HomeMy WebLinkAboutOrdinance 081-15f,
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Ordinance No. 81 -j -5
RECORD OF ORDINANCES
Form No. 30043
Passed , 20
AN ORDINANCE TO CREATE CHAPTER 38 OF THE
CODIFIED ORDINANCES OF THE CITY OF DUBLIN
REGARDING MUNICIPAL INCOME TAX
WHEREAS, the Home Rule Amendment of the Ohio Constitution, Article XVII,
Section 3, provides that "[m]unicipalities shall have authority to exercise all powers
of local self - government," and the municipal taxing power is one of such powers of
local self - government delegated by the people of the State to the people of
municipalities; and
WHEREAS, Article XIII, Section 6 of the Ohio Constitution provides that the General
Assembly may restrict a municipality's power of taxation to the extent necessary to
prevent abuse of such power, and Article XVIII, Section 13 of the Ohio Constitution
states that "laws may be passed to limit the powers of municipalities to levy taxes
and incur debts for local purposes;" and
WHEREAS, the General Assembly has determined that it is necessary and
appropriate to comprehensively review and amend Chapter 718 of the Ohio Revised
Code, setting forth statutory requirements for municipal income tax codes in Ohio,
and
WHEREAS, more specifically, the General Assembly enacted House Bill 5 in
December 2014, and mandated that municipal income tax codes be amended by
January 1, 2016 such that any income or withholding tax is "levied in accordance
with the provisions and limitations specified in [Chapter 718];" and
WHEREAS, upon a detailed review of House Bill 5 and the Codified Ordinances of
the City of Dublin, this Ordinance is found and determined by this Council to enact
the amendments required, prior to the January 1, 2016 deadline, to be in accord with
the provisions and limitations specified in Chapter 718 of the Revised Code.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Dublin,
Iof its elected members concurring, that:
Section 1. Chapter 38 of the Codified Ordinances is created to read as set forth
in the document entitled "Chapter 38, Income Tax," attached hereto as Exhibit A and
incorporated herein by reference.
Section 2. This Ordinance shall take effect and be in force from and after the
earliest date provided by law.
Passed this day of Uiff 1'�� , 2015.
or — Presiding Officer
ATTEST:
Clerk of Council
Office of the City Manager
5200 Prkway* IC'
ity of Dublin Phone: 614 - 1410.4 0 • Fax:h6 14 -04 1 0 -449 0 43017-1090 M e m o
To: Members of Dublin City Council
From: Dana L. McDaniel, City Manager
Date: October 29, 2015
Initiated By: Angel L. Mumma, Deputy City Manager /Director of Finance
V. Faye Gibson, Director of Taxation
Re: Ordinance No. 81 -15 - Municipal Income Tax Ordinance
Background
Significant and wide - ranging amendments to ORC 718 were enacted by Amended Substitute
House Bill 5, passed by the 130' General Assembly, and signed by Governor Kasich on December
19, 2014. Am. Sub. HB 5 requires municipal corporations to conform to and adopt the provisions
of ORC 718 in order to have the authority to impose, enforce, administer and collect a municipal
income tax.
Chapter 35 remains applicable to all tax years prior to 1/1/2016. Therefore, to comply with the
mandates in Am. Sub. HB 5, municipal income tax Ordinance 81 -15, effective January 1, 2016,
creates and authorizes the enactment of Chapter 38 in accordance with the provisions of ORC 718
to allow the continued administration and collection of the municipal income tax.
Changes for 2016
Due to the change in estimated payment due dates, the City of Dublin will receive five estimated
payments instead of four, which will actually increase revenue in 2016 only. However, the
minimum amount required to be remitted is increased from $100 to $200.
Penalty on late withholding payments will increase from 10.0% to 50.0% of the tax due and on
non - withholding payments from 10.0% to 15.0 %.
Changes that will impact revenue negatively (i.e., Net Operating Loss, pass- through offsets) are
not effective until tax years beginning on or after 1/1/2017.
Recommendation
Staff recommends approval of Ordinance 81 -15 at the second reading /public hearing on November
16, 2015.
CHAPTER 38
Municipal Income Tax
Effective January 1, 2016
For taxable years beginning with taxable year 2016
38.01 AUTHORITY TO LEVY TAX; PURPOSES OF TAX;
RATE; APPLICABILITY AND EFFECTIVE DATE
38.011 AUTHORITY TO LEVY TAX
38.012 PURPOSES OF TAX; RATE
38.013 ALLOCATION OF FUNDS
38.014 APPLICABILITY AND EFFECTIVE
DATE
38.02 STATEMENT OF PROCEDURAL HISTORY; STATE
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TAX
38.03 DEFINITIONS
38.04 INCOME SUBJECT TO TAX FOR INDIVIDUALS
38.041 DETERMINING MUNICIPAL TAXABLE
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38.043 EXEMPTION FOR MEMBER OR
EMPLOYEE OF GENERAL
ASSEMBLY AND CERTAIN JUDGES
1
38.05 COLLECTION AT SOURCE
38.051 COLLECTION AT SOURCE;
WITHHOLDING FROM WAGES
38.052 COLLECTION AT SOURCE;
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38.06 INCOME SUBJECT TO NET PROFIT TAX
38.061 DETERMINING MUNICIPAL TAXABLE
INCOME FOR TAXPAYERS WHO ARE
NOT INDIVIDUALS
38.062 NET PROFIT; INCOME SUBJECT TO
NET PROFIT TAX; ALTERNATIVE
APPORTIONMENT
38.063 CONSOLIDATED FEDERAL INCOME
TAX RETURN
38.064 TAX CREDIT FOR BUSINESSES THAT
FOSTER NEW JOBS IN OHIO
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RETENTION
38.07 DECLARATION OF ESTIMATED TAX
38.08 CREDIT FOR TAX PAID
38.081 CREDIT FOR TAX PAID TO ANOTHER
MUNICIPALITY
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QUALIFYING LOSS
OA
38.083 CREDIT FOR PERSON WORKING IN
JOINT ECONOMIC DEVELOPMENT
DISTRICT OR ZONE
38.084 CREDIT FOR TAX BEYOND STATUTE
Mel zKol :1ra1011101 [ell : »111.1.]
38.09 ANNUAL RETURN
38.091 RETURN AND PAYMENT OF TAX
38.092 RETURN AND PAYMENT OF TAX;
INDIVIDUALS SERVING IN COMBAT
ZONE
38.093 USE OF OHIO BUSINESS GATEWAY;
TYPES OF FILINGS AUTHORIZED
38.094 EXTENSION OF TIME TO FILE
38.095 AMENDED RETURNS
38.096 REFUNDS
38.10 PENALTY, INTEREST, FEES AND CHARGES
38.12 ROUNDING
38.13 AUTHORITY AND POWERS OF THE FINANCE
DIRECTOR AND TAX ADMINISTRATOR
38.131 AUTHORITY OF FINANCE DIRECTOR;
38.132 AUTHORITY OF TAX
ADMINISTRATOR; ADMINISTRATIVE
3
POWERS OF THE TAX
ADMINISTRATOR
38.133 AUTHORITY OF TAX
ADMINISTRATOR; COMPROMISE OF
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38.134 AUTHORITY OF TAX
ADMINISTRATOR; RIGHT TO
EXAMINE
38.135 AUTHORITY OF TAX
ADMINISTRATOR; REQUIRING
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38.14 CONFIDENTIALITY
38.15 FRAUD
38.16 OPINION OF THE TAX ADMINISTRATOR
38.17 ASSESSMENT; APPEAL BASED ON PRESUMPTION
OF DELIVERY
38.18 LOCAL BOARD OF TAX REVIEW; APPEAL TO
LOCAL BOARD OF TAX REVIEW
38.19 ACTIONS TO RECOVER; STATUTE OF
LIMITATIONS
38.20 ADOPTION OF RULES
38.30 CONTRACT PROVISIONS
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il
38.97 COLLECTION OF TAX AFTER TERMINATION OF
CHAPTER
38.98 SAVINGS CLAUSE
38.99 VIOLATIONS - PENALTY
38.01 AUTHORITY TO LEVY TAX; PURPOSES OF TAX;
RATE; APPLICABILITY AND EFFECTIVE DATE
38.011 AUTHORITY TO LEVY TAX
(A) The tax on income and the withholding tax established by
this Chapter 38 are authorized by Article XVIII, Section 3 of the
Ohio Constitution. The tax on income and the withholding tax
established by this Chapter 38 are deemed to be levied in
accordance with, and to be consistent with, the provisions and
limitations of Ohio Revised Code Chapter 718 (ORC 718). This
Chapter is deemed to incorporate the provisions of ORC 718.
(B) The tax is an annual tax levied on the income of every
person residing in or earning or receiving income in the municipal
corporation, and shall be measured by municipal taxable income.
The Municipality shall tax income at a uniform rate. The tax is
levied on Municipal Taxable Income, as defined herein.
(Source: ORC 718.04)
(C) The income tax at the rate of two (2.0) percent shall be
levied, collected and paid with respect to the qualifying wages,
commissions, and other compensation earned or deemed to be
received on or after January 1, 2016, and with respect to the net
profits of business, professions or other activities earned on or
after January 1, 2016. The income tax rate of two (2.0) percent
shall be levied, collected and paid with respect to: all prizes,
awards and winnings of residents of the city derived from gaming,
wagering, sweepstakes and games of chance; all prizes, awards
and winnings of non - residents derived from gaming, wagering,
sweepstakes and games of chance related to the winning of such
income within the city; and all prizes, awards and winnings paid to
residents of the city by the State Lottery Commission.
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38.012 PURPOSES OF TAX; RATE
1. To provide for the purposes of general municipal operations,
maintenance, new equipment and capital improvements of the
Municipality.
2. The tax upon the income specified herein shall remain in
effect for the purpose of filing returns and collection of the tax at
the rate of two (2.0) percent. (Source: ORC 718.04)
38.013 ALLOCATION OF FUNDS
(A) One and one -half percent of the tax revenues shall be used
as follows:
(1) Such part thereof as shall be necessary to defray the
cost of collecting the taxes levied by this chapter and
enforcing the provisions hereof.
(2) Such part thereof as Council may deem appropriate to
the General Fund for the purpose of paying the cost of
general municipal obligations.
(3) Such part thereof as Council may deem appropriate for
the purpose of paying the cost of maintenance of, and
the purchase of new equipment, motorized or other.
(4) Such part thereof as Council may appropriate for the
purpose of paying the cost, acquisition, construction,
repair and /or maintenance of streets.
(B) One -half of one percent of the tax revenues shall be
transferred to a Capital Improvement Tax Fund and used
exclusively for capital improvements.
38.014 APPLICABILITY AND EFFECTIVE DATE
(A) The effective date of the provisions of this Chapter 38 shall
be January 1, 2016, and shall apply to municipal taxable years
beginning on or after January 1, 2016.
(B) The enactment of this chapter does not repeal /amend the
existing sections of Chapter 35 for any taxable year prior to 2016.
For municipal taxable years beginning before January 1, 2016,
the city shall continue to administer, audit, and enforce the
municipal income tax under Dublin City Chapter 35 and ORC 718
as it existed prior to January 1, 2016.
(Source: Uncodified Section 2 of Am Sub HB 5, passed
Dec 2014; ORC 718.04)
38.02 STATEMENT OF PROCEDURAL HISTORY,
STATE MANDATED CHANGES TO
MUNICIPAL INCOME TAX
(A) Significant and wide - ranging amendments to ORC
718 were enacted by Am Sub HB 5, passed by the 1301h
General Assembly, and signed by Governor Kasich on
December 19, 2014, and H.B. 5 required municipal
corporations to conform to and adopt the provisions of
ORC 718 in order to have the authority to impose,
enforce, administer and collect a municipal income tax.
(B) As mandated by AM Sub H.B. 5, municipal income
tax Ordinance 2015 -81, effective January 1, 2016,
authorizes the enactment of Chapter 38 in accordance
with the provisions of ORC 718 to allow the continued
administration and collection of the municipal income tax.
38.03 DEFINITIONS
Any term used in this chapter that is not otherwise defined in this
chapter has the same meaning as when used in a comparable
M
context in laws of the United States relating to federal income
taxation or in Title LVII of the Ohio Revised Code, unless a
different meaning is clearly required. If a term used in this chapter
that is not otherwise defined in this chapter is used in a
comparable context in both the laws of the United States relating
to federal income tax and in Title LVII of the Ohio Revised Code
and the use is not consistent, then the use of the term in the laws
of the United States relating to federal income tax shall control
over the use of the term in Title LVI I of the Ohio Revised Code.
For purposes of this Section, the singular shall include the plural,
and the masculine shall include the feminine and the gender -
neutral.
As used in this chapter:
(A) "ADJUSTED FEDERAL TAXABLE INCOME," for a person
required to file as a C corporation, or for a person that has elected
to be taxed as a C corporation under division 23(D) of this
section, means a C corporation's federal taxable income before
net operating losses and special deductions as determined under
the Internal Revenue Code, adjusted as follows:
(1) Deduct intangible income to the extent included in
federal taxable income. The deduction shall be allowed
regardless of whether the intangible income relates to assets
used in a trade or business or assets held for the production
of income.
(2) Add an amount equal to five per cent of intangible
income deducted under division (A)(1) of this section, but
excluding that portion of intangible income directly related to
the sale, exchange, or other disposition of property
described in section 1221 of the Internal Revenue Code;
(3) Add any losses allowed as a deduction in the
computation of federal taxable income if the losses directly
relate to the sale, exchange, or other disposition of an asset
described in section 1221 or 1231 of the Internal Revenue
Code;
(4) (a) Except as provided in division (A)(4)(b) of this
section, deduct income and gain included in federal
taxable income to the extent the income and gain
directly relate to the sale, exchange, or other disposition
of an asset described in section 1221 or 1231 of the
Internal Revenue Code;
(b) Division (A)(4)(a) of this section does not apply to
the extent the income or gain is income or gain
described in section 1245 or 1250 of the Internal
Revenue Code.
(5) Add taxes on or measured by net income allowed as a
deduction in the computation of federal taxable income;
(6) In the case of a real estate investment trust or regulated
investment company, add all amounts with respect to
dividends to, distributions to, or amounts set aside for or
credited to the benefit of investors and allowed as a
deduction in the computation of federal taxable income;
(7) Deduct, to the extent not otherwise deducted or
excluded in computing federal taxable income, any income
derived from a transfer agreement or from the enterprise
transferred under that agreement under section 4313.02 of
the Ohio Revised Code;
(8) (a) Except as limited by divisions (A)(8)(b)(c) and (d)
of this section, deduct any net operating loss incurred
by the person in a taxable year beginning on or after
January 1, 2017.
The amount of such net operating loss shall be
deducted from net profit that is reduced by exempt
income to the extent necessary to reduce municipal
taxable income to zero, with any remaining unused
portion of the net operating loss carried forward to not
more than five consecutive taxable years following the
taxable year in which the loss was incurred, but in no
10
case for more years than necessary for the deduction to
be fully utilized.
(b) No person shall use the deduction allowed by
division (A)(8)(a) of this section to offset qualifying
wages.
(c) (i) For taxable years beginning in 2018, 2019,
20201 2021, or 2022, a person may not deduct, for
purposes of an income tax levied by a municipal
corporation that levies an income tax before
January 1, 2016, more than fifty per cent of the
amount of the deduction otherwise allowed by
division (A)(8)(a) of this section.
(ii) For taxable years beginning in 2023 or
thereafter, a person may deduct, for purposes of
an income tax levied by a municipal corporation
that levies an income tax before January 1, 2016,
the full amount allowed by division (A)(8)(a) of this
section.
(d) Nothing in division (A)(8)(c)(i) of this section
precludes a person from carrying forward, for use with
respect to any return filed for a taxable year beginning
after 2018, any amount of net operating loss that was
not fully utilized by operation of division (A)(8)(c)(i) of
this section. To the extent that an amount of net
operating loss that was not fully utilized in one or more
taxable years by operation of division (A)(8)(c)(i) of this
section is carried forward for use with respect to a
return filed for a taxable year beginning in 2019, 20201
2021, or 2022, the limitation described in division
(A)(8)(c)(i) of this section shall apply to the amount
carried forward.
(e) Any person utilizing a post -2017 net operating loss
carry forward deduction shall submit with the return
reflecting said deduction a schedule detailing the
calculation and application of the net operating loss
carry forward.
11
(9) Deduct any net profit of a pass- through entity owned
directly or indirectly by the taxpayer and included in the
taxpayer's federal taxable income unless an affiliated group
of corporations includes that net profit in the group's federal
taxable income in accordance with division (E)(3)(b) of
Section 38.063 of this Chapter.
(10) Add any loss incurred by a pass- through entity owned
directly or indirectly by the taxpayer and included in the
taxpayer's federal taxable income unless an affiliated group
of corporations includes that loss in the group's federal
taxable income in accordance with division (E)(3)(b) of
Section 38.063 of this Chapter.
(11) Add any deduction from a pass- through entity not
allowed as a deduction for a C- Corporation under the
Internal Revenue Code.
If the taxpayer is not a C corporation, is not a publicly traded
partnership that has made the election described in division
(V)(4) of this section, and is not an individual, the taxpayer shall
compute adjusted federal taxable income under this section as if
the taxpayer were a C corporation, except guaranteed payments
and other similar amounts paid or accrued to a partner, former
partner, shareholder, former shareholder, member, or former
member shall not be allowed as a deductible expense unless
such payments are in consideration for the use of capital and
treated as payment of interest under section 469 of the Internal
Revenue Code or United States treasury regulations. Amounts
paid or accrued to a qualified self - employed retirement plan with
respect to a partner, former partner, shareholder, former
shareholder, member, or former member of the taxpayer,
amounts paid or accrued to or for health insurance for a partner,
former partner, shareholder, former shareholder, member, or
former member, and amounts paid or accrued to or for life
insurance for a partner, former partner, shareholder, former
shareholder, member, or former member shall not be allowed as
a deduction.
12
Nothing in division (A) of this section shall be construed as
allowing the taxpayer to add or deduct any amount more than
once or shall be construed as allowing any taxpayer to deduct any
amount paid to or accrued for purposes of federal self -
employment tax.
(B) (1) "ASSESSMENT" means any of the following:
(a) A written finding by the Tax Administrator that a
person has underpaid municipal income tax, or owes
penalty and interest, or any combination of tax, penalty,
or interest, to the municipal corporation;
(b) A full or partial denial of a refund request issued
under Section 38.096 (B)(2) of this Chapter;
(c) A Tax Administrator's denial of a taxpayer's
request for use of an alternative apportionment method,
issued under Section 38.062(B)(2) of this Chapter; or
(d) A Tax Administrator's requirement for a taxpayer
to use an alternative apportionment method, issued
under Section 38.062(B)(3) of this Chapter.
(e) For purposes of division (13)(1)(a), (b), (c) and (d)
of this Section, an assessment shall commence the
person's time limitation for making an appeal to the
Local Board of Tax Review pursuant to Section 38.18 of
this Chapter, and shall have "ASSESSMENT" written
in all capital letters at the top of such finding.
