As Introduced 1
123rd General Assembly 4
Regular Session H. B. No. 477 5
1999-2000 6
REPRESENTATIVES MOTTLEY-THOMAS 8
_________________________________________________________________ 9
A B I L L
To amend sections 718.01, 718.02, 718.05, and 11
733.85; to amend, for the purpose of adopting new 12
section numbers as indicated in parentheses,
sections 718.03 (718.16), 718.05 (718.041), 13
718.06 (718.12), 718.07 (718.13), 718.08
(718.15), and 733.85 (718.11); and to enact new 14
sections 718.03, 718.05, 718.06, 718.07, and 15
718.08 and sections 718.14 and 5703.49 of the
Revised Code to modify the authority of municipal 16
corporations to impose income taxes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 18
Section 1. That sections 718.01, 718.02, 718.05, and 20
733.85 be amended, sections 718.03 (718.16), 718.05 (718.041), 21
718.06 (718.12), 718.07 (718.13), 718.08 (718.15), and 733.85 22
(718.11) be amended for the purpose of adopting new section 23
numbers as indicated in parentheses, and new sections 718.03, 24
718.05, 718.06, 718.07, and 718.08 and sections 718.14 and 25
5703.49 of the Revised Code be enacted to read as follows: 26
Sec. 718.01. (A) As used in this chapter: 35
(1) "Internal Revenue Code" means the Internal Revenue 37
Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. 39
(2) "Schedule C" means internal revenue service schedule C 41
filed by a taxpayer pursuant to the Internal Revenue Code. 43
(3) "Form 2106" means internal revenue service form 2106 45
filed by a taxpayer pursuant to the Internal Revenue Code. 46
(4) "Intangible income" means income of any of the 48
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following types: income yield, interest, dividends, or other 49
income arising from the ownership, sale, exchange, or other 50
disposition of intangible property including, but not limited to, 51
investments, deposits, money, or credits as those terms are
defined in Chapter 5701. of the Revised Code. 52
(B) No municipal corporation with respect to that income 54
that it may tax shall tax such income at other than a uniform 56
rate.
(C) No municipal corporation shall levy a tax on income at 58
a rate in excess of one per cent without having obtained the 59
approval of the excess by a majority of the electors of the 60
municipality voting on the question at a general, primary, or 61
special election. The legislative authority of the municipal 62
corporation shall file with the board of elections at least
seventy-five days before the day of the election a copy of the 63
ordinance together with a resolution specifying the date the 64
election is to be held and directing the board of elections to 65
conduct the election. The ballot shall be in the following form: 66
"Shall the Ordinance providing for a ... per cent levy on income 67
for (Brief description of the purpose of the proposed levy) be
passed? 68
FOR THE INCOME TAX 70
AGAINST THE INCOME TAX" 72
In the event of an affirmative vote, the proceeds of the 74
levy may be used only for the specified purpose. 75
(D)(1) Except as otherwise provided in division (D)(2) of 77
this section, no municipal corporation shall exempt from a tax on 78
income, compensation for personal services of individuals over 79
eighteen years of age or the net profit from a business or 80
profession.
(2) The legislative authority of a municipal corporation 82
may, by ordinance or resolution, exempt from a tax on income any 83
compensation arising from the grant, sale, exchange, or other 84
disposition of a stock option; the exercise of a stock option; or 85
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the sale, exchange, or other disposition of stock purchased under 86
a stock option.
(E) Nothing in this section shall prevent a municipal 88
corporation from permitting lawful deductions as prescribed by 89
ordinance. If a taxpayer's taxable income includes income 90
against which the taxpayer has taken a deduction for federal 91
income tax purposes as reportable on the taxpayer's form 2106, 92
and against which a like deduction has not been allowed by the
municipal corporation, the municipal corporation shall deduct 93
from the taxpayer's taxable income an amount equal to the 94
deduction shown on such form allowable against such income, to 95
the extent not otherwise so allowed as a deduction by the 96
municipal corporation. In the case of a taxpayer who has a net
profit from a business or profession that is operated as a sole 97
proprietorship, no municipal corporation may tax or use as the 98
base for determining the amount of the net profit that shall be 99
considered as having a taxable situs in the municipal 100
corporation, a greater amount than the net profit reported by the
taxpayer on schedule C filed in reference to the year in question 101
as taxable income from such sole proprietorship, except as 102
otherwise specifically provided by ordinance or regulation. 103
(F) No municipal corporation shall tax any of the 105
following:
(1) The military pay or allowances of members of the armed 107
forces of the United States and of members of their reserve 108
components, including the Ohio national guard; 109
(2) The income of religious, fraternal, charitable, 111
scientific, literary, or educational institutions to the extent 112
that such income is derived from tax-exempt real estate, 113
tax-exempt tangible or intangible property, or tax-exempt 114
activities;
(3) Except as otherwise provided in division (G) of this 116
section, intangible income; 117
(4) Compensation paid under section 3501.28 or 3501.36 of 119
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the Revised Code to a person serving as a precinct election 120
official, to the extent that such compensation does not exceed 121
one thousand dollars annually. Such compensation in excess of 122
one thousand dollars may be subjected to taxation by a municipal
corporation. A municipal corporation shall not require the payer 123
of such compensation to withhold any tax from that compensation. 124
(5) Compensation paid to an employee of a transit 126
authority, regional transit authority, or regional transit 127
commission created under Chapter 306. of the Revised Code for 128
operating a transit bus or other motor vehicle for the authority 129
or commission in or through the municipal corporation, unless the
bus or vehicle is operated on a regularly scheduled route, the 130
operator is subject to such a tax by reason of residence or 131
domicile in the municipal corporation, or the headquarters of the 132
authority or commission is located within the municipal 133
corporation.;
