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|
As Introduced
123rd General Assembly
Regular Session
1999-2000 | H. B. No. 477 |
REPRESENTATIVES MOTTLEY-THOMAS
A BILL
To amend sections 718.01, 718.02, 718.05, and 733.85; to amend, for the
purpose of adopting new section numbers as indicated in parentheses, sections
718.03 (718.16), 718.05 (718.041), 718.06 (718.12), 718.07 (718.13), 718.08
(718.15), and 733.85 (718.11); and to enact new sections 718.03, 718.05,
718.06, 718.07, and 718.08 and sections 718.14 and 5703.49 of the Revised Code
to modify the authority of municipal corporations to impose income taxes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 718.01, 718.02, 718.05, and 733.85 be
amended, sections 718.03 (718.16), 718.05 (718.041), 718.06
(718.12), 718.07 (718.13), 718.08 (718.15), and 733.85 (718.11) be
amended for the purpose of adopting new section numbers as
indicated in parentheses, and new sections 718.03, 718.05, 718.06,
718.07, and 718.08 and sections 718.14 and 5703.49 of the Revised Code be
enacted to read as follows:
Sec. 718.01. (A) As used in this chapter:
(1) "Internal Revenue Code" means the Internal Revenue Code of
1986, 100
Stat. 2085, 26 U.S.C. 1, as amended.
(2) "Schedule C" means internal revenue service schedule C
filed by a
taxpayer pursuant to the Internal Revenue Code.
(3) "Form 2106" means internal revenue service form 2106 filed by a taxpayer
pursuant to the Internal Revenue Code.
(4) "Intangible income" means income of any of the following types: income
yield, interest, 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 Revised Code.
(B) No municipal corporation with respect to that income
that it may tax
shall tax such income at other than a uniform rate.
(C) No municipal corporation shall levy a tax on income at a rate in excess
of one per cent without having obtained the approval of the excess by a
majority of the electors of the municipality voting on the question at a
general, primary, or special election. The legislative authority of the
municipal corporation shall file with the board of elections at least
seventy-five days before the day of the election a copy of the ordinance
together with a resolution specifying the date the election is to be held and
directing the board of elections to conduct the election. The ballot shall be
in the following form: "Shall the Ordinance providing for a ... per cent levy
on income for (Brief description of the purpose of the proposed levy) be
passed?
FOR THE INCOME TAX
AGAINST THE INCOME TAX"
In the event of an affirmative vote, the proceeds of the
levy may be used only for the specified purpose.
(D)(1) Except as otherwise provided in division (D)(2) of this section, no
municipal corporation shall exempt from a tax on income, compensation for
personal services of individuals over eighteen years of age or the net profit
from a business or profession.
(2) The legislative authority of a municipal corporation may, by ordinance or
resolution, exempt from a tax on income any compensation arising from the
grant, 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.
(E) Nothing in this section shall prevent a municipal corporation from
permitting lawful deductions as prescribed by ordinance. If a taxpayer's
taxable income includes income against which the taxpayer has taken a
deduction for federal income tax purposes as reportable on the taxpayer's form
2106, and against which a like deduction has not been allowed by the municipal
corporation, the municipal corporation shall deduct from the taxpayer's
taxable income an amount equal to the deduction shown on such form allowable
against such income, to the extent not otherwise so allowed as a deduction by
the municipal corporation. In the case of a taxpayer who has a net profit
from a business or profession that is operated as a sole proprietorship, no
municipal corporation may tax or use as the base for determining the amount of
the net profit that shall be considered as having a taxable situs in the
municipal corporation, a greater amount than the net profit reported by the
taxpayer on schedule C filed in reference to the year in question as taxable
income from such sole proprietorship, except as otherwise specifically
provided by ordinance or regulation.
(F) No municipal corporation shall tax any of the following:
(1) The military pay or allowances of members of the armed forces of the
United States and of members of their reserve components, including the Ohio
national guard;
(2) The income of religious, fraternal, charitable, scientific, literary, or
educational institutions to the extent that such income is derived from
tax-exempt real estate, tax-exempt tangible or intangible property, or
tax-exempt activities;
(3) Except as otherwise provided in division (G) of this section, intangible
income;
(4) Compensation paid under section 3501.28 or 3501.36 of the Revised Code to
a person serving as a precinct election official, to the extent that such
compensation does not exceed one thousand dollars annually. Such compensation
in excess of one thousand dollars may be subjected to taxation by a municipal
corporation. A municipal corporation shall not require the payer of such
compensation to withhold any tax from that compensation.
(5) Compensation paid to an employee of a transit authority, regional transit
authority, or regional transit commission created under Chapter 306. of the
Revised Code for operating a transit bus or other motor vehicle for the
authority or commission in or through the municipal corporation, unless the
bus or vehicle is operated on a regularly scheduled route, the operator is
subject to such a tax by reason of residence or domicile in the municipal
corporation, or the headquarters of the authority or commission is located
within the municipal corporation.;
(6) The income of a public utility when that public utility is
subject to the tax levied under section 5727.24 or 5727.30 of the Revised
Code, except starting January 1, 2002, the income of an
electric company or combined company, as defined in section 5727.01 of the
Revised Code, may
be taxed by a municipal corporation. For a combined company, only the income
attributed from the activity of an electric company shall be subject to
taxation by a municipal corporation. The income of an electric
company or combined company subject to taxation by a municipal
corporation shall be computed by taking into account the
adjustments provided by division (I)(16) of section 5733.04 of the
Revised Code.