(2) "ASSESSMENT" does not include notice(s) denying a
request for refund issued under Section 38.096 (B)(3) of this
Chapter, a billing statement notifying a taxpayer of current or
past -due balances owed to the municipal corporation, a Tax
Administrator's request for additional information, a
notification to the taxpayer of mathematical errors, or a Tax
Administrator's other written correspondence to a person or
taxpayer that does not meet the criteria prescribed by
division (B)(1) of this section.
(C) "AUDIT" means the examination of a person or the
inspection of the books, records, memoranda, or accounts of a
13
person, ordered to appear before the Tax Administrator, for the
purpose of determining liability for a municipal income tax
(D) "BOARD OF REVIEW" has same meaning as "Local Board
of Tax Review.
(E) "CALENDAR QUARTER" means the three -month period
ending on the last day of March, June, September, or December.
(F) "CASINO OPERATOR" and "CASINO FACILITY" have the
same meanings as in section 3772.01 of the Ohio Revised Code.
(G) "CERTIFIED MAIL," "EXPRESS MAIL," "UNITED STATES
MAIL," "POSTAL SERVICE," and similar terms include any
delivery service authorized pursuant to section 5703.056 of the
Ohio Revised Code.
(H) "COMPENSATION" means any form of remuneration paid
to an employee for personal services.
(1) "DISREGARDED ENTITY" means a single member limited
liability company, a qualifying subchapter S subsidiary, or another
entity if the company, subsidiary, or entity is a disregarded entity
for federal income tax purposes.
(J) "DOMICILE" means the true, fixed and permanent home of
the taxpayer to which, whenever absent, the taxpayer intends to
return.
(K) "EXEMPT INCOME" means all of the following:
(1) The military pay or allowances of members of the
armed forces of the United States or members of their
reserve components, including the national guard of any
state;
(2) Intangible income; as described in division (0) of this
section.
(3) Social security benefits, railroad retirement benefits,
unemployment compensation, pensions, retirement benefit
payments, payments from annuities, and similar payments
made to an employee or to the beneficiary of an employee
under a retirement program or plan, disability payments
received from private industry or local, state, or federal
governments or from charitable, religious or educational
organizations, and the proceeds of sickness, accident, or
14
liability insurance policies. As used in division (K)(3) of this
section, "unemployment compensation" does not include
supplemental unemployment compensation described in
section 3402(0)(2) of the Internal Revenue Code.
(4) The income of religious, fraternal, charitable, scientific,
literary, or educational institutions to the extent such income
is derived from tax - exempt real estate, tax - exempt tangible
or intangible property, or tax - exempt activities.
(5) Compensation paid under section 3501.28 or 3501.36
of the Ohio Revised Code to a person serving as a precinct
election official to the extent that such compensation does
not exceed one thousand dollars for the taxable year. Such
compensation in excess of one thousand dollars for the
taxable year may be subject to taxation by a municipal
corporation. A municipal corporation shall not require the
payer of such compensation to withhold any tax from that
compensation.
(6) Dues, contributions, and similar payments received by
charitable, religious, educational, or literary organizations or
labor unions, lodges, and similar organizations;
(7) Alimony and child support received;
(8) Awards for personal injuries or for damages to property
from insurance proceeds or otherwise, excluding
compensation paid for lost salaries or wages or awards for
punitive damages;
(9) Income of a public utility when that public utility is
subject to the tax levied under section 5727.24 or 5727.30 of
the Ohio Revised Code. Division (K)(9) of this section does
not apply for purposes of Chapter 5745 of the Ohio Revised
Code.
(10) Gains from involuntary conversions, interest on federal
obligations, items of income subject to a tax levied by the
state and that a municipal corporation is specifically
prohibited by law from taxing, and income of a decedent's
estate during the period of administration except such
income from the operation of a trade or business;
15
(11) Compensation or allowances excluded from federal
gross income under section 107 of the Internal Revenue
Code;
(12) Employee compensation that is not qualifying wages as
defined in Division (FF) of this section;
(13) Compensation paid to a person employed within the
boundaries of a United States air force base under the
jurisdiction of the United States air force that is used for the
housing of members of the United States air force and is a
center for air force operations, unless the person is subject
to taxation because of residence or domicile. If the
compensation is subject to taxation because of residence or
domicile, tax on such income shall be payable only to the
municipal corporation of residence or domicile.
(14) An S corporation shareholder's distributive share of net
profits of the S corporation, other than any part of the
distributive share of net profits that represents wages as
defined in section 3121(a) of the Internal Revenue Code or
net earnings from self - employment as defined in section
1402(a) of the Internal Revenue Code.
(15) All of the municipal taxable income earned by
individuals under eighteen years of age.
(16) (a) Except as provided in divisions (K)(16)(b), (c), and
(d) of this section, qualifying wages described in
division (13)(1) or (E) of Section 38.052 of this Chapter
to the extent the qualifying wages are not subject to
withholding for the Municipality under either of those
divisions.
(b) The exemption provided in division (K)(16)(a) of
this section does not apply with respect to the municipal
corporation in which the employee resided at the time
the employee earned the qualifying wages.
(c) The exemption provided in division (K)(16)(a) of
this section does not apply to qualifying wages that an
employer elects to withhold under division (D)(2) of
Section 38.052 of this Chapter
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(d) The exemption provided in division (K)(16)(a) of
this section does not apply to qualifying wages if both of
the following conditions apply:
(i) For qualifying wages described in division
(13)(1) of Section 38.052 of this Chapter, the
employee's employer withholds and remits tax on
the qualifying wages to the municipal corporation
in which the employee's principal place of work is
situated, or, for qualifying wages described in
division (E) of Section 38.052 of this Chapter, the
employee's employer withholds and remits tax on
the qualifying wages to the municipal corporation
in which the employer's fixed location is located;
(ii) The employee receives a refund of the tax
described in division (K)(16)(a) of this section on
the basis of the employee not performing services
in that municipal corporation.
(17) (a) Except as provided in division (K)(17)(b) or (c) of
this section, compensation that is not qualifying wages
paid to a nonresident individual for personal services
performed in the Municipality on not more than twenty
days in a taxable year.
(b) The exemption provided in division (K)(17(a) of
this section does not apply under either of the following
circumstances:
(i) The individual's base of operation is located
in the Municipality.
(ii) The individual is a professional athlete,
professional entertainer, or public figure, and the
compensation is paid for the performance of
services in the individual's capacity as a
professional athlete, professional entertainer, or
public figure. For purposes of division (K)(17)(b)(ii)
of this section, "professional athlete," "professional
entertainer," and "public figure" have the same
meanings as in Section 38.052 of this Chapter.
17
(c) Compensation to which division (K)(17) of this
section applies shall be treated as earned or received
at the individual's base of operation. If the individual
does not have a base of operation, the compensation
shall be treated as earned or received where the
individual is domiciled.
(d) For purposes of division (K)(17) of this section,
"base of operation" means the location where an
individual owns or rents an office, storefront, or similar
facility to which the individual regularly reports and at
which the individual regularly performs personal
services for compensation.
(18) Compensation paid to a person for personal services
performed for a political subdivision on property owned by
the political subdivision, regardless of whether the
compensation is received by an employee of the subdivision
or another person performing services for the subdivision
under a contract with the subdivision, if the property on
which services are performed is annexed to a municipal
corporation pursuant to section 709.023 of the Ohio Revised
Code on or after March 27, 2013, unless the person is
subject to such taxation because of residence. If the
compensation is subject to taxation because of residence,
municipal income tax shall be payable only to the municipal
corporation of residence.
(19) For an individual, the gain from the sale of rental real
estate property. Any related loss from the sale of rental real
estate property shall not be taken against any source of
income of the individual.
(20) Any item of income that is exempt income of a pass -
through entity is exempt income of each owner of the pass -
through entity to the extent of that owner's distributive or
proportionate share of that item of the entity's income.
(21) Income the taxation of which is prohibited by the
constitution or laws of the United States.
18
(L) "FORM 2106" means internal revenue service form 2106
filed by a taxpayer pursuant to the Internal Revenue Code.
(M) "GENERIC FORM" means an electronic or paper form that
is not prescribed by a particular municipal corporation and that is
designed for reporting taxes withheld by an employer, agent of an
employer, or other payer, estimated municipal income taxes, or
annual municipal income tax liability, including a request for
refund.
(N) "INCOME" means the following:
(1) (a) For residents, all income, salaries, qualifying
wages, commissions, prizes, awards and winnings paid
to residents of the municipality derived from the State
lottery and paid by the State Lottery Commission and
other compensation from whatever source earned or
received by the resident, including the resident's
distributive share of the net profit of pass- through
entities owned directly or indirectly by the resident and
any net profit of the resident, except as provided in
division (V)(4) of this section.
(b) For the purposes of division (N)(1)(a) of this
section:
(i) Any net operating loss of the resident
incurred in the taxable year and the resident's
distributive share of any net operating loss
generated in the same taxable year and
attributable to the resident's ownership interest in
a pass- through entity shall be allowed as a
deduction, for that taxable year and the following
five taxable years, against any other net profit of
the resident or the resident's distributive share of
any net profit attributable to the resident's
ownership interest in a pass- through entity until
fully utilized, subject to division (N)(1)(d) of this
section;
(ii) The resident's distributive share of the net
profit of each pass- through entity owned directly or
19
indirectly by the resident shall be calculated
without regard to any net operating loss that is
carried forward by that entity from a prior taxable
year and applied to reduce the entity's net profit for
the current taxable year.
(c) Division (N)(1)(b) of this section does not apply
with respect to any net profit or net operating loss
attributable to an ownership interest in an S
corporation.
(d) Any amount of a net operating loss used to reduce
a taxpayer's net profit for a taxable year shall reduce
the amount of net operating loss that may be carried
forward to any subsequent year for use by that
taxpayer. In no event shall the cumulative deductions
for all taxable years with respect to a taxpayer's net
operating loss exceed the original amount of that net
operating loss available to that taxpayer.
(2) In the case of nonresidents, all income, salaries,
qualifying wages, commissions, and other compensation
from whatever source earned or received by the nonresident
for work done, services performed or rendered, or activities
conducted in the Municipality, including any net profit of the
nonresident, but excluding the nonresident's distributive
share of the net profit or loss of only pass- through entities
owned directly or indirectly by the nonresident.
(3) For taxpayers that are not individuals, net profit of the
taxpayer;
(4) For both resident and non - resident individuals, "other
compensation" shall mean;
(a) Tips, bonuses, or gifts of any type, and including
compensation received by domestic servants, casual employees
and other types of employees. These payments are normally
reported on a Form 1099 MISC.
(b) If the income appears as part of Medicare wages
on a W -2 form and is not shown to be an exception in accordance
with section 38.03(K) of this section, it shall be considered other
20
compensation and is therefore taxable to the individual, including
but not limited to;
(i) Payments made by an employer to an
employee during periods of absence from work are taxable when
paid and at the tax rate in effect at the time of payment,
regardless of the fact that such payments may be labeled as sick
leave or sick pay, sick pay paid by the employer to the employee,
severance pay, supplemental unemployment benefits described
in section 3402(o)(2) of the Internal Revenue Code, vacation pay,
terminal pay, supplemental unemployment pay, wage and salary
continuation plans, payments made for the release of liability
related to termination of employment.
(ii) Tips, bonuses, fees, gifts in lieu of pay,
gratuities.
(iii) Strike pay; grievance pay.
(iv) Employer paid premiums for group term life
insurance to the extent taxable for federal income tax purposes.
(v) Car allowance, personal use of employer -
provided vehicle.
(vi) Incentive payments, no matter how
described, including, but not limited to, payments to induce early
retirement.
(vii) Contributions by an employee or on behalf of
an employee, from gross wages, into an employee or third party
trust or pension plan as permitted by any provision of the Internal
Revenue Code that may a excludable from gross wages for
federal income tax purposes such as 401 K, 403(b), and 457
plans.
(viii) Nonqualified Deferred Compensation Plans
or programs described in section 3121(v)(2)(C) of the Internal
Revenue Code.
(c) Trust payments not made pursuant to employee's
retirement.
(d) Where compensation is paid or received in
property, its fair market value at the time of receipt shall be
subject to the tax and to withholding.
21
(i) Board, lodging or similar items received by an
employee in lieu of additional cash compensation shall be
included in earnings at their fair market value.
(ii) Restricted stock awards that vest over a
period of time are taxable at their fair market value at the time
they become vested and included in Medicare wages, as shown
on the employee's IRS Form W -2.
(0) "INTANGIBLE INCOME" means income of any of the
following types: income yield, interest, capital gains, dividends, or
other income arising from the ownership, sale, exchange, or other
disposition of intangible property including, but not limited to,
investments, deposits, money, or credits as those terms are
defined in Chapter 5701 of the Ohio Revised Code, and patents,
copyrights, trademarks, trade names, investments in real estate
investment trusts, investments in regulated investment
companies, and appreciation on deferred compensation.
"Intangible income" does not include prizes, awards, or other
income associated with any lottery winnings, gambling winnings,
or other similar games of chance.
(P) "INTERNAL REVENUE CODE" means the "Internal
Revenue Code of 1986," 100 Sta. 2085, 26 U.S.C.A. 1, as
amended.
(Q) "LIMITED LIABILITY COMPANY" means a limited liability
company formed under Chapter 1705 of the Ohio Revised Code
or under the laws of another state.
(R) "LOCAL BOARD OF TAX REVIEW" and "BOARD OF TAX
REVIEW" means the entity created under Section 38.18 of this
Chapter.
(S) "MUNICIPAL CORPORATION" means, in general terms, a
status conferred upon a local government unit, by state law giving
the unit certain autonomous operating authority such as the
power of taxation, power of eminent domain, police power and
regulatory power, and includes a joint economic development
district or joint economic development zone that levies an income
tax under section 715.691, 715.701 715.71, or 715.74 of the Ohio
Revised Code.
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(T)(1) "MUNICIPAL TAXABLE INCOME" means the
following:
(a) For a person other than an individual, income
reduced by exempt income to the extent otherwise
included in income and then, as applicable, apportioned
or sitused to the Municipality under Section 38.062 of
this Chapter.
(b) For an individual who is a resident of the
Municipality, income reduced by exempt income to the
extent otherwise included in income, then reduced as
provided in division (T)(2) of this section.
(c) For an individual who is a nonresident of the
Municipality, income reduced by exempt income to the
extent otherwise included in income and then, as
applicable, apportioned or sitused to the Municipality
under Section 38.062 of this Chapter, then reduced as
provided in division (T)(2) of this section.
(2) In computing the municipal taxable income of a
taxpayer who is an individual, the taxpayer may subtract, as
provided in division (T)(1) (b) or (c) of this section, the
amount of the individual's employee business expenses
reported on the individual's form 2106 that the individual
deducted for federal income tax purposes for the taxable
year, subject to the limitation imposed by section 67 of the
Internal Revenue Code. For the municipal corporation in
which the taxpayer is a resident, the taxpayer may deduct all
such expenses allowed for federal income tax purposes. For
a municipal corporation in which the taxpayer is not a
resident, the taxpayer may deduct such expenses only to the
extent the expenses are related to the taxpayer's
performance of personal services in that nonresident
municipal corporation.
(U) "MUNICIPALITY" as used in this Chapter means the City of
Dublin.
(V) "NET OPERATING LOSS" means a loss incurred by a
person in the operation of a trade or business. "Net operating
23
loss" does not include unutilized losses resulting from basis
limitations, at -risk limitations, or passive activity loss limitations.
(V) (1) "NET PROFIT" for a person other than an individual
means adjusted federal taxable income.
(2) "NET PROFIT" for a person who is an individual means
the individual's net profit required to be reported on schedule
C, schedule E, or schedule F reduced by any net operating
loss carried forward. For the purposes of this division, the
net operating loss carried forward shall be calculated and
deducted in the same manner as provided in division (A)(8)
of this section.
(3) For the purposes of this chapter, and notwithstanding
division (V)(1) of this section, net profit of a disregarded
entity shall not be taxable as against that disregarded entity,
but shall instead be included in the net profit of the owner of
the disregarded entity.
(4) (a) For purposes of this chapter, "publicly traded
partnership" means any partnership, an interest in
which is regularly traded on an established securities
market. A "publicly traded partnership" may have any
number of partners.
(b) For the purposes of this chapter, and not
withstanding any other provision of this chapter, the net
profit of a publicly traded partnership that makes the
election described in division (W)(4)(c) of this section
shall be taxed as if the partnership were a C
corporation, and shall not be treated as the net profit or
income of any owner of the partnership.
(c) A publicly traded partnership that is treated as a
partnership for federal income tax purposes and that is
subject to tax on its net profits in one or more municipal
corporations in this state may elect to be treated as a C
corporation for municipal income tax purposes. The
publicly traded partnership shall make the election in
every municipal corporation in which the partnership is
subject to taxation on its net profits. The election shall
24
be made on the annual tax return filed in each such
municipal corporation. Once the election is made, the
election is binding for a five -year period beginning with
the first taxable year of the initial election. The election
continues to be binding for each subsequent five -year
period unless the taxpayer elects to discontinue filing
municipal income tax returns as a C corporation for
municipal purposes under division (W)(4)(d) of this
section.
(d) An election to discontinue filing as a C corporation
must be made in the first year following the last year of
a five -year election period in effect under division
(W)(4)(c) of this section. The election to discontinue
filing as a C corporation is binding for a five -year period
beginning with the first taxable year of the election and
continues to be binding for each subsequent five -year
period unless the taxpayer elects to discontinue filing
municipal income tax returns as a partnership for
municipal purposes. An election to discontinue filing as
a partnership must be made in the first year following
the last year of a five -year election period.
(e) The publicly traded partnership shall not be
required to file the election with any municipal
corporation in which the partnership is not subject to
taxation on its net profits, but division (W)(4)(b) of this
section applies to all municipal corporations in which an
individual owner of the partnership resides.
(f) The individual owners of the partnership not filing
as a C Corporation shall be required to file with their
municipal corporation of residence, and report
partnership distribution of net profit.
(X) "NONRESIDENT" means an individual that is not a resident
of the Municipality.
(Y) "OHIO BUSINESS GATEWAY" means the online computer
network system, created under section 125.30 of the Ohio
Revised Code, that allows persons to electronically file business
25
reply forms with state agencies and includes any successor
electronic filing and payment system.
(Z) "OTHER PAYER" means any person, other than an
individual's employer or the employer's agent, that pays an
individual any amount included in the federal gross income of the
individual. "Other payer" includes casino operators and video
lottery terminal sales agents.
(AA) "PASS- THROUGH ENTITY" means a partnership not
treated as an association taxable as a C corporation for federal
income tax purposes, a limited liability company not treated as an
association taxable as a C corporation for federal income tax
purposes, an S corporation, or any other class of entity from
which the income or profits of the entity are given pass- through
treatment for federal income tax purposes. "Pass- through entity"
does not include a trust, estate, grantor of a grantor trust, or
disregarded entity.
(BB) "PENSION" means any amount paid to an employee or
former employee that is reported to the recipient on an IRS form
1099 -R, or successor form. Pension does not include deferred
compensation, or amounts attributable to nonqualified deferred
compensation plans, reported as FICA/Medicare wages on an
IRS form W -2, Wage and Tax Statement, or successor form.
