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H. B. No. 5 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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Representatives Grossman, Henne
A BILL
To amend sections 715.013, 718.02, 718.03, 718.051,
718.07, 718.09, 718.10, 718.11, 718.121, 718.13,
5703.059, 5703.57, 5717.011, 5717.03, 5739.12,
5739.124, 5741.122, 5747.063, 5747.064, and
5751.07, to amend, for the purpose of adopting a
new section number as indicated in parentheses,
section 718.04 (718.50), to enact new sections
718.01, 718.011, 718.04, 718.05, 718.06, 718.08,
and 718.12 and sections 718.052, 718.18 to 718.31,
718.35 to 718.39, 718.41 to 718.44, and 718.99,
and to repeal sections 718.01, 718.011, 718.041,
718.05, 718.06, 718.08, 718.12, and 718.14 of the
Revised Code to revise the laws governing income
taxes imposed by municipal corporations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 715.013, 718.02, 718.03, 718.051,
718.07, 718.09, 718.10, 718.11, 718.121, 718.13, 5703.059,
5703.57, 5717.011, 5717.03, 5739.12, 5739.124, 5741.122, 5747.063,
5747.064, and 5751.07 be amended, section 718.04 (718.50) be
amended for the purpose of adopting a new section number as
indicated in parentheses, and new sections 718.01, 718.011,
718.04, 718.05, 718.06, 718.08, and 718.12 and sections 718.052,
718.18, 718.19, 718.20, 718.21, 718.22, 718.23, 718.24, 718.25,
718.26, 718.27, 718.28, 718.29, 718.30, 718.31, 718.35, 718.36,
718.37, 718.38, 718.39, 718.41, 718.42, 718.43, 718.44, and 718.99
of the Revised Code be enacted to read as follows:
Sec. 715.013. (A) Except as otherwise expressly authorized by
the Revised Code, no municipal corporation shall levy a tax that
is the same as or similar to a tax levied under Chapter 322.,
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,
5707., 5725., 5727., 5728., 5729., 5731., 5735., 5737., 5739.,
5741., 5743., or 5749., or 5751. of the Revised Code.
(B) This section does not prohibit a municipal corporation
from levying a tax on any of the following:
(1) Amounts received for admission to any place;
(2) The income of an electric company or combined company, as
defined in section 5727.01 of the Revised Code;
(3) On and after January 1, 2004, the income of a telephone
company, as defined in section 5727.01 of the Revised Code.
Sec. 718.01. Any term used in this chapter that is not
otherwise defined in this chapter has the same meaning as when
used in a comparable context in laws of the United States relating
to federal income taxation or in Title LVII of the 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 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 LVII of the Revised
Code.
(A) "Municipal taxable income," in the case of a person who
is not an individual who is a resident of a municipal corporation,
means income, reduced by exempt income to the extent otherwise
included in income and then apportioned or sitused to the
municipal corporation under section 718.02 of the Revised Code. In
the case of an individual who is a resident of the municipal
corporation, "municipal taxable income" means income reduced by
exempt income to the extent included in income.
(B) "Income" means the following:
(1)(a) For residents, all income, salaries, qualifying wages,
commissions, 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 (B)(1)(b) of this section. Any
losses reflected on a taxpayer's federal tax return from an
investment as a partner in a pass-through entity shall not be
allowed as a deduction against any other source of income other
than the income described in division (B)(1)(a) of this section.
(b) Federal adjusted gross income in the case of a municipal
corporation that, by resolution or ordinance adopted on or before
December 31, 2011, adopted federal adjusted gross income as the
income subject to tax for purposes of imposing a tax on income.
(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 municipal corporation, including both of the following:
(a) The nonresident's distributive share of the net profit of
pass-through entities owned, directly or indirectly, by the
nonresident, but any losses reflected on a taxpayer's federal tax
return from an investment as a partner in a pass-through entity
shall not be allowed as a deduction against any other source of
income other than the income described in division (B)(2)(a) of
this section; and
(b) Any net profit of the nonresident.
(3) Net profit of any taxpayer that is not an individual;
(4) Lottery, sweepstakes, gambling and sports winnings,
winnings from games of chance, and prizes and awards, minus any
related deductions authorized under the Internal Revenue Code and
claimed against such winnings.
(C) "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)(a) Except as provided in division (C)(2)(b) of this
section, intangible income;
(b) A municipal corporation that taxed any type of intangible
income on March 29, 1988, pursuant to Section 3 of S.B. 238 of the
116th general assembly, may continue to tax that type of income 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 voted in favor thereof at an election
held on November 8, 1988.
(3) Social security benefits, railroad retirement benefits,
unemployment compensation, payments from pension plans, retirement
benefits, annuities, and similar payments made to an employee or
to the beneficiary of an employee under a retirement program or
plan, whether qualified or nonqualified, 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
liability insurance policies. The amounts described in division
(C)(3) of this section qualify as exempt income only to the extent
such amounts are not included in qualifying wages. As used in
division (C)(3) of this section, "unemployment compensation" does
not include supplemental unemployment compensation described in
section 3402(o)(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
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) Compensation for personal injuries or for damages to
property from insurance proceeds or otherwise, excluding
compensation paid for lost salaries or wages or compensation from
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
Revised Code. Division (C)(9) of this section does not apply for
purposes of Chapter 5745. of the 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;
(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;
(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) For an individual under eighteen years of age, all
income except qualifying wages;
(15)(a) Qualifying wages described in division (B)(1) of
section 718.011 of the Revised Code to the extent the qualifying
wages are not subject to withholding under division (B)(2) of that
section.
(b) Nothing in this division prohibits an employee from
receiving a refund of the taxes described in division (B)(2) of
section 718.011 of the Revised Code.
(c) The exemption provided in division (C)(15)(a) of this
section does not apply for the municipal corporation in which the
employee resided at the time the employee earned the qualifying
wages that are not subject to withholding under division (B)(1) of
section 718.011 of the Revised Code.
(16) Income the taxation of which is prohibited by the
constitution or laws of the United States.
(D)(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, schedule F, or form 4797, reduced by any net operating
loss carried forward. For the purposes of division (D)(2) of this
section, the net operating loss carried forward shall be
calculated and deducted in the same manner as provided in
divisions (E)(8) and (9) of this section.
(3) For the purposes of this chapter, and notwithstanding
division (D)(1) of this section, net profit of a single member
limited liability company that for federal income tax purposes is
treated as neither an S corporation nor a C corporation shall not
be taxable as against that single member limited liability
company, but shall instead be included in the net profit of the
owner of the single member limited liability company.
(4) For the purposes of this chapter, and notwithstanding
division (D)(1) of this section, the net profits of a pass-through
entity shall only be taxed and reported in the manner described in
section 718.43 of the Revised Code.
(E) "Adjusted federal taxable income," for a person required
to file as a C corporation 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 (E)(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 (E)(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 (E)(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
providing public services under a contract through a project owned
by the state, as described in section 126.604 of the Revised Code
or derived from a transfer agreement or from the enterprise
transferred under that agreement under section 4313.02 of the
Revised Code;
(8)(a) Except as limited by divisions (E)(8)(b), (c), and (d)
of this section, deduct any net operating loss incurred by the
taxpayer in taxable years beginning after 2014. The amount of the
net operating loss as apportioned and sitused under section 718.02
of the Revised Code for the year the loss was incurred shall be
deducted from net profit reduced by exempt income to the extent
necessary to reduce municipal taxable income to zero, with the
remaining unused portion of the deduction, if any, carried forward
to the remaining years of a designated carryover period, but in no
case for more years than necessary for the deduction to be fully
utilized. For the purposes of this chapter, "net operating loss"
includes, but is not limited to, unutilized losses resulting from
basis limitations, at-risk limitations, or passive activity loss
limitations.
(b) No taxpayer shall use the deduction allowed by division
(E)(8) of this section to offset qualifying wages.
(c)(i) For taxable years beginning after 2015, a taxpayer may
not deduct more than twenty per cent of the amount of the
deduction otherwise allowed by division (E)(8)(a) of this section.
(ii) For taxable years beginning after 2016, a taxpayer may
not deduct more than forty per cent of the amount of the deduction
otherwise allowed by division (E)(8)(a) of this section.
(iii) For taxable years beginning after 2017, a taxpayer may
not deduct more than sixty per cent of the amount of the deduction
otherwise allowed by division (E)(8)(a) of this section.
(iv) For taxable years beginning after 2018, a taxpayer may
not deduct more than eighty per cent of the amount of the
deduction otherwise allowed by division (E)(8)(a) of this section.
(v) For taxable years beginning after 2019 and thereafter, a
taxpayer may deduct the full amount allowed by division (E)(8)(a)
of this section.
(d) Any net operating loss deduction that is available under
division (E)(9) of this section must be utilized before a taxpayer
may deduct any amount pursuant to division (E)(8) of this section.
(e) Nothing in divisions (E)(8)(c)(i) to (v) of this section
prevents a taxpayer from carrying forward, for the period
otherwise permitted under division (E)(8)(a) of this section, any
amount of net operating loss that was not fully utilized by
operation of divisions (E)(8)(c)(i) to (v) of this section.
(f) As used in division (E)(8) of this section, "designated
carryover period" means the five consecutive taxable years after
the taxable year in which the net operating loss occurred.
(9) Deduct any net operating loss incurred in a taxable year
beginning before January 1, 2015, to the extent such deduction was
permitted by a resolution or ordinance of a municipal corporation
adopted by the municipal corporation before January 1, 2014. Any
deduction taken under division (E)(9) of this section may be
carried forward to any taxable year, including taxable years
beginning in 2015 or thereafter, for the number of taxable years
provided in the resolution or ordinance or until fully utilized,
whichever is earlier.
(10) Patronage dividends that a person paid, distributed, or
accrued for the taxable year and that the person is entitled to
deduct for federal income tax purposes for the taxable year shall
be allowed for the purpose of computing municipal taxable income
for the taxable year and shall not be added back, in whole or in
part, in the computation of adjusted federal taxable income for
the taxable year.
If the taxpayer is not a C corporation, is not a single
member limited liability company that is treated as a disregarded
entity for federal income tax purposes, 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;
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.
Nothing in division (E) 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. Nothing in division (E) of this section shall be construed as
allowing the owner of a pass-through entity to utilize any current
year net operating loss or net operating loss carryforward of such
pass-through entity to offset the net profit or wages of the
owner.
(F) "Schedule C" means internal revenue service schedule C
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
(G) "Schedule E" means internal revenue service schedule E
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
(H) "Schedule F" means internal revenue service schedule F
(form 1040) filed by a taxpayer pursuant to the Internal Revenue
Code.