(6) The income of a public utility when that public 135
utility is subject to the tax levied under section 5727.24 or 136
5727.30 of the Revised Code, except starting January 1, 2002, the 137
income of an electric company or combined company, as defined in 138
section 5727.01 of the Revised Code, may be taxed by a municipal 140
corporation. For a combined company, only the income attributed 141
from the activity of an electric company shall be subject to
taxation by a municipal corporation. The income of an electric 142
company or combined company subject to taxation by a municipal 143
corporation shall be computed by taking into account the 144
adjustments provided by division (I)(16) of section 5733.04 of 145
the Revised Code. 146
(7) ON AND AFTER JANUARY 1, 2001, ITEMS EXCLUDED FROM 148
FEDERAL GROSS INCOME PURSUANT TO SECTION 107 OF THE INTERNAL 150
REVENUE CODE;
(8) ON AND AFTER JANUARY 1, 2001, COMPENSATION PAID TO AN 152
EMPLOYEE OR INDEPENDENT CONTRACTOR FOR PERSONAL SERVICES 153
PERFORMED WITHIN THE MUNICIPAL CORPORATION IF THE EMPLOYEE OR 154
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CONTRACTOR DOES NOT RESIDE IN THE MUNICIPAL CORPORATION, THE 155
PRINCIPAL PLACE OF BUSINESS OF THE EMPLOYEE'S EMPLOYER OR OF THE 156
CONTRACTOR IS LOCATED OUTSIDE THE MUNICIPAL CORPORATION, AND THE 157
EMPLOYEE OR CONTRACTOR PERFORMS SUCH PERSONAL SERVICES IN THE 158
MUNICIPAL CORPORATION ON TWELVE OR FEWER DAYS IN THE CALENDAR 159
YEAR. DIVISION (F)(8) OF THIS SECTION DOES NOT APPLY TO 160
PROFESSIONAL ENTERTAINERS OR PROFESSIONAL ATHLETES. 161
(G) Any municipal corporation that taxes any type of 163
intangible income on March 29, 1988, pursuant to Section 3 of 164
Amended Substitute Senate Bill No. 238 of the 116th general 165
assembly, may continue to tax that type of income after 1988 if a 166
majority of the electors of the municipal corporation voting on 167
the question of whether to permit the taxation of that type of
intangible income after 1988 vote in favor thereof at an election 168
held on November 8, 1988. 169
(H) Nothing in this section or section 718.02 of the 171
Revised Code shall authorize the levy of any tax on income that a 172
municipal corporation is not authorized to levy under existing 174
laws or shall require a municipal corporation to allow a 175
deduction from taxable income for losses incurred from a sole 176
proprietorship or partnership.
Sec. 718.02. (A) In the taxation of income which THAT is 185
subject to municipal income taxes, if the books and records of a 186
taxpayer conducting a business or profession both within and 187
without the boundaries of a municipal corporation shall disclose 188
with reasonable accuracy what portion of its net profit is 189
attributable to that part of the business or profession conducted 190
within the boundaries of the municipal corporation, then only 191
such portion shall be considered as having a taxable situs in 192
such municipal corporation for purposes of municipal income 193
taxation. In the absence of such records, net profit from a 194
business or profession conducted both within and without the 195
boundaries of a municipal corporation shall be considered as 196
having a taxable situs in such municipal corporation for purposes 197
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of municipal income taxation in the same proportion as the 198
average ratio of: 199
(1) The average net book value of the real and tangible 201
personal property owned or used by the taxpayer in the business 202
or profession in such municipal corporation during the taxable 203
period to the average net book value of all of the real and 204
tangible personal property owned or used by the taxpayer in the 205
business or profession during the same period, wherever situated. 206
As used in the preceding paragraph, real property shall 208
include property rented or leased by the taxpayer and the value 209
of such property shall be determined by multiplying the annual 210
rental thereon by eight; 211
(2) Wages, salaries, and other compensation paid during 213
the taxable period to persons employed in the business or 214
profession for services performed in such municipal corporation 215
to wages, salaries, and other compensation paid during the same 216
period to persons employed in the business or profession, 217
wherever their services are performed, EXCLUDING COMPENSATION 218
DESCRIBED IN DIVISION (F)(8) OF SECTION 718.01 OF THE REVISED 219
CODE;
(3) Gross receipts of the business or profession from 221
sales made and services performed during the taxable period in 222
such municipal corporation to gross receipts of the business or 223
profession during the same period from sales and services, 224
wherever made or performed. 225
In the event that IF the foregoing allocation formula does 227
not produce an equitable result, another basis may, under uniform 228
regulations be substituted, UNDER UNIFORM REGULATIONS, so as to 230
produce such AN EQUITABLE result. 231
(B) As used in division (A) of this section, "sales made 233
in a municipal corporation" mean: 234
(1) All sales of tangible personal property which is 236
delivered within such municipal corporation regardless of where 237
title passes if shipped or delivered from a stock of goods within 238
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such municipal corporation; 239
(2) All sales of tangible personal property which is 241
delivered within such municipal corporation regardless of where 242
title passes even though transported from a point outside such 243
municipal corporation if the taxpayer is regularly engaged 244
through its own employees in the solicitation or promotion of 245
sales within such municipal corporation and the sales result from 246
such solicitation or promotion; 247
(3) All sales of tangible personal property which is 249
shipped from a place within such municipal corporation to 250
purchasers outside such municipal corporation regardless of where 251
title passes if the taxpayer is not, through its own employees, 252
regularly engaged in the solicitation or promotion of sales at 253
the place where delivery is made. 254
Sec. 718.03. (A) AS USED IN THIS SECTION: 256
(1) "WITHHOLDING BASE" INCLUDES ONLY WAGES AS DEFINED IN 258
SECTION 3121 OF THE INTERNAL REVENUE CODE AS THAT SECTION EXISTED 260
ON JANUARY 1, 2001, WITHOUT REGARD TO THE LIMITATION OF SECTION 261
3121(a)(1) OF THE INTERNAL REVENUE CODE, AND SUPPLEMENTAL 264
UNEMPLOYMENT COMPENSATION BENEFITS AS DEFINED IN SECTION 3402 OF 265
THE INTERNAL REVENUE CODE AS THAT SECTION EXISTED ON JANUARY 1, 266
2001.