(7) ON AND AFTER JANUARY 1, 2001, ITEMS EXCLUDED FROM
FEDERAL GROSS INCOME PURSUANT TO SECTION 107 OF THE INTERNAL
REVENUE CODE;
(8) ON AND AFTER JANUARY 1, 2001, COMPENSATION PAID TO AN
EMPLOYEE OR INDEPENDENT CONTRACTOR FOR PERSONAL SERVICES PERFORMED
WITHIN THE MUNICIPAL CORPORATION IF THE EMPLOYEE OR CONTRACTOR DOES NOT
RESIDE IN THE MUNICIPAL CORPORATION, THE PRINCIPAL PLACE OF
BUSINESS OF THE EMPLOYEE'S EMPLOYER OR OF THE CONTRACTOR IS
LOCATED OUTSIDE THE MUNICIPAL CORPORATION, AND THE EMPLOYEE OR
CONTRACTOR PERFORMS SUCH PERSONAL SERVICES IN THE MUNICIPAL
CORPORATION ON TWELVE OR FEWER DAYS IN THE CALENDAR YEAR.
DIVISION (F)(8) OF THIS SECTION DOES NOT APPLY TO PROFESSIONAL
ENTERTAINERS OR PROFESSIONAL ATHLETES.
(G) Any municipal corporation that taxes any type of intangible income on
March 29, 1988, pursuant to Section 3 of Amended Substitute Senate Bill No.
238 of the 116th general assembly, may continue to tax that type of income
after 1988 if a majority of the electors of the municipal corporation voting
on the question of whether to permit the taxation of that type of intangible
income after 1988 vote in favor thereof at an election held on November 8,
1988.
(H) Nothing in this section or section 718.02 of the Revised Code
shall authorize the levy of any tax on income that a municipal
corporation is not
authorized to levy under existing laws or shall require a municipal
corporation to allow a deduction from taxable income for losses incurred from
a sole proprietorship or partnership.
Sec. 718.02. (A) In the taxation of income which THAT is
subject to municipal income taxes, if the books and records of a
taxpayer conducting a business or profession both within and
without the boundaries of a municipal corporation shall disclose
with reasonable accuracy what portion of its net profit is
attributable to that part of the business or profession conducted
within the boundaries of the municipal corporation, then only
such portion shall be considered as having a taxable situs in
such municipal corporation for purposes of municipal income
taxation. In the absence of such records, net profit from a
business or profession conducted both within and without the
boundaries of a municipal corporation shall be considered as
having a taxable situs in such municipal corporation for purposes
of municipal income taxation in the same proportion as the
average ratio of:
(1) The average net book value of the real and tangible
personal property owned or used by the taxpayer in the business
or profession in such municipal corporation during the taxable
period to the average net book value 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.
As used in the preceding paragraph, 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 persons employed in the business or
profession for services performed in such municipal corporation
to wages, salaries, and other compensation paid during the same
period to persons employed in the business or profession,
wherever their services are performed, EXCLUDING COMPENSATION
DESCRIBED IN DIVISION (F)(8) OF SECTION 718.01 of the Revised Code;
(3) Gross receipts of the business or profession from
sales made and services performed during the taxable period in
such municipal corporation to gross receipts of the business or
profession during the same period from sales and services,
wherever made or performed.
In the event that IF the foregoing allocation formula does not
produce an equitable result, another basis may, under uniform
regulations be substituted, UNDER UNIFORM
REGULATIONS, so as to produce such AN EQUITABLE
result.
(B) As used in division (A) of this section, "sales made
in a municipal corporation" mean:
(1) All sales of tangible personal property which is
delivered within such municipal corporation regardless of where
title passes if shipped or delivered from a stock of goods within
such municipal corporation;
(2) All sales of tangible personal property which is
delivered within such municipal corporation regardless of where
title passes even though transported from a point outside such
municipal corporation if 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;
(3) All sales of tangible personal property which is
shipped from a place within such municipal corporation to
purchasers outside such municipal corporation regardless of where
title passes if the taxpayer is not, through its own employees,
regularly engaged in the solicitation or promotion of sales at
the place where delivery is made.
Sec. 718.03. (A) AS USED IN THIS SECTION:
(1) "WITHHOLDING BASE" INCLUDES ONLY WAGES AS DEFINED IN SECTION
3121 OF THE INTERNAL REVENUE CODE AS THAT SECTION
EXISTED ON
JANUARY 1, 2001, WITHOUT REGARD TO THE LIMITATION OF SECTION
3121(a)(1) OF THE INTERNAL REVENUE
CODE, AND
SUPPLEMENTAL UNEMPLOYMENT COMPENSATION BENEFITS AS DEFINED IN SECTION
3402 OF THE INTERNAL REVENUE CODE AS THAT SECTION
EXISTED ON JANUARY 1, 2001.