(I) "Internal Revenue Code" has the same meaning as in
section 5747.01 of the Revised Code.
(J) "Resident" means an individual who is both domiciled in
this state for purposes of being subject to the tax levied by
section 5747.02 as determined under section 5747.24 of the Revised
Code and domiciled in the municipal corporation.
(K) "Nonresident" means an individual that is not a resident.
(L)(1) "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 or, except as provided
in division (L)(2)(a) of this section, a single member limited
liability company that is treated as a disregarded entity for
federal income tax purposes.
(2)(a) A single member limited liability company that is a
disregarded entity for federal tax purposes may be a separate
taxpayer from its single member in all Ohio municipal corporations
in which it either filed as a separate taxpayer or did not file
for its taxable year ending in 2003, if all of the following
conditions are met:
(i) The limited liability company's single member is also a
limited liability company.
(ii) The limited liability company and its single member were
formed and doing business in one or more Ohio municipal
corporations for at least five years before January 1, 2004.
(iii) Not later than December 31, 2004, the limited liability
company and its single member each made an election to be treated
as a separate taxpayer under division (L)(2) of this section.
(iv) The limited liability company was not formed for the
purpose of evading or reducing Ohio municipal corporation income
tax liability of the limited liability company or its single
member.
(v) The Ohio municipal corporation that was the primary place
of business of the sole member of the limited liability company
consented to the election.
(b) For purposes of division (L)(2)(a)(v) of this section, a
municipal corporation was the primary place of business of a
limited liability company if, for the limited liability company's
taxable year ending in 2003, its income tax liability was greater
in that municipal corporation than in any other municipal
corporation in Ohio, and that tax liability to that municipal
corporation for its taxable year ending in 2003 was at least four
hundred thousand dollars.
(M) "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. "Person" does not include grantor
trusts.
(N) "Pass-through entity" means a partnership not treated as
an association taxable as a corporation for federal income tax
purposes, a limited liability company not treated as an
association taxable as a 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
single member limited liability company.
(O) "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.
(P) "Single member limited liability company" means a limited
liability company that has one direct owner and is treated as a
disregarded entity for federal income tax purposes.
(Q) "Limited liability company" means a limited liability
company formed under Chapter 1705. of the Revised Code or under
the laws of another state.
(R) "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 attributable to a nonqualified deferred
compensation plan or program described in section 3121(v)(2)(C) of
the Internal Revenue Code if the compensation is included in wages
and the municipal corporation has, by resolution or ordinance
adopted before January 1, 2015, exempted the amount from
withholding and tax.
(d) Any amount included in wages if 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 and the
municipal corporation has, by resolution or ordinance adopted
before January 1, 2015, exempted the amount from withholding and
tax.
(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 and the
municipal corporation has not, by resolution or ordinance,
exempted the amount from withholding and tax adopted before
January 1, 2015. Division (R)(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 (R)(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) 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 included in the taxpayer's gross income for federal income
tax purposes;
(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 (R)(2) of this section
or section 718.03 of the Revised Code, as that section existed
before the effective date of ...B... of the 130th general
assembly.
(3) Except as otherwise provided in division (R)(2)(a) of
this section and division (F) of section 718.03 of the Revised
Code, no amount shall be deducted on the basis that the amount is
exempt income.
(S) "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 Revised Code, and patents,
copyrights, trademarks, tradenames, investments in real estate
investment trusts, investments in regulated investment companies,
and appreciation on deferred compensation. "Intangible income"
does not include income required to be reported by a taxpayer on
schedule C, schedule E, or schedule F, prizes, awards, or other
income associated with any lottery winnings, gambling winnings, or
other similar games of chance.
(T) "Taxable year" means the corresponding tax reporting
period as prescribed for the taxpayer under the Internal Revenue
Code.
(U) "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 or the regional income tax
agency or their successors in interest, or another entity
organized to perform functions similar to those performed by the
central collection agency and the regional income tax agency, if,
in any case, the agency or entity administers municipal income
taxes on behalf of at least thirty-one municipal corporations.
(V) "Employer" means a person that is an employer for federal
income tax purposes.
(W) "Employee" means an individual who is an employee for
federal income tax purposes.
(X) "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.
(Y) "Calendar quarter" means the three-month period ending on
the last day of March, June, September, or December.
(Z) "Form 4797" means internal revenue service form 4797
filed by a taxpayer pursuant to the Internal Revenue Code.
(AA) "Municipal corporation" includes a joint economic
development district or joint economic development zone that
levies an income tax under section 715.691, 715.70, 715.71, or
715.74 of the Revised Code.
(BB) "Audit" means the examination of a person or the
inspection of the books, records, memoranda, or accounts of a
person for the purpose of determining liability for a municipal
income tax, provided the tax administrator has contacted the
person, whether in writing, through telecommunication, or in
person, regarding the examination or to request additional data
from the person. "Audit" does not include the review of a
taxpayer's tax return unless the tax administrator has contacted
the person regarding such return.
(CC) "Generic form" means an electronic or paper form
designed for reporting taxes withheld by an employer, agent of an
employer, other payer, or pass-through entity, estimated municipal
income taxes, or annual municipal income tax liability or for
filing a refund claim that is prescribed by the municipal tax
policy board pursuant to section 718.42 of the Revised Code or
otherwise includes all the information required by the municipal
tax policy board on the corresponding electronic or paper form.
(DD) "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.
(EE) "Ohio business gateway" means the online computer
network system, created under section 125.30 of the Revised Code,
that allows persons to electronically file business reply forms
with state agencies and includes any successor electronic filing
and payment system.
(FF) "Local board of tax review" and "board of tax review"
mean the entity created under section 718.11 of the Revised Code.
(GG) "Municipal tax policy board" means the board created in
section 718.42 of the Revised Code.
(HH) "Casino operator" and "casino facility" have the same
meanings as in section 3772.01 of the Revised Code.
(II) "Video lottery terminal" has the same meaning as in
section 3770.21 of the Revised Code.
(JJ) "Video lottery terminal sales agent" means a lottery
sales agent licensed under Chapter 3770. of the Revised Code to
conduct video lottery terminals on behalf of the state pursuant to
section 3770.21 of the Revised Code.
(KK) "Postal service" means the United States postal service.
(LL) "Certified mail," "express mail," "United States mail,"
"postal service," and similar terms include any delivery service
authorized pursuant to section 5703.056 of the Revised Code.
(MM) "Postmark date," "date of postmark," and similar terms
include the date recorded and marked in the manner described in
division (B)(3) of section 5703.056 of the Revised Code.
(NN) "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.
(OO) "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
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 (OO)(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 (OO)(1) to (3) of this
section have been met.
(PP)(1) "Assessment" means 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 that commences the person's
time limitation for making an appeal to the local board of tax
review pursuant to section 718.11 or 718.12 of the Revised Code,
and has "ASSESSMENT" written in all capital letters at the top of
such finding.
(2) "Assessment" also includes a tax administrator's denial,
in whole or in part, of a taxpayer's qualified refund claim.
(3) "Assessment" does not include a tax administrator's
written denial, in whole or in part, of a taxpayer's refund claim
made on an originally filed annual tax return or a tax
administrator's written correspondence to a person or taxpayer
unless the receipt of such correspondence commences the time
limitation for making an appeal to the local board of tax review
pursuant to section 718.11 or 718.12 of the Revised Code.
(QQ) "Qualified refund claim" means a refund claim made on a
timely filed amended tax return.
Sec. 718.011. (A) 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
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 business" means the worksite
location 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 spends the greatest number of days in a
calendar year performing services for or on behalf of the
employee's employer. For the purposes of this division, the
location at which an employee spends a particular day shall be
determined in accordance with division (B)(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) and (E) 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
municipal corporation.
(b) The employee is a resident of the municipal corporation
and has requested that the employer withhold tax from the
employee's qualifying wages as provided in section 718.03 of the
Revised Code.
(c) 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.
(2) For the purposes of division (B)(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 of more of the following activities shall be considered to
have been spent at the employee's principal place of work:
(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
(B)(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 (B)(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) 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
(B)(1) of this section, the employer shall begin withholding tax
for any subsequent days in that calendar year on which the
employer pays qualifying wages to the employee for personal
services performed in that municipal corporation.
(E) Divisions (B)(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 718.03 of the Revised
Code.
(F)(1) As used in this division, "duty days" means every day
on which a professional athlete performs services for a
professional athletic team, including, but not limited to, any day
on which the team competes or is scheduled to compete in a regular
or post-season game, practice days, days on which team meetings
are held, promotional days, pre-season training camp days,
off-season team mini-camp days, and days on which work-out or
rehabilitation activities are conducted at team facilities.
(2) The income that a professional athlete receives for
services performed for a professional athletic team shall be
sitused to a municipal corporation based upon the ratio of the
number of duty days the professional athlete spent in the
municipal corporation to the total number of duty days spent both
within and outside of the municipal corporation during the taxable
year.
(3) For the purposes of division (A)(2) of section 718.02 of
the Revised Code, the wages, salaries, and other remuneration paid
to a professional athlete for the performance of services for a
professional athletic team shall be sitused to a municipal
corporation in a manner that is consistent with the method for
situsing the professional athlete's income to the municipal
corporation under division (F)(2) of this section.
Sec. 718.02. This section does not apply to taxpayers that
are subject to and required to file reports under Chapter 5745. of
the Revised Code. This section applies to any taxpayer engaged in
a business or profession in a municipal corporation that imposes
an income tax in accordance with this chapter, unless the taxpayer
is an individual who resides in the municipal corporation 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 Revised Code.
(A) Except as otherwise provided in division (D) divisions
(B) and (G) of this section, 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
the municipal corporation 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 and tangible
personal property owned or used by the taxpayer in the business or
profession in such the municipal corporation 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.
As used in the preceding paragraph, real and tangible
personal 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 individuals employed in the business or
profession for services performed in such the municipal
corporation to wages, salaries, and other compensation paid during
the same period to
persons individuals employed in the business or
profession, wherever their the individual's services are
performed, excluding compensation
that is not taxable by the
municipal corporation under section 718.011 described in division
(C)(15) of section 718.01 of the Revised Code;
(3) Gross Total gross receipts of the business or profession
from sales and rentals made and services performed during the
taxable period in
such the municipal corporation to total gross
receipts of the business or profession during the same period from
sales, rentals, and services, wherever made or performed.
If the foregoing apportionment formula does not produce an
equitable result, another basis may be substituted, under uniform
regulations, so as to produce 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 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 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 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.
(C) Except as otherwise provided in division (D) of this
section, net (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 a municipal corporation, the tax
administrator of the municipal corporation may require or allow
the taxpayer to 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:
(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 municipal corporation;
(d) A modification of one or more of the factors.