(CC) "PERSON" includes individuals, firms, companies, joint
stock companies, business trusts, estates, trusts, partnerships,
limited liability partnerships, limited liability companies,
associations, C corporations, S corporations, governmental
entities, and any other entity.
(DD) "POSTAL SERVICE" means the United States postal
service, or private delivery service delivering documents and
packages within an agreed upon delivery schedule, or any other
carrier service delivering the item.
(EE) "POSTMARK DATE," "DATE OF POSTMARK," and similar
terms include the date recorded and marked by a delivery service
and recorded electronically to a database kept in the regular
course if its business and marked on the cover in which the
26
payment or document is enclosed, the date on which the payment
or document was given to the delivery service for delivery
(FF) "QUALIFYING WAGES" means wages, as defined in
section 3121(a) of the Internal Revenue Code, without regard to
any wage limitations, adjusted as follows:
(1) Deduct the following amounts:
(a) Any amount included in wages if the amount
constitutes compensation attributable to a plan or
program described in section 125 of the Internal
Revenue Code.
(b) Any amount included in wages if the amount
constitutes payment on account of a disability related to
sickness or an accident paid by a party unrelated to the
employer, agent of an employer, or other payer.
(c) Any amount included in wages that is exempt
income.
(2) Add the following amounts:
(a) Any amount not included in wages solely because
the employee was employed by the employer before
April 1, 1986.
(b) Any amount not included in wages because the
amount arises from the sale, exchange, or other
disposition of a stock option, the exercise of a stock
option, or the sale, exchange, or other disposition of
stock purchased under a stock option. Division
(FF)(2)(b) of this section applies only to those amounts
constituting ordinary income.
(c) Any amount not included in wages if the amount is
an amount described in section 401(k), 403(b), or 457
of the Internal Revenue Code. Division (FF)(2)(c) of
this section applies only to employee contributions and
employee deferrals.
(d) Any amount that is supplemental unemployment
compensation benefits described in section 3402(o)(2)
27
of the Internal Revenue Code and not included in
wages.
(e) Any amount received that is treated as self -
employment income for federal tax purposes in
accordance with section 1402(a)(8) of the Internal
Revenue Code.
(f) Any amount not included in wages if all of the
following apply:
(i) For the taxable year the amount is employee
compensation that is earned outside of the United
States and that either is included in the taxpayer's
gross income for federal income tax purposes or
would have been included in the taxpayer's gross
income for such purposes if the taxpayer did not
elect to exclude the income under section 911 of
the Internal Revenue Code;
(ii) For no preceding taxable year did the amount
constitute wages as defined in section 3121(a) of
the Internal Revenue Code;
(iii) For no succeeding taxable year will the
amount constitute wages; and
(iv) For any taxable year the amount has not
otherwise been added to wages pursuant to either
division (FF)(2) of this section or section 718.03 of
the Ohio Revised Code, as that section existed
before the effective date of H.B. 5 of the 130th
general assembly, March 23, 2015.
(GG) "RELATED ENTITY" means any of the following:
(1) An individual stockholder, or a member of the
stockholder's family enumerated in section 318 of the
Internal Revenue Code, if the stockholder and the members
of the stockholder's family own directly, indirectly,
beneficially, or constructively, in the aggregate, at least fifty
per cent of the value of the taxpayer's outstanding stock;
(2) A stockholder, or a stockholder's partnership, estate,
trust, or corporation, if the stockholder and the stockholder's
0
partnerships, estates, trusts, or corporations own directly,
indirectly, beneficially, or constructively, in the aggregate, at
least fifty per cent of the value of the taxpayer's outstanding
stock;
(3) A corporation, or a party related to the corporation in a
manner that would require an attribution of stock from the
corporation to the party or from the party to the corporation
under division (GG)(4) of this section, provided the taxpayer
owns directly, indirectly, beneficially, or constructively, at
least fifty per cent of the value of the corporation's
outstanding stock;
(4) The attribution rules described in section 318 of the
Internal Revenue Code apply for the purpose of determining
whether the ownership requirements in divisions (GG)(1) to
(3) of this section have been met.
(1-11-1) "RELATED MEMBER" means a person that, with respect to
the taxpayer during all or any portion of the taxable year, is either
a related entity, a component member as defined in section
1563(b) of the Internal Revenue Code, or a person to or from
whom there is attribution of stock ownership in accordance with
section 1563(e) of the Internal Revenue Code except, for
purposes of determining whether a person is a related member
under this division, "twenty per cent" shall be substituted for "5
percent" wherever "5 percent" appears in section 1563(e) of the
Internal Revenue Code.
(II) "RESIDENT" means an individual who is domiciled in the
Municipality as determined under Section 38.042 of this Chapter.
(ii) "S CORPORATION" means a person that has made an
election under subchapter S of Chapter 1 of Subtitle A of the
Internal Revenue Code for its taxable year.
(KK) "SCHEDULE C" means internal revenue service schedule C
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
(LL) "SCHEDULE E" means internal revenue service schedule E
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
29
(MM) "SCHEDULE F" means internal revenue service schedule F
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
(NN) "SINGLE MEMBER LIMITED LIABILITY COMPANY"
means a limited liability company that has one direct member.
(00) "SMALL EMPLOYER" means any employer that had total
revenue of less than five hundred thousand dollars during the
preceding taxable year. For purposes of this division, "total
revenue" means receipts of any type or kind, including, but not
limited to, sales receipts; payments; rents; profits; gains,
dividends, and other investment income; commissions; premiums;
money; property; grants; contributions; donations; gifts; program
service revenue; patient service revenue; premiums; fees,
including premium fees and service fees; tuition payments;
unrelated business revenue; reimbursements; any type of
payment from a governmental unit, including grants and other
allocations; and any other similar receipts reported for federal
income tax purposes or under generally accepted accounting
principles. "Small employer" does not include the federal
government; any state government, including any state agency or
instrumentality; any political subdivision; or any entity treated as a
government for financial accounting and reporting purposes.
(PP) "TAX ADMINISTRATOR" means the individual charged with
direct responsibility for administration of an income tax levied by a
municipal corporation in accordance with this chapter, and also
includes the following:
(1) A municipal corporation acting as the agent of another
municipal corporation;
(2) A person retained by a municipal corporation to
administer a tax levied by the municipal corporation, but only
if the municipal corporation does not compensate the person
in whole or in part on a contingency basis;
(3) The Central Collection Agency (CCA) or the Regional
Income Tax Agency (RITA) or their successors in interest, or
another entity organized to perform functions similar to those
30
performed by the Central Collection Agency and the
Regional Income Tax Agency.
(QQ) "TAX RETURN PREPARER" means any individual
described in section 7701(a)(36) of the Internal Revenue CODE
AND 26 C.F.R. 301.7701-15.
(RR) "TAXABLE YEAR" means the corresponding tax reporting
period as prescribed for the taxpayer under the Internal Revenue
Code.
(SS) (A) "TAXPAYER" means a person subject to a tax levied
on income by a municipal corporation in accordance with this
chapter. "Taxpayer" does not include a grantor trust, a
disregarded entity or a qualifying subchapter S subsidiary for
federal income tax purposes, but "taxpayer" includes any
other person who owns the grantor trust, disregarded entity,
or qualifying subchapter S subsidiary.
(TT) "TAXPAYERS' RIGHTS AND RESPONSIBILITIES" means
the rights provided to taxpayers in sections 718.11, 718.12,
718.191 718.231 718.361 718.371 718.381 5717.011, and 5717.03
of the Ohio Revised Code and any corresponding ordinances of
the Municipality, and the responsibilities of taxpayers to file,
report, withhold, remit, and pay municipal income tax and
otherwise comply with Chapter 718 of the Ohio Revised Code and
resolutions, ordinances, and rules adopted by a municipal
corporation for the imposition and administration of a municipal
income tax.
(UU) "VIDEO LOTTERY TERMINAL" has the same meaning as
in section 3770.21 of the Ohio Revised Code.
(W) "VIDEO LOTTERY TERMINAL SALES AGENT" means a
lottery sales agent licensed under Chapter 3770 of the Ohio
Revised Code to conduct video lottery terminals on behalf of the
state pursuant to section 3770.21 of the Ohio Revised Code.
(Source: Most definitions can be found in ORC 718.01)
31
38.04 INCOME SUBJECT TO TAX FOR INDIVIDUALS
38.041 DETERMINING MUNICIPAL TAXABLE INCOME
FOR INDIVIDUALS
(A) "Municipal Taxable Income" for a resident of the Municipality
is calculated as follows:
(1) "Income" reduced by "Exempt Income" to the extent
such exempt income is otherwise included in income,
reduced by allowable employee business expense
deduction as found in division (T)(2) of Section 38.03 of
this Chapter.
(a) "Income" is defined in Section 38.03 (N) of this
Chapter.
(i) "Qualifying Wages" is defined in Section
38.03(FF).
(ii) "Net profit" is included in "income ", and
is defined in Section 38.03 (W) of this
Chapter. This section also provides that the
net operating loss carryforward shall be
calculated and deducted in the same manner
as provided in division (A)(8) of Section
38.03. Treatment of net profits received by
an individual taxpayer from rental real estate
is provided in Section 38.062(E).
(iii) Section 38.03(N) provides the following:
offsetting and net operating loss carryforward
treatment in (N)(1)(b)(i); resident's distributive
share of net profit from pass through entity
treatment in (N)(1)(b)(ii).
(iv) "Pass Through Entity" is defined in
Section 38.03(AA).
(b) "Exempt Income" is defined in Section 38.03 (K) of
this Chapter.
(c) Allowable employee business expense deduction
is described in (T)(2) of Section 38.03 of this
32
Chapter, and is subject to the limitations provided
in that section.
(B) "Municipal Taxable Income" for a nonresident of the
Municipality is calculated as follows:
(1) "Income" reduced by "Exempt Income" to the extent
such exempt income is otherwise included in income,
as applicable, apportioned or sitused to the Municipality
as provided in Section 38.062 of this Chapter, reduced
by allowable employee business expense deduction as
found in (T)(2) of Section 38.03 of this Chapter equals
"Municipal Taxable Income ".
(a) "Income" is defined in Section 38.03(N) of this
Chapter.
(i) "Qualifying Wages" is defined in Section
38.03(FF).
(ii) "Net profit" is included in "income ", and
is defined in Section 38.03(W) of this
Chapter. This section also provides that the
net operating loss carryforward shall be
calculated and deducted in the same manner
as provided in division (A)(8) of Section
38.03. "Net profit" for a nonresident individual
includes any net profit of the nonresident, but
excludes the distributive share of net profit or
loss of only pass through entity owned
directly or indirectly by the nonresident.
(iii) "Pass Through Entity" is defined in
Section 38.03(AA).
(b) "Exempt Income" is defined in Section 38.03(K) of
this Chapter.
(c) "Apportioned or sitused to the Municipality as
provided in Section 38.062 of this Chapter"
includes the apportionment of net profit income
attributable to work done or services performed in
the Municipality. Treatment of net profits received
33
by an individual taxpayer from rental real estate is
provided in Section 38.062(E).
(d) "Allowable employee business expense deduction"
as described in (T)(2) of Section 38.03 of this
Chapter, is subject to the limitations provided in
that section. For a nonresident of the Municipality,
the deduction is limited to the extent the expenses
are related to the performance of personal
services by the nonresident in the Municipality.
38.042 DOMICILE
(A) As used in this section:
(1) "Domicile" means the true, fixed and permanent home
of the taxpayer to which whenever absent, the taxpayer
intends to return.
(2) An individual is presumed to be domiciled in the
Municipality for all or part of a taxable year if the individual
was domiciled in the Municipality on the last day of the
immediately preceding taxable year or if the tax
administrator reasonably concludes that the individual is
domiciled in the Municipality for all or part of the taxable
year.
(3) An individual may rebut the presumption of domicile
described in division (A)(1) of this section if the individual
establishes by a preponderance of the evidence that the
individual was not domiciled in the Municipality for all or part
of the taxable year.
(B) For the purpose of determining whether an individual is
domiciled in the Municipality for all or part of a taxable year,
factors that may be considered include, but are not limited to, the
following:
(1) The individual's domicile in other taxable years;
(2) The location at which the individual is registered to
vote;
(3) The address on the individual's driver's license;
(4) The location of real estate for which the individual
34
claimed a property tax exemption or reduction allowed on
the basis of the individual's residence or domicile;
(5) The location and value of abodes owned or leased by
the individual;
(6) Declarations, written or oral, made by the individual
regarding the individual's residency;
(7) The primary location at which the individual is
employed.
(8) The location of educational institutions attended by the
individual's dependents as defined in section 152 of the
Internal Revenue Code, to the extent that tuition paid to
such educational institution is based on the residency of the
individual or the individual's spouse in the municipal
corporation or state where the educational institution is
located;
(9) The number of contact periods the individual has with
the Municipality. For the purposes of this division, an
individual has one "contact period" with the Municipality if
the individual is away overnight from the individual's abode
located outside of the Municipality and while away overnight
from that abode spends at least some portion, however
minimal, of each of two consecutive days in the
Municipality. For purposes of this section, the State's
contact period test or bright -line test and resulting
determination have no bearing on municipal residency or
domicile.
(C) All applicable factors are provided in Ohio Revised Code
Section 718.012.
(Source: ORC 718.012)
38.043 EXEMPTION FOR MEMBER OR EMPLOYEE OF
GENERAL ASSEMBLY AND CERTAIN JUDGES
(A) Only the municipal corporation of residence shall be
permitted to levy a tax on the income of any member or employee
35
of the Ohio General Assembly, including the Lieutenant Governor,
whose income is received as a result of services rendered as
such member or employee and is paid from appropriated funds of
this state.
(B) Only the municipal corporation of residence and the city of
Columbus shall levy a tax on the income of the Chief Justice or a
Justice of the Supreme Court received as a result of services
rendered as the Chief Justice or Justice. Only the municipal
corporation of residence shall levy a tax on the income of a judge
sitting by assignment of the Chief Justice or on the income of a
district court of appeals judge sitting in multiple locations within
the district, received as a result of services rendered as a judge.
(Source: ORC 718.50)
38.05 COLLECTION AT SOURCE
38.051 COLLECTION AT SOURCE; WITHHOLDING FROM
QUALIFYING WAGES
(A) (1) Each employer, agent of an employer, or other payer
located or doing business in the Municipality shall withhold
from each employee an amount equal to the qualifying
wages of the employee earned by the employee in the
Municipality multiplied by the applicable rate of the
Municipality's income tax, except for qualifying wages for
which withholding is not required under section 38.052 of
this Chapter or division (D) or (F) of this section. 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) In addition to withholding the amounts required under
division (A)(1) of this section, an employer, agent of an
employer, or other payer may also deduct and withhold, on
the request of an employee, taxes for the municipal
36
corporation in which the employee is a resident.
(B) An employer, agent of an employer, or other payer shall
remit to the Tax Administrator of the Municipality 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, along with any report required by the
Tax Administrator to accompany such payment, according to
the following schedule:
(1) Any employer, agent of an employer, or other
payer not required to make payments under division
(13)(2) or (13)(3) of this section of taxes required to be
deducted and withheld shall make quarterly payments
to the Tax Administrator not later than the fifteenth day
of the month following the end of each calendar quarter.
(2) 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 municipal corporation in the preceding
calendar year exceeded two thousand three hundred
ninety -nine dollars, or if the total amount of taxes
deducted and withheld or required to be deducted and
withheld on behalf of the Municipality in any month of
the preceding calendar quarter exceeded two hundred
dollars. Payment under division (13)(2) of this section
shall be made so that the payment is received by the
Tax Administrator not later than fifteen days after the
last day of each month.
(3) Taxes required to be deducted and withheld shall
be remitted semimonthly to the Tax Administrator if the
total taxes deducted and withheld or required to be
deducted on behalf of the Municipality in the preceding
calendar year exceeded eleven thousand nine hundred
ninety -nine dollars, or if the total amount of taxes
deducted and withheld or required to be deducted and
withheld on behalf of the Municipality in any month of
the receding calendar year exceeded one thousand
37
dollars. The payment under division (B)(3 of this
section shall be made so that the payment is received
by the Tax Administrator not later than one of the
following:
(a) If the taxes were deducted and withheld or
required to be deducted and withheld during the
first fifteen days of a month, the third banking day
after the fifteenth day of that month;
(b) If the taxes were deducted and withheld or
required to be deducted and withheld after the
fifteenth day of a month and before the first day of
the immediately following month, the third banking
day after the last day of that month.
(4) An employer, agent of an employer or other payer
is required to make payment by electronic funds
transfer to the Tax Administrator of all taxes deducted
and withheld on behalf of the employee for remittance
to the Municipality 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 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. Once the threshold for remitting payment
electronically for federal purposes has been met, any
accrued municipal income tax withheld from employee
qualifying wages earned within the Municipality shall be
remitted to the Municipality at the same time that the
federal tax withholding payment is due.
(C) 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
38
accepted by the Municipality as the return required of an
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, unless the Municipality
requires all resident individual taxpayers to file a tax return under
section 38.091 of this Chapter,
(D) An employer, agent of an employer, or other payer is not
required to withhold municipal 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.
(E) (1) 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.
(2) The failure of an employer, agent of an employer, or
other payer to remit to the Municipality 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.
(F) Compensation deferred before June 26, 2003, is not subject
to any municipal corporation income tax or municipal 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.
(G) 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 Municipality until such time as the withheld amount is remitted
to the Tax Administrator.
(H) On or before the last day of February of each year, an
employer shall file a Withholding Reconciliation Return with the
Tax Administrator listing the names, addresses, and social
39
security numbers of all employees from whose qualifying wages
tax was withheld or should have been withheld for the Municipality
during the preceding calendar year, the amount of tax withheld, if
any, from each such employee's qualifying wage, the total amount
of qualifying wages paid to such employee during the preceding
calendar year, 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, 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 other information as may be
required by the Tax Administrator.
(1) 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.
(J) A 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. At no time shall an employer withhold at a rate greater
than that of the Municipality.
(K) An employer is required to deduct and withhold municipal
income tax on tips and gratuities received by the employer's
employees and constituting qualifying wages 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.
(Source: ORC 718.03)
40
38.052 COLLECTION AT SOURCE; OCCASIONAL
ENTRANT
(A) The following terms as used in this section:
(1) "Employer" includes a person that is a related member
to or of an employer.
(2) "Professional athlete" means an athlete who performs
services in a professional athletic event for wages or other
remuneration.
(3) "Professional entertainer" means a person who
performs services in the professional performing arts for
wages or other remuneration on a per -event basis.
(4) "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.
(5) "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.
(6) "Worksite location" means a construction site or other
temporary worksite in this state at which the employer
provides services for more than twenty days during the
calendar year. "Worksite location" does not include the home
of an employee.
(7) "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
41
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 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 (13)(1)(a) of this section among
those two 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 deemed in
accordance with division (13)(2) of this section, except that
"location" shall be substituted for "municipal corporation"
wherever "municipal corporation" appears in that division.