(2) "OTHER PAYER" MEANS ANY PAYER OF ANY ITEM INCLUDED IN THE
WITHHOLDING BASE TO AN INDIVIDUAL, OTHER THAN THE EMPLOYER OF THAT
INDIVIDUAL OR THAT EMPLOYER'S AGENT.
(3) "EMPLOYEE" INCLUDES SELF-EMPLOYED INDIVIDUALS AND OFFICERS.
(B) BEGINNING JANUARY 1, 2001, A MUNICIPAL CORPORATION
SHALL NOT REQUIRE ANY EMPLOYER, AGENT
OF AN EMPLOYER, OR OTHER PAYER TO DEDUCT AND WITHHOLD TAXES FROM ANY
COMPENSATION OF AN INDIVIDUAL OTHER THAN COMPENSATION
INCLUDED IN THE WITHHOLDING BASE OF THAT INDIVIDUAL.
(C)(1) BEGINNING JANUARY 1, 2001, A MUNICIPAL
CORPORATION
SHALL NOT REQUIRE ANY EMPLOYER,
AGENT OF AN EMPLOYER, OR OTHER PAYER TO DEDUCT AND WITHHOLD TAXES
FROM THE WITHHOLDING BASE OF AN INDIVIDUAL UNLESS THE TOTAL AMOUNT
OF TAX REQUIRED TO BE DEDUCTED AND WITHHELD ON ACCOUNT OF ALL
EMPLOYEES OF THE EMPLOYER FOR A CALENDAR YEAR BEGINNING ON OR
AFTER THAT DATE EXCEEDS ONE HUNDRED FIFTY DOLLARS.
(2) IF THE TOTAL AMOUNT OF TAX REQUIRED TO BE DEDUCTED AND
WITHHELD ON ACCOUNT OF ALL EMPLOYEES OF AN EMPLOYER FOR A CALENDAR YEAR
BEGINNING ON OR AFTER JANUARY 1, 2001, EXCEEDS ONE HUNDRED FIFTY
DOLLARS
FOR A MUNICIPAL CORPORATION, THE MUNICIPAL CORPORATION MAY REQUIRE
THE EMPLOYER, AGENT, OR OTHER PAYER TO DEDUCT AND WITHHOLD TAXES
IN EACH ENSUING YEAR EVEN IF THE AMOUNT REQUIRED TO BE DEDUCTED
AND WITHHELD IN EACH OF THOSE ENSUING YEARS IS ONE HUNDRED FIFTY
DOLLARS OR LESS, EXCEPT AS OTHERWISE PROVIDED IN DIVISION (C)(3)
OF THIS SECTION.
(3) IF AN EMPLOYER, AGENT, OR OTHER PAYER IS REQUIRED TO DEDUCT
AND WITHHOLD TAXES FOR AN ENSUING YEAR UNDER DIVISION (C)(2) OF
THIS SECTION, AND THE TOTAL AMOUNT OF TAX REQUIRED TO BE DEDUCTED AND WITHHELD
UNDER THAT DIVISION IN EACH OF THREE
CONSECUTIVE ENSUING YEARS IS ONE HUNDRED FIFTY DOLLARS OR LESS,
THE MUNICIPAL CORPORATION SHALL NOT REQUIRE THE EMPLOYER, AGENT,
OR OTHER PAYER TO DEDUCT AND WITHHOLD TAXES IN ANY YEAR FOLLOWING
THE LAST OF THOSE CONSECUTIVE YEARS UNLESS THE AMOUNT REQUIRED TO
BE DEDUCTED AND WITHHELD IN ANY SUCH FOLLOWING YEAR EXCEEDS ONE
HUNDRED FIFTY DOLLARS.
Sec. 718.05 718.041. As of November 19, 1965, the
jurisdiction of the courts of Ohio
to hear and determine actions for the recovery of taxes on income which
THAT is
exempt under section 718.04 of the Revised Code shall terminate.
Sec. 718.05. BEGINNING JANUARY 1, 2001, ANY TAXPAYER THAT HAS
REQUESTED AN EXTENSION FOR
FILING A FEDERAL INCOME TAX RETURN MAY REQUEST AN EXTENSION FOR
THE FILING OF A MUNICIPAL INCOME TAX RETURN. THE TAXPAYER SHALL
MAKE THE REQUEST BY FILING A COPY OF THE TAXPAYER'S REQUEST FOR A
FEDERAL FILING EXTENSION WITH THE INDIVIDUAL OR OFFICE CHARGED
WITH THE ADMINISTRATION OF THE MUNICIPAL INCOME TAX. THE REQUEST
FOR EXTENSION SHALL BE FILED NOT LATER THAN THE LAST DAY FOR
FILING THE MUNICIPAL INCOME TAX RETURN AS PRESCRIBED BY ORDINANCE
OR RULE OF THE MUNICIPAL CORPORATION. A MUNICIPAL CORPORATION
SHALL GRANT SUCH A REQUEST FOR EXTENSION FOR A PERIOD NOT LESS
THAN THE PERIOD OF THE FEDERAL EXTENSION REQUEST. A MUNICIPAL
CORPORATION MAY DENY A TAXPAYER'S REQUEST FOR EXTENSION ONLY IF
THE TAXPAYER FAILS TO TIMELY FILE THE REQUEST, FAILS TO FILE A
COPY OF THE REQUEST FOR THE FEDERAL EXTENSION, OR OWES THE
MUNICIPAL CORPORATION ANY DELINQUENT INCOME TAX OR ANY PENALTY,
INTEREST, ASSESSMENT, OR OTHER CHARGE FOR THE LATE PAYMENT OR
NONPAYMENT OF INCOME TAX. THE GRANTING OF AN EXTENSION FOR FILING
A MUNICIPAL CORPORATION INCOME TAX RETURN DOES NOT EXTEND THE LAST
DATE FOR PAYING THE TAX WITHOUT PENALTY UNLESS THE MUNICIPAL
CORPORATION GRANTS AN EXTENSION OF THAT DATE.
