880.03 INCOME SUBJECT TO TAXATION.
(a) Taxable Income. Subject to Section 880.01 shall be imposed on and after July 1, 1978, at the rate of one percent (1%) per year, and an additional annual tax for the sole purpose of providing funds for capital improvements of the Municipality, including the payment of debt service on obligations issued to fund capital improvements, shall be imposed on and after July 1, 1988, at the rate of five-tenths of one percent (0.5%) per year upon the following:
(1) On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by residents of the Municipality, and, for the 2004 taxable year and all taxable years thereafter, on all income derived or received from lotteries, gaming, wagering or other schemes of chance by residents of the Municipality, provided the total income received from such lotteries, gaming, wagering or other schemes of chance is equal to or greater than five thousand dollars ($5,000.00) and further that no expenses associated with lotteries, gaming, wagering or other schemes of chance can offset the income;
(2) On all salaries, wages, commissions and other compensation earned during the effective period of this chapter by nonresidents for work done or services performed or rendered in the Municipality;
(3) A. On the portion attributable to the Municipality of the net profits earned during the effective period of this chapter of all resident unincorporated businesses, professions or other entities, derived from sales made, work done, services performed or rendered and business or other activities conducted in the Municipality; and
B. On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a resident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity by the Municipality;
(4) A. On the portion attributable to the Municipality of the net profits earned during the effective period of this chapter of all nonresident unincorporated businesses, professions or other entities, derived from sales made, work done or services performed or rendered and business or other activities conducted in the Municipality, whether or not such unincorporated business entity has an office or place of business in the Municipality; and
B. On the portion of the distributive share of the net profits earned during the effective period of this chapter of a resident partner or owner of a nonresident unincorporated business entity not attributable to the Municipality and not levied against such unincorporated business entity by the Municipality; and
(5) On the portion attributable to the Municipality of the net profits earned during the effective period of this chapter of all corporations derived from sales made, work done, services performed or rendered and business or other activities cond
ucted in the Municipality, whether or not such corporations have an office or place of business in the Municipality.
(6) Stock options and disqualifying disposition of an incentive stock option.
(7) Deferred compensation.
(8) Supplemental unemployment compensation.
(9) Sick pay (including third party sick pay).
(10) Reimbursed moving expenses.
(11) Severance pay. (Ord. 05-3. Passed 1-6-05.)
(b) Net Profits Attributable to the Municipality. The portion of the net profits attributable to the Municipality of a taxpayer conducting a business, profession or other activity both within and without the boundaries of the Municipality shall be determined as provided in Ohio R.C. 718.02 and in accordance with the rules and regulations adopted by the Administrator pursuant to this chapter.
(Ord. 88-5. Approved by voters 5-3-88.)
(c) Operating Loss Carry-Forward and Offsets Against Wage Income.
(1) A. The portion of a net operating loss sustained in any taxable year (subsequent to the date of the first ordinance permitting loss carry-forwards), allocable to the Municipality, may be applied against the portion of the profit of succeeding years, until exhausted, but in no event for more than three taxable years. No portion of a net operating loss shall be carried back against the net profits of any prior year.
(Ord. 00-66. Passed 12-21-00.)
B. Operating losses from business or professional activities, the profits of which would be taxable under the ordinance, may not be offset against salaries, wages, commissions, or other personal service compensation, except upon cessation of all business and professional activities, and in no event for more than five taxable years.
(Ord. 97-44. Passed 7-17-97.)
(2) The portion of a net operating loss sustained shall be allocated to the Municipality in the same manner as provided in this section for allocating net profits to the Municipality.
(3) The Administrator shall provide, by rules and regulations, for the manner in which such net operating loss carry-forward shall be determined.
(d) Consolidated Returns.
(1) Filing of consolidated returns may be permitted, required or denied in accordance with the rules and regulations prescribed by the Administrator.
(2) In the case of a corporation that carries on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or if any person operates a division, branch, factory, office, laboratory or activity within the Municipality constituting a portion only of its total business, the Administrator shall require such additional information as he or she may
deem necessary to ascertain whether or not net profits are properly allocated to the Municipality. If the Administrator finds net profits are not properly allocated to the Municipality by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates or transactions with such division, branch, factory, office, laboratory or activity, or by some other method, he or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the Municipality.
(Ord. 88-5. Approved by voters 5-3-88.)
(e) Exceptions. The tax provided for in this chapter shall not be levied upon income from interest, dividends, capital gains, unemployment, retirement, military pay or allowances of members of the Armed Forces of the United States, or upon the net profits of any civic, charitable, religious, fraternal or other organization specified in Ohio R.C. 718.01 to the extent that such net profits are exempted from Municipal income taxes under such sections.
On and after January 1, 2001, compensation paid to an individual for personal services performed within the municipal corporation, if the individual does not reside in the municipal corporation, performs such personal services in the municipal corporation on twelve or fewer days in the calendar year, and, if the individual is an employee, the principal place of business of the individual’s employer is located outside the municipal corporation, shall not be subject to taxation under this chapter. This exception shall not apply to professional entertainers or professional athletes or to promoters of professional entertainment or sports events and their employees.
On and after January 1, 2003, items excluded from federal gross income pursuant to Section 107 of the Internal Revenue Code shall not be subject to taxation under this chapter.
(Ord. 91-21. Passed 4-4-91; Ord. 00-66. Passed 12-21-00.)
(f) Deductions. For purposes of the income tax imposed by this chapter on individuals, for the 2004 taxable year and all taxable years thereafter, unreimbursed employee business expense taken as an itemized deduction on an individual’s federal income tax return, as reported on Federal Form 2106, is an allowable deduction only to the extent such deduction is properly taken under federal income tax law. (Ord. 04-23. Passed 6-17-04.)