(B) (1) Subject to divisions (C), (E), (F), and (G) of this section,
an employer is not required to withhold municipal income tax
on qualifying wages paid to an employee for the
performance of personal services in a municipal corporation
that imposes such a tax if the employee performed such
services in the municipal corporation on twenty or fewer
days in a calendar year, unless one of the following
conditions applies:
(a) The employee's principal place of work is located
in the Municipality.
(b) The employee performed services at one or more
42
presumed worksite locations in the Municipality. For the
purposes of this division, "presumed worksite location"
means a construction site or other temporary worksite
in this state at which the employer provides services
that can reasonably be expected by the employer to
last more than twenty days in a calendar year. Services
can "reasonably be expected by the employer to last
more than twenty days" if either of the following applies
at the time the services commence:
(i) The nature of the services are such that it will
require more than twenty days of actual services
to complete the services;
(ii) The agreement between the employer and its
customer to perform services at a location requires
the employer to perform actual services at the
location for more than twenty days.
(c) The employee is a resident of the Municipality and
has requested that the employer withhold tax from the
employee's qualifying wages as provided in section
38.051 of this Chapter.
(d) 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 within
the Municipality.
(2) For the purposes of division (13)(1) of this section, an
employee shall be considered to have spent a day
performing services in a municipal corporation only if
the employee spent more time performing services for
or on behalf of the employer in that municipal
corporation 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:
43
(a) Traveling to the location at which the employee
will first perform services for the employer for the day;
(b) Traveling from a location at which the employee
was performing services for the employer to any other
location;
(c) 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;
(d) Transporting or delivering property described in
division (13)(2)(c) 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;
(e) 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.
(C) If the principal place of work of an employee is located in a
municipal corporation that imposes an income tax in accordance
with this chapter, the exception from withholding requirements
described in division (13)(1) 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 the municipal corporation in which the employee's
principal place of work is located.
(D) (1) Except as provided in division (D)(2) of this section, if,
during a calendar year, the number of days an employee
spends performing personal services in a municipal
corporation exceeds the twenty -day threshold described in
division (13)(1) of this section, the employer shall withhold
and remit tax to that municipal corporation for any
subsequent days in that calendar year on which the
employer pays qualifying wages to the employee for
44
personal services performed in that municipal corporation.
(2) An employer required to begin withholding tax for a
municipal corporation under division (D)(1) of this section
may elect to withhold tax for that municipal corporation for
the first twenty days on which the employer paid qualifying
wages to the employee for personal services performed in
that municipal corporation.
(3) If an employer makes the election described in division
(D)(2) of this section, the taxes withheld and paid by such an
employer during those first twenty days to the municipal
corporation in which the employee's principal place of work
is located are refundable to the employee.
(E) Without regard to the number of days in a calendar year on
which an employee performs personal services in any municipal
corporation, an 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 municipal corporation in which the employer's
fixed location is located if the employer qualifies as a small
employer as defined in Section 38.03 of this Chapter. To
determine whether an employer qualifies as a small employer for
a taxable year, a Tax Administrator may require the employer to
provide the Tax Administrator with the employer's federal income
tax return for the preceding taxable year.
(F) Divisions (13)(1) and (D) of this section shall not apply to the
extent that a Tax Administrator and an employer enter into an
agreement regarding the manner in which the employer shall
comply with the requirements of section 38.051 of this Chapter.
(Source: ORC 718.011; ORC 718.01)
38.06 INCOME SUBJECT TO NET PROFIT TAX
38.061 DETERMINING MUNICIPAL TAXABLE INCOME FOR
TAXPAYERS WHO ARE NOT INDIVIDUALS
"Municipal Taxable Income" for a taxpayer who is not an
individual for the Municipality is calculated as follows:
45
(A) "Income" reduced by "Exempt Income" to the extent
otherwise included in income, multiplied by
apportionment equals "Municipal Taxable Income'.
(1) "Income" for a taxpayer that is not an individual
means the "Net Profit" of the taxpayer.
(a) "Net Profit" for a person other than an
individual is defined in Section 38.03(W).
(b) "Adjusted Federal Taxable Income" is
defined in Section 38.03(A) of this Chapter.
(2) "Exempt Income" is defined in Section 38.03(K) of
this Chapter.
(3) "Apportionment" means the apportionment as
determined by Section 38.062 of this Chapter.
(Source: ORC 718.01)
38.062 NET PROFIT; INCOME SUBJECT TO NET PROFIT
TAX; ALTERNATIVE APPORTIONMENT
This section applies to any taxpayer engaged in a business or
profession in the Municipality unless the taxpayer is an individual
who resides in the Municipality or the taxpayer is an electric
company, combined company, or telephone company that is
subject to and required to file reports under Chapter 5745 of the
Ohio Revised Code.
(A) Net profit from a business or profession conducted both
within and without the boundaries of the Municipality shall be
considered as having a taxable situs in the Municipality for
purposes of municipal income taxation in the same proportion as
the average ratio of the following:
(1) The average original cost of the real property and
tangible personal property owned or used by the taxpayer in
the business or profession in the Municipality during the
taxable period to the average original cost of all of the real
and tangible personal property owned or used by the
taxpayer in the business or profession during the same
period, wherever situated.
46
As used in the preceding paragraph, tangible personal or
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;
(2) Wages, salaries, and other compensation paid during
the taxable period to individuals employed in the business or
profession for services performed in the Municipality to
wages, salaries, and other compensation paid during the
same period to individuals employed in the business or
profession, wherever the individual's services are performed,
excluding compensation from which taxes are not - required to
be withheld under section 38.052 of this Chapter;
(3) Total gross receipts of the business or profession from
sales and rentals made and services performed during the
taxable period in the Municipality to total gross receipts of
the business or profession during the same period from
sales, rentals, and services, wherever made or performed.
(B) (1) If the apportionment factors described in division
(A) of this section do not fairly represent the extent of a taxpayer's
business activity in the Municipality, the taxpayer may request, or
the Tax Administrator of the Municipality may require, that the
taxpayer use, with respect to all or any portion of the income of
the taxpayer, an alternative apportionment method involving one
or more of the following:
(a) Separate accounting;
(b) The exclusion of one or more of the factors;
(c) The inclusion of one or more additional factors that
would provide for a more fair apportionment of the
income of the taxpayer to the Municipality;
(d) A modification of one or more of the factors.
(2) A taxpayer request to use an alternative apportionment
method shall be in writing and shall accompany a tax return,
timely filed appeal of an assessment, or timely filed
amended tax return. The taxpayer may use the requested
alternative method unless the Tax Administrator denies the
request in an assessment issued within the period
prescribed by division (A) of Section 38.19 of this Chapter.
47
(3) A Tax Administrator may require a taxpayer to use an
alternative apportionment method as described in division
(13)(1) of this section only by issuing an assessment to the
taxpayer within the period prescribed by division (A) of
Section 38.19 of this Chapter.
(4) Nothing in division (B) of this section nullifies or
otherwise affects any alternative apportionment arrangement
approved by a Tax Administrator or otherwise agreed upon
by both the Tax Administrator and taxpayer before January
1, 2016.
(C) As used in division (A)(2) of this section, "wages, salaries,
and other compensation" includes only wages, salaries, or other
compensation paid to an employee for services performed at any
of the following locations:
(1) A location that is owned, controlled, or used by, rented
to, or under the possession of one of the following:
(a) The employer;
(b) A vendor, customer, client, or patient of the
employer, or a related member of such a vendor,
customer, client, or patient;
(c) A vendor, customer, client, or patient of a person
described in division (C)(1)(b) of this section, or a
related member of such a vendor, customer, client, or
patient.
(2) Any location at which a trial, appeal, hearing,
investigation, inquiry, review, court - martial, or similar
administrative, judicial, or legislative matter or proceeding is
being conducted, provided that the compensation is paid for
services performed for, or on behalf of, the employer or that
the employee's presence at the location directly or indirectly
benefits the employer;
(3) Any other location, if the Tax Administrator determines
that the employer directed the employee to perform the
services at the other location in lieu of a location described in
division (C)(1) or (2) of this section solely in order to avoid or
reduce the employer's municipal income tax liability. If a Tax
Administrator makes such a determination, the employer
M
may dispute the determination by establishing, by a
preponderance of the evidence, that the Tax Administrator's
determination was unreasonable.
(D) For the purposes of division (A)(3) of this section, receipts
from sales and rentals made and services performed shall be
sitused to a municipal corporation as follows:
(1) Gross receipts from the sale of tangible personal
property shall be sitused to the municipal corporation in
which the sale originated. For the purposes of this division, a
sale of property originates in a municipal corporation if,
regardless of where title passes, the property meets any of
the following criteria:
(a) The property is shipped to or delivered within the
municipal corporation from a stock of goods located
within the municipal corporation.
(b) The property is delivered within the municipal
corporation from a location outside the municipal
corporation, provided the taxpayer is regularly engaged
through its own employees in the solicitation or
promotion of sales within such municipal corporation
and the sales result from such solicitation or promotion.
(c) The property is shipped from a place within the
municipal corporation to purchasers outside the
municipal corporation, provided that the taxpayer is not,
through its own employees, regularly engaged in the
solicitation or promotion of sales at the place where
delivery is made.
(2) Gross receipts from the sale of services shall be sitused
to the municipal corporation to the extent that such services
are performed in the municipal corporation.
(3) To the extent included in income, gross receipts from
the sale of real property located in the municipal corporation
shall be sitused to the municipal corporation.
(4) To the extent included in income, gross receipts from
rents and royalties from real property located in the
municipal corporation shall be sitused to the municipal
corporation.
(5) Gross receipts from rents and royalties from tangible
49
personal property shall be sitused to the municipal
corporation based upon the extent to which the tangible
personal property is used in the municipal corporation.
(E) The net profit received by an individual taxpayer from the
rental of real estate owned — directly by the individual or by a
disregarded entity owned by the individual shall be subject to tax
only by the municipal corporation in which the property generating
the net profit is located and the municipal corporation in which the
individual taxpayer that receives the net profit resides.
A municipal corporation shall allow such taxpayers to elect to use
separate accounting for the purpose of calculating net profit
sitused under this division to the municipal corporation in which
the property is located.
For purposes of the application of any net operating loss realized
from the rental of real estate, said loss is to be applied using
separate accounting as it relates to those properties within a
given municipal taxing jurisdiction.
Common or shared expenses relating to rental real estate shall be
allocated equally among all rental properties.
(F) (1) Except as provided in division (F)(2) of this section,
commissions received by a real estate agent or broker
relating to the sale, purchase, or lease of real estate shall be
sitused to the municipal corporation in which the real estate
is located. Net profit reported by the real estate agent or
broker shall be allocated to a municipal corporation based
upon the ratio of the commissions the agent or broker
received from the sale, purchase, or lease of real estate
located in the municipal corporation to the commissions
received from the sale, purchase, or lease of real estate
everywhere in the taxable year.
(2) An individual who is a resident of a municipal
corporation that imposes a municipal income tax shall report
the individual's net profit from all real estate activity on the
individual's annual tax return for that municipal corporation.
The individual may claim a credit for taxes the individual paid
on such net profit to another municipal corporation to the
extent that such credit is allowed under Section 38.081 of
this Chapter.
50
(G) If, in computing a taxpayer's adjusted federal taxable
income, the taxpayer deducted any amount with respect to a
stock option granted to an employee, and if the employee is not
required to include in the employee's income any such amount or
a portion thereof because it is exempted from taxation under
divisions (K)(12) and (FF)(1)(c) of Section 38.03 of this Chapter,
by a municipal corporation to which the taxpayer has apportioned
a portion of its net profit, the taxpayer shall add the amount that is
exempt from taxation to the taxpayer's net profit that was
apportioned to that municipal corporation. In no case shall a
taxpayer be required to add to its net profit that was apportioned
to that municipal corporation any amount other than the amount
upon which the employee would be required to pay tax were the
amount related to the stock option not exempted from taxation.
This division applies solely for the purpose of making an
adjustment to the amount of a taxpayer's net profit that was
apportioned to a municipal corporation under this section.
(H) When calculating the ratios described in division (A) of this
section for the purposes of that division or division (B) of this
section, the owner of a disregarded entity shall include in the
owner's ratios the property, payroll, and gross receipts of such
disregarded entity.
(Source: ORC 718.02)
38.063 CONSOLIDATED FEDERAL INCOME TAX RETURN
(A) As used in this section:
(1) "Affiliated group of corporations" means an affiliated
group as defined in section 1504 of the Internal Revenue
Code, except that, if such a group includes at least one
incumbent local exchange carrier that is primarily engaged in
the business of providing local exchange telephone service
in this state, the affiliated group shall not include any
incumbent local exchange carrier that would otherwise be
included in the group.
(2) "Consolidated federal income tax return" means a
51
consolidated return filed for federal income tax purposes
pursuant to section 1501 of the Internal Revenue Code.
(3) "Consolidated federal taxable income" means the
consolidated taxable income of an affiliated group of
corporations, as computed for the purposes of filing a
consolidated federal income tax return, before consideration
of net operating losses or special deductions. "Consolidated
federal taxable income" does not include income or loss of
an incumbent local exchange carrier that is excluded from
the affiliated group under division (A)(1) of this section.
(4) "Incumbent local exchange carrier" has the same
meaning as in section 4927.01 of the Revised Code.
(5) "Local exchange telephone service" has the same
meaning as in section 5727.01 of the Revised Code.
(B) (1) For taxable years beginning on or after January 1,
2016, a taxpayer that is a member of an affiliated group of
corporations may elect to file a consolidated municipal
income tax return for a taxable year if at least one member
of the affiliated group of corporations is subject to the
municipal income tax in that taxable year and if the affiliated
group of corporations filed a consolidated federal income tax
return with respect to that taxable year.
(a) The election is binding for a five -year period
beginning with the first taxable year of the initial election
unless a change in the reporting method is required
under federal law.
(b) The election continues to be binding for each
subsequent five -year period unless the taxpayer elects
to discontinue filing consolidated municipal income tax
returns under division (13)(2) of this section; or
(c) A taxpayer receives permission from the Tax
Administrator. The Tax Administrator shall approve
such a request for good cause shown.
(2) An election to discontinue filing consolidated municipal
income tax returns under this section must be made in the
first year following the last year of a five -year consolidated
municipal income tax return election period in effect under
division (13)(1) of this section. The election to discontinue
52
filing a consolidated municipal income tax return is binding
for a five -year period beginning with the first taxable year of
the election.
(3) An election made under division (13)(1) or (2) of this
section is binding on all members of the affiliated group of
corporations subject to a municipal income tax.
(C) A taxpayer that is a member of an affiliated group of
corporations that filed a consolidated federal income tax return for
a taxable year shall file a consolidated municipal income tax
return for that taxable year if the Tax Administrator determines, by
a preponderance of the evidence, that intercompany transactions
have not been conducted at arm's length and that there has been
a distortive shifting of income or expenses with regard to
allocation of net profits to the municipal corporation. A taxpayer
that is required to file a consolidated municipal income tax return
for a taxable year shall file a consolidated municipal income tax
return for all subsequent taxable years unless the taxpayer
requests and receives written permission from the Tax
Administrator to file a separate return or a taxpayer has
experienced a change in circumstances.
(D) A taxpayer shall prepare a consolidated municipal income
tax return in the same manner as is required under the United
States Department of Treasury regulations that prescribe
procedures for the preparation of the consolidated federal income
tax return required to be filed by the common parent of the
affiliated group of which the taxpayer is a member.
(E) (1) Except as otherwise provided in divisions (E)(2), (3),
and (4) of this section, corporations that file a consolidated
municipal income tax return shall compute adjusted federal
taxable income, as defined in section 38.03(A) of this
Chapter, by substituting "consolidated federal taxable
income" for "federal taxable income" wherever "federal
taxable income" appears in that division and by substituting
"an affiliated group of corporation's" for "a C corporation's"
wherever "a C corporation's" appears in that division.
(2) No corporation filing a consolidated municipal income
tax return shall make any adjustment otherwise required
under division of 38.03(A) of this Chapter to the extent that
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the item of income or deduction otherwise subject to the
adjustment has been eliminated or consolidated in the
computation of consolidated federal taxable income.
(3) If the net profit or loss of a pass- through entity having at
least eighty per cent of the value of its ownership interest
owned or controlled, directly or indirectly, by an affiliated
group of corporations is included in that affiliated group's
consolidated federal taxable income for a taxable year, the
corporation filing a consolidated municipal income tax return
shall do one of the following with respect to that pass -
through entity's net profit or loss for that taxable year:
(a) Exclude the pass- through entity's net profit or loss
from the consolidated federal taxable income of the
affiliated group and, for the purpose of making the
computations required in Section 38.062 of this
Chapter, exclude the property, payroll, and gross
receipts of the pass- through entity in the computation of
the affiliated group's net profit sitused to a municipal
corporation. If the entity's net profit or loss is so
excluded, the entity shall be subject to taxation as a
separate taxpayer on the basis of the entity's net profits
that would otherwise be included in the consolidated
federal taxable income of the affiliated group.
(b) Include the pass- through entity's net profit or loss
in the consolidated federal taxable income of the
affiliated group and, for the purpose of making the
computations required in Section 38.062 of this
Chapter, include the property, payroll, and gross
receipts of the pass- through entity in the computation of
the affiliated group's net profit sitused to a municipal
corporation. If the entity's net profit or loss is so
included, the entity shall not be subject to taxation as a
separate taxpayer on the basis of the entity's net profits
that are included in the consolidated federal taxable
income of the affiliated group. The entity shall be
subject to taxation as a separate taxpayer on that
portion of the entity's net profit or loss not included in
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the consolidated federal taxable income of the affiliated
group and sitused to the municipal corporation.
(4) If the net profit or loss of a pass- through entity having
less than eighty per cent of the value of its ownership
interest owned or controlled, directly or indirectly, by an
affiliated group of corporations is included in that affiliated
group's consolidated federal taxable income for a taxable
year, all of the following shall apply:
(a) The corporation filing the consolidated municipal
income tax return shall exclude the pass- through
entity's net profit or loss from the consolidated federal
taxable income of the affiliated group and, for the
purposes of making the computations required in
Section 38.062 of this Chapter, exclude the property,
payroll, and gross receipts of the pass- through entity in
the computation of the affiliated group's net profit
sitused to a municipal corporation;
(b) The pass- through entity shall be subject to
municipal income taxation as a separate taxpayer in
accordance with this chapter on the basis of the entity's
net profits that would otherwise be included in the
consolidated federal taxable income of the affiliated
group.
(F) Corporations filing a consolidated municipal income tax
return shall make the computations required under Section
38.062 of this Chapter by substituting "consolidated federal
taxable income attributable to" for "net profit from" wherever "net
profit from" appears in that section and by substituting "affiliated
group of corporations" for "taxpayer" wherever "taxpayer" appears
in that section.
(G) Each corporation filing a consolidated municipal income tax
return is jointly and severally liable for any tax, interest, penalties,
fines, charges, or other amounts imposed by a municipal
corporation in accordance with this chapter on the corporation, an
affiliated group of which the corporation is a member for any
portion of the taxable year, or any one or more members of such
an affiliated group.