Sec. 718.06. ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL
CORPORATION THAT IMPOSES A TAX ON THE INCOME OR NET PROFITS OF CORPORATIONS
SHALL ACCEPT FOR FILING A CONSOLIDATED INCOME TAX
RETURN FROM ANY AFFILIATED GROUP OF CORPORATIONS SUBJECT TO THE
MUNICIPAL CORPORATION'S TAX IF THAT AFFILIATED GROUP FILED FOR THE
SAME TAX REPORTING PERIOD A CONSOLIDATED RETURN FOR FEDERAL INCOME
TAX PURPOSES PURSUANT TO SECTION 1501 OF THE INTERNAL
REVENUE
CODE. IF AN AFFILIATED GROUP OF CORPORATIONS FILES A CONSOLIDATED
RETURN UNDER THIS SECTION, THE MUNICIPAL CORPORATION SHALL NOT
PROHIBIT THE GROUP TO OFFSET THE OPERATING LOSSES OF ONE OR MORE
MEMBERS OF THE GROUP AGAINST THE OPERATING PROFITS OF ONE OR MORE
OTHER MEMBERS OF THE GROUP.
Sec. 718.07. (A) AS USED IN THIS SECTION:
(1) "INTERNET" MEANS THE INTERNATIONAL COMPUTER NETWORK OF BOTH
FEDERAL AND NONFEDERAL INTEROPERABLE PACKET SWITCHED DATA NETWORKS,
INCLUDING THE GRAPHICAL SUBNETWORK KNOWN AS THE WORLD WIDE WEB.
(2) "GENERIC FORM" MEANS AN ELECTRONIC OR PAPER FORM DESIGNED FOR
THE REPORTING OF ANY TAX ON INCOME IMPOSED BY A MUNICIPAL CORPORATION
AND THAT IS NOT PRESCRIBED BY A PARTICULAR MUNICIPAL CORPORATION FOR THE
REPORTING OF THAT MUNICIPAL CORPORATION'S TAX ON INCOME.
(3) "RETURN PREPARER" MEANS ANY PERSON OTHER THAN A TAXPAYER THAT
IS AUTHORIZED BY A MUNICIPAL CORPORATION TO COMPLETE AND FILE AN INCOME
TAX RETURN, REPORT, OR OTHER DOCUMENT FOR OR ON BEHALF OF A
TAXPAYER.
(B) ON AND AFTER JANUARY 1, 2001, ANY MUNICIPAL
CORPORATION THAT
REQUIRES TAXPAYERS TO FILE INCOME TAX RETURNS, REPORTS, OR OTHER DOCUMENTS
SHALL ACCEPT FOR FILING A GENERIC FORM OF SUCH A RETURN, REPORT, OR DOCUMENT
IF THE
GENERIC FORM, ONCE COMPLETED AND FILED, CONTAINS ALL OF THE
INFORMATION REQUIRED TO BE SUBMITTED WITH THE MUNICIPAL
CORPORATION'S PRESCRIBED RETURNS, REPORTS, OR DOCUMENTS, AND IF
THE TAXPAYER OR RETURN PREPARER FILING THE GENERIC FORM OTHERWISE
COMPLIES WITH RULES OR ORDINANCES OF THE MUNICIPAL CORPORATION
GOVERNING THE FILING OF RETURNS, REPORTS, OR DOCUMENTS.
(C) ON AND AFTER JANUARY 1, 2001, ANY MUNICIPAL
CORPORATION THAT
REQUIRES TAXPAYERS TO FILE INCOME TAX RETURNS, REPORTS, OR OTHER DOCUMENTS
SHALL MAKE BLANKS OF SUCH RETURNS, REPORTS, OR DOCUMENTS, AND ANY INSTRUCTIONS
OR
OTHER INFORMATION PERTAINING THERETO, AVAILABLE TO THE PUBLIC
ELECTRONICALLY THROUGH THE INTERNET. THE MUNICIPAL CORPORATION
SHALL PRESCRIBE RULES GOVERNING THE FOLLOWING:
(1) THE APPROPRIATE METHODOLOGY, PROTOCOL, AND DATA FILE
STRUCTURE FOR THE ELECTRONIC FILING OF RETURNS, REPORTS, OR OTHER
DOCUMENTS;
(2) THE MANNER BY WHICH DOCUMENTS SHALL BE SIGNED BY THE FILER OR
THE FILER'S RETURN PREPARER IF SUCH A SIGNATURE IS REQUIRED;
(3) THE MANNER BY WHICH THE MUNICIPAL CORPORATION ACKNOWLEDGES
THE RECEIPT OF RETURNS, REPORTS, AND OTHER DOCUMENTS FILED
ELECTRONICALLY;
(4) THE MANNER BY WHICH THE MUNICIPAL CORPORATION PRESERVES SUCH
RETURNS, REPORTS, AND DOCUMENTS.
