CHAPTER 181 Income Tax - Regional Income Tax ?· CHAPTER 181 Income Tax ... 181.07 Declarations. ...…
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CHAPTER 181 Income Tax
181.01 Purpose. 181.02 Definitions. 181.03 Imposition of tax. 181.04 Effective date. 181.05 Return and payment of tax. 181.06 Collection at source. 181.07 Declarations. 181.08 Duties of the Administrator. 181.09 Investigative powers of the Administrator; penalty for divulging confidential information. 181.10 Interest and penalties. 181.11 Collection of unpaid taxes and refunds of overpayment. 181.12 Violations; penalties. 181.13 Board of Review. 181.14 Allocation of funds. 181.15 Credit for tax paid to another municipality or JEDD. 181.16 Savings clause. 181.17 Collection after termination of levy of tax. 181.18 Amendment by Council. 181.19 Scope.
CROSS REFERENCES Power to levy income tax - see Ohio Const., Art. XVIII, Sec. 3
Municipal income taxes - see Ohio R.C. Ch. 718 181.01 PURPOSE. To provide funds for the purpose of general municipal operations, maintenance, new equipment, extension, and enlargement of municipal services and facilities, development and improvement of municipal parks and recreation facilities, and capital improvements of the City of Tallmadge there shall be and is hereby levied a tax of two percent (2%) per annum on salaries, wages, commissions, income, and other compensation, and on net profits as hereinafter provided. (Ord. 13-2007. Passed 1-25-07.)
181.02 DEFINITIONS. As used in this Chapter, the following words shall have the meaning ascribed to them in this section, except as and if the context clearly indicates or requires a different meaning. The singular shall include the plural, and the masculine shall include the feminine and the neuter. Unless otherwise expressly provided in this Chapter, the definition of any term will be the same as such term is used in a comparable context in the Internal Revenue Code of 1986, as amended. (a) Adjusted federal taxable income means a C corporations federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, but including subsequent adjustments from required additions and deductions. Pass-through entities must compute Adjusted Federal Taxable Income as if the pass-through entity was a C corporation. This definition does not apply to any taxpayer required to file a return under Ohio Revised Code (ORC) section 5745.03 or to the net profit from a sole proprietorship. This definition is effective for tax years beginning on or after January 1, 2004. (b) Association means a partnership, limited partnership, limited liability company, or any other form of unincorporated enterprise, owned by one or more persons. (c) Board of Review means the Board created by and constituted as provided in Section 181.13. (d) Business means an enterprise activity, profession, or undertaking of any nature conducted for profit, whether by an individual, partnership, limited partnership, corporation, association or any other entity. (e) City means the City of Tallmadge, Ohio. (f) Corporation means a corporation, including S Corporations as defined in the federal tax code, 26 U.S.C. 1361, or joint stock association organized under the laws of the United States, the State of Ohio, or any other state, territory, foreign country or dependency. (g) Domicile means the permanent legal residence of a taxpayer. A taxpayer may have more than one residence but not more than one domicile. (h) Employee means an individual whose earnings are subject to the withholding of Federal Income Tax or Social Security Tax, and/or an individual who works for income, qualifying wages, salary, commissions or other types of compensation in the services and under the control of any employer.
(i) Employer means an individual, partnership, limited partnership, association, corporation, government body, unit or agency or any other entity, whether or not organized for profit, who employs one or more persons on an income, salary, wage, commission or other compensation basis. (j) Generic Form means an electronic or paper form designed for reporting estimated municipal income taxes, and/or annual municipal income tax liability, and/or separate requests for refunds, that contain all the information required on Tallmadges regular tax return, estimated payment, and refund request forms, and are in a similar format that will allow processing of the generic forms without altering Tallmadges procedures for processing forms. (k) Gross receipts means the total revenue derived from sales, work done, or service rendered. (l) Income means all monies, subject to limitations imposed by ORC Chapter 718, derived from any source whatsoever, including but not limited to: (1) All income, qualifying wages, commissions, other compensation and other income from whatever source received by residents of Tallmadge. (2) All salaries, wages, commissions, other compensation and other income from whatsoever source received by nonresidents for work done or services performed or rendered or activities conducted in Tallmadge. (3) The portion attributable to the city of the net profits of all unincorporated businesses, associations, professions, corporations, or other entities, from sales made, work done, services performed or rendered, and business or other activities conducted in Tallmadge. (m) Joint Economic Development District means a district created under Ohio R.C. 715.70 through 715.83, as amended from time to time. (n) "Net Profits" for a taxpayer other than an individual means the "adjusted federal taxable income" as defined in Ohio R.C. 718.01. (o) "Net Profits" for a taxpayer who is an individual means the individual's profit, other than amounts exempted under Ohio R.C. 718.01(F) and are required to be reported on IRS Schedules C, E, or F. (p) Nonresident means an individual domiciled outside the City of Tallmadge. (q) Nonresident unincorporated business entity means an unincorporated business entity not having an office or place of business within the City of Tallmadge.