(2) A taxpayer may request to use an alternative
apportionment method under this division by submitting a request
to the tax administrator. The request shall be in writing.
A taxpayer may not use an alternative apportionment method on
the taxpayer's tax return without the prior approval of the tax
administrator. A taxpayer may use an alternative apportionment
method on a timely filed amended tax return or in a timely filed
appeal of an assessment without the prior approval of the tax
commissioner; in such a case, the taxpayer shall file the request
to use the alternative method with the amended return or the
appeal. If approved, the alternative method shall apply only to
the taxable years included in the taxpayer's request unless the
tax administrator provides otherwise in writing. If the tax
administrator denies a request filed with an amended tax return
under this section, the taxpayer may appeal the denial in the same
manner prescribed for the appeal of an assessment under section
718.18 of the Revised Code.
(3) Nothing in this section prohibits a taxpayer that
requests the use of an alternative method in one or more taxable
years from requesting the use of an alternative method in any
other taxable year. The approval or denial of a taxpayer's request
to use an alternative method in one taxable year shall not limit
the authority of the tax administrator to approve or deny requests
from the same taxpayer with respect to other taxable years.
(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:
(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 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 if the
property is received in the municipal corporation by the
purchaser. In the case of delivery of tangible personal property
by common carrier or by other means of transportation, the place
at which title to such property is transferred to the buyer shall
be considered the place where the purchaser receives the property.
(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
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) Net profit from rental activity not constituting a
business or profession shall be subject to tax only by the
municipal corporation in which the property generating the net
profit is located.
(D) This section does not apply to individuals who are
residents of the municipal corporation and, except as otherwise
provided in section 718.01 of the Revised Code, a municipal
corporation may impose a tax on all income earned by residents of
the municipal corporation to the extent allowed by the United
States Constitution.
(E) If, in computing the 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 income any amount or any portion thereof because it
is exempted from taxation under division (H)(10) of section 718.01
of the Revised Code and division (A)(2)(d) of section 718.03 of
the Revised Code 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 divisions (A) and (B)
of this section.
A municipal corporation shall allow taxpayers to elect to use
separate accounting for the purpose of calculating net profit
sitused to the municipal corporation under this division, but
shall permit such an election only if the taxpayer requests to
make the same election in every municipal corporation in which the
taxpayer must report such net profit for the taxable year and if
the taxpayer agrees to use separate accounting with respect to
such net profit in every municipal corporation that approves such
a request for at least five consecutive taxable years after making
the election.
(F) Net profit relating to the sales and commissions of a
real estate agent or broker shall be sitused to a municipal
corporation based upon the ratio of the commissions the agent or
broker received from sales of real estate located in the municipal
corporation to the commissions received from sales of real estate
everywhere in the taxable year.
(G) Items of income described in division (B)(4) of section
718.01 of the Revised Code that are received by a person who is
not conducting a trade or business and whose primary activity is
generating such income shall be sitused to the municipal
corporation in which the person resides at the time the person
receives such income, if the taxpayer is an individual, and to the
municipal corporation in which the person receives such income.
(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 person that is a disregarded entity
for federal income tax purposes shall include in the owner's
ratios the property, payroll, and gross receipts of such
disregarded entity.
Sec. 718.03. (A) As used in this section:
(1) "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.
(2) "Qualifying wages" means wages, as defined in section
3121(a) of the Internal Revenue Code, without regard to any wage
limitations, adjusted as follows:
(a) Deduct the following amounts:
(i) 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;
(ii) For purposes of division (B) of this section, any amount
included in wages if the amount constitutes payment on account of
sickness or accident disability.
(b) Add the following amounts:
(i) Any amount not included in wages solely because the
employee was employed by the employer prior to April 1, 1986;
(ii) 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 and the
municipal corporation has not, by resolution or ordinance,
exempted the amount from withholding and tax. Division
(A)(2)(b)(ii) of this section applies only to those amounts
constituting ordinary income.
(iii) Any amount not included in wages if the amount is an
amount described in section 401(k) or 457 of the Internal Revenue
Code. Division (A)(2)(b)(iii) of this section applies only to
employee contributions and employee deferrals.
(iv) Any amount that is supplemental unemployment
compensation benefits described in section 3402(o)(2) of the
Internal Revenue Code and not included in wages.
(c) Deduct any amount attributable to a nonqualified deferred
compensation plan or program described in section 3121(v)(2)(C) of
the Internal Revenue Code if the compensation is included in wages
and has, by resolution or ordinance, been exempted from taxation
by the municipal corporation.
(d) Deduct any amount included in wages if 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 and the
municipal corporation has, by resolution or ordinance, exempted
the amount from withholding and tax.
(B) Except as provided in division (F) of this section, for
taxable years beginning after 2003, no municipal corporation shall
require any employer or any agent of any employer or any other
payer, to withhold tax with respect to any amount other than
qualifying wages. Nothing in this section prohibits an employer
from withholding tax on a basis greater than qualifying wages.
(C) Each employer, agent of an employer, or other payer
located or doing business in a municipal corporation that imposes
a tax on income in accordance with this chapter shall withhold
from each employee an amount equal to the qualifying wages of the
employee earned by the employee in the municipal corporation
multiplied by the applicable rate of the municipal corporation's
income tax, except for qualifying wages for which withholding is
not required under division (D) or (F) of this section or section
718.011 of the Revised Code. 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.
An employer, agent of an employer, or other payer may deduct
and withhold, on the request of an employee, taxes for the
municipal 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 a municipal corporation the
creator of the income taxes deducted and withheld or the income
taxes required to be deducted and withheld by the employer, agent,
or other payer according to the following schedule:
(1) Taxes deducted and withheld shall be remitted semimonthly
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 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
municipal corporation in any month of the preceding calendar
quarter exceeded one thousand dollars. Payment under division
(B)(1) 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.
(2) If not required to be remitted in accordance with
division (B)(1) of this section, 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 did not
exceed eleven thousand nine hundred ninety-nine dollars but did
exceed 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 municipal corporation in
any month of the preceding calendar quarter did not exceed one
thousand dollars, but exceeded two hundred dollars. Payment under
division (B)(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) Any employer, agent of an employer, or other payer not
required to make payments under division (B)(1) or (2) of this
section of taxes required to be deducted and withheld shall make
quarterly payments to the tax administrator not later than the
last day of the month following the end of the last day of each
calendar quarter.
(C) An employer, agent of an employer, or other payer shall
make and file a return on forms prescribed by the municipal tax
policy board pursuant to section 718.42 of the Revised Code,
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. Unless the tax administrator
requires all individual taxpayers to file a tax return under
section 718.05 of the Revised Code, a return filed by an employer,
agent, or other payer under this division shall be accepted by a
tax administrator and municipal corporation 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.
(D) An employer, agent of an employer, or other payer is not
required to make any withholding 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.
(D)(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 by a municipal corporation
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 municipal corporation 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.
(E)(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.
(F) A municipal corporation may require a casino facility or
a casino operator, as defined in Section 6(C)(9) of Article XV,
Ohio Constitution, and section 3772.01 of the Revised Code,
respectively, or a lottery sales agent conducting video lottery
terminals on behalf of the state to withhold and remit tax with
respect to amounts other than qualifying wages.
(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 municipal corporation until such time as the withheld
amount is remitted to the tax administrator.
(H) On or before the twenty-eighth day of February of each
year, an employer shall file a withholding return with the tax
administrator listing the names, addresses, and social security
numbers of all employees from whose qualifying wages tax was
withheld for the municipal corporation during the preceding
calendar year, the amount of tax withheld from each employee, and
other information as may be required on the forms created by the
municipal tax policy board under section 718.42 of the Revised
Code.
(I) 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) 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.
Sec. 718.031. (A) A municipal corporation shall require a
casino facility or a casino operator, as defined in Section
6(C)(9) of Article XV, Ohio Constitution, and section 3772.01 of
the Revised Code, respectively, or a lottery sales agent
conducting video lottery terminals on behalf of the state to
withhold and remit municipal income tax with respect to amounts
other than qualifying wages as provided in this section.
(B)(1) If a person's winnings at a casino facility are an
amount for which reporting to the internal revenue service of the
amount is required by section 6041 of the Internal Revenue Code,
as amended, the casino operator shall deduct and withhold
municipal income tax from the person's winnings at the rate of the
tax imposed by the municipal corporation in which the casino
facility is located.
(C) Amounts deducted and withheld by a casino operator are
held in trust for the benefit of the municipal corporation to
which the tax is owed.
(1) On or before the tenth day of each month, the casino
operator shall file a return electronically with the tax
administrator of the municipal corporation, identifying the person
from whose winnings amounts were deducted and withheld, the amount
of each such deduction and withholding during the preceding
calendar month, the amount of the winnings from which each such
amount was withheld, the type of casino gaming that resulted in
such winnings, and any other information required by the tax
administrator. With this return, the casino operator shall remit
electronically to the municipal corporation all amounts deducted
and withheld during the preceding month.
(2) Annually, on or before the thirty-first day of January, a
casino operator shall file an annual return electronically with
the tax administrator of the municipal corporation in which the
casino facility is located, indicating the total amount deducted
and withheld during the preceding calendar year. The casino
operator shall remit electronically with the annual return any
amount that was deducted and withheld and that was not previously
remitted. If the identity of a person and the amount deducted and
withheld with respect to that person were omitted on a monthly
return for that reporting period, that information shall be
indicated on the annual return.
(3) Annually, on or before the thirty-first day of January, a
casino operator shall issue an information return to each person
with respect to whom an amount has been deducted and withheld
during the preceding calendar year. The information return shall
show the total amount of municipal income tax deducted from the
person's winnings during the preceding year. The casino operator
shall provide to the tax administrator a copy of each information
return issued under this division. The administrator may require
that such copies be transmitted electronically.
(4) A casino operator that fails to file a return and remit
the amounts deducted and withheld shall be personally liable for
the amount withheld and not remitted. Such personal liability
extends to any penalty and interest imposed for the late filing of
a return or the late payment of tax deducted and withheld.
(5) If a casino operator sells the casino facility or
otherwise quits the casino business, the amounts deducted and
withheld along with any penalties and interest thereon are
immediately due and payable. The successor shall withhold an
amount of the purchase money that is sufficient to cover the
amounts deducted and withheld along with any penalties and
interest thereon until the predecessor casino operator produces
either of the following:
(a) A receipt from the tax administrator showing that the
amounts deducted and withheld and penalties and interest thereon
have been paid;
(b) A certificate from the tax administrator indicating that
no amounts are due.
If the successor fails to withhold purchase money, the
successor is personally liable for the payment of the amounts
deducted and withheld and penalties and interest thereon.