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(H) Corporations and their affiliates that made an election or
entered into an agreement with a municipal corporation before
January 1, 2016, to file a consolidated or combined tax return with
such municipal corporation may continue to file consolidated or
combined tax returns in accordance with such election or
agreement for taxable years beginning on and after January 1,
2016.
(Source: ORC 718.06)
38.064 TAX CREDIT FOR BUSINESSES THAT FOSTER
NEW JOBS IN OHIO
The Municipality, by Ordinance, may grant a refundable or
nonrefundable credit against its tax on income to a taxpayer to
foster job creation in the Municipality. If a credit is granted under
this section, it shall be measured as a percentage of the new
income tax revenue the Municipality derives from new employees
of the taxpayer and shall be for a term not exceeding fifteen
years. Before the Municipality passes an ordinance granting a
credit, the Municipality and the taxpayer shall enter into an
agreement specifying all the conditions of the credit.
(Source: ORC 718.15)
38.065 TAX CREDITS TO FOSTER JOB RETENTION
The Municipality, by Ordinance, —may grant a refundable or
nonrefundable credit against its tax on income to a taxpayer for
the purpose of fostering job retention in the Municipality. If a
credit is granted under this section, it shall be measured as a
percentage of the income tax revenue the Municipality derives
from the retained employees of the taxpayer, and shall be for a
term not exceeding fifteen years. Before the Municipality passes
an ordinance allowing such a credit, the Municipality and the
taxpayer shall enter into an agreement specifying all the
conditions of the credit.
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(Source: ORC 718.151)
38.07 DECLARATION OF ESTIMATED TAX
(A) As used in this section:
(1) "Estimated taxes" means the amount that the
taxpayer reasonably estimates to be the taxpayer's tax
liability for a municipal corporation's income tax for the
current taxable year.
(2) "Tax liability" means the total taxes due to a municipal
corporation for the taxable year, after allowing any credit to
which the taxpayer is entitled, and after applying any
estimated tax payment, withholding payment, or credit from
another taxable year.
(B) (1) Every taxpayer shall make a declaration of estimated
taxes for the current taxable year, on the form prescribed by
the Tax Administrator, if the amount payable as estimated
taxes is at least two hundred dollars. For the purposes of this
section:
(a) Taxes withheld from qualifying wages shall be
considered as paid to the municipal corporation for
which the taxes were withheld in equal amounts on
each payment date. If the taxpayer establishes the
dates on which all amounts were actually withheld, the
amounts withheld shall be considered as paid on the
dates on which the amounts were actually withheld.
(b) An overpayment of tax applied as a credit to a
subsequent taxable year is deemed to be paid on the
date of the postmark stamped on the cover in which the
payment is mailed or, if the payment is made by
electronic funds transfer, the date the payment is
submitted. As used in this division, "date of the
postmark" means, in the event there is more than one
date on the cover, the earliest date imprinted on the
cover by the postal service.
(c) A taxpayer having a taxable year of less than
twelve months shall make a declaration under rules
prescribed by the Tax Administrator.
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(d) Taxes withheld by a casino operator or by a lottery
sales agent under section 718.031 of the Ohio Revised
Code are deemed to be paid to the municipal
corporation for which the taxes were withheld on the
date the taxes are withheld from the taxpayer's
winnings.
(2) Taxpayers filing joint returns shall file joint declarations
of estimated taxes.
(3) The declaration of estimated taxes shall be filed on or
before the date prescribed for the filing of municipal income
tax returns under division (G) of Section 38.091 of this
Chapter or on or before the fifteenth day of the fourth month
of the first taxable year after the taxpayer becomes subject
to tax for the first time.
(4) Taxpayers reporting on a fiscal year basis shall file a
declaration on or before the fifteenth day of the fourth month
after the beginning of each fiscal year or period.
(5) The original declaration or any subsequent amendment
may be increased or decreased on or before any
subsequent quarterly payment day as provided in this
section.
(C) (1) The required portion of the tax liability for the taxable
year that shall be paid through estimated taxes made
payable to the Municipality or Tax Administrator, including
the application of tax refunds to estimated taxes and
withholding on or before the applicable payment date, shall
be as follows:
(a) On or before the fifteenth day of the fourth month
after the beginning of the taxable year, twenty -two and
one -half per cent of the tax liability for the taxable year;
(b) On or before the fifteenth day of the sixth month
after the beginning of the taxable year, forty -five per
cent of the tax liability for the taxable year;
(c) On or before the fifteenth day of the ninth month
after the beginning of the taxable year, sixty -seven and
one -half per cent of the tax liability for the taxable year;
(d) On or before the fifteenth day of the twelfth month
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of the taxable year, ninety per cent of the tax liability for
the taxable year.
(2) A taxpayer may amend a declaration under rules
prescribed by the Tax Administrator. When an amended
declaration has been filed, the unpaid balance shown due on
the amended declaration shall be paid in equal installments
on or before the remaining payment dates. The amended
declaration must be filed on the next applicable due date as
outlined in (C)(1)(a) through (d) of this section.
(3) On or before the fifteenth day of the fourth month of the
year following that for which the declaration or amended
declaration was filed, an annual return shall be filed and any
balance which may be due shall be paid with the return in
accordance with section 38.091 of this Chapter.
(a) For taxpayers who are individuals, or who are not
individuals and are reporting and filing on a calendar
year basis, the annual tax return is due on the same
date as the filing of the federal tax return, unless
extended pursuant to division (G) of section 5747.08 of
the Revised Code.
(b) For taxpayers who are not individuals, and are
reporting and filing on a fiscal year basis or any period
other than a calendar year, the annual return is due on
the fifteenth day of the fourth month following the end of
the taxable year or period.
(4) An amended declaration is required whenever the
taxpayer's estimated tax liability changes during the taxable
year. A change in estimated tax liability may either increase
or decrease the estimated tax liability for the taxable year.
(D) (1) In the case of any underpayment of any portion of a tax
liability, penalty and interest may be imposed pursuant to
section 38.10 of this Chapter upon the amount of
underpayment for the period of underpayment, unless the
underpayment is due to reasonable cause as described in
division (E) of this section. The amount of the underpayment
shall be determined as follows:
(a) For the first payment of estimated taxes each
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year, twenty -two and one -half per cent of the tax
liability, less the amount of taxes paid by the date
prescribed for that payment;
(b) For the second payment of estimated taxes each
year, forty -five per cent of the tax liability, less the
amount of taxes paid by the date prescribed for that
payment;
(c) For the third payment of estimated taxes each
year, sixty -seven and one -half per cent of the tax
liability, less the amount of taxes paid by the date
prescribed for that payment;
(d) For the fourth payment of estimated taxes each
year, ninety per cent of the tax liability, less the amount
of taxes paid by the date prescribed for that payment.
(2) The period of the underpayment shall run from the day
the estimated payment was required to be made to the date
on which the payment is made. For purposes of this section,
a payment of estimated taxes on or before any payment date
shall be considered a payment of any previous
underpayment only to the extent the payment of estimated
taxes exceeds the amount of the payment presently required
to be paid to avoid any penalty.
(E) An underpayment of any portion of tax liability determined
under division (D) of this section shall be due to reasonable cause
and the penalty imposed by this section shall not be added to the
taxes for the taxable year if any of the following apply:
(1) The amount of estimated taxes that were paid equals at
least ninety per cent of the tax liability for the current taxable
year, determined by annualizing the income received during
the year up to the end of the month immediately preceding
the month in which the payment is due.
(2) The amount of estimated taxes that were paid equals at
least one hundred per cent of the tax liability shown on the
return of the taxpayer for the preceding taxable year,
provided that the immediately preceding taxable year
reflected a period of twelve months and the taxpayer filed a
return with the municipal corporation under Section 38.091
of this Chapter for that year.
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(3) The taxpayer is an individual who resides in the
Municipality but was not domiciled there on the first day of
January of the calendar year that includes the first day of the
taxable year.
(F) A Tax Administrator may waive the requirement for filing a
declaration of estimated taxes for any class of taxpayers
after finding that the waiver is reasonable and proper in view
of administrative costs and other factors.
(Source: 718.08)
38.08 CREDIT FOR TAX PAID
38.081 CREDIT FOR MUNICIPAL INCOME TAX PAID
(A) Resident Individual
(1) An individual taxpayer who resides in the Municipality,
and earns qualifying wages for work done or services performed
or rendered in any municipal corporation, shall be allowed a credit
in the amount of municipal income tax paid by or on behalf of that
individual if it is demonstrated that a municipal income tax has
been so paid. Such credit shall be allowed only to the extent of
the tax assessed by this chapter.
(2) A resident individual with income from an ownership
interest in one or more pass- through entities, activities of a sole
proprietor, or rental activities, after the deduction of distributable
losses from other pass- through entities or business activities not
utilized as a net operating loss carryforward in any municipal
taxing jurisdiction after January 1, 2018, shall be allowed a non-
refundable credit for the amount so paid by him or on his behalf in
such other municipal corporation only to the extent of the tax
assessed by this chapter.
(3) The credit to tax paid by a resident individual for
salaries or wages earned in a non - resident municipal corporation
is limited to the tax that is paid after all allowable 2016 expenses
61
have been deducted and shall not exceed the tax established by
this chapter.
(4) No credit shall be given to a resident individual for any
school district income tax.
(B) Non - Resident Individual
(1) Every individual taxpayer who is a non - resident of the
Municipality who earned qualifying wages for work done or
services performed or rendered in the Municipality, shall be
allowed a credit for the amount so paid if it is demonstrated that a
municipal income tax has been paid by or on behalf of that
individual. Such credit shall be applied only to the extent of the
tax assessed by this chapter.
(2) A non - resident individual with ownership interest in one
or more pass- through entities taxed at the entity level shall not
report said income or losses on a non - resident individual annual
return and shall not be allowed any credit for taxes paid on his or
her behalf by the pass- through entity to any municipal
corporation.
(3) No credit shall be given to a non - resident individual for
any school district income tax.
38.082 REFUNDABLE CREDIT FOR QUALIFYING LOSS
(A) As used in this section:
(1) "Nonqualified deferred compensation plan" means
a compensation plan described in section 3121(v)(2)(C) of
the Internal Revenue Code.
(2) (a) Except as provided in division (A)(2)(b) of this
section, "qualifying loss" means the excess, if any, of
the total amount of compensation the payment of which
is deferred pursuant to a nonqualified deferred
compensation plan over the total amount of income the
taxpayer has recognized for federal income tax
purposes for all taxable years on a cumulative basis as
compensation with respect to the taxpayer's receipt of
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money and property attributable to distributions in
connection with the nonqualified deferred compensation
plan.
(b) If, for one or more taxable years, the taxpayer has
not paid to one or more municipal corporations income
tax imposed on the entire amount of compensation the
payment of which is deferred pursuant to a nonqualified
deferred compensation plan, then the "qualifying
loss" is the product of the amount resulting from the
calculation described in division (A)(2)(a) of this section
computed without regard to division (A)(2)(b) of this
section and a fraction the numerator of which is the
portion of such compensation on which the taxpayer
has paid income tax to one or more municipal
corporations and the denominator of which is the total
amount of compensation the payment of which is
deferred pursuant to a nonqualified deferred
compensation plan.
(c) With respect to a nonqualified deferred
compensation plan, the taxpayer sustains a qualifying
loss only in the taxable year in which the taxpayer
receives the final distribution of money and property
pursuant to that nonqualified deferred compensation
plan.
(3) "Qualifying tax rate" means the applicable tax rate
for the taxable year for the which the taxpayer paid income
tax to a municipal corporation with respect to any portion of
the total amount of compensation the payment of which is
deferred pursuant to a nonqualified deferred compensation
plan. If different tax rates applied for different taxable years,
then the "qualifying tax rate" is a weighted average of
those different tax rates. The weighted average shall be
based upon the tax paid to the municipal corporation each
year with respect to the nonqualified deferred compensation
plan.
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(B) (1) Except as provided in division (D) of this section, a
refundable credit shall be allowed against the income tax
imposed by a municipal corporation for each qualifying loss
sustained by a taxpayer during the taxable year. The amount
of the credit shall be equal to the product of the qualifying
loss and the qualifying tax rate.
(2) A taxpayer shall claim the credit allowed under this
section from each municipal corporation to which the
taxpayer paid municipal income tax with respect to the
nonqualified deferred compensation plan in one or more
taxable years.
(3) If a taxpayer has paid tax to more than one municipal
corporation with respect to the nonqualified deferred
compensation plan, the amount of the credit that a taxpayer
may claim from each municipal corporation shall be
calculated on the basis of each municipal corporation's
proportionate share of the total municipal corporation income
tax paid by the taxpayer to all municipal corporations with
respect to the nonqualified deferred compensation plan.
(4) In no case shall the amount of the credit allowed under
this section exceed the cumulative income tax that a
taxpayer has paid to a municipal corporation for all taxable
years with respect to the nonqualified deferred
compensation plan.
(C) (1) For purposes of this section, municipal corporation
income tax that has been withheld with respect to a
nonqualified deferred compensation plan shall be considered
to have been paid by the taxpayer with respect to the
nonqualified deferred compensation plan.
(2) Any municipal income tax that has been refunded or
otherwise credited for the benefit of the taxpayer with
respect to a nonqualified deferred compensation plan shall
not be considered to have been paid to the municipal
corporation by the taxpayer.
(D) The credit allowed under this section is allowed only to the
extent the taxpayer's qualifying loss is attributable to:
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(1) The insolvency or bankruptcy of the employer who had
established the nonqualified deferred compensation plan; or
(2) The employee's failure or inability to satisfy all of the
employer's terms and conditions necessary to receive the
nonqualified deferred compensation.
(Source: ORC 718.021)
38.083 CREDIT FOR PERSON WORKING IN JOINT
ECONOMIC DEVELOPMENT DISTRICT OR ZONE
A Municipality shall grant a credit against its tax on income to a
resident of the Municipality who works in a joint economic
development zone created under section 715.691 or a joint
economic development district created under section 715.70,
715.71, or 715.72 of the Ohio Revised Code to the same extent
that it grants a credit against its tax on income to its residents who
are employed in another municipal corporation, pursuant to
Section 38.081 of this Chapter.
(Source: ORC 718.16)
38.084 CREDIT FOR TAX BEYOND STATUTE FOR
OBTAINING REFUND
(A) Income tax that has been deposited or paid to the
Municipality, but should have been deposited or paid to another
municipal corporation, is allowable by the Municipality as a
refund, but is subject to the three -year limitation on refunds as
provided in Section 38.096 of this Chapter.
(B) Income tax that should have been deposited or paid to the
Municipality, but was deposited or paid to another municipal
corporation, shall be subject to collection and recovery by the
Municipality. To the extent a refund of such tax or withholding is
barred by the limitation on refunds as provided in section 38.096,
the Municipality will allow a non - refundable credit equal to the tax
65
or withholding paid to the other municipality against the income
tax the Municipality claims is due. If the Municipality's tax rate is
higher, the tax representing the net difference of the tax rates is
also subject to collection by the Municipality, along with any
penalty and interest accruing during the period of nonpayment.
(C) No carryforward of credit will be permitted when the
overpayment is beyond the three -year limitation for refunding of
same as provided in Section 38.096 of this Chapter.
(Source: ORC 718.121)
K1:111: _1L1 ILI lelel0NAiI1N0I
38.091 RETURN AND PAYMENT OF TAX
(A)(1) Unless the provisions of division (A)(2) of this section apply,
an annual return with respect to the income tax levied on
Municipal Taxable Income by the Municipality shall be
completed and filed by every taxpayer for any taxable year
for which the taxpayer is subject to the tax, regardless of
whether or not income tax is due.
(2) The Tax Administrator shall accept on behalf of all
nonresident individual taxpayers a return filed by an
employer, agent of an employer, or other payer located in
the Municipality under subsection 38.051(C) of this Chapter
when the nonresident individual taxpayer's sole income
subject to the tax is the qualifying wages reported by the
employer, agent of an employer, or other payer, and no
additional tax is due to the Municipality.
(3) All resident individual taxpayers, 18 years of age and
older, shall file an annual municipal income tax return with
the Municipality, regardless of income or liability.
(B) If an individual is deceased, any return or notice required of
that individual shall be completed and filed by that decedent's
executor, administrator, or other person charged with the property
of that decedent.
(C) If an individual is unable to complete and file a return or
66
notice required by the Municipality in accordance with this
chapter, the return or notice required of that individual shall be
completed and filed by the individual's duly authorized agent,
guardian, conservator, fiduciary, or other person charged with the
care of the person or property of that individual. Such duly
authorized agent, guardian, conservator, fiduciary, or other
person charged with the care of the person or property of that
individual shall provide, with the filing of the return, appropriate
documentation to support that they are authorized to file a return
or notice on behalf of the taxpayer. This notice shall include any
legally binding authorizations, and contact information including
name, address, and phone number of the duly authorized agent,
guardian, conservator, fiduciary, or other person.
(D) Returns or notices required of an estate or a trust shall be
completed and filed by the fiduciary of the estate or trust. Such
fiduciary shall provide, with the filing of the return, appropriate
documentation to support that they are authorized to file a return
or notice on behalf of the taxpayer. This notice shall include any
legally binding authorizations, and contact information including
name, address, and phone number of the fiduciary.
(E) No municipal corporation shall deny spouses the ability to
file a joint return.
(F) (1) Each return required to be filed under this section shall
contain the signature of the taxpayer or the taxpayer's duly
authorized agent and of the person who prepared the return
for the taxpayer, and shall include the taxpayer's social
security number or taxpayer identification number. Each
return shall be verified by a declaration under penalty of
perjury.
(2) A taxpayer who is an individual is required to include,
with each annual return, amended return, or request for
refund required under this section, copies of only the
following documents: all of the taxpayer's Internal Revenue
Service form W -2, "Wage and Tax Statements," including all
information reported on the taxpayer's federal W -2, as well
as taxable wages reported or withheld for any municipal
corporation; the taxpayer's Internal Revenue Service form
1040; and, with respect to an amended tax return or refund
67
request, any other documentation necessary to support the
refund request or the adjustments made in the amended
return. An individual taxpayer who files the annual return
required by this section electronically is not required to
provide paper copies of any of the foregoing to the Tax
Administrator unless the Tax Administrator requests such
copies after the return has been filed.
(3) A taxpayer that is not an individual is required to
include, with each annual net profit return, amended net
profit return, or request for refund required under this
section, copies of only the following documents: the
taxpayer's Internal Revenue Service form 1041, form 1065,
form 1120, form 1120 -REIT, form 1120F, or form 1120S,
and, with respect to an amended tax return or refund
request, any other documentation necessary to support the
refund request or the adjustments made in the amended
return.
(4) A taxpayer that is not an individual and that files an
annual net profit return electronically through the Ohio
business gateway or in some other manner shall either mail
the documents required under this division to the Tax
Administrator at the time of filing or, if electronic submission
is available, submit the documents electronically through the
Ohio business gateway or a portal provided by Municipality.