(r) Person means every natural person, partnership, limited partnership, corporation, fiduciary or association. Whenever used in any section, phrase, or clauses prescribing and imposing a penalty, the term person as applied to any association, shall mean the partners or members thereof, and as applied to corporation, the officers thereof. (s) Place of business means any bona fide office (other than a mere statutory office), factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity, individually or through one or more of his employees regularly in attendance. (t) Qualifying wage means Wages as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, but including subsequent adjustments from required additions and deductions. Qualifying wage represents employees income from which municipal tax shall be deducted by the employer, and any wages not considered a part of qualifying wage shall not be taxed by the Municipality. This definition is effective January 1, 2004, for taxable years 2004 and later. (u) Resident means an individual domiciled in the City of Tallmadge. (v) Resident unincorporated business entity means an unincorporated business entity having an office or place of business within the City. (w) Tax year means the calendar year, or the fiscal year upon the basis of which net profits are to be computed under this Chapter, and, in the case of a return for a fractional part of a year, the period for which such return is required to be made. (x) "Tax Administrator", as designated by Article VI of The Charter of the City of Tallmadge, means the Director of Finance who administers and enforces the provisions of this Chapter. (y) "Taxable Income", excluding wage or other compensation exempted under qualifying wages and exemptions described in Section 181.03(e), means salaries, wages, commissions, or any other compensation paid by an employer before any deductions and/or the net profits from the operation of a business, profession, or other enterprise or activity, including rental property. The term "other compensation" includes all forms of earned income, including, but not limited to, tips, tax shelter plans, gifts of any type for services rendered, vacation and holiday pay, wage continuation benefits, director's fees, jury duty fees, stock options granted in connection with the performance of service and not designated as capital gains, property in lieu of cash, sick pay, bonuses, severance pay and any payments for covenants not to compete or the like when accrued, incentive payments in whatever form, company closing benefits,
supplemental unemployment benefits, earnings designated as deferred compensation or compensation paid by an employer in whatever form for services rendered, employer paid premiums for group-term insurance in excess of fifty thousand dollars ($50,000), strike benefits, depreciation recapture, ordinary income shown on Federal Form 4797, and a resident partner's or stockholder's distributive share of a nonresident partnership or S-corporation net profits (whether received as wages paid or a draw from a drawing or capital account and whether received or accrued). Taxable income also includes income reported on federal tax returns from gaming, wagering, lotteries (including the Ohio or any other State lottery), and schemes of chance effective during the year in which such income from gaming, wagering, lotteries, or schemes of chance is received. (z) Taxpayer means a person, whether an individual, partnership, limited partnership, corporation, association or other entity, required hereunder to file a return and/or to pay a tax hereunder. (Ord. 13-2007. Passed 1-25-07.) 181.03 IMPOSITION OF TAX. (a) Subject to the provisions of Section 181.16, an annual tax for the purposes specified in Section 181.01 hereof shall be imposed at the rate of two percent (2%) per annum commencing March 1, 2004 upon the following: (1) On all income earned and/or received during the effective period of this Chapter by residents of the City of Tallmadge. For further clarification income includes, but is not limited to, lottery, gambling winnings, sports winnings, games of skill, and games of chance. No deductions shall be permitted against income from lottery, gambling winnings, sports winnings, games of skill, and games of chance. (2) On all income earned and/or received during the effective period of this Chapter by nonresident individuals for work done or services performed in the City of Tallmadge. Income earned and/or received as holiday, sick, and/or vacation pay is taxable to the City of Tallmadge. Separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer shall be allocable only to the City of Tallmadge. However, the City of Tallmadge shall not tax the compensation of an individual if all of the following apply: A. The individual does not reside in the City of Tallmadge. B. The compensation is paid for personal services performed by the individual in the City of Tallmadge on twelve or fewer days during the calendar year. A day is a full day or any fractional part of a day.
C. In the case of an individual who is an employee, the principal place of business of the individuals employer is located outside the City of Tallmadge and the individual pays tax on compensation described in subsection (b) hereof to the City, if any, in which the employers principal place of business is located, and no portion of that tax is refunded to the individual. D. The individual is not a professional entertainer or professional athlete; the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by the City of Tallmadge. (3) On the portion attributable to the City of Tallmadge of the net profits earned during the effective period of this Chapter of all resident and nonresident corporations, unincorporated businesses, professions, or other entities, derived from sales made, work done, services performed or rendered, and business or other activities conducted in the City of Tallmadge, whether or not such corporations have an office or place of business in the City of Tallmadge. (4) On the portion of the distributive share of the net profits earned and/or received during the effective period of this Chapter of resident partners, resident S-corporation shareholders or owners of resident and nonresident unincorporated business entities and S-corporations not attributable to the City of Tallmadge and not levied against such business entity. Provided, however, that the liability of an individual partner or owner taxable hereunder shall be subject to the provisions of Section 181.15 hereof. (b) The portion of the net profits attributable to the City of Tallmadge of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the City of Tallmadge shall be determined as provided in Section 718.02 of the Revised Code of Ohio and in accordance with the rules and regulations adopted by the Tax Administrator pursuant to this Chapter. (c) Business or Rental Loss. (1) A business or rental loss is not allowed as an offset against Federal Form W-2 income. (2) A business or rental loss may only be applied in the year in which it is incurred. (3) Excluding rentals, a taxpayers net profits and losses from businesses operating within Tallmadge may be combined to determine the profit or loss attributable to operations within Tallmadge.
(4) A taxpayers net profits and losses from rentals within Tallmadge may be combined to determine the profit or loss attributable to rental operations within Tallmadge. (d) 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 City of Tallmadge. However, once the aff...