether or not net profits are properly allocated to the Village. If the Superintendent finds net profits are not properly allocated to the Village 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 or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the Village.
   (d)   Exceptions. The tax provided for herein shall not be levied upon:
      (1)   Military pay or allowances of members of the Armed Forces of the United States and of members of their reserve components, including the Ohio National Guard.
      (2)   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.
      (3)   Poor relief, unemployment insurance benefits, pensions paid as a result of retirement, and disability benefits received from local, State or Federal governments or charitable, religious or educational organizations.
      (4)   Proceeds of insurance paid by reason of the death of the insured, disability benefits, annuities or gratuities not in the nature of compensation for services rendered from whatever source derived.
      (5)   Receipts by bona fide charitable, religious and educational organizations and associations, when those receipts are from seasonal or casual entertainment, amusements, sports events and health and welfare activities when any such are conducted by bona fide charitable, religious or educational organizations and associations.
      (6)   Personal earnings of all persons under 16 years of age.
      (7)   Expenses deductible on Federal Form 2106, subject to audit and approval by the Superintendent of Taxation.
      (8)   Parsonage allowance, to the extent of the rental allowance or rental value of a house provided as a part of an ordained minister's compensation.  The minister must be duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination and be permitted to perform all the sacraments of the religious body, including that of marriage.
      (9)   Compensation paid to a precinct election official, to the extent that such compensation does not exceed one thousand dollars ($1,000) annually.
      (10)   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, or to compensation for punitive damages.
      (11)   Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State of Ohio from which the Village is specifically prohibited from taxing and income of a decedent's estate during the period of administration (except such income from the operation of a business).
      (12)   Income, 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.
      (13)   Income, salaries, wages, commissions and other compensation 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 the Village to impose net income taxes.
(Initiative Ord. Passed 11-5-68;  Ord. 83-11  Passed 8-15-83; Ord. 2004-11.  Passed 4-5-04.)