(1) On all salaries, wages, commissions and other compensations earned on and after July 1, 1959, by residents of the City.
(2) On all salaries, wages, commissions and other compensation earned on and after July 1, 1959, 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 on and after July 1, 1959, of all resident associations, unincorporated businesses, professions or other activities conducted in the City.
B. On a resident partner's or owner's share of the net profits of a resident association or other unincorporated business entity not attributable to the City and not levied against such association or other unincorporated business entity.
(4) A. On the portion attributable to the City of the net profits earned on and after July 1, 1959, of all nonresident associations, unincorporated business, professions or other activities, derived from sales made, work done or services performed or rendered or business or other activities conducted in the City, whether or not such association or unincorporated business entity has an office or place of business in the City.
B. On a resident partner's or owner's share of the net profits of a nonresident association or other unincorporated business entity not attributable to the City and not levied against such association or other unincorporated business entity.
(5) On the portion attributable to the City of the net profits earned on and after July 1, 1959, 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.
(Ord. 59-86. Passed 5-15-59; Ord. 80-62. Approved by voters 6-3-80.)
(b) Deductions for Business Expenses. An employee who pays his business expenses from his commissions or other compensation, without reimbursement from his employer, may deduct from his gross commissions or other compensation business expenses allowed by the Internal Revenue Service for Federal income tax purposes, but only to the extent such expenses are incurred in earning commissions or other compensation subject to the tax imposed by this chapter.
(c) Allocation of Net Profits. Where a person conducts a business both within and outside the City, the portion of the entire net profits of such business to be allocated as having been made within the City may be determined from the records of such business, if such business has bona fide records which disclose with reasonable accuracy what portion of its net profits is attributable to that part of its activities conducted within the City, or at the option of the taxpayer may be determined by the following formula, which shall be used if the taxpayer does not have bona fide records, showing net profit from City business activities subject, however, to the provisions of subsection (c)(2) hereof.
(1) Multiply the entire net profits of the business by a business allocation percentage to be determined by:
A. Ascertaining the percentage which the average net book value of the real and tangible personal property owned or used in the business and situated within the City during the period covered by the return, is of the average net book value of all the real and tangible personal property owned or used in the business, wherever situated, during such period. Real property includes 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. Ascertaining the percentage which the gross receipts of the business from sales made and services performed in the City, during the period covered by the return, are of the total gross receipts from all sales and services, wherever made or performed, during such period.
1. Sales made within the City shall be deemed to include all sales of tangible personal property which is delivered within the City, regardless of where title passes, if shipped or delivered from a stock of goods within the City.
2. All sales of tangible personal property which is delivered within the City, regardless of where title passes, even though transported from a point outside the City, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion.
(Ord. 59-86. Passed 5-15-59.)
3. All sales of tangible personal property which is shipped from a place within the City to purchasers outside the City, regardless of where title passes.
(Ord. 86-29. Passed 2-10-86.)
C. Ascertaining the percentage which the total wages, salaries and other compensation paid, during the period covered by the return, to employees for services performed in the City is of the total wages, salaries, commissions and other compensation paid, during such period, to all employees within and outside the City.
(Ord. 59-86. Passed 5-15-59.)
D. Adding together the percentage determined in accordance with subsections A., B., and C. hereof or such of the aforesaid percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in arriving at such total.
(Ord. 86-29. Passed 2-10-86.)
(2) However, in the event a just and equitable result cannot be obtained under the formula provided for herein, the Board of Review, upon application of the taxpayer or the Administrator, shall, under uniform regulations adopted by the Board, have the authority to substitute other factors or methods calculated to effect a fair and proper allocation.
(Ord. 59-86. Passed 5-15-59.)
(d) Consolidated Returns.
(1) Filing of consolidated returns shall, in the discretion of the Administrator, be permitted in accordance with rules and regulations prescribed by Council.
(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 City constituting a portion only of its total business, the Administrator shall require such additional information as may be necessary to ascertain whether net profits allocable to the City are being distorted by the shifting of income, apportionment of expenses or other devices available to common control. If the Administrator finds that a person's net profits allocable to the City are distorted 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 shall adjust such transactions so as to produce a fair and proper allocation of net profits to the City. If necessary, the Administrator may require the filing of a consolidated return.
(Ord. 59-86. Passed 5-15-59.)
(e) Rentals from Real Property.
(1) Rentals received by the taxpayer are to be included only if and to the extent that the rental, ownership, management or operation of the real estate from which such rentals are derived, whether so rented, managed or operated by taxpayer individually or through agents or other representatives, constitutes a business activity of the taxpayer in whole or in part.
(2) In determining the amount of net monthly rental of any real property, periods during which, by reason of vacancy or any other cause, rentals are not received shall not be taken into consideration by the taxpayer.
(3) Rentals received by a taxpayer engaged in the business of buying and selling real estate shall be considered as part of business income.
(4) "Real property" includes commercial property, residential property, farm property and any and all other types of real estate.
(5) In determining the taxable income from rentals, the deductible expenses shall be of the same nature, extent and amount as are allowed by the Internal Revenue Service for Federal income tax purposes.
(6) Residents of the City are subject to taxation upon the net income from rentals, regardless of the location of the real property owned.
(7) Nonresidents of the City are subject to such taxation only if the real property is situated within the City.
(8) Corporations owning or managing real estate are taxable only on that portion of income derived from property located in the City.
(Ord. 84-84. Passed 6-11-84.)
(f) Patents and Copyrights. Income from patents or copyrights is not to be included in net profits subject to the tax if the income from such patents or copyrights is subject to the State Intangible Tax. Conversely, such a State Intangible Tax is not deductible in determining the City tax. Such items shall be clearly disclosed on an attachment to be filed with the City tax return.
(g) Exemptions. The tax provided for herein shall not be levied on the following:
(1) Funds received from local, State or Federal governments because of service in the armed forces of the United States by the person rendering such service, or as a result of another person rendering such service.
(2) Poor relief, pensions, unemployment compensation or similar payments, including disability benefits received from private industry or local, State or Federal governments or from charitable, religious or educational organizations, or social security.
(3) Alimony received.
(4) Income, dues, contributions, receipts from casual entertainment, amusements, sports events and health and welfare activities received by religious, fraternal, charitable, scientific, literary, educational institutions or organizations, labor unions, lodges and similar organizations.
(5) Any association, organization, corporation, club or trust, which is exempt from Federal taxes on income by reason of its charitable, religious, educational, literary, scientific, etc., purposes.
(6) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State of Ohio, which the City is prohibited from taxing and income of a decedent's estate during the period of administration, (except such income from the operation of a business.)
(7) Compensation for personal services of all persons under sixteen years of age whether residents or nonresidents.
(Ord. 59-86. Passed 5-15-59; Ord. 11-78. Passed 12-12-11.)