The department of taxation shall publish a method of
electronically submitting the documents required under this
division through the Ohio business gateway on or before
January 1, 2016. The department shall transmit all
documents submitted electronically under this division to the
appropriate Tax Administrator.
(5) After a taxpayer files a tax return, the Tax Administrator
shall request, and the taxpayer shall provide, any
information, statements, or documents required by the
Municipality to determine and verify the taxpayer's municipal
income tax liability. The requirements imposed under
division (F) of this section apply regardless of whether the
taxpayer files on a generic form or on a form prescribed by
the Tax Administrator.
W
(6) Any other documentation, including schedules, other
municipal income tax returns, or other supporting
documentation necessary to verify credits, income, losses,
or other pertinent factors on the return shall also be included
to avoid delay in processing, or disallowance by the Tax
Administrator of undocumented credits or losses.
(G) (1) (a) Except as otherwise provided in this chapter, each
individual income tax return required to be filed under this
section shall be completed and filed as required by the Tax
Administrator on or before the date prescribed for the filing of
state individual income tax returns under division (G) of
section 5747.08 of the Ohio Revised Code. The taxpayer
shall complete and file the return or notice on forms
prescribed by the Tax Administrator or on generic forms,
together with remittance made payable to the Municipality or
Tax Administrator.
(b) Except as otherwise provided in this chapter, each
annual net profit income tax return required to be filed
under this section by a taxpayer that is not an individual
shall be completed and filed as required by the tax
administrator on or before the fifteenth day of the fourth
month following the end of the taxpayer's taxable year
or period. The taxpayer shall complete and file the
return or notice on forms prescribed by the tax
administrator or on generic forms, together with
remittance made payable to the Municipality or Tax
Administrator.
(c) In the case of individual income tax return required
to be filed by an individual, and net profit income tax
return required to be filed by a taxpayer who is not an
individual, no remittance is required if the amount
shown to be due is ten dollars or less.
(2) If the Tax Administrator considers it necessary in order
to ensure the payment of the tax imposed by the Municipality
in accordance with this chapter, the Tax Administrator may
require taxpayers to file returns and make payments
otherwise than as provided in this section, including
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taxpayers not otherwise required to file annual returns.
(3) With respect to taxpayers to whom Section 38.092 of
this Chapter applies, to the extent that any provision in this
division conflicts with any provision in Section 38.092 of this
Chapter, the provision in Section 38.092 of this Chapter
prevails.
(H) (1) For taxable years beginning after 2015, the Municipality
shall not require a taxpayer to remit tax with respect to net
profits if the amount due is ten dollars or less.
(2) Any taxpayer not required to remit tax to the
Municipality for a taxable year pursuant to division (H)(1) of
this section shall file with the Municipality an annual net profit
return under division (F)(3) and (4) of this section.
(1) This division shall not apply to payments required to be
made under division Section 38.051(6) of this Chapter.
(1) If any report, claim, statement, or other document
required to be filed, or any payment required to be made,
within a prescribed period or on or before a prescribed date
under this chapter is delivered after that period or that to the
Tax Administrator or other municipal official with which the
report, claim, statement, or other document is required to be
filed, or to which the payment is required to be made, the
date of the postmark stamped on the cover in which the
report, claim, statement, or other document, or payment is
mailed shall be deemed to be the date of delivery or the date
of payment. "The date of postmark" means, in the event
there is more than one date on the cover, the earliest date
imprinted on the cover by the postal service.
(2) If a payment is required to be made by electronic funds
transfer, the payment is considered to be made when the
payment is credited to an account designated by the Tax
Administrator for the receipt of tax payments, except that,
when a payment made by electronic funds transfer is
delayed due to circumstances not under the control of the
taxpayer, the payment is considered to be made when the
taxpayer submitted the payment. For purposes of this
section, "submitted the payment" means the date which the
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taxpayer has designated for the delivery of payment, which
may or may not be the same date as the date the payment
was initiated by the taxpayer.
(J) The amounts withheld for the Municipality by an employer,
the agent of an employer, or other payer as described in section
38.051 of this Chapter shall be allowed to the recipient of the
compensation as credits against payment of the tax imposed on
the recipient unless the amounts withheld were not remitted to the
Municipality and the recipient colluded with the employer, agent,
or other payer in connection with the failure to remit the amounts
withheld.
(K) Each return required by the Municipality to be filed in
accordance with this section shall include a box that the taxpayer
may check to authorize another person, including a tax return
preparer who prepared the return, to communicate with the Tax
Administrator about matters pertaining to the return. The return or
instructions accompanying the return shall indicate that by
checking the box the taxpayer authorizes the Tax Administrator to
contact the preparer or other person concerning questions that
arise during the examination or other review of the return and
authorizes the preparer or other person only to provide the Tax
Administrator with information that is missing from the return, to
contact the Tax Administrator for information about the
examination or other review of the return or the status of the
taxpayer's refund or payments, and to respond to notices about
mathematical errors, offsets, or return preparation that the
taxpayer has received from the Tax Administrator and has shown
to the preparer or other person. Authorization by the taxpayer
of another person to communicate with the Tax Administrator
about matters pertaining to the return does not preclude the Tax
Administrator from contacting the taxpayer regarding such
matters.
(L) The Tax Administrator of the Municipality shall accept for
filing a generic form of any income tax return, report, or document
required by the Municipality in accordance with this Chapter,
provided that the generic form, once completed and filed, contains
all of the information required by ordinances, resolutions, or rules
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adopted by the Municipality or Tax Administrator, and provided
that the taxpayer or tax return preparer filing the generic form
otherwise complies with the provisions of this Chapter and of the
Municipality's Ordinance or resolution governing the filing of
returns, reports, or documents.
(M) When income tax returns, reports, or other documents
require the signature of a tax return preparer, the Tax
Administrator shall accept a facsimile of such a signature in lieu of
a manual signature.
(N) (1) As used in this division, "worksite location" has the
same meaning as in section 38.052 of this chapter.
(2) A person may notify a tax administrator that the person
does not expect to be a taxpayer with respect to the
municipal corporation for a taxable year if both of the
following conditions apply:
(a) The person was required to file a tax return with
the municipal corporation for the immediately preceding
taxable year because the person performed services at
a worksite location within the municipal corporation, and
the person has filed all appropriate and required returns
and remitted all applicable income tax and withholding
payments as provided by this chapter. The tax
administrator is not required to accept an affidavit from
a taxpayer who has not complied with the provisions of
this chapter.
(b) The person no longer provides services in the
municipal corporation, and does not expect to be
subject to the municipal corporation's income tax for the
taxable year.
(3) The person shall provide the notice in a signed affidavit
that briefly explains the person's circumstances, including
the location of the previous worksite location and the last
date on which the person performed services or made any
sales within the municipal corporation. The affidavit also
shall include the following statement: "The affiant has no
plans to perform any services within the municipal
corporation, make any sales in the municipal corporation, or
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otherwise become subject to the tax levied by the municipal
corporation during the taxable year. If the affiant does
become subject to the tax levied by the municipal
corporation for the taxable year, the affiant agrees to be
considered a taxpayer and to properly register as a taxpayer
with the municipal corporation, if such a registration is
required by the municipal corporation's resolutions,
ordinances, or rules." The person shall sign the affidavit
under penalty of perjury.
(4) If a person submits an affidavit described in division
(N)(2) of this section, the tax administrator shall not require
the person to file any tax return for the taxable year unless
the tax administrator possesses information that conflicts
with the affidavit or if the circumstances described in the
affidavit change, or the taxpayer has engaged in activity
which results in work being performed, services provided,
sales made, or other activity that results in municipal taxable
income reportable to the Municipality in the taxable year. It
shall be the responsibility of the taxpayer to comply with the
provisions of this chapter relating to the reporting and filing
of municipal taxable income on an annual municipal income
tax return, even if an affidavit has been filed with the tax
administrator for the taxable year. Nothing in division (N) of
this section prohibits the tax administrator from performing
an audit of the person.
(Source: ORC 718.05)
38.092 RETURN AND PAYMENT OF TAX; INDIVIDUALS
SERVING IN COMBAT ZONE
(A) Each member of the national guard of any state and each
member of a reserve component of the armed forces of the
United States called to active duty pursuant to an executive order
issued by the President of the United States or an act of the
Congress of the United States, and each civilian serving as
support personnel in a combat zone or contingency operation in
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support of the armed forces, may apply to the Tax Administrator
of the Municipality for both an extension of time for filing of the
return and an extension of time for payment of taxes required by
the Municipality in accordance with this chapter during the period
of the member's or civilian's duty service and for one hundred
eighty days thereafter. The application shall be filed on or before
the one hundred eightieth day after the member's or civilian's duty
terminates. An applicant shall provide such evidence as the Tax
Administrator considers necessary to demonstrate eligibility for
the extension.
(B) (1) If the Tax Administrator ascertains that an applicant is
qualified for an extension under this section, the Tax
Administrator shall enter into a contract with the applicant for
the payment of the tax in installments that begin on the one
hundred eighty -first day after the applicant's active duty or
service terminates. Except as provided in division (13)(3) of
this section, the Tax Administrator may prescribe such
contract terms as the Tax Administrator considers
appropriate.
(2) If the Tax Administrator ascertains that an applicant is
qualified for an extension under this section, the applicant
shall neither be required to file any return, report, or other tax
document nor be required to pay any tax otherwise due to
the Municipality before the one hundred eighty -first day after
the applicant's active duty or service terminates.
(3) Taxes paid pursuant to a contract entered into under
division (13)(1) of this section are not delinquent. The Tax
Administrator shall not require any payments of penalties or
interest in connection with those taxes for the extension
period.
(C) (1) Nothing in this division denies to any person described
in this division the application of divisions (A) and (B) of this
section.
(2) (a) A qualifying taxpayer who is eligible for an
extension under the Internal Revenue Code shall
receive both an extension of time in which to file any
return, report, or other tax document and an extension
of time in which to make any payment of taxes required
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by the Municipality in accordance with this chapter. The
length of any extension granted under division (C)(2)(a)
of this section shall be equal to the length of the
corresponding extension that the taxpayer receives
under the Internal Revenue Code. As used in this
section, "qualifying taxpayer" means a member of the
national guard or a member of a reserve component of
the armed forces of the United States called to active
duty pursuant to either an executive order issued by the
President of the United States or an act of the
Congress of the United States, or a civilian serving as
support personnel in a combat zone or contingency
operation in support of the armed forces.
(b) Taxes the payment of which is extended in
accordance with division (C)(2)(a) of this section are not
delinquent during the extension period. Such taxes
become delinquent on the first day after the expiration
of the extension period if the taxes are not paid prior to
that date. The Tax Administrator shall not require any
payment of penalties or interest in connection with
those taxes for the extension period. The Tax
Administrator shall not include any period of extension
granted under division (C)(2)(a) of this section in
calculating the penalty or interest due on any unpaid
tax.
(D) For each taxable year to which division (A), (B), or (C) of this
section applies to a taxpayer, the provisions of divisions (13)(2)
and (3) or (C) of this section, as applicable, apply to the spouse of
that taxpayer if the filing status of the spouse and the taxpayer is
married filing jointly for that year.
(Source: ORC 718.052)
38.093 USE OF OHIO BUSINESS GATEWAY; TYPES OF
FILINGS AUTHORIZED
(A) Any taxpayer subject to municipal income taxation with
respect to the taxpayer's net profit from a business or profession
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may file any municipal income tax return or, estimated municipal
income tax return, or extension for filing a municipal income tax
return, and may make payment of amounts shown to be due on
such returns, by using the Ohio Business Gateway.
(B) Any employer, agent of an employer, or other payer may
report the amount of municipal income tax withheld from
qualifying wages, and may make remittance of such amounts, by
using the Ohio Business Gateway.
(C) Nothing in this section affects the due dates for filing
employer withholding tax returns or deposit of any required tax.
(D) The use of the Ohio Business Gateway by municipal
corporations, taxpayers, or other persons does not affect the legal
rights of municipalities or taxpayers as otherwise permitted by
law. The State of Ohio shall not be a party to the administration
of municipal income taxes or to an appeal of a municipal income
tax matter, except as otherwise specifically provided by law.
(E) Nothing in this section shall be construed as limiting or
removing the authority of any municipal corporation to administer,
audit, and enforce the provisions of its municipal income tax.
(Source: ORC 718.051)
38.094 EXTENSION OF TIME TO FILE
(A) Any taxpayer that has duly requested an automatic six -
month extension for filing the taxpayer's federal income tax return
shall automatically receive an extension for the filing of a
municipal income tax return. The extended due date of the
municipal income tax return shall be the fifteenth day of the tenth
month after the last day of the taxable year to which the return
relates.
(B) Any taxpayer that qualifies for an automatic federal
extension for a period other than six - months for filing the
taxpayer's federal income tax return shall automatically receive an
extension for the filing of a municipal income tax return. The
extended due date of the municipal income tax return shall be the
same as that of the extended federal income tax return.
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(C) A taxpayer that has not requested or received a six -month
extension for filing the taxpayer's federal income tax return may
request that the tax administrator grant the taxpayer a six -month
extension of the date for filing the taxpayer's municipal income tax
return. If the request is received by the tax administrator on or
before the date the municipal income tax return is due, the tax
administrator shall grant the taxpayer's requested extension.
(D) An extension of time to file under this chapter is not an
extension of the time to pay any tax due unless the Tax
Administrator grants an extension of that date.
(E) If the State Tax Commissioner extends for all taxpayers the
date for filing state income tax returns under division (G) of
section 5747.08 of the Ohio Revised Code, a taxpayer shall
automatically receive an extension for the filing of a municipal
income tax return. The extended due date of the municipal
income tax return shall be the same as the extended due date of
the state income tax return.
(Source: ORC 718.05)
38.095 AMENDED RETURNS
(A) (1) A taxpayer shall file an amended return with the Tax
Administrator in such form as the Tax Administrator requires
if any of the facts, figures, computations, or attachments
required in the taxpayer's annual return to determine the tax
due levied by the Municipality in accordance with this
chapter must be altered.
(2) Within sixty days after the final determination of any
federal or state tax liability affecting the taxpayer's municipal
tax liability, that taxpayer shall make and file an amended
municipal return showing income subject to the municipal
income tax based upon such final determination of federal or
state tax liability, and pay any additional municipal income
tax shown due thereon or make a claim for refund of any
overpayment, unless the tax or overpayment is ten dollars or
less.
(3) If a taxpayer intends to file an amended consolidated
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municipal income tax return, or to amend its type of return
from a separate return to a consolidated return, based on the
taxpayer's consolidated federal income tax return, the
taxpayer shall notify the Tax Administrator before filing the
amended return, following the provisions of Section 38.063
of this chapter.
(B) (1) In the case of an underpayment, the amended return
shall be accompanied by payment of any combined
additional tax due together with any penalty and interest
thereon. If the combined tax shown to be due is ten dollars
or less, such amount need not accompany the amended
return. Except as provided under division (13)(2) of this
section, the amended return shall not reopen those facts,
figures, computations, or attachments from a previously filed
return that are not affected, either directly or indirectly, by the
adjustment to the taxpayer's federal or state income tax
return unless the applicable statute of limitations for civil
actions or prosecutions under section 38.19 of this Chapter
has not expired for a previously filed return.
(2) The additional tax to be paid shall not exceed the
amount of tax that would be due if all facts, figures,
computations, and attachments were reopened.
(C) (1) In the case of an overpayment, a request for refund
may be filed under this division within the period prescribed
by division (A)(2) of section 38.19 of this Chapter for filing
the amended return even if it is filed beyond the period
prescribed in that division if it otherwise conforms to the
requirements of that division. If the amount of the refund is
ten dollars or less, no refund need be paid by the
Municipality to the taxpayer. Except as set forth in division
(C)(2) of this section, a request filed under this division shall
claim refund of overpayments resulting from alterations to
only those facts, figures, computations, or attachments
required in the taxpayer's annual return that are affected,
either directly or indirectly, by the adjustment to the
taxpayer's federal or state income tax return unless it is also
filed within the time prescribed in section 38.096 of this
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Chapter. Except as set forth in division (C)(2) of this section,
the request shall not reopen those facts, figures,
computations, or attachments that are not affected, either
directly or indirectly, by the adjustment to the taxpayer's
federal or state income tax return.
(2) The amount to be refunded shall not exceed the
amount of refund that would be due if all facts, figures,
computations, and attachments were reopened.
(Source: ORC 718.12, 718.41)
KI:1111 -: N NI 1f1 LI I IR
(A) Upon receipt of a request for a refund, the Tax Administrator
of the Municipality, in accordance with this section, shall refund to
employers, agents of employers, other payers, or taxpayers, with
respect to any income or withholding tax levied by the
Municipality:
(1) Overpayments of more than ten dollars;
(2) Amounts paid erroneously if the refund requested
exceeds ten dollars.
(B) (1) Except as otherwise provided in this chapter, returns
setting forth a request for refund shall be filed with the Tax
Administrator, within three years after the tax was due or
paid, whichever is later. Any documentation that
substantiates the taxpayer's claim for a refund must be
included with the return filing. Failure to remit all
documentation, including schedules, other municipal income
tax returns, or other supporting documentation necessary to
verify credits, income, losses or other pertinent factors on
the return will cause delay in processing, and / or
disallowance of undocumented credits or losses.
(2) On filing of the refund request, the Tax Administrator
shall determine the amount of refund due and certify such
amount to the appropriate municipal corporation official for
payment. Except as provided in division (13)(3) of this
section, the administrator shall issue an assessment to any
taxpayer whose request for refund is fully or partially denied.
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The assessment shall state the amount of the refund that
was denied, the reasons for the denial, and instructions for
appealing the assessment.
(3) If a Tax Administrator denies in whole or in part a
refund request included within the taxpayer's originally filed
annual income tax return, the Tax Administrator shall notify
the taxpayer, in writing, of the amount of the refund that was
denied, the reasons for the denial, and instructions for
requesting an assessment that may be appealed under
Section 38.18 of this Chapter.
(C) A request for a refund that is received after the last day for
filing specified in division (B) of this section shall be considered to
have been filed in a timely manner if any of the following
situations exist:
(1) The request is delivered by the postal service, and the
earliest postal service postmark on the cover in which the
request is enclosed is not later than the last day for filing the
request.
(2) The request is delivered by the postal service, the only
postmark on the cover in which the request is enclosed was
affixed by a private postal meter, the date of that postmark is
not later than the last day for filing the request, and the
request is received within seven days of such last day.
(3) The request is delivered by the postal service, no
postmark date was affixed to the cover in which the request
is enclosed or the date of the postmark so affixed is not
legible, and the request is received within seven days of the
last day for making the request.
(D) Interest shall be allowed and paid on any overpayment by a
taxpayer of any municipal income tax obligation from the date of
the overpayment until the date of the refund of the overpayment,
except that if any overpayment is refunded within ninety days
after the final filing date of the annual return or ninety days after
the completed return is filed, whichever is later, no interest shall
be allowed on the refund. For the purpose of computing the
payment of interest on amounts overpaid, no amount of tax for
any taxable year shall be considered to have been paid before the
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date on which the return on which the tax is reported is due,
without regard to any extension of time for filing that return.