(6) The failure of a casino operator to deduct and withhold
the required amount from a person's winnings does not relieve that
person from liability for the municipal income tax with respect to
those winnings.
(D) If a person's prize award from a video lottery terminal
is an amount for which reporting to the internal revenue service
is required by section 6041 of the Internal Revenue Code, as
amended, the video lottery sales agent shall deduct and withhold
municipal income tax from the person's prize award at the rate of
the tax imposed by the municipal corporation in which the video
lottery terminal facility is located.
(E) Amounts deducted and withheld by a video lottery sales
agent are held in trust for the benefit of the municipal
corporation to which the tax is owed.
(1) The video lottery sales agent shall issue to a person
from whose prize award an amount has been deducted and withheld a
receipt for the amount deducted and withheld, and shall obtain
from the person receiving a prize award the person's name,
address, and social security number in order to facilitate the
preparation of returns required by this section.
(2) On or before the tenth day of each month, the video
lottery sales agent shall file a return electronically with the
tax administrator of the municipal corporation identifying the
persons from whose prize awards amounts were deducted and
withheld, the amount of each such deduction and withholding during
the preceding calendar month, the amount of the prize award from
which each such amount was withheld, and any other information
required by the tax administrator. With the return, the video
lottery sales agent shall remit electronically to the tax
administrator all amounts deducted and withheld during the
preceding month.
(3) A video lottery sales agent shall maintain a record of
all receipts issued under division (E) of this section and shall
make those records available to the tax administrator upon
request. Such records shall be maintained in accordance with
section 5747.17 of the Revised Code and any rules adopted pursuant
thereto.
(4) Annually, on or before the thirty-first day of January,
each video lottery terminal sales agent shall file an annual
return electronically with the tax administrator of the municipal
corporation in which the facility is located indicating the total
amount deducted and withheld during the preceding calendar year.
The video lottery sales agent shall remit electronically with the
annual return any amount that was deducted and withheld and that
was not previously remitted. If the identity of a person and the
amount deducted and withheld with respect to that person were
omitted on a monthly return for that reporting period, that
information shall be indicated on the annual return.
(5) Annually, on or before the thirty-first day of January, a
video lottery sales agent shall issue an information return to
each person with respect to whom an amount has been deducted and
withheld during the preceding calendar year. The information
return shall show the total amount of municipal income tax
deducted and withheld from the person's prize award by the video
lottery sales agent during the preceding year. A video lottery
sales agent shall provide to the tax administrator of the
municipal corporation a copy of each information return issued
under this division. The tax administrator may require that such
copies be transmitted electronically.
(6) A video lottery sales agent who fails to file a return
and remit the amounts deducted and withheld is personally liable
for the amount deducted and withheld and not remitted. Such
personal liability extends to any penalty and interest imposed for
the late filing of a return or the late payment of tax deducted
and withheld.
(F) If a video lottery sales agent ceases to operate video
lottery terminals, the amounts deducted and withheld along with
any penalties and interest thereon are immediately due and
payable. The successor of the video lottery sales agent that
purchases the video lottery terminals from the agent shall
withhold an amount from the purchase money that is sufficient to
cover the amounts deducted and withheld and any penalties and
interest thereon until the predecessor video lottery sales agent
operator produces either of the following:
(1) A receipt from the tax administrator showing that the
amounts deducted and withheld and penalties and interest thereon
have been paid;
(2) A certificate from the tax administrator indicating that
no amounts are due.
If the successor fails to withhold purchase money, the
successor is personally liable for the payment of the amounts
deducted and withheld and penalties and interest thereon.
(G) The failure of a video lottery sales agent to deduct and
withhold the required amount from a person's prize award does not
relieve that person from liability for the municipal income tax
with respect to that prize award.
(H) The tax administrator of a municipal corporation may
impose a penalty of up to one thousand dollars if a casino
operator or video lottery sales agent files a return late, fails
to file a return, remits amounts deducted and withheld late, or
fails to remit amounts deducted and withheld as required under
this section. Interest shall accrue on past due amounts deducted
and withheld at the rate prescribed in section 5703.47 of the
Revised Code.
(I) Amounts deducted and withheld on behalf of a municipal
corporation shall be allowed as a credit against payment of the
tax imposed by the municipal corporation and shall be treated as
taxes paid for purposes of section 718.08 of the Revised Code.
This division applies only to the person for whom the amount is
deducted and withheld.
(J) The tax administrator shall prescribe the forms of the
receipts and returns required under this section.
Sec. 718.04. (A) A municipal corporation may levy a tax on
income only in accordance with the limitations specified in this
chapter. On or after January 1, 2015, no municipal corporation
shall levy such a tax unless the ordinance or resolution levying
the tax, as adopted or amended by the legislative authority of the
municipal corporation, includes all of the following:
(1) A statement that 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 that the tax shall be measured by
municipal taxable income;
(2) A statement that the municipal corporation is levying the
tax in accordance with the limitations specified in this chapter
and that the resolution or ordinance thereby incorporates, by
reference, the provisions of this chapter;
(4) Whether, and the extent to which, a credit will be
allowed against the tax as described in division (E) of this
section;
(5) The purpose or purposes of the tax;
(6) Any other provision necessary for the administration of
the tax, provided that the provision does not conflict with any
provision of this chapter or any rule adopted by the municipal tax
policy board pursuant to this chapter.
(B) Before January 1, 2015, the legislative authority of each
municipal corporation that levies a municipal income tax that
would otherwise be in effect on that date shall take one of the
following actions:
(1) Repeal the ordinance or resolution that levies the tax;
(2) Amend the ordinance or resolution that levies the tax to
include the provisions described in division (A) of this section
and to otherwise comply with the limitations specified in this
chapter.
Any municipal income tax ordinance or resolution that is not
repealed or amended as provided in this division before January 1,
2015, shall be considered to be repealed on December 31, 2014, and
the municipal corporation that adopted the ordinance or resolution
shall not enforce the ordinance or resolution after that date.
(C) Any municipal corporation that, on or before the
effective date of the enactment of this section, levies an income
tax at a rate in excess of one per cent and that amends the
ordinance or resolution levying the tax as provided in division
(B)(2) of this section may continue to levy the tax at the rate
specified in the original resolution, provided that such rate
continues in effect only for the taxable years specified in the
original ordinance or resolution. Any such municipal corporation
that repeals an ordinance or resolution as provided in division
(B)(1) of this section may, notwithstanding division (D)(2) of
this section, enact a new ordinance or resolution under division
(A) of this section that levies a tax at the same rate specified
in the repealed ordinance or resolution, provided that the tax is
levied at such rate only for the taxable years specified in the
repealed ordinance or resolution and that the municipal
corporation adopts the new ordinance or resolution on or before
December 31, 2015.
(D)(1) No municipal corporation shall tax income at other
than a uniform rate.
(2) Except as provided in division (C) of this section, 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 ninety 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?
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FOR THE INCOME TAX |
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AGAINST THE INCOME TAX |
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In the event of an affirmative vote, the proceeds of the levy may
be used only for the specified purpose.
(E) A municipal corporation may, by ordinance or resolution,
grant a credit to residents of the municipal corporation for all
or a portion of the taxes the resident paid to other municipal
corporations, in this state or elsewhere, on income the resident
earned or received in the other municipal corporations.
(F) Except as otherwise provided in this chapter, a municipal
corporation that levies an income tax in effect for taxable years
beginning before January 1, 2015, may continue to administer and
enforce the provisions of such tax for all taxable years beginning
before January 1, 2015, provided that the provisions of such tax
are consistent with this chapter as it existed prior to the
effective date of the enactment of this section.
(G) Nothing in this chapter authorizes a municipal
corporation to levy a tax on income or net profit, or to
administer or collect such a tax or penalties or interest related
to such a tax, contrary to the limitations specified in this
chapter.
Sec. 718.05. An annual return with respect to the income tax
levied by a municipal corporation shall be completed and filed by
every taxpayer for any taxable year for which the taxpayer is
liable for the tax. If the total credit allowed against the tax as
described in division (E) of section 718.04 of the Revised Code
for the year is equal to or exceeds the tax imposed by the
municipal corporation, no return shall be required unless the
municipal ordinance or resolution levying the tax requires the
filing of a return in such circumstances.
(A) 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.
(B) If an individual is unable to complete and file a return
or notice required by a municipal corporation 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.
(C) Returns or notices required of an estate or a trust shall
be completed and filed by the fiduciary of the estate or trust.
(D) No municipal corporation shall deny spouses the ability
to file a joint return.
(E) 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 the penalties of perjury in accordance with
division (H) of section 718.42 of the Revised Code.
(F)(1) Except as otherwise provided in this chapter, each
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 and notices under division (G) of section 5747.08 of the
Revised Code. The taxpayer shall complete and file the return or
notice on forms prescribed by the municipal tax policy board or on
generic forms, together with remittance made payable to the
municipal corporation or tax administrator. No remittance is
required if the amount shown to be due is five dollars or less.
(2) Any taxpayer that is subject to a municipal corporation's
income tax and that has received an extension to file a federal
income tax return shall not be required to notify the municipal
corporation of the federal extension and shall not be required to
file any municipal income tax return that relates to the same tax
period to which the federal extension relates until the due date
to which the filing of the federal return has been extended. An
extension of time to file under this division is not an extension
of the time to pay any tax due. Upon the filing of the municipal
income tax return, the taxpayer shall include a copy of the
request for the federal filing extension.
(3) If a taxpayer does not request and obtain a federal
extension as described in division (F)(2) of this section, the
taxpayer may request an extension of time to file a municipal
income tax return by filing the request through the Ohio business
gateway or directly with the tax administrator of the municipal
corporation with which the return is required to be filed.
Upon good cause shown, the tax administrator may extend the
period for filing any notice or return.
(4) In order to facilitate the filing of extension requests,
the tax commissioner and the Ohio business gateway steering
committee shall take all steps necessary to provide taxpayers with
the ability to file such requests through the Ohio business
gateway and to notify tax administrators when such requests are
filed.
(5) If the tax administrator considers it necessary in order
to ensure the payment of the tax imposed by the municipal
corporation 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 taxpayers not
otherwise required to file annual returns.
(6) To the extent that any provision in this division
conflicts with any provision in section 718.052 of the Revised
Code, the provision in that section prevails.
(G)(1) For taxable years beginning after 2014, a municipal
corporation shall not require a taxpayer to file a return or remit
tax with respect to net profits if divisions (G)(1)(a), (b), and
(c) apply:
(a) The average ratio computed under section 718.02 of the
Revised Code for the purposes of apportioning the taxpayer's net
profit to the municipal corporation for the taxable year is less
than one per cent;
(b) If not for the application of division (G) of this
section, the amount of tax the taxpayer would owe to the municipal
corporation on the taxpayer's net profit for the taxable year is
less than fifty dollars;
(c) The total amount of qualifying wages the taxpayer paid to
employees for services performed within the municipal corporation
during the taxable year is less than fifty thousand dollars.