(D) ON OR BEFORE DECEMBER 31, 2001, ANY MUNICIPAL
CORPORATION SUBJECT TO DIVISION (B) OR (C) OF THIS SECTION
SHALL ESTABLISH AN
ELECTRONIC SITE ACCESSIBLE THROUGH THE INTERNET THAT INCORPORATES AN
ELECTRONIC LINK TO THE SITE ESTABLISHED PURSUANT TO SECTION
5703.49 of the Revised Code, AND SHALL PROVIDE TO THE TAX
COMMISSIONER THE UNIFORM RESOURCE LOCATOR OF THE SITE ESTABLISHED
PURSUANT TO THIS DIVISION.
Sec. 718.08. (A) AS USED IN THIS SECTION, "ESTIMATED TAX
LIABILITY" MEANS THE AMOUNT THAT A TAXPAYER ESTIMATES TO BE THE
TAXPAYER'S LIABILITY FOR A MUNICIPAL CORPORATION'S INCOME TAX FOR
A YEAR PRIOR TO APPLYING ANY CREDITS, ESTIMATED TAX PAYMENTS, OR
WITHHELD TAXES FOR THE YEAR, OR REFUNDS FROM A PRIOR YEAR.
(B) BEGINNING JANUARY 1, 2003, A MUNICIPAL CORPORATION
THAT REQUIRES A TAXPAYER TO REMIT PAYMENT OF ESTIMATED TAXES MAY REQUIRE A
TAXPAYER TO REMIT SUCH PAYMENTS ONLY AS PRESCRIBED BY DIVISIONS
(B)(1) TO (4) OF THIS SECTION, SUBJECT TO DIVISIONS
(C) AND (D) OF THIS SECTION:
(1) NOT MORE THAN TWENTY-TWO AND ONE-HALF PER CENT OF THE
TAXPAYER'S ESTIMATED TAX LIABILITY FOR THE CURRENT YEAR SHALL BE REQUIRED TO
HAVE BEEN REMITTED ON OR BEFORE THE THIRTIETH DAY OF APRIL OR THE DAY
ON
WHICH THE ANNUAL TAX RETURN FOR THE PRIOR YEAR IS REQUIRED TO BE FILED
DISREGARDING ANY EXTENSION, AS PRESCRIBED BY
ORDINANCE OR RULE OF THE MUNICIPAL CORPORATION;
(2) NOT MORE THAN FORTY-FIVE PER CENT OF THE TAXPAYER'S ESTIMATED
TAX LIABILITY FOR THE CURRENT YEAR SHALL BE REQUIRED TO HAVE BEEN REMITTED ON
OR BEFORE THE THIRTY-FIRST DAY OF JULY;
(3) NOT MORE THAN SIXTY-SEVEN AND ONE-HALF PER CENT OF THE
TAXPAYER'S ESTIMATED TAX LIABILITY FOR THE CURRENT YEAR SHALL BE REQUIRED TO
HAVE BEEN REMITTED ON OR BEFORE THE THIRTY-FIRST DAY OF OCTOBER;
(4) NOT MORE THAN NINETY PER CENT OF THE TAXPAYER'S ESTIMATED TAX
LIABILITY FOR THE PREVIOUS YEAR SHALL BE REQUIRED TO HAVE BEEN REMITTED ON OR
BEFORE THE THIRTY-FIRST DAY OF JANUARY.
(C) ANY AMOUNT DEDUCTED AND WITHHELD FOR TAXES FROM THE
COMPENSATION OF A TAXPAYER SHALL BE CONSIDERED AS ESTIMATED TAXES PAID IN
EQUAL AMOUNTS ON EACH OF THE PAYMENT DATES PRESCRIBED
BY DIVISION (B) OF THIS SECTION.
(D) A MUNICIPAL CORPORATION SHALL NOT IMPOSE ANY PENALTY,
INTEREST, INTEREST PENALTY, OR OTHER ASSESSMENT OR CHARGE ON A TAXPAYER
IN EITHER OF THE FOLLOWING CIRCUMSTANCES:
(1) THE TAXPAYER HAS NOT RESIDED IN THE MUNICIPAL CORPORATION
CONTINUOUSLY SINCE THE FIRST DAY OF JANUARY OF THE CURRENT
CALENDAR YEAR;
(2) THE AMOUNT THE TAXPAYER HAS REMITTED PURSUANT TO DIVISION (B)
OF THIS SECTION EQUALS AT LEAST ONE HUNDRED PER CENT OF THE
TAXPAYER'S TAX LIABILITY FOR THE PRECEDING YEAR AS SHOWN ON THE
RETURN FILED BY THE TAXPAYER FOR THE PRECEDING YEAR, PROVIDED THAT
THE RETURN FOR THE PRECEDING YEAR REFLECTED A TWELVE-MONTH PERIOD
AND THE TAXPAYER FILED A RETURN FOR THE PRECEDING YEAR.