(2) "OTHER PAYER" MEANS ANY PAYER OF ANY ITEM INCLUDED IN 268
THE WITHHOLDING BASE TO AN INDIVIDUAL, OTHER THAN THE EMPLOYER OF 269
THAT INDIVIDUAL OR THAT EMPLOYER'S AGENT. 270
(3) "EMPLOYEE" INCLUDES SELF-EMPLOYED INDIVIDUALS AND 272
OFFICERS.
(B) BEGINNING JANUARY 1, 2001, A MUNICIPAL CORPORATION 274
SHALL NOT REQUIRE ANY EMPLOYER, AGENT OF AN EMPLOYER, OR OTHER 276
PAYER TO DEDUCT AND WITHHOLD TAXES FROM ANY COMPENSATION OF AN 277
INDIVIDUAL OTHER THAN COMPENSATION INCLUDED IN THE WITHHOLDING 278
BASE OF THAT INDIVIDUAL.
(C)(1) BEGINNING JANUARY 1, 2001, A MUNICIPAL CORPORATION 281
SHALL NOT REQUIRE ANY EMPLOYER, AGENT OF AN EMPLOYER, OR OTHER 283
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PAYER TO DEDUCT AND WITHHOLD TAXES FROM THE WITHHOLDING BASE OF 284
AN INDIVIDUAL UNLESS THE TOTAL AMOUNT OF TAX REQUIRED TO BE 285
DEDUCTED AND WITHHELD ON ACCOUNT OF ALL EMPLOYEES OF THE EMPLOYER 286
FOR A CALENDAR YEAR BEGINNING ON OR AFTER THAT DATE EXCEEDS ONE 287
HUNDRED FIFTY DOLLARS.
(2) IF THE TOTAL AMOUNT OF TAX REQUIRED TO BE DEDUCTED AND 289
WITHHELD ON ACCOUNT OF ALL EMPLOYEES OF AN EMPLOYER FOR A 290
CALENDAR YEAR BEGINNING ON OR AFTER JANUARY 1, 2001, EXCEEDS ONE 291
HUNDRED FIFTY DOLLARS FOR A MUNICIPAL CORPORATION, THE MUNICIPAL 293
CORPORATION MAY REQUIRE THE EMPLOYER, AGENT, OR OTHER PAYER TO 294
DEDUCT AND WITHHOLD TAXES IN EACH ENSUING YEAR EVEN IF THE AMOUNT 295
REQUIRED TO BE DEDUCTED AND WITHHELD IN EACH OF THOSE ENSUING 296
YEARS IS ONE HUNDRED FIFTY DOLLARS OR LESS, EXCEPT AS OTHERWISE 297
PROVIDED IN DIVISION (C)(3) OF THIS SECTION. 298
(3) IF AN EMPLOYER, AGENT, OR OTHER PAYER IS REQUIRED TO 300
DEDUCT AND WITHHOLD TAXES FOR AN ENSUING YEAR UNDER DIVISION 301
(C)(2) OF THIS SECTION, AND THE TOTAL AMOUNT OF TAX REQUIRED TO 302
BE DEDUCTED AND WITHHELD UNDER THAT DIVISION IN EACH OF THREE 303
CONSECUTIVE ENSUING YEARS IS ONE HUNDRED FIFTY DOLLARS OR LESS, 304
THE MUNICIPAL CORPORATION SHALL NOT REQUIRE THE EMPLOYER, AGENT, 305
OR OTHER PAYER TO DEDUCT AND WITHHOLD TAXES IN ANY YEAR FOLLOWING 306
THE LAST OF THOSE CONSECUTIVE YEARS UNLESS THE AMOUNT REQUIRED TO 307
BE DEDUCTED AND WITHHELD IN ANY SUCH FOLLOWING YEAR EXCEEDS ONE 308
HUNDRED FIFTY DOLLARS. 309
Sec. 718.05 718.041. As of November 19, 1965, the 318
jurisdiction of the courts of Ohio to hear and determine actions 320
for the recovery of taxes on income which THAT is exempt under 322
section 718.04 of the Revised Code shall terminate.
Sec. 718.05. BEGINNING JANUARY 1, 2001, ANY TAXPAYER THAT 324
HAS REQUESTED AN EXTENSION FOR FILING A FEDERAL INCOME TAX RETURN 326
MAY REQUEST AN EXTENSION FOR THE FILING OF A MUNICIPAL INCOME TAX 327
RETURN. THE TAXPAYER SHALL MAKE THE REQUEST BY FILING A COPY OF 328
THE TAXPAYER'S REQUEST FOR A FEDERAL FILING EXTENSION WITH THE 329
INDIVIDUAL OR OFFICE CHARGED WITH THE ADMINISTRATION OF THE 330
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MUNICIPAL INCOME TAX. THE REQUEST FOR EXTENSION SHALL BE FILED 331
NOT LATER THAN THE LAST DAY FOR FILING THE MUNICIPAL INCOME TAX 332
RETURN AS PRESCRIBED BY ORDINANCE OR RULE OF THE MUNICIPAL 333
CORPORATION. A MUNICIPAL CORPORATION SHALL GRANT SUCH A REQUEST 334
FOR EXTENSION FOR A PERIOD NOT LESS THAN THE PERIOD OF THE 335
FEDERAL EXTENSION REQUEST. A MUNICIPAL CORPORATION MAY DENY A 336
TAXPAYER'S REQUEST FOR EXTENSION ONLY IF THE TAXPAYER FAILS TO 337
TIMELY FILE THE REQUEST, FAILS TO FILE A COPY OF THE REQUEST FOR 338
THE FEDERAL EXTENSION, OR OWES THE MUNICIPAL CORPORATION ANY 339
DELINQUENT INCOME TAX OR ANY PENALTY, INTEREST, ASSESSMENT, OR 340
OTHER CHARGE FOR THE LATE PAYMENT OR NONPAYMENT OF INCOME TAX. 341
THE GRANTING OF AN EXTENSION FOR FILING A MUNICIPAL CORPORATION 342
INCOME TAX RETURN DOES NOT EXTEND THE LAST DATE FOR PAYING THE 343
TAX WITHOUT PENALTY UNLESS THE MUNICIPAL CORPORATION GRANTS AN 344
EXTENSION OF THAT DATE.