(2) Any taxpayer not required to file a tax return with or
remit tax to a municipal corporation for a taxable year pursuant
to division (G)(1) of this section shall file with the municipal
corporation an affidavit exemption form. The municipal tax policy
board shall prescribe the form and contents of the affidavit
exemption form. No taxpayer shall be required to file an affidavit
exemption form pursuant to this division until the municipal tax
policy board prescribes the form.
(H) This division shall not apply to payments required to be
made under division (B)(1) or (2) of section 718.03 of the Revised
Code.
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 date by United
States mail 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.
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.
"The 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.
(I) The amounts withheld by an employer, the agent of an
employer, or an other payer as described in section 718.03 of the
Revised Code shall be allowed to the recipient of the compensation
as credits against payment of the tax imposed on the recipient by
the municipal corporation, unless the amounts withheld were not
remitted to the municipal corporation and the recipient colluded
with the employer, agent, or other payer in connection with the
failure to remit the amounts withheld.
(J) The municipal tax policy board shall ensure that each
return required by a municipal corporation to be filed in
accordance with this section includes 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 auditing 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 auditing 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.
(K) The tax administrator of a municipal corporation shall
accept for filing a generic form of any income tax return, report,
or document required by the municipal corporation in accordance
with this chapter, provided that the generic form, once completed
and filed, contains all of the information required by rules
adopted by the municipal tax policy board, and provided that the
taxpayer or tax return preparer filing the generic form otherwise
complies with the provisions of this chapter and of the municipal
corporation ordinance or resolution governing the filing of
returns, reports, or documents.
(L) 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.
Sec. 718.051. (A) As used in this section, "Ohio business
gateway" means the online computer network system, initially
created by the department of administrative services under section
125.30 of the Revised Code, that allows private businesses to
electronically file business reply forms with state agencies and
includes any successor electronic filing and payment system.
(B) Notwithstanding section 718.05 of the Revised Code, on
and after January 1, 2005, any taxpayer that is subject to any
municipal corporation's tax on the net profit from a business or
profession and has received an extension to file the federal
income tax return shall not be required to notify the municipal
corporation of the federal extension and shall not be required to
file any municipal income tax return until the last day of the
month to which the due date for filing the federal return has been
extended, provided that, on or before the date for filing the
municipal income tax return, the person notifies the tax
commissioner of the federal extension through the Ohio business
gateway. An extension of time to file is not an extension of the
time to pay any tax due.
(C) For taxable years beginning on or after January 1, 2005,
a Any taxpayer subject to any municipal corporation's tax on
income taxation with respect to the taxpayer's net profit from a
business or profession may file any municipal income tax return or
estimated municipal income return, and may make payment of amounts
shown to be due on such returns, by using the Ohio business
gateway.
(D)(1) As used in this division, "qualifying wages" has the
same meaning as in section 718.03 of the Revised Code.
(2)(B) Any employer, agent of an employer, or other payer may
report the amount of municipal income tax withheld from qualifying
wages paid on or after January 1, 2007, and may make remittance of
such amounts, by using the Ohio business gateway.
(E)(C) Nothing in this section affects the due dates for
filing employer withholding tax returns.
(F)(D) No municipal corporation shall be required to pay any
fee or charge for the operation or maintenance of the Ohio
business gateway.
(G)(E) The use of the Ohio business gateway by municipal
corporations, taxpayers, or other persons pursuant to this section
does not affect the legal rights of municipalities or taxpayers as
otherwise permitted by law. This state 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.
(H)(F)(1) The tax commissioner shall adopt rules
establishing:
(a) The format of documents to be used by taxpayers to file
returns and make payments through the Ohio business gateway; and
(b) The information taxpayers must submit when filing
municipal income tax returns through the Ohio business gateway.
(2) The commissioner shall consult with the Ohio business
gateway steering committee before adopting the rules described in
division (H)(F)(1) of this section.
(I)(G) Nothing in this section shall be construed as limiting
or removing the ability authority of any municipal corporation to
administer, audit, and enforce the provisions of its municipal
income tax.
(H) Upon the request of a tax administrator, the tax
commissioner shall provide to the tax administrator any municipal
income tax data the commissioner has acquired under Chapter 5745.
of the Revised Code.
Sec. 718.052. (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 support of the armed forces, may apply to the tax
administrator of a municipal corporation for both an extension of
time for filing of the return and an extension of time for payment
of taxes required by the municipal corporation 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 (B)(3) of this
section, the tax administrator may prescribe such contract terms
as the tax administrator considers appropriate. If the amount owed
is two thousand four hundred dollars or less, the contract shall
be for not longer than twelve months. If the amount owed is more
than two thousand four hundred dollars, the contract shall be for
not longer than twenty-four months.
(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
municipal corporation 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 (B)(1) of this section are not delinquent. The tax
administrator shall not require any payments of penalties,
interest 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 by a municipal corporation 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 the
reserve component of the armed forces of the United States, who is
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.
(b) Taxes whose payment 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, interest 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, interest 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
(B)(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.
Sec. 718.06. (A) As used in this section:
(1) "Consolidated federal income tax return" means a
consolidated return filed for federal income tax purposes pursuant
to section 1501 of the Internal Revenue Code.
(2) "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.
(B) For taxable years beginning on or after January 1, 2015,
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 is
subject to the municipal income tax in that taxable year and if
the affiliated group filed a consolidated federal income tax
return with respect to that taxable year.
(C) 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.
(D)(1) Except as otherwise provided in divisions (D)(2) and
(3) of this section, corporations that elect to file a
consolidated municipal income tax return shall compute adjusted
federal taxable income, as defined in section 718.01 of the
Revised Code, 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 electing to file a consolidated municipal
income tax return shall make any adjustment otherwise required
under division (E) of section 718.01 of the Revised Code to the
extent that 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 eighty per cent or more of the net profit or loss of a
pass-through entity is included in an affiliated group's
consolidated federal taxable income, both of the following shall
apply:
(a) The pass-through entity shall not be required to collect
and remit the tax described in section 718.43 of the Revised Code
on the portion of the entity's net profits that are included in
the consolidated federal taxable income of the affiliated group.
(b) For the purposes of making the computations required
under section 718.02 of the Revised Code, the property, payroll,
and gross receipts of the pass-through entity shall be included in
the calculation of the affiliated group's net profit sitused to a
municipal corporation.
(4) If less than eighty per cent of the net profit or loss of
a pass-through entity is included in an affiliated group's
consolidated federal taxable income, all of the following shall
apply:
(a) The pass-through entity is required to collect and remit
the tax described in section 718.43 of the Revised Code on the
portion of the entity's net profits that are included in the
consolidated federal taxable income of the affiliated group.
(b) For the purposes of making the computations required
under section 718.02 of the Revised Code, the property, payroll,
and gross receipts of the pass-through entity shall not be
included in the calculation of the affiliated group's net profit
sitused to a municipal corporation.
(c) The affiliated group shall deduct from the group's
consolidated federal taxable income any portion of the net profit
of the pass-through entity that is included in the consolidated
federal taxable income of affiliated group.
(d) The affiliated group shall add back to the group's
consolidated federal taxable income any amount of loss incurred by
the pass-through entity that is included in the consolidated
federal taxable income of affiliated group.
(E) Corporations electing to file a consolidated municipal
income tax return shall make the computations required under
section 718.02 of the Revised Code 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.
(F) Each corporation electing to file 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.
(G) Once a taxpayer has elected to file a consolidated
municipal income tax return, or once a tax administrator has
required the taxpayer to file such a return, for any taxable year,
the taxpayer shall continue to file consolidated municipal income
tax returns in each subsequent taxable year unless the taxpayer
receives written permission from the tax administrator to file a
separate return for a taxable year.
(H) Corporations that made an election with a municipal
corporation before January 1, 2015, to file a consolidated tax
return with such municipal corporation in a manner similar to that
provided in division (B) of this section shall continue to file
consolidated tax returns in such manner unless the corporations
obtain permission from the tax administrator to discontinue such
filing.
Sec. 718.07. On and after January 1, 2002, each The tax
administrator of a municipal corporation that imposes a tax on
income in accordance with this chapter shall make electronic
versions of any rules or ordinances governing the tax available to
the public through the internet, including, but not limited to,
ordinances or rules governing the rate of tax; payment and
withholding of taxes; filing any prescribed returns, reports, or
other documents; 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. On and after that date, any municipal
corporation that requires taxpayers to file income tax returns,
reports, or other documents The tax administrator shall make
blanks of such any prescribed returns, reports, or documents, and
any instructions pertaining thereto, available to the public
electronically through the internet. Electronic versions of rules,
ordinances, blanks, and instructions shall be made available
either by posting them on the electronic site established by the
tax commissioner under section 5703.49 of the Revised Code or and,
if the municipal corporation or tax administrator maintains an
electronic site for the posting of such documents that is
accessible through the internet, by posting them on an that
electronic site established by the municipal corporation that is
accessible through the internet. If a municipal corporation or tax
administrator establishes such an electronic site, the municipal
corporation shall incorporate an electronic link between that site
and 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:
(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 for the taxable
year, after allowing any credit to which the taxpayer is entitled,
but prior to applying any estimated tax payment, withholding
payment, or credit from another taxable year.
(3) "Taxes paid" include payments of estimated taxes made
under division (C) of this section, taxes withheld from the
taxpayer's compensation, taxes collected on behalf of the taxpayer
by a pass-through entity under section 718.43 of the Revised Code,
and tax credits applied by the taxpayer in payment of estimated
taxes.
(B)(1) Every taxpayer shall make a declaration of estimated
taxes for the current taxable year, in the form prescribed by the
municipal tax policy board under section 718.42 of the Revised
Code, if the amount payable as estimated taxes, less the amount to
be withheld from the taxpayer's compensation, is more than two
hundred dollars. For the purposes of this section:
(a) Taxes withheld from compensation shall be considered as
paid in equal amounts on each payment date unless the taxpayer
establishes the dates on which all amounts were actually withheld,
in which case the amounts withheld shall be considered as paid on
the dates on which the amounts were actually withheld.
(b) Tax refunds applied as credits to a subsequent taxable
year are deemed to be paid on the date the taxpayer files a return
showing the credits to be applied.
(c) Taxes collected on behalf of the taxpayer by a
pass-through entity under section 718.43 of the Revised Code are
deemed to be paid on the date the pass-through entity is required
to collect and remit the taxes under that section.