Sec. 733.85 718.11. (A) As used in this section,
"municipal corporation" means any municipal corporation, including a
municipal corporation organized under Chapter 705. of the Revised
Code, that is not operating
under a charter adopted or amended
pursuant to Section 7 or 9 of Article XVIII, Ohio Constitution.
(B)(1) The legislative authority of a municipal corporation
may provide, by ordinance or resolution, for the method of
appointing and removing an officer who shall be responsible for
the collection and deposit to the municipal treasury of municipal
income taxes and the enforcement and administration of the
municipal corporation's income tax ordinances, resolutions, and
rules, including the powers, duties, and functions of the
responsible administering officer and employees serving under his
THE ADMINISTERING OFFICER'S
direction and control. If no such ordinance or resolution is
adopted, the city auditor or village clerk shall be the officer
responsible for the collection and deposit to the municipal
treasury of income taxes and the enforcement and administration
of the municipal corporation's income tax ordinances,
resolutions, and rules.
(C)(2) The legislative authority of a municipal corporation
may, by ordinance or resolution, authorize the responsible
administering officer described in division (B)(A)(1) of this
section
to promulgate ADOPT, revise, and repeal rules with respect to
the
administration and enforcement of the municipal corporation's
income tax ordinances and resolutions. The rules shall be filed
with the clerk of the legislative authority and made available
for public inspection at the offices of the administering officer
and no other publication shall be required. The rules shall not
conflict with the municipal corporation's ordinances and
resolutions OR THIS CHAPTER.
(3) ON AND AFTER JANUARY 1, 2001, EACH MUNICIPAL CORPORATION THAT
IMPOSES A TAX ON INCOME SHALL PUBLISH THROUGH THE INTERNET
ELECTRONIC VERSIONS OF ANY RULES OR ORDINANCES GOVERNING THE TAX,
INCLUDING BUT NOT LIMITED TO THE RATE OF TAX; PERSONS REQUIRED TO
PAY OR WITHHOLD INCOME TAXES; INSTRUCTIONS FOR FILING ANY
PRESCRIBED RETURNS, REPORTS, OR OTHER DOCUMENTS; PRESCRIBED DATES
FOR FILING OR PAYING TAXES INCLUDING ESTIMATED TAXES; PENALTIES,
INTEREST, ASSESSMENT, AND OTHER COLLECTION REMEDIES; RIGHTS OF
TAXPAYERS TO APPEAL; AND PROCEDURES FOR FILING APPEALS. AS USED
IN THIS DIVISION, "INTERNET" HAS THE SAME MEANING AS IN SECTION
718.07 of the Revised Code.
(D)(B) WHENEVER THE RESPONSIBLE ADMINISTERING OFFICER
ISSUES A
DECISION OR RULING REGARDING A TAXPAYER'S MUNICIPAL INCOME TAX OBLIGATION, THE
OFFICER SHALL NOTIFY THE TAXPAYER AT
THE SAME TIME OF THE TAXPAYER'S RIGHT TO APPEAL THE DECISION OR
RULING AND OF THE MANNER IN WHICH THE TAXPAYER MAY APPEAL THE
DECISION OR RULING.
(C) The legislative authority of a municipal corporation
may SHALL provide, by ordinance or resolution, for the
establishment,
composition, AND method of appointment and removal, AND
term of office, if any, and powers, duties, functions, and procedures
OF MEMBERS, of an appeals board to hear appeals from decisions
and rulings of
municipal administrative officers, other than the director of law
or other chief legal officer of the municipal corporation, with
respect to municipal income taxes. The appeals board shall have
jurisdiction with respect to appeals as provided by ordinance or
resolution. Every final order, adjudication, or decision of the
appeals board shall be subject to review pursuant to Chapter
2506. of the Revised Code. IF
(E) If authorized by ordinance or resolution, and
notwithstanding any other provision of the Revised Code to the
contrary, any elected or appointed administrative officer of the
municipal corporation may be appointed as a member of the appeals
board authorized REQUIRED by division (D)(C) of
this section or designated as
the responsible administering officer described in division
(B)(A)
of this section.
(F) This section shall apply to any municipal ordinance or
resolution existingat the effective date of this section or thereafter
enacted or amended.
(D) ANY PERSON AGGRIEVED BY A DECISION OR RULING BY THE
RESPONSIBLE ADMINISTERING OFFICER APPOINTED UNDER DIVISION (A) OF
THIS SECTION MAY APPEAL THE DECISION OR RULING TO THE BOARD OF APPEAL CREATED
UNDER THIS SECTION BY
FILING WITH THE BOARD A WRITTEN REQUEST AND COPIES OF ALL RETURNS AND OTHER
DOCUMENTS PERTAINING TO
THE DECISION OR RULING. THE REQUEST AND OTHER DOCUMENTS SHALL BE
FILED WITH THE BOARD NOT LATER THAN THIRTY DAYS AFTER NOTICE OF
THE DECISION OR RULING IS ISSUED BY THE ADMINISTERING OFFICER.
THE REQUEST SHALL STATE THE ERRORS COMPLAINED OF IN THE APPEAL.