Interest shall be paid at the interest rate described in division
(A)(4) of Section 38.10 of this Chapter.
(E) As used in this section, "withholding tax" has the same
meaning as in section 38.10 of this Chapter.
(Source: ORC 718.19.)
38.10 PENALTY, INTEREST, FEES, AND CHARGES
(A) As used in this section:
(1) "Applicable law" means this chapter, the resolutions,
ordinances, codes, directives, instructions, and rules
adopted by the Municipality provided such resolutions,
ordinances, codes, directives, instructions, and rules impose
or directly or indirectly address the levy, payment,
remittance, or filing requirements of a municipal income tax.
(2) "Federal short -term rate" means the rate of the average
market yield on outstanding marketable obligations of the
United States with remaining periods to maturity of three
years or less, as determined under section 1274 of the
Internal Revenue Code, for July of the current year.
(3) "Income tax," "estimated income tax," and "withholding
tax" mean any income tax, estimated income tax, and
withholding tax imposed by a municipal corporation pursuant
to applicable law, including at any time before January 1,
2016.
(4) "Interest rate as described in division (A) of this section"
means the federal short -term rate, rounded to the nearest
whole number per cent, plus five per cent. The rate shall
apply for the calendar year next following the July of the year
in which the federal short -term rate is determined in
accordance with division (A)(2) of this section.
(5) "Return" includes any tax return, report, reconciliation,
schedule, and other document required to be filed with a Tax
Administrator or municipal corporation by a taxpayer,
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employer, any agent of the employer, or any other payer
pursuant to applicable law, including at any time before
January 1, 2016.
(6) "Unpaid estimated income tax" means estimated
income tax due but not paid by the date the tax is required to
be paid under applicable law.
(7) "Unpaid income tax" means income tax due but not
paid by the date the income tax is required to be paid under
applicable law.
(8) "Unpaid withholding tax" means withholding tax due but
not paid by the date the withholding tax is required to be paid
under applicable law.
(9) "Withholding tax" includes amounts an employer, any
agent of an employer, or any other payer did not withhold in
whole or in part from an employee's qualifying wages, but
that, under applicable law, the employer, agent, or other
payer is required to withhold from an employee's qualifying
wages.
(B) (1) This section shall apply to the following:
(a) Any return required to be filed under applicable
law for taxable years beginning on or after January 1,
2016;
(b) Income tax, estimated income tax, and withholding
tax required to be paid or remitted to the Municipality on
or after January 1, 2016 for taxable years beginning on
or after January 1, 2016
(2) This section does not apply to returns required to be
filed or payments required to be made before January 1,
2016, regardless of the filing or payment date. Returns
required to be filed or payments required to be made before
January 1, 2016, but filed or paid after that date shall be
subject to the ordinances or rules, as adopted from time to
time before January 1, 2016 of this Municipality.
(C) The Municipality shall impose on a taxpayer, employer, any
agent of the employer, and any other payer, and will attempt to
collect, the interest amounts and penalties prescribed in this
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section when the taxpayer, employer, any agent of the employer,
or any other payer for any reason fails, in whole or in part, to
make to the Municipality timely and full payment or remittance of
income tax, estimated income tax, or withholding tax or to file
timely with the Municipality any return required to be filed.
(1) Interest shall be imposed at the rate defined as "interest
rate as described in division (A) of this section ", per annum,
on all unpaid income tax, unpaid estimated income tax, and
unpaid withholding tax. This imposition of interest shall be
assessed per month, or fraction of a month.
(2) With respect to unpaid income tax and unpaid
estimated income tax, a penalty equal to fifteen percent of
the amount not timely paid shall be imposed.
(3) With respect to any unpaid withholding tax, a penalty
equal to fifty percent of the amount not timely paid shall be
imposed.
(4) With respect to returns other than estimated income tax
returns, the Municipality —shall impose a monthly penalty of
twenty -five dollars for each failure to timely file each return,
regardless of the liability shown thereon for each month, or
any fraction thereof, during which the return remains unfiled
regardless of the liability shown thereon. The penalty shall
not exceed a total of one hundred fifty dollars in assessed
penalty for each failure to timely file a return.
(D) With respect to income taxes, estimated income taxes,
withholding taxes, and returns, the Municipality shall not impose,
seek to collect, or collect any penalty, amount of interest, charges
or additional fees not described in this section.
(E) With respect to income taxes, estimated income taxes,
withholding taxes, and returns, the Municipality shall not refund
or credit any penalty, amount of interest, charges, or additional
fees that were properly imposed or collected before January 1,
2016.
(F) The Tax Administrator may, in the Tax Administrator's sole
discretion, abate or partially abate penalties or interest imposed
under this section when the Tax Administrator deems such
83
abatement or partial abatement to be appropriate. Such
abatement or partial abatement shall be properly documented and
maintained on the record of the taxpayer who received benefit of
such abatement or partial abatement.
(G) The Municipality may impose on the taxpayer, employer,
any agent of the employer, or any other payer the Municipality's
post - judgment collection costs and fees, including attorney's fees.
(Source: ORC 718.27)
38.11 AUDIT
(A) At or before the commencement of an audit, as defined in
Section 38.03(3) of this Chapter, the Tax Administrator shall
provide to the taxpayer a written description of the roles of the
Tax Administrator and of the taxpayer during an audit and a
statement of the taxpayer's rights, including any right to obtain a
refund of an overpayment of tax. At or before the commencement
of an audit, the Tax Administrator shall inform the taxpayer when
the audit is considered to have commenced.
(B) Except in cases involving suspected criminal activity, the
Tax Administrator shall conduct an audit of a taxpayer during
regular business hours and after providing reasonable notice to
the taxpayer. A taxpayer who is unable to comply with a proposed
time for an audit on the grounds that the proposed time would
cause inconvenience or hardship must offer reasonable
alternative dates for the audit.
(C) At all stages of an audit by the Tax Administrator, a
taxpayer is entitled to be assisted or represented by an attorney,
accountant, bookkeeper, or other tax practitioner. The Tax
Administrator shall prescribe a form by which a taxpayer may
designate such a person to assist or represent the taxpayer in the
conduct of any proceedings resulting from actions by the Tax
Administrator. If a taxpayer has not submitted such a form, the
Tax Administrator may accept other evidence, as the Tax
Administrator considers appropriate, that a person is the
84
authorized representative of a taxpayer.
A taxpayer may refuse to answer any questions asked by the
person conducting an audit until the taxpayer has an opportunity
to consult with the taxpayer's attorney, accountant, bookkeeper,
or other tax practitioner. This division does not authorize the
practice of law by a person who is not an attorney.
(D) A taxpayer may record, electronically or otherwise, the audit
examination.
(E) The failure of the Tax Administrator to comply with a
provision of this section shall neither excuse a taxpayer from
payment of any taxes owed by the taxpayer nor cure any
procedural defect in a taxpayer's case.
(F) If the Tax Administrator fails to substantially comply with the
provisions of this section, the Tax Administrator, upon application
by the taxpayer, shall excuse the taxpayer from penalties and
interest arising from the audit.
(Source: ORC 718.36)
38.12 ROUNDING
A person may round to the nearest whole dollar all amounts the
person is required to enter on any return, report, voucher, or other
document required under this chapter. Any fractional part of a
dollar that equals or exceeds fifty cents shall be rounded to the
next whole dollar, and any fractional part of a dollar that is less
than fifty cents shall be dropped, rounding down to the nearest
whole dollar. If a person chooses to round amounts entered on a
document, the person shall round all amounts entered on the
document.
(Source: ORC 718.25)
38.131 AUTHORITY OF FINANCE DIRECTOR AND TAX
ADMINISTRATOR
85
The Finance Director or his delegate shall collect and receive the
tax imposed by this chapter in the manner prescribed by this
chapter, and he shall also keep an accurate record showing
payment received by him from each taxpayer and the date of the
payment.
The Finance Director shall have the power to appoint a Tax
Administrator to assist in the administration of this chapter, and
such Administrator shall be responsible to the Finance Director.
38.132 AUTHORITY OF TAX ADMINISTRATOR;
ADMINISTRATIVE POWERS OF THE TAX
ADMINISTRATOR
The Tax Administrator has the authority to perform all duties and
functions necessary and appropriate to implement the provisions
of this Chapter, including without limitation:
(A) Exercise all powers whatsoever of an inquisitorial nature as
provided by law, including, the right to inspect books, accounts,
records, memorandums, and federal and state income tax
returns, to examine persons under oath, to issue orders or
subpoenas for the production of books, accounts, papers,
records, documents, and testimony, to take depositions, to apply
to a court for attachment proceedings as for contempt, to approve
vouchers for the fees of officers and witnesses, and to administer
oaths; provided that the powers referred to in this division of this
section shall be exercised by the Tax Administrator only in
connection with the performance of the duties respectively
assigned to the Tax Administrator under a municipal corporation
income tax ordinance or resolution adopted in accordance with
this chapter;
(B) Appoint agents and prescribe their powers and duties;
(C) Confer and meet with officers of other municipal corporations
and states and officers of the United States on any matters
pertaining to their respective official duties as provided by law;
(D) Exercise the authority provided by law, including orders from
bankruptcy courts, relative to remitting or refunding taxes,
86
including penalties and interest thereon, illegally or erroneously
imposed or collected, or for any other reason overpaid, and, in
addition, the Tax Administrator may investigate any claim of
overpayment and make a written statement of the Tax
Administrator's findings, and, if the Tax Administrator finds that
there has been an overpayment, approve and issue a refund
payable to the taxpayer, the taxpayer's assigns, or legal
representative as provided in this chapter;
(E) Exercise the authority provided by law relative to consenting
to the compromise and settlement of tax claims;
(F) Exercise the authority provided by law relative to the use of
alternative apportionment methods by taxpayers in accordance
with section 38.062 of this Chapter;
(G) Make all tax findings, determinations, computations,
assessments and orders the Tax Administrator is by law
authorized and required to make and, pursuant to time limitations
provided by law, on the Tax Administrator's own motion, review,
redetermine, or correct any tax findings, determinations,
computations, assessments or orders the Tax Administrator has
made, but the Tax Administrator shall not review, redetermine, or
correct any tax finding, determination, computation, assessment
or order which the Tax Administrator has made for which an
appeal has been filed with the Local Board of Tax Review or other
appropriate tribunal, unless such appeal or application is
withdrawn by the appellant or applicant, is dismissed, or is
otherwise final;
(H) Destroy any or all returns or other tax documents in the
manner authorized by law;
(1) Enter into an agreement with a taxpayer to simplify the
withholding obligations described in section 38.051 of this
Chapter.
(Source: ORC 718.24)
38.133 AUTHORITY OF TAX ADMINISTRATOR;
COMPROMISE OF CLAIM AND PAYMENT OVER
TIME
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(A) As used in this section, "claim" means a claim for an amount
payable to the Municipality that arises pursuant to the municipal
income tax imposed in accordance with this chapter.
(B) The Tax Administrator may do either of the following if such
action is in the best interests of the Municipality:
(1) Compromise a claim;
(2) Extend for a reasonable period the time for payment of
a claim by agreeing to accept monthly or other periodic
payments, upon such terms and conditions as the Tax
Administrator may require.
(C) The Tax Administrator's rejection of a compromise or
payment- over -time agreement proposed by a person with respect
to a claim shall not be appealable.
(D) A compromise or payment- over -time agreement with respect
to a claim shall be binding upon and shall inure to the benefit of
only the parties to the compromise or agreement, and shall not
extinguish or otherwise affect the liability of any other person.
(E) (1) A compromise or payment- over -time agreement with
respect to a claim shall be void if the taxpayer defaults under
the compromise or agreement or if the compromise or
agreement was obtained by fraud or by misrepresentation of
a material fact. Any amount that was due before the
compromise or agreement and that is unpaid shall remain
due, and any penalties or interest that would have accrued in
the absence of the compromise or agreement shall continue
to accrue and be due.
(2) The Tax Administrator shall have sole discretion to
determine whether or not penalty, interest, charges or
applicable fees will be assessed through the duration of any
compromise or payment- over -time agreement.
(F) The Tax Administrator may require that the taxpayer provide
detailed financial documentation and information, in order to
determine whether or not a payment- over -time agreement will be
authorized. The taxpayer's failure to provide the necessary and
required information by the Tax Administrator shall preclude
consideration of a payment- over -time agreement.
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(Source: 718.28)
38.134 AUTHORITY OF TAX ADMINISTRATOR; RIGHT TO
EXAMINE
(A) The Tax Administrator, or any authorized agent or
employee thereof may examine the books, papers, records, and
federal and state income tax returns of any employer, taxpayer, or
other person that is subject to, or that the Tax Administrator
believes is subject to, the provisions of this Chapter for the
purpose of verifying the accuracy of any return made or, if no
return was filed, to ascertain the tax due under this Chapter.
Upon written request by the Tax Administrator or a duly
authorized agent or employee thereof, every employer, taxpayer,
or other person subject to this section is required to furnish the
opportunity for the Tax Administrator, authorized agent, or
employee to investigate and examine such books, papers,
records, and federal and state income tax returns at a reasonable
time and place designated in the request.
(B) The records and other documents of any taxpayer,
employer, or other person that is subject to, or that a Tax
Administrator believes is subject to, the provisions of this Chapter
shall be open to the Tax Administrator's inspection during
business hours and shall be preserved for a period of six years
following the end of the taxable year to which the records or
documents relate, unless the Tax Administrator, in writing,
consents to their destruction within that period, or by order
requires that they be kept longer. The Tax Administrator of a
municipal corporation may require any person, by notice served
on that person, to keep such records as the Tax Administrator
determines necessary to show whether or not that person is
liable, and the extent of such liability, for the income tax levied by
the Municipality or for the withholding of such tax.
(C) The Tax Administrator may examine under oath any person
that the Tax Administrator reasonably believes has knowledge
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concerning any income that was or would have been returned for
taxation or any transaction tending to affect such income. The Tax
Administrator may, for this purpose, compel any such person to
attend a hearing or examination and to produce any books,
papers, records, and federal and state income tax returns in such
person's possession or control. The person may be assisted or
represented by an attorney, accountant, bookkeeper, or other tax
practitioner at any such hearing or examination. This division
does not authorize the practice of law by a person who is not an
attorney.
(D) No person issued written notice by the Tax Administrator
compelling attendance at a hearing or examination or the
production of books, papers, records, or federal and state income
tax returns under this section shall fail to comply.
(Source: ORC 718.23)
38.135 AUTHORITY OF TAX ADMINISTRATOR; REQUIRING
IDENTIFYING INFORMATION
(A) The Tax Administrator may require any person filing a tax
document with the Tax Administrator to provide identifying
information, which may include the person's social security
number, federal employer identification number, or other
identification number requested by the Tax Administrator. A
person required by the Tax Administrator to provide identifying
information that has experienced any change with respect to that
information shall notify the Tax Administrator of the change
before, or upon, filing the next tax document requiring the
identifying information.
(B) (1) If the Tax Administrator makes a request for identifying
information and the Tax Administrator does not receive valid
identifying information within thirty days of making the
request, nothing in this chapter prohibits the Tax
Administrator from imposing a penalty upon the person to
whom the request was directed pursuant to section 38.10 of
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this Chapter, in addition to any applicable penalty described
in section 38.99 of this Chapter.
(2) If a person required by the Tax Administrator to provide
identifying information does not notify the Tax Administrator
of a change with respect to that information as required
under division (A) of this section within thirty days after filing
the next tax document requiring such identifying information,
nothing in this chapter prohibits the Tax Administrator from
imposing a penalty pursuant to section 38.10 of this Chapter.
(3) The penalties provided for under divisions (13)(1) and
(2) of this section may be billed and imposed in the same
manner as the tax or fee with respect to which the identifying
information is sought and are in addition to any applicable
criminal penalties described in section 38.99 of this Chapter
for a violation of 38.15 of this Chapter, and any other
penalties that may be imposed by the Tax Administrator by
law.
(Source: ORC 718.26)
38.14 CONFIDENTIALITY
(A) Any information gained as a result of returns, investigations,
hearings, or verifications required or authorized by ORC 718 or by
the charter or ordinance of the Municipality is confidential, and no
person shall access or disclose such information except in
accordance with a proper judicial order or in connection with the
performance of that person's official duties or the official business
of the Municipality as authorized by ORC 718 or the charter or
ordinance authorizing the levy. The Tax Administrator of the
Municipality or a designee thereof may furnish copies of returns
filed or otherwise received under this chapter and other related
tax—information to the Internal Revenue Service, the State Tax
Commissioner, and Tax Administrators of other municipal
corporations.
(B) This section does not prohibit the Municipality from
publishing or disclosing statistics in a form that does not disclose
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information with respect to particular taxpayers.
(Source: ORC 718.13)
38.15 FRAUD
No person shall knowingly make, present, aid, or assist in the
preparation or presentation of a false or fraudulent report, return,
schedule, statement, claim, or document authorized or required
by municipal corporation ordinance or state law to be filed with
the Tax Administrator, or knowingly procure, counsel, or advise
the preparation or presentation of such report, return, schedule,
statement, claim, or document, or knowingly change, alter, or
amend, or knowingly procure, counsel or advise such change,
alteration, or amendment of the records upon which such report,
return, schedule, statement, claim, or document is based with
intent to defraud the Municipality or the Tax Administrator.
(Source: ORC 718.38)
38.16 OPINION OF THE TAX ADMINISTRATOR
(A) An "opinion of the Tax Administrator" means an opinion
issued under this section with respect to prospective municipal
income tax liability. It does not include ordinary correspondence of
the Tax Administrator.
(B) A taxpayer may submit a written request for an opinion of the
Tax Administrator as to whether or how certain income, source of
income, or a certain activity or transaction will be taxed. The
written response of the Tax Administrator shall be an "opinion of
the Tax Administrator" and shall bind the Tax Administrator, in
accordance with divisions (C), (G), and (H) of this section,
provided all of the following conditions are satisfied:
(1) The taxpayer's request fully and accurately describes
the specific facts or circumstances relevant to a
determination of the taxability of the income, source of
income, activity, or transaction, and, if an activity or
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transaction, all parties involved in the activity or transaction
are clearly identified by name, location, or other pertinent
facts.
(2) The request relates to a tax imposed by the Municipality
in accordance with this Chapter.
(3) The Tax Administrator's response is signed by the Tax
Administrator and designated as an "opinion of the Tax
Administrator."