(d) Taxes withheld by a casino operator or by a lottery sales
agent under section 718.031 of the Revised Code are deemed to be
paid on the date the taxes are withheld from the taxpayer's
winnings.
(2) Taxpayers filing joint returns shall file joint
declarations of estimated taxes. A taxpayer may amend a
declaration under rules prescribed by the municipal tax policy
board. A taxpayer having a taxable year of less than twelve months
shall make a declaration under rules prescribed by the municipal
tax policy board. The declaration of estimated taxes for an
individual under a disability shall be made and filed by the
person who is required to file the income tax return.
(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 (F) of section 718.05 of the Revised Code
or on or before the fifteenth day of the fourth month 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 declaration shall be filed upon a form prescribed by
the municipal tax policy board.
(6) 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 municipal corporation 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 of
the taxable year, ninety per cent of the tax liability for the
taxable year.
(2) When an amended return has been filed, the unpaid balance
shown due on the amended return shall be paid in equal
installments on or before the remaining payment dates.
(3) On or before the last 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 718.05 of the Revised Code.
(D)(1) In the case of any underpayment of estimated taxes, a
penalty shall be added to the taxes for the taxable year computed
as interest at the rate per annum prescribed by section 5703.47 of
the Revised Code 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 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.
(3) The penalty imposed under division (D) of this section
shall be in lieu of any other interest charge or penalty imposed
for failure to file an estimated return and make estimated
payments as required by this section.
(E)(1) An underpayment of estimated taxes 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:
(a) The amount of tax that was 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.
(b) The amount of tax that was 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 718.05 of the Revised Code for that
year.
(c) The taxpayer is an individual who resides in the
municipal corporation but was not domiciled there on the first day
of January of the current calendar year.
(2) The 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.
Sec. 718.09. (A) This section applies to either of the
following:
(1) A municipal corporation that shares the same territory as
a city, local, or exempted village school district, to the extent
that not more than five per cent of the territory of the municipal
corporation is located outside the school district and not more
than five per cent of the territory of the school district is
located outside the municipal corporation;
(2) A municipal corporation that shares the same territory as
a city, local, or exempted village school district, to the extent
that not more than five per cent of the territory of the municipal
corporation is located outside the school district, more than five
per cent but not more than ten per cent of the territory of the
school district is located outside the municipal corporation, and
that portion of the territory of the school district that is
located outside the municipal corporation is located entirely
within another municipal corporation having a population of four
hundred thousand or more according to the federal decennial census
most recently completed before the agreement is entered into under
division (B) of this section.
(B) The legislative authority of a municipal corporation to
which this section applies may propose to the electors an income
tax, one of the purposes of which shall be to provide financial
assistance to the school district through payment to the district
of not less than twenty-five per cent of the revenue generated by
the tax, except that the legislative authority may not propose to
levy the income tax on the incomes of nonresident individuals.
Prior to proposing the tax, the legislative authority shall
negotiate and enter into a written agreement with the board of
education of the school district specifying the tax rate, the
percentage of tax revenue to be paid to the school district, the
purpose for which the school district will use the money, the
first year the tax will be levied, which shall be the first year
after the year in which the levy is approved or any later year,
the date of the special election on the question of the tax, and
the method and schedule by which the municipal corporation will
make payments to the school district. The special election shall
be held on a day specified in division (D) of section 3501.01 of
the Revised Code, except that the special election may not be held
on the day for holding a primary election as authorized by the
municipal corporation's charter unless the municipal corporation
is to have a primary election on that day.
After the legislative authority and board of education have
entered into the agreement, the legislative authority shall
provide for levying the tax by ordinance. The ordinance shall
include the provisions described in division (A) of section 718.04
of the Revised Code and shall state the tax rate, the percentage
of tax revenue to be paid to the school district, the purpose for
which the municipal corporation will use its share of the tax
revenue, the first year the tax will be levied, and that the
question of the income tax will be submitted to the electors of
the municipal corporation. The legislative authority also shall
adopt a resolution specifying the regular or special election date
the election will be held and directing the board of elections to
conduct the election. At least ninety days before the date of the
election, the legislative authority shall file certified copies of
the ordinance and resolution with the board of elections.
(C) The board of elections shall make the necessary
arrangements for the submission of the question to the electors of
the municipal corporation, and shall conduct the election in the
same manner as any other municipal income tax election. Notice of
the election shall be published in a newspaper of general
circulation in the municipal corporation once a week for four
consecutive weeks, or as provided in section 7.16 of the Revised
Code, prior to the election, and shall include statements of the
rate and municipal corporation and school district purposes of the
income tax, the percentage of tax revenue that will be paid to the
school district, and the first year the tax will be levied. The
ballot shall be in the following form:
"Shall the ordinance providing for a ..... per cent levy on
income for (brief description of the municipal corporation and
school district purposes of the levy, including a statement of the
percentage of tax revenue that will be paid to the school
district) be passed? The income tax, if approved, will not be
levied on the incomes of individuals who do not reside in (the
name of the municipal corporation).
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For the income tax |
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Against the income tax |
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(D) If the question is approved by a majority of the
electors, the municipal corporation shall impose the income tax
beginning in on the first day of January of the year specified in
the ordinance. The proceeds of the levy may be used only for the
specified purposes, including payment of the specified percentage
to the school district.
Sec. 718.10. (A) This section applies to a group of two or
more municipal corporations that, taken together, share the same
territory as a single city, local, or exempted village school
district, to the extent that not more than five per cent of the
territory of the municipal corporations as a group is located
outside the school district and not more than five per cent of the
territory of the school district is located outside the municipal
corporations as a group.
(B) The legislative authorities of the municipal corporations
in a group of municipal corporations to which this section applies
each may propose to the electors an income tax, to be levied in
concert with income taxes in the other municipal corporations of
the group, except that a legislative authority may not propose to
levy the income tax on the incomes of individuals who do not
reside in the municipal corporation. One of the purposes of such a
tax shall be to provide financial assistance to the school
district through payment to the district of not less than
twenty-five per cent of the revenue generated by the tax. Prior to
proposing the taxes, the legislative authorities shall negotiate
and enter into a written agreement with each other and with the
board of education of the school district specifying the tax rate,
the percentage of the tax revenue to be paid to the school
district, the first year the tax will be levied, which shall be
the first year after the year in which the levy is approved or any
later year, and the date of the election on the question of the
tax, all of which shall be the same for each municipal
corporation. The agreement also shall state the purpose for which
the school district will use the money, and specify the method and
schedule by which each municipal corporation will make payments to
the school district. The special election shall be held on a day
specified in division (D) of section 3501.01 of the Revised Code,
including a day on which all of the municipal corporations are to
have a primary election.
After the legislative authorities and board of education have
entered into the agreement, each legislative authority shall
provide for levying its tax by ordinance. Each ordinance shall
include the provisions described in division (A) of section 718.04
of the Revised Code and shall state the rate of the tax, the
percentage of tax revenue to be paid to the school district, the
purpose for which the municipal corporation will use its share of
the tax revenue, and the first year the tax will be levied. Each
ordinance also shall state that the question of the income tax
will be submitted to the electors of the municipal corporation on
the same date as the submission of questions of an identical tax
to the electors of each of the other municipal corporations in the
group, and that unless the electors of all of the municipal
corporations in the group approve the tax in their respective
municipal corporations, none of the municipal corporations in the
group shall levy the tax. Each legislative authority also shall
adopt a resolution specifying the regular or special election date
the election will be held and directing the board of elections to
conduct the election. At least ninety days before the date of the
election, each legislative authority shall file certified copies
of the ordinance and resolution with the board of elections.
(C) For each of the municipal corporations, the board of
elections shall make the necessary arrangements for the submission
of the question to the electors, and shall conduct the election in
the same manner as any other municipal income tax election. For
each of the municipal corporations, notice of the election shall
be published in a newspaper of general circulation in the
municipal corporation once a week for four consecutive weeks, or
as provided in section 7.16 of the Revised Code, prior to the
election. The notice shall include a statement of the rate and
municipal corporation and school district purposes of the income
tax, the percentage of tax revenue that will be paid to the school
district, and the first year the tax will be levied, and an
explanation that the tax will not be levied unless an identical
tax is approved by the electors of each of the other municipal
corporations in the group. The ballot shall be in the following
form:
"Shall the ordinance providing for a ... per cent levy on
income for (brief description of the municipal corporation and
school district purposes of the levy, including a statement of the
percentage of income tax revenue that will be paid to the school
district) be passed? The income tax, if approved, will not be
levied on the incomes of individuals who do not reside in (the
name of the municipal corporation). In order for the income tax to
be levied, the voters of (the other municipal corporations in the
group), which are also in the (name of the school district) school
district, must approve an identical income tax and agree to pay
the same percentage of the tax revenue to the school district.
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For the income tax |
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Against the income tax |
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(D) If the question is approved by a majority of the electors
and identical taxes are approved by a majority of the electors in
each of the other municipal corporations in the group, the
municipal corporation shall impose the tax beginning in on the
first day of January of the year specified in the ordinance. The
proceeds of the levy may be used only for the specified purposes,
including payment of the specified percentage to the school
district.
Sec. 718.11. (A)(1) The legislative authority of each
municipal corporation that imposes a tax on income in accordance
with this chapter shall maintain a local board of tax review to
hear appeals as provided in this section. The legislative
authority of any municipal corporation that does not impose a tax
on income on the effective date of this amendment June 26, 2003,
but that imposes such a tax after that date, shall establish such
a board by ordinance not later than one hundred eighty days after
the tax takes effect.
(2) The local board of tax review shall consist of three
members. Two members shall be appointed by the legislative
authority of the municipal corporation, but such appointees may
not be employees, elected officials, or contractors with the
municipal corporation at any time during their term or in the five
years immediately preceding the date of appointment. One member
shall be appointed by the top administrative official of the
municipal corporation. This member may be an employee of the
municipal corporation, 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 municipal
corporation shall be two years. The board member appointed by the
top administrative official of the municipal corporation 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
by majority vote for malfeasance, misfeasance, or nonfeasance in
office. To remove such a member, the legislative authority must
give the member a copy of the charges against the member and
afford the member an opportunity to be publicly heard in person or
by counsel in the member's own defense upon not less than ten
days' notice. The decision by the legislative authority on the
charges is final and not appealable.
(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.
(B) Whenever a tax administrator issues a decision an
assessment regarding a an underpayment of municipal income tax
obligation that is subject to appeal as provided in this section
or in an ordinance or regulation of the municipal corporation or
denies a qualified refund claim, the tax administrator shall
notify the taxpayer in writing at the same time of the taxpayer's
right to appeal the decision assessment or denial and of the
manner in which the taxpayer may appeal the decision assessment or
denial.