THE BOARD OF APPEAL SHALL CONDUCT A HEARING WITHIN FORTY-FIVE DAYS
AFTER RECEIVING THE REQUEST, UNLESS THE TAXPAYER WAIVES A HEARING. IF
THE TAXPAYER WAIVES A HEARING, THE BOARD MAY HEAR THE APPEAL ON THE
RECORD AND ANY DOCUMENTS OR OTHER EVIDENCE FILED BY THE TAXPAYER
OR THE RESPONSIBLE ADMINISTERING OFFICER. IF THE TAXPAYER DOES
NOT WAIVE THE HEARING, THE TAXPAYER MAY APPEAR BEFORE THE BOARD
AND MAY BE REPRESENTED BY AN ATTORNEY AT LAW, CERTIFIED PUBLIC
ACCOUNTANT, OR OTHER REPRESENTATIVE. A HEARING MAY BE CONTINUED
IF AGREED TO BY THE TAXPAYER AND THE BOARD. THE BOARD SHALL ISSUE
A DECISION ON THE APPEAL WITHIN NINETY DAYS AFTER THE BOARD'S
FINAL HEARING ON THE APPEAL, AND SEND NOTICE OF ITS DECISION BY
ORDINARY MAIL TO THE PETITIONER WITHIN FIFTEEN DAYS AFTER ISSUING
THE DECISION.
EACH BOARD OF APPEAL CREATED PURSUANT TO THIS SECTION SHALL ADOPT
RULES GOVERNING ITS PROCEDURES AND SHALL KEEP A RECORD OF ITS
TRANSACTIONS. SUCH RECORDS ARE NOT PUBLIC RECORDS AVAILABLE FOR
INSPECTION UNDER SECTION 149.43 of the Revised Code. HEARINGS
REQUESTED BY A TAXPAYER BEFORE A BOARD OF APPEAL CREATED PURSUANT TO THIS
SECTION ARE NOT MEETINGS OF A PUBLIC BODY SUBJECT TO SECTION 121.22 of the Revised Code.
Sec. 718.06 718.12. (A) Civil actions to recover municipal
income taxes and penalties and interest on municipal income taxes
shall be brought within three years after the tax was due or the
return was filed, whichever is later.
(B) Prosecutions for an offense made punishable under a
municipal 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) Claims for refund of municipal income taxes must be
brought within the time limitation provided in division (A) of
this section.
(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 complete return is filed, whichever is
later, no interest shall be allowed on the refunded overpayment.
For purposes of computing the payment of interest on
overpayments, no amount of tax for any taxable year shall be
treated as having been paid before the date on which the tax
return for that year was due without regard to any extension of
time for filing that return. The interest shall be paid
at the rate of interest prescribed by section 5703.47 of the Revised Code.
Sec. 718.07 718.13. Any information gained as a result of
returns, investigations, hearings, or verifications required or
authorized by this chapter or by a charter or ordinance of a
municipal corporation levying an income tax pursuant to this
chapter is confidential, and no person shall 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 municipal corporation as
authorized by this chapter or the charter or ordinance
authorizing the levy. The tax administrator of the municipal
corporation may furnish copies of returns filed under this
chapter to the internal revenue service and to the tax
commissioner.
Sec. 718.14. (A) AS USED IN THIS SECTION:
(1) "S CORPORATION" MEANS A CORPORATION THAT HAS MADE AN ELECTION
UNDER SUBCHAPTER S OF CHAPTER 1 OF SUBTITLE
A OF THE INTERNAL REVENUE CODE FOR ITS
TAXABLE YEAR.
(2) "LIMITED LIABILITY COMPANY" MEANS A LIMITED LIABILITY COMPANY
FORMED UNDER CHAPTER 1705. of the Revised Code OR UNDER THE LAWS
OF ANOTHER STATE.
(3) "PASS-THROUGH ENTITY" MEANS A PARTNERSHIP, S CORPORATION,
LIMITED LIABILITY COMPANY, OR ANY OTHER PERSON THE INCOME OR PROFITS FROM
WHICH ARE GIVEN PASS-THROUGH TREATMENT UNDER THE INTERNAL
REVENUE CODE.
(4) "INCOME FROM A PASS-THROUGH ENTITY" MEANS PARTNERSHIP INCOME
OF PARTNERS, DISTRIBUTIVE SHARES OF SHAREHOLDERS OF AN S
CORPORATION, MEMBERSHIP INTERESTS OF MEMBERS OF A LIMITED LIABILITY COMPANY,
OR OTHER DISTRIBUTIVE OR PROPORTIONATE OWNERSHIP SHARES
OF OTHER PASS-THROUGH ENTITIES.
