181.03 IMPOSITION OF TAX.

   (a)   Application. To provide funds for the purposes set forth in Section 181.04, there is hereby levied an annual tax at a rate of two and three-quarter percent (2 3/4%) per annum, on and after January 1, 2003, upon the following:

      (1)   On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by residents of the City.

      (2)   On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the City.

      (3)   A.   On the portion attributable to the City of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions or other activities, derived from sales made, work done or services performed or rendered and business or other activities conducted in the City.

         B.   On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.

      (4)   A.   On the portion attributable to the City of the net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions or other activities derived from sales made, work done or services performed or rendered and business or other activities conducted in the City, whether or not such unincorporated business entity has an office or place of business in the City.

         B.   On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.

      (5)   On the portion attributable to the City 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 the City, whether or not such corporations have an office or place of business in the City.

   (b)   Allocation. The portion of the net profits attributable to the City or a taxpayer conducting a business, profession or other activity both within and without the boundaries of the City shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Director of Finance pursuant to this chapter.

   (c)   Alternate Computation. Each such taxpayer shall have the option of paying, in lieu of the tax measured as above provided, a tax of two and three-quarter percent (2 3/4%) of the taxpayer's payroll paid during the taxable period, to employees who perform services for the taxpayer within the City, if the tax thus calculated on the taxpayer's payroll shall be as large as, or be greater than, the tax which the taxpayer would pay as levied and calculated in the manner set forth in the foregoing provisions.

   A taxpayer electing to pay the alternative tax shall not be obligated to file a return or report of the taxpayer's net profits earned during the taxable period, but shall file a statement under oath made by the taxpayer or principal accounting officer that the tax calculated upon its payroll as provided here and above will equal or exceed the tax levied and provided for by subsection (a)(3) to (5) hereof. The Director of Finance may use all authority of investigation and examination of the taxpayer's records provided for hereinafter in Section 181.09 to verify the accuracy of such statement.

   (d)   Rentals. Rental income received by a taxpayer shall be included in the computation of net profits from business activities under subsection (a)(3) to (5) hereof, only if and to the extent that the rental, ownership, management or operations of the real estate from which such rentals are derived, whether so rented, managed by taxpayer individually or through agents or other representatives, constitutes a business activity of the taxpayer in whole or in part.

   Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of one hundred dollars ($100.00) per month, it shall be prima-facie evidence that the rental, ownership, management or operation of such properties is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax; provided that in case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits of the lessee, whether or not such rental exceeds one hundred dollars ($100.00) per month; provided further that in the case of farm property, the owner shall be considered engaged in a business activity when he shares in the crops or when the rental is based on a percentage of the gross or net receipts derived from the farms, whether or not the gross income exceeds one hundred dollars ($100.00) per month; and provided further that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds one hundred dollars ($100.00) per month.

   (e)   Exception. The tax provided for herein shall not be levied upon unearned income or upon the military pay or allowance of members of the armed forces of the United States, or upon the net profits of any civic, charitable, religious, fraternal or other organization specified in Ohio R.C. 718.01 to the extent that such net profits are exempted from municipal income taxes under such section.
(Approved by Voters 11-5-02.)