Sec. 718.06. ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL 346
CORPORATION THAT IMPOSES A TAX ON THE INCOME OR NET PROFITS OF 347
CORPORATIONS SHALL ACCEPT FOR FILING A CONSOLIDATED INCOME TAX 348
RETURN FROM ANY AFFILIATED GROUP OF CORPORATIONS SUBJECT TO THE 349
MUNICIPAL CORPORATION'S TAX IF THAT AFFILIATED GROUP FILED FOR 350
THE SAME TAX REPORTING PERIOD A CONSOLIDATED RETURN FOR FEDERAL 351
INCOME TAX PURPOSES PURSUANT TO SECTION 1501 OF THE INTERNAL 353
REVENUE CODE. IF AN AFFILIATED GROUP OF CORPORATIONS FILES A 354
CONSOLIDATED RETURN UNDER THIS SECTION, THE MUNICIPAL CORPORATION 355
SHALL NOT PROHIBIT THE GROUP TO OFFSET THE OPERATING LOSSES OF 356
ONE OR MORE MEMBERS OF THE GROUP AGAINST THE OPERATING PROFITS OF 357
ONE OR MORE OTHER MEMBERS OF THE GROUP. 358
Sec. 718.07. (A) AS USED IN THIS SECTION: 360
(1) "INTERNET" MEANS THE INTERNATIONAL COMPUTER NETWORK OF 362
BOTH FEDERAL AND NONFEDERAL INTEROPERABLE PACKET SWITCHED DATA 363
NETWORKS, INCLUDING THE GRAPHICAL SUBNETWORK KNOWN AS THE WORLD 364
WIDE WEB.
(2) "GENERIC FORM" MEANS AN ELECTRONIC OR PAPER FORM 366
DESIGNED FOR THE REPORTING OF ANY TAX ON INCOME IMPOSED BY A 367
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MUNICIPAL CORPORATION AND THAT IS NOT PRESCRIBED BY A PARTICULAR 368
MUNICIPAL CORPORATION FOR THE REPORTING OF THAT MUNICIPAL 369
CORPORATION'S TAX ON INCOME.
(3) "RETURN PREPARER" MEANS ANY PERSON OTHER THAN A 371
TAXPAYER THAT IS AUTHORIZED BY A MUNICIPAL CORPORATION TO 372
COMPLETE AND FILE AN INCOME TAX RETURN, REPORT, OR OTHER DOCUMENT 373
FOR OR ON BEHALF OF A TAXPAYER. 374
(B) ON AND AFTER JANUARY 1, 2001, ANY MUNICIPAL 376
CORPORATION THAT REQUIRES TAXPAYERS TO FILE INCOME TAX RETURNS, 378
REPORTS, OR OTHER DOCUMENTS SHALL ACCEPT FOR FILING A GENERIC 379
FORM OF SUCH A RETURN, REPORT, OR DOCUMENT IF THE GENERIC FORM, 381
ONCE COMPLETED AND FILED, CONTAINS ALL OF THE INFORMATION 382
REQUIRED TO BE SUBMITTED WITH THE MUNICIPAL CORPORATION'S 383
PRESCRIBED RETURNS, REPORTS, OR DOCUMENTS, AND IF THE TAXPAYER OR 384
RETURN PREPARER FILING THE GENERIC FORM OTHERWISE COMPLIES WITH 385
RULES OR ORDINANCES OF THE MUNICIPAL CORPORATION GOVERNING THE 386
FILING OF RETURNS, REPORTS, OR DOCUMENTS.