(C) An opinion of the Tax Administrator shall remain in effect
and shall protect the taxpayer for whom the opinion was prepared
and who reasonably relies on it from liability for any taxes,
penalty, or interest otherwise chargeable on the activity or
transaction specifically held by the Tax Administrator's opinion to
be taxable in a particular manner or not to be subject to taxation
for any taxable years that may be specified in the opinion, or until
the earliest of the following dates:
(1) The effective date of a written revocation by the Tax
Administrator sent to the taxpayer by certified mail, return
receipt requested. The effective date of the revocation shall
be the taxpayer's date of receipt or one year after the
issuance of the opinion, whichever is later;
(2) The effective date of any amendment or enactment of a
relevant section of the Ohio Revised Code, uncodified state
law, or the Municipality's income tax ordinance that would
substantially change the analysis and conclusion of the
opinion of the Tax Administrator;
(3) The date on which a court issues an opinion
establishing or changing relevant case law with respect to
the Ohio Revised Code, uncodified state law, or the
Municipality's income tax ordinance;
(4) If the opinion of the Tax Administrator was based
on the interpretation of federal law, the effective date of any
change in the relevant federal statutes or regulations, or the
date on which a court issues an opinion establishing or
changing relevant case law with respect to federal statutes
or regulations;
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(5) The effective date of any change in the taxpayer's
material facts or circumstances;
(6) The effective date of the expiration of the opinion, if
specified in the opinion.
(D) (1) A taxpayer is not relieved of tax liability for any activity
or transaction related to a
request for an opinion that contained any misrepresentation
or omission of one or more material facts.
(2) If the taxpayer knowingly has misrepresented the
pertinent facts or omitted material facts with intent to defraud
the Municipality in order to obtain a more favorable opinion,
the taxpayer may be in violation of section 38.15 of this
Chapter..
(E) If a Tax Administrator provides written advice under this
section, the opinion shall include a statement that:
(1) The tax consequences stated in the opinion may be
subject to change for any of the reasons stated in division
(C) of this section;
(2) It is the duty of the taxpayer to be aware of such
changes.
(F) A Tax Administrator may refuse to offer an opinion on any
request received under this section.
(G) This section binds a Tax Administrator only with respect to
opinions of the Tax Administrator issued on or after January 1,
2016.
(H) An opinion of a Tax Administrator binds that Tax
Administrator only with respect to the taxpayer for whom the
opinion was prepared and does not bind the Tax Administrator of
any other municipal corporation.
(I) A Tax Administrator shall make available the text of all
opinions issued under this section, except those opinions
prepared for a taxpayer who has requested that the text of the
opinion remain confidential. In no event shall the text of an
opinion be made available until the Tax Administrator has
removed all information that identifies the taxpayer and any other
parties involved in the activity or transaction.
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(J) An opinion of the Tax Administrator issued under this section
or a refusal to offer an opinion under subsection (F) may not be
appealed.
(Source: ORC 718.38)
38.17 ASSESSMENT; APPEAL BASED ON PRESUMPTION
OF DELIVERY
(A) (1) The Tax Administrator shall serve an assessment either
by personal service, by certified mail, or by a delivery service
authorized under section 5703.056 of the Ohio Revised
Code.
(2) The Tax Administrator may deliver the assessment
through alternative means as provided in this section,
including, but not limited to, delivery by secure electronic
mail. Such alternative delivery method must be authorized
by the person subject to the assessment.
(3) Once service of the assessment has been made by the
Tax Administrator or other municipal official, or the designee
of either, the person to whom the assessment is directed
may protest the ruling of that assessment by filing an appeal
with the Local Board of Tax Review within sixty days after
the receipt of service. The delivery of an assessment of the
Tax Administrator as prescribed in Section 718.18 of the
Revised Code is prima facie evidence that delivery is
complete and that the assessment is served.
(B) (1) A person may challenge the presumption of delivery
and service as set forth in this division. A person disputing
the presumption of delivery and service under this section
bears the burden of proving by a preponderance of the
evidence that the address to which the assessment was sent
was not an address with which the person was associated at
the time the Tax Administrator originally mailed the
assessment by certified mail. For the purposes of this
section, a person is associated with an address at the time
the Tax Administrator originally mailed the assessment if, at
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that time, the person was residing, receiving legal
documents, or conducting business at the address; or if,
before that time, the person had conducted business at the
address and, when the assessment was mailed, the person's
agent or the person's affiliate was conducting business at the
address. For the purposes of this section, a person's affiliate
is any other person that, at the time the assessment was
mailed, owned or controlled at least twenty per cent, as
determined by voting rights, of the addressee's business.
(2) If a person elects to appeal an assessment on the basis
described in division (B)(1) of this section, and if that
assessment is subject to collection and is not otherwise
appealable, the person must do so within sixty days after the
initial contact by the Tax Administrator or other municipal
official, or the designee of either, with the person. Nothing in
this division prevents the Tax Administrator or other official
from entering into a compromise with the person if the
person does not actually file such an appeal with the Local
Board of Tax Review.
(Source: ORC 718.18)
38.18 LOCAL BOARD OF TAX REVIEW; APPEAL TO
LOCAL BOARD OF TAX REVIEW
(A) (1) The legislative authority of the Municipality shall
maintain a Local Board of Tax Review to hear appeals as
provided in Ohio Revised Code Chapter 718.
(2) The Local Board of Tax Review shall consist of three
members, who must be domiciled in the Municipality.
(a) Two members shall be appointed by the legislative
authority of the Municipality, and may not be employees,
elected officials, or contractors with the Municipality at any
time during their term or in the five years immediately
preceding the date of appointment.
(b) One member shall be appointed by the top
administrative official of the Municipality. This member may
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be an employee of the Municipality, but may not be the
director of finance or equivalent officer, or the Tax
Administrator or other similar official or an employee directly
involved in municipal tax matters, or any direct subordinate
thereof.
(3) The term for members of the Local Board of Tax
Review appointed by the legislative authority of the
Municipality shall be two years. There is no limit on the
number of terms that a member may serve should the
member be reappointed by the legislative authority. The
board member appointed by the top administrative official of
the Municipality shall serve at the discretion of the
administrative official.
(4) Members of the board of tax review appointed by the
legislative authority may be removed by the legislative
authority as set forth in Section 718.11(A)(4) of the Revised
Code.
(5) A member of the board who, for any reason, ceases to
meet the qualifications for the position prescribed by this
section shall resign immediately by operation of law.
(6) A vacancy in an unexpired term shall be filled in the
same manner as the original appointment within sixty days
of when the vacancy was created. Any member appointed to
fill a vacancy occurring prior to the expiration of the term for
which the member's predecessor was appointed shall hold
office for the remainder of such term. No vacancy on the
board shall impair the power and authority of the remaining
members to exercise all the powers of the board.
(7) If a member is temporarily unable to serve on the board
due to a conflict of interest, illness, absence, or similar
reason, the legislative authority or top administrative official
that appointed the member shall appoint another individual
to temporarily serve on the board in the member's place.
This appointment shall be subject to the same requirements
and limitations as are applicable to the appointment of the
member temporarily unable to serve.
(8) No member of the Local Board of Tax Review shall
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receive compensation, fee, or reimbursement of expenses
for service on the board.
(B) Whenever a Tax Administrator issues an assessment, the
Tax Administrator shall notify the taxpayer in writing at the same
time of the taxpayer's right to appeal the assessment, the manner
in which the taxpayer may appeal the assessment, and the
address to which the appeal should be directed, and to whom the
appeal should be directed.
(C) Any person who has been issued an assessment may
appeal the assessment to the board by filing a request with the
board. The request shall be in writing, shall specify the reason or
reasons why the assessment should be deemed incorrect or
unlawful and shall be filed within sixty days after the taxpayer
receives the assessment.
(D) The Local Board of Tax Review shall schedule a hearing to
be held within sixty days after receiving an appeal of an
assessment under division (C) of this section, unless the taxpayer
requests additional time to prepare or waives a hearing. If the
taxpayer does not waive the hearing, the taxpayer may appear
before the board and /or may be represented by an attorney at
law, certified public accountant, or other representative. The
board may allow a hearing to be continued as jointly agreed to by
the parties. In such a case, the hearing must be completed within
one hundred twenty days after the first day of the hearing unless
the parties agree otherwise.
(E) The board may affirm, reverse, or modify the Tax
Administrator's assessment or any part of that assessment. The
board shall issue a final determination on the appeal within ninety
days after the board's final hearing on the appeal, and send a
copy of its final determination by ordinary mail to all of the parties
to the appeal within fifteen days after issuing the final
determination. The taxpayer or the Tax Administrator may appeal
the board's final determination as provided in section 5717.011 of
the Ohio Revised Code.
(F) The Local Board of Tax Review created pursuant to this
section shall adopt rules governing its procedures, including a
schedule of related costs, and shall keep a record of its
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transactions. The rules governing the Local Board of Tax Review
procedures shall be in writing, and may be amended as needed
by the Local Board of Tax Review. Such records are not public
records available for inspection under section 149.43 of the Ohio
Revised Code. For this reason, any documentation, copies of
returns or reports, final determinations, or working papers for
each case must be maintained in a secure location under the
control of the Tax Administrator. No member of the Local Board of
Tax Review may remove such documentation, copies of returns
or reports, final determinations, or working papers from the
hearing. Hearings requested by a taxpayer before a Local Board
of Tax Review created pursuant to this section are not meetings
of a public body subject to section 121.22 of the Ohio Revised
Code. For this reason, such hearings shall not be open to the
public, and only those parties to the case may be present during
the hearing.
(Source: ORC 718.11)
38.19 ACTIONS TO RECOVER; STATUTE OF
LIMITATIONS
(A) (1) (a) Civil actions to recover municipal income taxes
and penalties and interest on municipal income taxes shall be
brought within the latter of:
(i) Three years after the tax was due or the
return was filed, whichever is later; or
(ii) One year after the conclusion of the
qualifying deferral period, if any.
(b) The time limit described in division (A)(1)(a) of this
section may be extended at any time if both the Tax
Administrator and the employer, agent of the employer,
other payer, or taxpayer consent in writing to the
extension. Any extension shall also extend for the same
period of time the time limit described in division (C) of
this section.
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(2) As used in this section, "qualifying deferral period"
means a period of time beginning and ending as
follows:
(a) Beginning on the date a person who is aggrieved
by an assessment files with a Local Board of Tax
Review the request described in Section 38.18 of this
Chapter. That date shall not be affected by any
subsequent decision, finding, or holding by any
administrative body or court that the Local Board of Tax
Review with which the aggrieved person filed the
request did not have jurisdiction to affirm, reverse, or
modify the assessment or any part of that assessment.
(b) Ending the later of the sixtieth day after the date
on which the final determination of the Local Board of
Tax Review becomes final or, if any party appeals from
the determination of the Local Board of Tax Review, the
sixtieth day after the date on which the final
determination of the Local Board of Tax Review is
either ultimately affirmed in whole or in part or ultimately
reversed and no further appeal of either that affirmation,
in whole or in part, or that reversal is available or taken.
(B) Prosecutions for an offense made punishable under a
resolution or ordinance imposing an income tax shall be
commenced within three years after the commission of the
offense, provided that in the case of fraud, failure to file a return,
or the omission of twenty -five per cent or more of income required
to be reported, prosecutions may be commenced within six years
after the commission of the offense.
(C) A claim for a refund of municipal income taxes shall be
brought within the time limitation provided in Section 38.096 of
this Chapter.
(D) (1) Notwithstanding the fact that an appeal is pending, the
petitioner may pay all or a portion of the assessment that is
the subject of the appeal. The acceptance of a payment by
the Municipality does not prejudice any claim for refund upon final
determination of the appeal.
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(2) If upon final determination of the appeal an error in the
assessment is corrected by the Tax Administrator, upon an
appeal so filed or pursuant to a final determination of the
Local Board of Tax Review created under Section 38.18 of
this Chapter, of the Ohio board of tax appeals, or any court
to which the decision of the Ohio board of tax appeals has
been appealed, so that the amount due from the party
assessed under the corrected assessment is less than the
amount paid, there shall be issued to the appellant or to the
appellant's assigns or legal representative a refund in the
amount of the overpayment as provided by Section 38.096
of this Chapter, with interest on that amount as provided by
division (D) of this section.
(E) No civil action to recover municipal income tax or related
penalties or interest shall be brought during either of the following
time periods:
(1) The period during which a taxpayer has a right to
appeal the imposition of that tax or interest or those
penalties;
(2) The period during which an appeal related to the
imposition of that tax or interest or those penalties is
pending.
(Source: ORC 718.12)
38.20 ADOPTION OF RULES
(A) Pursuant to Section 718.30 of the Revised Code, the
Municipality, pursuant to this Chapter, grants authority to the Tax
Administrator to adopt rules to administer the income tax imposed
by the Municipality.
(B) All rules adopted under this section shall be published and
posted on the internet.
(Source: ORC 718.30)
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KI *11 =0101 LI 111 :7_« i :J :1001..1 [0]LIK
No contract on behalf of the Municipality for works or
improvements of the Municipality shall be binding or valid unless
such contract contains the following provisions;
"Said hereby further agrees to
withhold all municipal income taxes due or payable under the
provisions of Chapter 38 of the Codified Ordinances of Dublin,
Ohio, for wages, salaries and commissions paid to its employees
and further agrees that any of its subcontractors shall be required
to agree to withhold any such municipal income taxes due under
such chapter for services performed under this contract."
KI:K WALII Q We] N III VN11107 :491LI [0
(A) Each owner, or the duly designated agent thereof, of one (1)
or more units of real property located within the City and which
are rented or available for rent as of January 1, 2004, and
thereafter, shall submit to the Tax Administrator, or the designee
thereof, on or before September 30 of each year a list of tenants
presently occupying those rental units and those units vacant.
For the purposes of this section, Rented Units includes any unit of
real property which is subject to a rental agreement, whether oral
or written, for residential, commercial or industrial purposes.
(1) Each owner, or the duly designated agent thereof, shall
incur a penalty of five dollars ($5.00) per month per
tenant, up to a maximum of one thousand dollars
($1,000.00), for failure to comply with section (A)
above.
(B) All employers, contractors or subcontractors who do work in
the City shall register with the Tax Administrator. The Tax
Administrator may request a list of all employees, subcontractors,
contractors or others who may do work for them within the
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Municipality whose profits, wages or earning are not presently
subject to withholding of the City of Dublin income tax (including
but not limited to 1099 MISC).
38.97 COLLECTION AFTER TERMINATION OF CHAPTER
(A) This chapter shall continue in full force and effect insofar as
the levy of taxes is concerned until repealed, and insofar as the
collection of taxes levied hereunder and actions and proceedings
for collecting any tax so levied or enforcing any provisions of this
chapter are concerned, it shall continue in full force and effect
until all of the taxes levied in the aforesaid period are fully paid
and any and all suits and prosecutions for the collection of taxes
or for the punishment of violations of this chapter have been fully
terminated, subject to the limitations contained in Section 38.19.
(B) Annual returns due for all or any part of the last effective
year of this chapter shall be due on the date provided in Section
38.091 as though the same were continuing.
38.98 SAVINGS CLAUSE
If any sentence, clause, section or part of this chapter, or any tax
imposed against, or exemption from tax granted to, any taxpayer
or forms of income specified herein is found to be
unconstitutional, illegal or invalid, such unconstitutionality,
illegality, or invalidity shall affect only such clause, sentence,
section or part of this chapter so found and shall not affect or
impair any of the remaining provisions, sentences, clauses,
sections or other parts of this chapter. It is hereby declared to be
the intention of the legislative authority of the Municipality that this
chapter would have been adopted had such unconstitutional,
illegal or invalid sentence, clause, section or part thereof not been
included in this chapter.
38.99 VIOLATIONS; PENALTY
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(A) Except as provided in division (B) of this section, whoever
violates Section 38.15 of this Chapter, division (A) of Section
38.14 of this Chapter„ or Section 38.051 of this Chapter by failing
to remit municipal income taxes deducted and withheld from an
employee, shall be guilty of a misdemeanor of the first degree and
shall be subject to a fine of not more than one thousand dollars or
imprisonment for a term of up to six months, or both. In addition,
the violation is punishable by dismissal from office or discharge
from employment, or both.
(B) Any person who discloses information received from the
Internal Revenue Service in violation of Internal Revenue Code
Sec. 7213(a), 7213A, or 7431 shall be guilty of a felony of the fifth
degree and shall be subject to a fine of not more than five
thousand dollars plus the costs of prosecution, or imprisonment
for a term not exceeding five years, or both. In addition, the
violation is punishable by dismissal from office or discharge from
employment, or both.
(C) Each instance of access or disclosure in violation of division
(A) of Section 38.14 of this Chapter constitutes a separate
offense.
(D) Whoever violates any provision of this Chapter for which
violation no penalty is otherwise provided, is guilty of a
misdemeanor of the third degree on a first offense and fined not
less than $250 nor more than $500 for the first; on a subsequent
offense within one year after the first offense, the person shall be
fined not less than $250 nor more than $500 or imprisoned not
more than 60 days, or both. By way of an illustrative
enumeration, violations of this Chapter shall include but not be
limited to the following acts, conduct, and /or omissions:
(1) Fail, neglect or refuse to make any return or declaration
required by this Chapter; or
(2) Knowingly make any incomplete return; or
(3) Willfully fail, neglect, or refuse to pay the tax, penalties,
and interest, or any combination thereof, imposed by this
Chapter; or
(4) Cause to not be remitted the city income tax withheld
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from qualifying wages of employees to the Municipality
municipal corporation as required by Section 38.051; or
(5) Neglect or refuse to withhold or remit municipal
income tax from employees; or
(6) Refuse to permit the Tax Administrator or any duly
authorized agent or employee to examine his or her books,
records, papers, federal and state income tax returns, or any
documentation relating to the income or net profits of a
taxpayer; or
(7) Fail to appear before the Tax Administrator and to
produce his or her books, records, papers, federal and state
income tax returns, or any documentation relating to the
income or net profits of a taxpayer upon order or subpoena
of the Tax Administrator; or
(8) Refuse to disclose to the Tax Administrator any
information with respect to such person's income or net
profits, or in the case of a person responsible for maintaining
information relating to his or her employers' income or net
profits, such person's employer's income or net profits; or
(9) Fail to comply with the provisions of this chapter or any
order or subpoena of the Tax Administrator; or
(10) To avoid imposition or collection of municipal
income tax, willfully give to an employer or prospective
employer false information as to his or her true name,
correct social security number and residence address, or
willfully fail to promptly notify an employer or a prospective
employer of any change in residence address and date
thereof; or
(11) Fail, as an employer, agent of an employer, or other
payer, to maintain proper records of employees residence
addresses, total qualifying wages paid and municipal tax
withheld, or to knowingly give the Tax Administrator false
information; or
(12) Willfully fail, neglect, or refuse to make any
payment of estimated municipal income tax for any taxable
year or any part of any taxable year in accordance with this
105
Chapter; or
(13) Attempt to do anything whatsoever to avoid the
payment of the whole or any part of the tax, penalties or
interest imposed by this Chapter.
(14) For purposes of this Section, any violation that does not
specify a culpable mental state or intent, shall be one of
strict liability and no culpable mental state or intent shall be
required for a person to be guilty of that violation.
(15) For purposes of this Section, the term "person" shall, in
addition to the meaning prescribed in Section 38.03, include
in the case of a corporation, association, pass- through entity
or unincorporated business entity not having any resident
owner or officer within the city, any employee or agent of
such corporation, association, pass- through entity or
unincorporated business entity who has control or
supervision over or is charged with the responsibility of filing
the municipal income tax returns and making the payments
of the municipal income tax as required by this Chapter.
(Source: ORC 718.99)
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