(C) Any person who is aggrieved by a decision by the tax
administrator and who has filed with the municipal corporation the
required returns or other documents pertaining to the municipal
income tax obligation at issue in the decision has been issued an
assessment may appeal the decision assessment to the board created
pursuant to this section by filing a request with the board. The
request shall be in writing, shall state specify the reason or
reasons why the
decision assessment should be deemed incorrect or
unlawful, and shall be filed within thirty
sixty days after the
tax administrator issues
taxpayer receives the decision
complained of assessment.
(D) The local board of tax review shall schedule a hearing to
be held within forty-five sixty days after receiving the request
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 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, but the hearing must be
completed within one hundred twenty days after the first day of
the hearing.
(E) The board may affirm, reverse, or modify the tax
administrator's decision assessment or any part of that decision
assessment. The board shall issue a final decision
determination
on the appeal within ninety days after the board's final hearing
on the appeal, and send a copy of its final decision
determination by ordinary mail to all of the parties to the appeal
within fifteen days after issuing the decision final
determination. The taxpayer or the tax administrator may appeal
the board's decision final determination as provided in section
5717.011 of the Revised Code.
Each (F) The local board of appeal tax review 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 local board of appeal tax review created
pursuant to this section are not meetings of a public body subject
to section 121.22 of the Revised Code.
(G) The tax administrator of a municipal corporation that
imposes a tax on income in accordance with this chapter shall post
on the web site of the tax administrator or on the web site of the
municipal corporation the rules of the local board of tax review,
the names of the board members, and the address to which appeals
and other correspondence must be sent. Any tax administrator that
fails to comply with this division shall not be permitted to
impose penalties or interest under section 718.27 of the Revised
Code on any taxpayer until compliance is attained.
Sec. 718.12. (A)(1) If an employer, agent of an employer, or
other payer collects a tax levied in accordance with this chapter
and fails to remit the tax as required by law, or fails to collect
the tax, the employer, agent of the employer, or other payer is
personally liable for any amount collected and not remitted, or
any amount not collected. If any taxpayer fails to file a return
or fails to pay a tax levied in accordance with this chapter, the
taxpayer is personally liable for the amount of the tax.
(2) If a taxpayer, employer, agent of an employer, or other
payer required to file a return as required by this chapter fails
to file the return within the time prescribed, files an incorrect
return, fails to remit the full amount of the taxes due for the
period covered by the return, or fails to remit any additional tax
due together with interest on the additional tax within the
prescribed time, the tax administrator of such municipal
corporation, based on any information in that tax administrator's
possession, may issue an assessment against any person liable for
any deficiency for the period for which the return is due or for
which the taxes are due.
(3) An assessment issued against the taxpayer or against the
employer, agent of the employer, or other payer pursuant to this
section shall not be considered an election of remedies or a bar
to an assessment against the other for failure to report or pay
the same tax. No assessment shall be issued against any person if
the tax has been paid by another. An assessment that has been paid
by another shall be canceled.
(4) The tax administrator of a municipal corporation shall
give the party assessed, whether pursuant to this section or
division (B) of section 718.02 of the Revised Code, written notice
of the assessment in the manner provided in section 718.18 of the
Revised Code. With the notice, the tax administrator shall provide
instructions on how to appeal the assessment and request a hearing
on the appeal at the local board of tax review.
(B) Except as provided in this division, no assessment shall
be issued against a taxpayer, employer, agent of an employer, or
other payer more than three years after the final date the return
subject to the assessment was required to be filed or the date the
return was filed, whichever is later.
Subject to division (C) of this section, the tax
administrator may assess any balance due as the result of a
reduction in the credit described in division (G) of section
718.04 of the Revised Code, including applicable penalty and
interest, within three years of the date on which the taxpayer
reports a change in either the portion of the taxpayer's income
subjected to a tax levied in accordance with this chapter or the
amount of tax paid to a municipal corporation pursuant to a tax
levied in accordance with this chapter.
Subject to division (C) of this section, the time limits
prescribed by this division may be extended if both the taxpayer,
employer, agent of the employer, or other payer and the tax
administrator consent in writing to the extension. Any such
extension shall also extend the three-year time limit in division
(B) of section 718.19 of the Revised Code for the same period of
time.
This division does not apply to an assessment against an
employer, agent of an employer, or other payer for taxes withheld
and not remitted to the municipal corporation, against a taxpayer,
employer, agent of an employer, or other payer that fails to file
a return subject to assessment as required by this chapter, or
against a taxpayer, employer, agent of an employer, or other payer
that files a fraudulent return.
(C)(1) Except as provided in division (C)(2) of this section,
the tax administrator shall not issue an assessment for any tax
payable to the municipal corporation that is administered by the
tax administrator, or for any penalty, interest, or additional
charge on such tax, after the expiration of ten years from the
date, including any extension, the tax return or report was due
when such amount was not reported and paid, provided that the
ten-year period shall be extended by the period of any lawful stay
to the assessment.
(2) There is no bar or limit to an assessment against any
person who fraudulently attempts to avoid a tax imposed in
accordance with this chapter.
(D) With or before the issuance of an assessment, the tax
administrator shall provide all of the following to the taxpayer,
employer, agent of the employer, or other payer:
(1) A written description of the basis for the assessment and
any penalty required to be imposed with the assessment;
(2) A written description of the right to appeal the
assessment and an explanation of the steps required to make such
an appeal to the municipal corporation's local board of tax
review, including the address at which such appeals must be filed;
(3) A written description of the collection remedies
available to the tax administrator, including a statement that if
the taxpayer, employer, agent of the employer, or other payer
fails to pay an assessment or appeal to the local board of tax
review within sixty days after service of the notice of
assessment, the tax administrator will certify the amount for
collection, and a summary of the provisions contained in this
chapter that relate to the right to appeal the assessment.
The failure of the tax administrator to comply with division
(D) 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. If the tax administrator fails to
substantially comply with division (D)(1) of this section, the tax
administrator, upon application by the taxpayer, shall excuse the
taxpayer from penalties and interest arising from the assessment.
(E) An assessment becomes final, with the amount being due
and payable to the municipal corporation, unless the party
assessed files an appeal to the local board of tax review within
sixty days after service of the notice of assessment as provided
in section 718.11 of the Revised Code. The appeal must be signed
by the party assessed or the party's authorized agent having
knowledge of the facts and must be delivered to the local board of
tax review and the tax administrator either personally or by
certified mail.
The tax administrator shall indicate on the assessment how
the party may make remittance. The appeal shall indicate the
objections of the party assessed, but additional objections may be
raised in writing if received by the local board of tax review
before the date the hearing on the appeal commences. If the appeal
has been properly filed, the local board of tax review, tax
administrator, and taxpayer shall proceed under section 718.11 of
the Revised Code.
(F) After an assessment issued by the tax administrator
becomes final, or after a final determination issued by the local
board of tax review becomes final, if any portion of the
assessment or the amount due pursuant to the final determination
remains unpaid, including accrued interest, a certified copy of
the tax administrator's assessment or the local board of tax
review's final determination shall be filed in the office of the
clerk of court of common pleas in the county in which the
municipal corporation is located. An assessment or final
determination shall become final upon the exhaustion of the
assessed party's appellate options or, if no appeal is timely
made, when the time period for making an appeal has expired.
Immediately upon the filing of the assessment or final
determination, the clerk shall enter a judgment against the party
assessed in the amount shown on the assessment or final
determination. The judgment shall have the same effect as other
judgments. Execution shall issue upon the judgment upon the
request of the tax administrator, and all laws applicable to sales
on execution shall apply to sales made under the judgment.
The portion of the assessment not paid within sixty days
after the assessment was issued shall bear interest at the rate
per annum prescribed by section 5703.47 of the Revised Code from
the day the tax administrator issues the assessment until it is
paid. Interest shall be paid in the same manner as the tax and may
be collected by the issuance of an assessment under this section.
(G) If the party assessed files an appeal under division (E)
of this section, the person, on or before the last day the appeal
may be filed, shall pay the assessed amount, including assessed
interest and assessed penalties, if any of the following
conditions exists:
(1) The person files a tax return reporting municipal taxable
income in an amount less than one cent and the reported amount is
not based on the computations required under this chapter.
(2) The person files a tax return that the tax administrator
determines to be incomplete, false, fraudulent, or frivolous.
(3) The person fails to file a tax return, and the basis for
this failure is not either of the following:
(a) An assertion that the person has no nexus with the
municipal corporation;
(b) The computations required under this chapter or the
application of credits allowed in accordance with this chapter
have the result that the person's tax liability is less than five
dollars and one cent.
(H)(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
municipal corporation does not prejudice any claim for refund upon
final determination of the appeal.
(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 decision of the local board of tax
review created under section 718.11 of the Revised Code, 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
718.19 of the Revised Code, with interest on that amount as
provided by that section.
Sec. 718.121. (A) Except as provided in division (B) of this
section, if tax or withholding is paid to a municipal corporation
on income or wages, and if a second municipal corporation imposes
or assesses a tax on that income or wages after the time period
allowed for a refund of the tax or withholding paid to the first
municipal corporation, the second municipal corporation shall
allow a nonrefundable credit, against the tax or withholding the
second municipality claims is due with respect to such income or
wages, equal to the tax or withholding paid to the first municipal
corporation with respect to such income or wages.
(B) If the tax rate in the second municipal corporation is
less than the tax rate in the first municipal corporation, then
the credit described in division (A) of this section shall be
calculated using the tax rate in effect in the second municipal
corporation.
(C) If the tax rate in the second municipal corporation is
greater than the tax rate in the first municipal corporation, the
tax due in excess of the credit afforded is to be paid to the
second municipal corporation, along with any interest accruing
thereto during the period of nonpayment.
(D) Nothing in this section permits any credit carryforward.
Sec. 718.13. (A) 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 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 municipal corporation as
authorized by this chapter or the charter or ordinance authorizing
the levy. The tax administrator of the municipal corporation 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 and to, the tax commissioner, and tax
administrators of other municipal corporations.
(B) This section does not prohibit the legislative authority
of a municipal corporation, by ordinance or resolution, from
authorizing the tax administrator to publish publishing or
disclosing statistics in a form that does not disclose information
with respect to particular taxpayers.
(C)(1) By the fifteenth day of June of each calendar year,
the tax administrator of each municipal corporation shall report
to the municipal tax policy board and the tax commissioner the
amount of tax revenue collected by type of tax and the amount
refunded by type of tax by the municipal corporation during the
preceding calendar year. The tax commissioner shall include a
summary of all such reports in the annual report issued under
section 5703.42 of the Revised Code.