(C) ON AND AFTER JANUARY 1, 2001, ANY MUNICIPAL 388
CORPORATION THAT REQUIRES TAXPAYERS TO FILE INCOME TAX RETURNS, 390
REPORTS, OR OTHER DOCUMENTS SHALL MAKE BLANKS OF SUCH RETURNS, 391
REPORTS, OR DOCUMENTS, AND ANY INSTRUCTIONS OR OTHER INFORMATION 393
PERTAINING THERETO, AVAILABLE TO THE PUBLIC ELECTRONICALLY 394
THROUGH THE INTERNET. THE MUNICIPAL CORPORATION SHALL PRESCRIBE 395
RULES GOVERNING THE FOLLOWING:
(1) THE APPROPRIATE METHODOLOGY, PROTOCOL, AND DATA FILE 397
STRUCTURE FOR THE ELECTRONIC FILING OF RETURNS, REPORTS, OR OTHER 398
DOCUMENTS; 399
(2) THE MANNER BY WHICH DOCUMENTS SHALL BE SIGNED BY THE 401
FILER OR THE FILER'S RETURN PREPARER IF SUCH A SIGNATURE IS 402
REQUIRED;
(3) THE MANNER BY WHICH THE MUNICIPAL CORPORATION 404
ACKNOWLEDGES THE RECEIPT OF RETURNS, REPORTS, AND OTHER DOCUMENTS 405
FILED ELECTRONICALLY; 406
(4) THE MANNER BY WHICH THE MUNICIPAL CORPORATION 408
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PRESERVES SUCH RETURNS, REPORTS, AND DOCUMENTS. 409
(D) ON OR BEFORE DECEMBER 31, 2001, ANY MUNICIPAL 411
CORPORATION SUBJECT TO DIVISION (B) OR (C) OF THIS SECTION SHALL 413
ESTABLISH AN ELECTRONIC SITE ACCESSIBLE THROUGH THE INTERNET THAT 414
INCORPORATES AN ELECTRONIC LINK TO THE SITE ESTABLISHED PURSUANT 415
TO SECTION 5703.49 OF THE REVISED CODE, AND SHALL PROVIDE TO THE 416
TAX COMMISSIONER THE UNIFORM RESOURCE LOCATOR OF THE SITE 417
ESTABLISHED PURSUANT TO THIS DIVISION. 418
Sec. 718.08. (A) AS USED IN THIS SECTION, "ESTIMATED TAX 420
LIABILITY" MEANS THE AMOUNT THAT A TAXPAYER ESTIMATES TO BE THE 421
TAXPAYER'S LIABILITY FOR A MUNICIPAL CORPORATION'S INCOME TAX FOR 422
A YEAR PRIOR TO APPLYING ANY CREDITS, ESTIMATED TAX PAYMENTS, OR 423
WITHHELD TAXES FOR THE YEAR, OR REFUNDS FROM A PRIOR YEAR. 424
(B) BEGINNING JANUARY 1, 2003, A MUNICIPAL CORPORATION 426
THAT REQUIRES A TAXPAYER TO REMIT PAYMENT OF ESTIMATED TAXES MAY 427
REQUIRE A TAXPAYER TO REMIT SUCH PAYMENTS ONLY AS PRESCRIBED BY 428
DIVISIONS (B)(1) TO (4) OF THIS SECTION, SUBJECT TO DIVISIONS (C) 430
AND (D) OF THIS SECTION:
(1) NOT MORE THAN TWENTY-TWO AND ONE-HALF PER CENT OF THE 432
TAXPAYER'S ESTIMATED TAX LIABILITY FOR THE CURRENT YEAR SHALL BE 433
REQUIRED TO HAVE BEEN REMITTED ON OR BEFORE THE THIRTIETH DAY OF 434
APRIL OR THE DAY ON WHICH THE ANNUAL TAX RETURN FOR THE PRIOR 436
YEAR IS REQUIRED TO BE FILED DISREGARDING ANY EXTENSION, AS 437
PRESCRIBED BY ORDINANCE OR RULE OF THE MUNICIPAL CORPORATION; 438
(2) NOT MORE THAN FORTY-FIVE PER CENT OF THE TAXPAYER'S 440
ESTIMATED TAX LIABILITY FOR THE CURRENT YEAR SHALL BE REQUIRED TO 441
HAVE BEEN REMITTED ON OR BEFORE THE THIRTY-FIRST DAY OF JULY; 442
(3) NOT MORE THAN SIXTY-SEVEN AND ONE-HALF PER CENT OF THE 444
TAXPAYER'S ESTIMATED TAX LIABILITY FOR THE CURRENT YEAR SHALL BE 445
REQUIRED TO HAVE BEEN REMITTED ON OR BEFORE THE THIRTY-FIRST DAY 446
OF OCTOBER;
(4) NOT MORE THAN NINETY PER CENT OF THE TAXPAYER'S 448
ESTIMATED TAX LIABILITY FOR THE PREVIOUS YEAR SHALL BE REQUIRED 449
TO HAVE BEEN REMITTED ON OR BEFORE THE THIRTY-FIRST DAY OF 450
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JANUARY.
(C) ANY AMOUNT DEDUCTED AND WITHHELD FOR TAXES FROM THE 452
COMPENSATION OF A TAXPAYER SHALL BE CONSIDERED AS ESTIMATED TAXES 453
PAID IN EQUAL AMOUNTS ON EACH OF THE PAYMENT DATES PRESCRIBED BY 455
DIVISION (B) OF THIS SECTION.
(D) A MUNICIPAL CORPORATION SHALL NOT IMPOSE ANY PENALTY, 457
INTEREST, INTEREST PENALTY, OR OTHER ASSESSMENT OR CHARGE ON A 458
TAXPAYER IN EITHER OF THE FOLLOWING CIRCUMSTANCES: 459
(1) THE TAXPAYER HAS NOT RESIDED IN THE MUNICIPAL 461
CORPORATION CONTINUOUSLY SINCE THE FIRST DAY OF JANUARY OF THE 462
CURRENT CALENDAR YEAR; 463
(2) THE AMOUNT THE TAXPAYER HAS REMITTED PURSUANT TO 465
DIVISION (B) OF THIS SECTION EQUALS AT LEAST ONE HUNDRED PER CENT 466
OF THE TAXPAYER'S TAX LIABILITY FOR THE PRECEDING YEAR AS SHOWN 467
ON THE RETURN FILED BY THE TAXPAYER FOR THE PRECEDING YEAR, 468
PROVIDED THAT THE RETURN FOR THE PRECEDING YEAR REFLECTED A 469
TWELVE-MONTH PERIOD AND THE TAXPAYER FILED A RETURN FOR THE 470
PRECEDING YEAR.
Sec. 733.85 718.11. (A) As used in this section, 479
"municipal corporation" means any municipal corporation, 480
including a municipal corporation organized under Chapter 705. of 481
the Revised Code, that is not operating under a charter adopted 483
or amended pursuant to Section 7 or 9 of Article XVIII, Ohio 484
Constitution.