(B) ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL
CORPORATION THAT
IMPOSES A TAX THAT APPLIES TO INCOME OF A PASS-THROUGH ENTITY SHALL GRANT A CREDIT TO TAXPAYERS THAT RESIDE OR ARE DOMICILED IN THE MUNICIPAL CORPORATION FOR
INCOME FROM A PASS-THROUGH ENTITY THAT DOES NOT CONDUCT BUSINESS
IN THE MUNICIPAL CORPORATION. THE AMOUNT OF THE CREDIT SHALL
EQUAL THE LESSER OF THE FOLLOWING AMOUNTS, SUBJECT TO DIVISION (C)
OF THIS SECTION:
(1) THE AMOUNT, IF ANY, OF TAX PAID BY THE PASS-THROUGH ENTITY TO
ANOTHER MUNICIPAL CORPORATION IN THIS STATE, APPORTIONED RATABLY
ACCORDING TO THE OWNERSHIP INTEREST OF THE TAXPAYER IN PROPORTION TO THE
OWNERSHIP INTEREST OF ALL PERSONS HAVING AN OWNERSHIP INTEREST IN
THE ENTITY;
(2) THE AMOUNT OF TAX THAT WOULD BE IMPOSED ON THE PASS-THROUGH
ENTITY BY THE MUNICIPAL CORPORATION IN WHICH THE TAXPAYER RESIDES OR IS
DOMICILED IF THE PASS-THROUGH ENTITY CONDUCTED BUSINESS IN THE MUNICIPAL
CORPORATION, APPORTIONED RATABLY ACCORDING TO THE OWNERSHIP
INTEREST OF THE TAXPAYER IN PROPORTION TO THE OWNERSHIP INTEREST
OF ALL PERSONS HAVING AN OWNERSHIP INTEREST IN THE ENTITY.
(C) IF A MUNICIPAL CORPORATION GRANTS A CREDIT FOR A PERCENTAGE,
LESS THAN ONE HUNDRED PER CENT, OF THE AMOUNT OF INCOME TAXES PAID BY AN
INDIVIDUAL WHO RESIDES IN THE MUNICIPAL CORPORATION TO
ANOTHER MUNICIPAL CORPORATION, THE AMOUNT OF CREDIT OTHERWISE
REQUIRED BY DIVISION (B) OF THIS SECTION SHALL BE MULTIPLIED BY
THAT PERCENTAGE.
(D) ON AND AFTER JANUARY 1, 2003, ANY MUNICIPAL
CORPORATION THAT
IMPOSES A TAX THAT APPLIES TO INCOME FROM A PASS-THROUGH ENTITY IN THE HANDS
OF THE PARTNER, SHAREHOLDER, MEMBER, OR OTHER
PERSON WITH AN OWNERSHIP INTEREST IN THE ENTITY, OR IMPOSES A TAX
THAT APPLIES TO THE INCOME OR NET PROFITS OF A PASS-THROUGH ENTITY
IN THE HANDS OF THE ENTITY SHALL SPECIFY BY ORDINANCE OR RULE
WHETHER THE TAX APPLIES TO THE INCOME FROM A PASS-THROUGH ENTITY
IN THE HANDS OF THE PARTNER, SHAREHOLDER, MEMBER, OR OTHER PERSON
WITH AN OWNERSHIP INTEREST IN THE ENTITY, OR APPLIES TO THE INCOME
OR NET PROFITS OF A PASS-THROUGH ENTITY IN THE HANDS OF THE
ENTITY.
Sec. 718.08 718.15. A municipal corporation, by ordinance,
may grant a refundable or
nonrefundable credit against its tax on income to a taxpayer that also
receives a tax credit under section 122.17 of the Revised Code. If a credit
is granted under this section, it shall be measured as a percentage of the new
income tax revenue the municipal corporation derives from new employees of the
taxpayer and shall be for a term not exceeding ten years. Before the
municipal corporation passes an ordinance granting a credit, the municipal
corporation and the taxpayer shall enter into an agreement specifying all the
conditions of the credit.
Sec. 718.03 718.16. A municipal corporation shall grant a
credit against its tax on
income to a resident of the municipal corporation who works in a joint
economic development zone created under section 715.691 or a joint
economic development district created under section 715.72 of the 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.
Sec. 5703.49. AS USED IN THIS SECTION, "INTERNET" MEANS THE
INTERNATIONAL COMPUTER NETWORK OF BOTH FEDERAL AND NONFEDERAL
INTEROPERABLE PACKET SWITCHED DATA NETWORKS, INCLUDING THE GRAPHICAL
SUBNETWORK KNOWN AS THE WORLD WIDE WEB.
ON OR BEFORE DECEMBER 31, 2001, THE TAX COMMISSIONER SHALL
ESTABLISH AN ELECTRONIC SITE ACCESSIBLE THROUGH THE INTERNET THAT
INCORPORATES ELECTRONIC LINKS TO EACH SITE ESTABLISHED PURSUANT TO
DIVISION (D) OF SECTION 718.07 of the Revised Code FOR WHICH THE
MUNICIPAL CORPORATION THAT ESTABLISHED THE SITE HAS PROVIDED A UNIFORM
RESOURCE LOCATOR PURSUANT TO THAT SECTION, AND SHALL MAINTAIN THE SITE
THEREAFTER.
Section 2. That existing sections 718.01, 718.02, 718.03, 718.05,
718.06, 718.07, 718.08, and 733.85 of the Revised Code are hereby
repealed.
Section 3. Section 718.01 of the Revised Code is presented in this act
as a composite of the section as amended by both
Am. 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 letters.
This is in recognition of the principle stated in division (B) of section
1.52 of the Revised Code that such amendments are to be
harmonized where not substantively irreconcilable and constitutes
a legislative finding that such is the resulting version in
effect prior to the effective date of this act.
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