(B)(1) The legislative authority of a municipal 486
corporation may provide, by ordinance or resolution, for the 487
method of appointing and removing an officer who shall be 488
responsible for the collection and deposit to the municipal 489
treasury of municipal income taxes and the enforcement and 490
administration of the municipal corporation's income tax 491
ordinances, resolutions, and rules, including the powers, duties, 492
and functions of the responsible administering officer and 493
employees serving under his THE ADMINISTERING OFFICER'S direction 495
and control. If no such ordinance or resolution is adopted, the 496
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city auditor or village clerk shall be the officer responsible 497
for the collection and deposit to the municipal treasury of 498
income taxes and the enforcement and administration of the 499
municipal corporation's income tax ordinances, resolutions, and 500
rules.
(C)(2) The legislative authority of a municipal 502
corporation may, by ordinance or resolution, authorize the 503
responsible administering officer described in division (B)(A)(1) 504
of this section to promulgate ADOPT, revise, and repeal rules 506
with respect to the administration and enforcement of the 508
municipal corporation's income tax ordinances and resolutions. 509
The rules shall be filed with the clerk of the legislative 510
authority and made available for public inspection at the offices 511
of the administering officer and no other publication shall be 512
required. The rules shall not conflict with the municipal 513
corporation's ordinances and resolutions OR THIS CHAPTER. 514
(3) ON AND AFTER JANUARY 1, 2001, EACH MUNICIPAL 516
CORPORATION THAT IMPOSES A TAX ON INCOME SHALL PUBLISH THROUGH 517
THE INTERNET ELECTRONIC VERSIONS OF ANY RULES OR ORDINANCES 518
GOVERNING THE TAX, INCLUDING BUT NOT LIMITED TO THE RATE OF TAX; 519
PERSONS REQUIRED TO PAY OR WITHHOLD INCOME TAXES; INSTRUCTIONS 520
FOR FILING ANY PRESCRIBED RETURNS, REPORTS, OR OTHER DOCUMENTS; 521
PRESCRIBED DATES FOR FILING OR PAYING TAXES INCLUDING ESTIMATED 522
TAXES; PENALTIES, INTEREST, ASSESSMENT, AND OTHER COLLECTION 523
REMEDIES; RIGHTS OF TAXPAYERS TO APPEAL; AND PROCEDURES FOR 524
FILING APPEALS. AS USED IN THIS DIVISION, "INTERNET" HAS THE 525
SAME MEANING AS IN SECTION 718.07 OF THE REVISED CODE. 526
(D)(B) WHENEVER THE RESPONSIBLE ADMINISTERING OFFICER 528
ISSUES A DECISION OR RULING REGARDING A TAXPAYER'S MUNICIPAL 530
INCOME TAX OBLIGATION, THE OFFICER SHALL NOTIFY THE TAXPAYER AT 531
THE SAME TIME OF THE TAXPAYER'S RIGHT TO APPEAL THE DECISION OR 532
RULING AND OF THE MANNER IN WHICH THE TAXPAYER MAY APPEAL THE 533
DECISION OR RULING. 534
(C) The legislative authority of a municipal corporation 536
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may SHALL provide, by ordinance or resolution, for the 537
establishment, composition, AND method of appointment and 539
removal, AND term of office, if any, and powers, duties, 540
functions, and procedures OF MEMBERS, of an appeals board to hear 541
appeals from decisions and rulings of municipal administrative 543
officers, other than the director of law or other chief legal 544
officer of the municipal corporation, with respect to municipal 545
income taxes. The appeals board shall have jurisdiction with 546
respect to appeals as provided by ordinance or resolution. Every 547
final order, adjudication, or decision of the appeals board shall 548
be subject to review pursuant to Chapter 2506. of the Revised 549
Code. IF
(E) If authorized by ordinance or resolution, and 551
notwithstanding any other provision of the Revised Code to the 552
contrary, any elected or appointed administrative officer of the 553
municipal corporation may be appointed as a member of the appeals 554
board authorized REQUIRED by division (D)(C) of this section or 556
designated as the responsible administering officer described in 557
division (B)(A) of this section. 559
(F) This section shall apply to any municipal ordinance or 561
resolution existing at the effective date of this section or 562
thereafter enacted or amended. 563
(D) ANY PERSON AGGRIEVED BY A DECISION OR RULING BY THE 565
RESPONSIBLE ADMINISTERING OFFICER APPOINTED UNDER DIVISION (A) OF 566
THIS SECTION MAY APPEAL THE DECISION OR RULING TO THE BOARD OF 567
APPEAL CREATED UNDER THIS SECTION BY FILING WITH THE BOARD A 569
WRITTEN REQUEST AND COPIES OF ALL RETURNS AND OTHER DOCUMENTS 570
PERTAINING TO THE DECISION OR RULING. THE REQUEST AND OTHER 571
DOCUMENTS SHALL BE FILED WITH THE BOARD NOT LATER THAN THIRTY 572
DAYS AFTER NOTICE OF THE DECISION OR RULING IS ISSUED BY THE 573
ADMINISTERING OFFICER. THE REQUEST SHALL STATE THE ERRORS 574
COMPLAINED OF IN THE APPEAL.
THE BOARD OF APPEAL SHALL CONDUCT A HEARING WITHIN 576
FORTY-FIVE DAYS AFTER RECEIVING THE REQUEST, UNLESS THE TAXPAYER 577
15
WAIVES A HEARING. IF THE TAXPAYER WAIVES A HEARING, THE BOARD 578
MAY HEAR THE APPEAL ON THE RECORD AND ANY DOCUMENTS OR OTHER 579
EVIDENCE FILED BY THE TAXPAYER OR THE RESPONSIBLE ADMINISTERING 580
OFFICER. IF THE TAXPAYER DOES NOT WAIVE THE HEARING, THE 581
TAXPAYER MAY APPEAR BEFORE THE BOARD AND MAY BE REPRESENTED BY AN 582
ATTORNEY AT LAW, CERTIFIED PUBLIC ACCOUNTANT, OR OTHER 583
REPRESENTATIVE. A HEARING MAY BE CONTINUED IF AGREED TO BY THE 584
TAXPAYER AND THE BOARD. THE BOARD SHALL ISSUE A DECISION ON THE 585
APPEAL WITHIN NINETY DAYS AFTER THE BOARD'S FINAL HEARING ON THE 586
APPEAL, AND SEND NOTICE OF ITS DECISION BY ORDINARY MAIL TO THE 587
PETITIONER WITHIN FIFTEEN DAYS AFTER ISSUING THE DECISION. 588
EACH BOARD OF APPEAL CREATED PURSUANT TO THIS SECTION SHALL 590
ADOPT RULES GOVERNING ITS PROCEDURES AND SHALL KEEP A RECORD OF 591
ITS TRANSACTIONS. SUCH RECORDS ARE NOT PUBLIC RECORDS AVAILABLE 592
FOR INSPECTION UNDER SECTION 149.43 OF THE REVISED CODE. 593
HEARINGS REQUESTED BY A TAXPAYER BEFORE A BOARD OF APPEAL CREATED 594
PURSUANT TO THIS SECTION ARE NOT MEETINGS OF A PUBLIC BODY 595
SUBJECT TO SECTION 121.22 OF THE REVISED CODE.
Sec. 718.06 718.12. (A) Civil actions to recover 604
municipal income taxes and penalties and interest on municipal 605
income taxes shall be brought within three years after the tax 606
was due or the return was filed, whichever is later. 607
(B) Prosecutions for an offense made punishable under a 609
municipal ordinance imposing an income tax shall be commenced 610
within three years after the commission of the offense, provided 611
that in the case of fraud, failure to file a return, or the 612
omission of twenty-five per cent or more of income required to be 613
reported, prosecutions may be commenced within six years after 614
the commission of the offense. 615
(C) Claims for refund of municipal income taxes must be 617
brought within the time limitation provided in division (A) of 618
this section. 619
(D) Interest shall be allowed and paid on any overpayment 621
by a taxpayer of any municipal income tax obligation from the 622
16
date of the overpayment until the date of the refund of the 623
overpayment, except that if any overpayment is refunded within 624
ninety days after the final filing date of the annual return or 625
ninety days after the complete return is filed, whichever is 626
later, no interest shall be allowed on the refunded overpayment. 627
For purposes of computing the payment of interest on 628
overpayments, no amount of tax for any taxable year shall be 629
treated as having been paid before the date on which the tax 630
return for that year was due without regard to any extension of 631
time for filing that return. The interest shall be paid at the 633
rate of interest prescribed by section 5703.47 of the Revised
Code.
Sec. 718.07 718.13. Any information gained as a result of 642
returns, investigations, hearings, or verifications required or 643
authorized by this chapter or by a charter or ordinance of a 644
municipal corporation levying an income tax pursuant to this 645
chapter is confidential, and no person shall disclose such 646
information except in accordance with a proper judicial order or 647
in connection with the performance of that person's official 648
duties or the official business of the municipal corporation as 649
authorized by this chapter or the charter or ordinance 650
authorizing the levy. The tax administrator of the municipal 651
corporation may furnish copies of returns filed under this 652
chapter to the internal revenue service and to the tax 653
commissioner. 654
Sec. 718.14. (A) AS USED IN THIS SECTION: 656
(1) "S CORPORATION" MEANS A CORPORATION THAT HAS MADE AN 658
ELECTION UNDER SUBCHAPTER S OF CHAPTER 1 OF SUBTITLE A OF THE 660
INTERNAL REVENUE CODE FOR ITS TAXABLE YEAR. 661
(2) "LIMITED LIABILITY COMPANY" MEANS A LIMITED LIABILITY 663
COMPANY FORMED UNDER CHAPTER 1705. OF THE REVISED CODE OR UNDER 664
THE LAWS OF ANOTHER STATE. 665
(3) "PASS-THROUGH ENTITY" MEANS A PARTNERSHIP, S 667
CORPORATION, LIMITED LIABILITY COMPANY, OR ANY OTHER PERSON THE 668
17
INCOME OR PROFITS FROM WHICH ARE GIVEN PASS-THROUGH TREATMENT 669
UNDER THE INTERNAL REVENUE CODE. 670
(4) "INCOME FROM A PASS-THROUGH ENTITY" MEANS PARTNERSHIP 672
INCOME OF PARTNERS, DISTRIBUTIVE SHARES OF SHAREHOLDERS OF AN S 673
CORPORATION, MEMBERSHIP INTERESTS OF MEMBERS OF A LIMITED 674
LIABILITY COMPANY, OR OTHER DISTRIBUTIVE OR PROPORTIONATE 675
OWNERSHIP SHARES OF OTHER PASS-THROUGH ENTITIES. 676
(B) ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL 678
CORPORATION THAT IMPOSES A TAX THAT APPLIES TO INCOME OF A 680
PASS-THROUGH ENTITY SHALL GRANT A CREDIT TO TAXPAYERS THAT RESIDE
OR ARE DOMICILED IN THE MUNICIPAL CORPORATION FOR INCOME FROM A 681
PASS-THROUGH ENTITY THAT DOES NOT CONDUCT BUSINESS IN THE 682
MUNICIPAL CORPORATION. THE AMOUNT OF THE CREDIT SHALL EQUAL THE 683
LESSER OF THE FOLLOWING AMOUNTS, SUBJECT TO DIVISION (C) OF THIS 684
SECTION:
(1) THE AMOUNT, IF ANY, OF TAX PAID BY THE PASS-THROUGH 686
ENTITY TO ANOTHER MUNICIPAL CORPORATION IN THIS STATE, 687
APPORTIONED RATABLY ACCORDING TO THE OWNERSHIP INTEREST OF THE 688
TAXPAYER IN PROPORTION TO THE OWNERSHIP INTEREST OF ALL PERSONS 689
HAVING AN OWNERSHIP INTEREST IN THE ENTITY; 690
(2) THE AMOUNT OF TAX THAT WOULD BE IMPOSED ON THE 692
PASS-THROUGH ENTITY BY THE MUNICIPAL CORPORATION IN WHICH THE 693
TAXPAYER RESIDES OR IS DOMICILED IF THE PASS-THROUGH ENTITY 694
CONDUCTED BUSINESS IN THE MUNICIPAL CORPORATION, APPORTIONED 695
RATABLY ACCORDING TO THE OWNERSHIP INTEREST OF THE TAXPAYER IN 696
PROPORTION TO THE OWNERSHIP INTEREST OF ALL PERSONS HAVING AN 697
OWNERSHIP INTEREST IN THE ENTITY.
(C) IF A MUNICIPAL CORPORATION GRANTS A CREDIT FOR A 699
PERCENTAGE, LESS THAN ONE HUNDRED PER CENT, OF THE AMOUNT OF 700
INCOME TAXES PAID BY AN INDIVIDUAL WHO RESIDES IN THE MUNICIPAL 701
CORPORATION TO ANOTHER MUNICIPAL CORPORATION, THE AMOUNT OF 702
CREDIT OTHERWISE REQUIRED BY DIVISION (B) OF THIS SECTION SHALL 703
BE MULTIPLIED BY THAT PERCENTAGE. 704
(D) ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL 706
18
CORPORATION THAT IMPOSES A TAX THAT APPLIES TO INCOME FROM A 708
PASS-THROUGH ENTITY IN THE HANDS OF THE PARTNER, SHAREHOLDER, 709
MEMBER, OR OTHER PERSON WITH AN OWNERSHIP INTEREST IN THE ENTITY, 710
OR IMPOSES A TAX THAT APPLIES TO THE INCOME OR NET PROFITS OF A 711
PASS-THROUGH ENTITY IN THE HANDS OF THE ENTITY SHALL SPECIFY BY 712
ORDINANCE OR RULE WHETHER THE TAX APPLIES TO THE INCOME FROM A 713
PASS-THROUGH ENTITY IN THE HANDS OF THE PARTNER, SHAREHOLDER, 714
MEMBER, OR OTHER PERSON WITH AN OWNERSHIP INTEREST IN THE ENTITY, 715
OR APPLIES TO THE INCOME OR NET PROFITS OF A PASS-THROUGH ENTITY 716
IN THE HANDS OF THE ENTITY. 717
Sec. 718.08 718.15. A municipal corporation, by ordinance, 726
may grant a refundable or nonrefundable credit against its tax on 728
income to a taxpayer that also receives a tax credit under 729
section 122.17 of the Revised Code. If a credit is granted under 730
this section, it shall be measured as a percentage of the new
income tax revenue the municipal corporation derives from new 731
employees of the taxpayer and shall be for a term not exceeding 732
ten years. Before the municipal corporation passes an ordinance 733
granting a credit, the municipal corporation and the taxpayer 734
shall enter into an agreement specifying all the conditions of 735
the credit.
Sec. 718.03 718.16. A municipal corporation shall grant a 744
credit against its tax on income to a resident of the municipal 746
corporation who works in a joint economic development zone 747
created under section 715.691 or a joint economic development 748
district created under section 715.72 of the Revised Code to the 749
same extent that it grants a credit against its tax on income to
its residents who are employed in another municipal corporation. 750
Sec. 5703.49. AS USED IN THIS SECTION, "INTERNET" MEANS 752
THE INTERNATIONAL COMPUTER NETWORK OF BOTH FEDERAL AND NONFEDERAL 753
INTEROPERABLE PACKET SWITCHED DATA NETWORKS, INCLUDING THE 754
GRAPHICAL SUBNETWORK KNOWN AS THE WORLD WIDE WEB. 755
ON OR BEFORE DECEMBER 31, 2001, THE TAX COMMISSIONER SHALL 757
ESTABLISH AN ELECTRONIC SITE ACCESSIBLE THROUGH THE INTERNET THAT 758
19
INCORPORATES ELECTRONIC LINKS TO EACH SITE ESTABLISHED PURSUANT 759
TO DIVISION (D) OF SECTION 718.07 OF THE REVISED CODE FOR WHICH 760
THE MUNICIPAL CORPORATION THAT ESTABLISHED THE SITE HAS PROVIDED 761
A UNIFORM RESOURCE LOCATOR PURSUANT TO THAT SECTION, AND SHALL 762
MAINTAIN THE SITE THEREAFTER. 763
Section 2. That existing sections 718.01, 718.02, 718.03, 765
718.05, 718.06, 718.07, 718.08, and 733.85 of the Revised Code 766
are hereby repealed. 767
Section 3. Section 718.01 of the Revised Code is presented 769
in this act as a composite of the section as amended by both Am. 771
Sub. S.B. 3 and Am. Sub. H.B. 283 of the 123rd General Assembly,
with the new language of neither of the acts shown in capital 772
letters. This is in recognition of the principle stated in 773
division (B) of section 1.52 of the Revised Code that such 774
amendments are to be harmonized where not substantively 775
irreconcilable and constitutes a legislative finding that such is 776
the resulting version in effect prior to the effective date of 777
this act.