(2) If the tax administrator of a municipal corporation fails
to timely comply with division (C)(1) of this section, the
municipal corporation may not impose any penalty described in
section 718.27 of the Revised Code for any taxable year ending in
the calendar year in which the report was due or any date
thereafter that precedes the date the tax administrator reports
the information.
(3) The municipal tax policy board shall maintain a list of
every municipal corporation that is ineligible to impose penalties
under division (C)(2) of this section and the time period during
which the ineligibility applies. The list shall be posted on the
web site of the department of taxation within thirty days of the
deadline prescribed in division (C)(1) of this section and shall
be updated at least annually.
Sec. 718.18. (A)(1) Subject to division (B) of this section,
a copy of each assessment shall be served upon the person affected
thereby either by personal service, by certified mail, or by a
delivery service authorized under section 5703.056 of the Revised
Code.
(2) With the permission of the person affected by an
assessment, a tax administrator may deliver the assessment through
alternative means as provided in this section, including, but not
limited to, delivery by secure electronic mail. Delivery by such
means satisfies the requirements for delivery under this section.
(B)(1)(a) If certified mail is returned because of an
undeliverable address, a tax administrator shall first utilize
reasonable means to ascertain a new last known address, including
the use of a change of address service offered by the postal
service or an authorized delivery service under section 5703.056
of the Revised Code. If, after using reasonable means, the tax
administrator is unable to ascertain a new last known address, the
assessment is final for purposes of seeking a judgment for
collection sixty days after the assessment sent by certified mail
is first returned to the tax administrator, and the tax
administrator shall deliver the assessment, if applicable, to the
appropriate municipal corporation official for collection.
(b) Notwithstanding delivery for collection under division
(B)(1)(a) of this section, once the tax administrator or other
municipal official, or the designee of either, makes an initial
contact with the person to whom the assessment is directed, the
person may protest an assessment by filing an appeal with the
local board of tax review within sixty days after the initial
contact. The delivery of an assessment under division (B)(1)(a) of
this section is prima facie evidence that delivery is complete and
that the assessment is served.
(2) If mailing of an assessment by certified mail is returned
for some cause other than an undeliverable address, the tax
administrator shall resend the assessment by ordinary mail. The
assessment shall show the date the tax administrator sends the
assessment and include the following statement:
"This assessment is deemed to be served on the addressee
under applicable law ten days from the date this assessment was
mailed by the tax administrator as shown on the assessment, and
all periods within which an appeal may be filed apply from and
after that date."
Unless the mailing is returned because of an undeliverable
address, the mailing of that information is prima facie evidence
that delivery of the assessment was completed ten days after the
tax administrator sent the assessment by ordinary mail and that
the assessment was served.
If the ordinary mail is subsequently returned because of an
undeliverable address, the tax administrator shall proceed under
division (B)(1)(a) of this section. A person may challenge the
presumption of delivery and service under this division in
accordance with division (C) of this section.
(C)(1) A person disputing the presumption of delivery and
service under division (B) of 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 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 the person elects to appeal an assessment that has
otherwise become final and is subject to collection, the person
must do so within sixty days after the initial contact by the
official, or the official's designee, with the person. The
official may enter into a compromise with the person if the person
does not file an appeal with the local board of tax review.
(D) Nothing in this section prohibits the tax administrator
or the tax administrator's designee from delivering an assessment
by personal service.
(E) Collection actions taken upon any assessment being
appealed under division (B)(1)(b) of this section shall be stayed
upon the pendency of an appeal under this section. If an appeal is
filed pursuant to this section on a claim that has been delivered
for collection, the collection activities with respect to the
assessment shall be stayed.
(F) As used in this section:
(1) "Last known address" means the address the tax
administrator has at the time a document is originally sent by
certified mail, or any address the tax administrator can ascertain
using reasonable means such as the use of a change of address
service offered by the postal service or an authorized delivery
service under section 5703.056 of the Revised Code.
(2) "Undeliverable address" means an address to which the
postal service or an authorized delivery service under section
5703.056 of the Revised Code is not able to deliver an assessment,
except when the reason for nondelivery is because the addressee
fails to acknowledge or accept the assessment.
Sec. 718.19. (A) The tax administrator of a municipal
corporation shall refund to employers, other payers, or taxpayers,
with respect to any income or withholding tax levied by the
municipal corporation:
(1) Overpayments of more than five dollars;
(2) Amounts in excess of five dollars paid illegally or
erroneously;
(3) Amounts in excess of five dollars paid on an illegal,
erroneous, or excessive assessment.
(B) Except as otherwise provided in this chapter,
applications for refund shall be filed with the tax administrator,
on the form prescribed by the municipal tax policy board, within
three years from the date of the illegal, erroneous, or excessive
payment of the tax, or within any additional period allowed by
section 718.12 or 718.41 of the Revised Code. If the municipal tax
policy board has not prescribed such a form, then the tax
administrator shall prescribe such a form.
On filing of the refund application, the tax administrator
shall determine the amount of refund due and certify such amount
to the appropriate municipal corporation official for payment.
(C)(1) Interest shall be allowed and paid upon any illegal or
erroneous assessment in excess of five dollars at the rate per
annum prescribed by section 5703.47 of the Revised Code from the
date of the payment of the illegal or erroneous assessment until
the date the refund of such amount is paid. If such refund results
from the filing of a return or report, or the payment accompanying
such return or report, by an employer, other payer, or taxpayer,
rather than from an assessment by the tax administrator, such
interest shall run from a period ninety days after the final
filing date of the annual return until the date the refund is
paid.
(2) Interest shall be allowed and paid at the rate per annum
prescribed by section 5703.47 of the Revised Code upon any
overpayment not described in division (C)(1) of this section and
in excess of five dollars from the date of the overpayment until
the date of the refund of the overpayment, except that if any such
overpayment is refunded within ninety days after the final filing
date of the annual return or ninety days after the return is
filed, whichever is later, no interest shall be allowed on such
overpayment. For purposes of the payment of interest on such
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 such return.
(D) An application 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 application is delivered by the postal service, and
the earliest postal service postmark on the cover in which the
application is enclosed is not later than the last day for filing
the application.
(2) The application is delivered by the postal service, the
only postmark on the cover in which the application is enclosed
was affixed by a private postal meter, the date of that postmark
is not later than the last day for filing the application, and the
application is received within seven days of such last day.
(3) The application is delivered by the postal service, no
postmark date was affixed to the cover in which the application is
enclosed or the date of the postmark so affixed is not legible,
and the application is received within seven days of the last day
for making the application.
(E)(1) On filing of a refund application for a qualified
refund claim, if a tax administrator determines that the amount of
the refund to which the applicant is entitled is less than the
amount claimed in the application, the tax administrator shall
give the applicant written notice of the discrepancy. The notice
shall be sent to the address shown on the application unless the
applicant notifies the tax administrator of a different address.
The notice shall include the following statement printed in
bold-faced capital letters: "THIS DENIAL OF FULL REFUND MAY BE
APPEALED. SEE SEPARATE SHEET REGARDING YOUR APPEAL RIGHTS TO THE
LOCAL BOARD OF TAX REVIEW." The notice shall contain a separate
sheet of paper providing detailed instructions on the procedures
for filing an appeal. The applicant shall have sixty days from the
date the applicant receives the notice to file an appeal with the
local board of tax review. If the applicant fails to file an
appeal within the sixty-day period, the tax administrator shall
take no further action and the denial of the refund, or of any
portion of the refund, becomes final.
(2) On the filing of a refund claim that is made on an
originally filed annual tax return, if a tax administrator
determines that the amount of the refund to which the applicant is
entitled is less than the amount claimed in the application, the
tax administrator shall give the applicant written notice of the
discrepancy, delivered by ordinary mail or in person. The notice
shall be sent to the address shown on the application unless the
applicant notifies the tax administrator of a different address.
The notice shall include the following statement printed in
boldface capital letters: "FULL OR PARTIAL DENIAL OF THIS REFUND
MAY BE CHALLENGED ONLY BY FILING AN AMENDED TAX RETURN. SEE
SEPARATE SHEET REGARDING HOW TO FILE AN AMENDED TAX RETURN." The
notice shall contain a separate sheet of paper providing detailed
instructions on the procedures for filing an amended tax return.
(F) As used in this section, "employer" includes an agent of
an employer, and "withholding tax" has the same meaning as in
section 718.27 of the Revised Code.
Sec. 718.20. If the tax administrator of a municipal
corporation finds that an employer, other payer, or taxpayer
liable for any income or withholding tax levied by the municipal
corporation is about to depart from the state, to remove the
employer's, other payer's, or taxpayer's property therefrom, to
conceal the employer's, other payer's, or taxpayer's self or the
employer's, other payer's, or taxpayer's property, or to do any
other act tending to prejudice or render wholly or partly
ineffectual proceedings to collect such tax, unless such
proceedings are brought without delay, or if the tax administrator
believes that the collection of the amount due from any employer,
other payer, or taxpayer will be jeopardized by delay, the tax
administrator shall give notice of such findings to such employer,
other payer, or taxpayer, together with the demand for an
immediate return and immediate payment of such tax, with an
assessment and penalty, if applicable as provided in section
718.12 of the Revised Code, whereupon such tax shall become
immediately due and payable. In such cases, the tax administrator
may immediately file the tax administrator's entry with the clerk
of the court of common pleas in the same manner and with the same
effect as provided in section 718.12 of the Revised Code, provided
that if such employer, other payer, or taxpayer, within five days
from notice of the assessment, furnishes evidence satisfactory to
the tax administrator that the employer, other payer, or taxpayer
is not in default in making returns or paying or collecting any
municipal income or withholding tax or that the employer, other
payer, or taxpayer will duly return and pay, or post bond
satisfactory to the tax administrator conditioned upon payment of
the tax finally determined to be due, such tax shall not be
payable prior to the time and manner otherwise fixed for payment
under section 718.12 of the Revised Code, and the person assessed
shall be restored to the rights granted the person under such
section. Upon satisfaction of the assessment the tax administrator
shall order the bond canceled, securities released, and judgment
vacated.
As used in this section, "employer" includes an agent of an
employer, and "withholding tax" has the same meaning as in section
718.27 of the Revised Code.
Sec. 718.21. (A) Any nonresident of a municipal corporation
who accepts the privileges extended by the laws of this state or
of the municipal corporation to nonresidents earning or receiving
income in such municipal corporation, and any resident of a
municipal corporation who becomes a nonresident or conceals the
person's whereabouts, thereby makes the secretary of state the
person's agent for the service of process or notice in any
assessment, action, or proceedings instituted against such person
under this chapter, such process or notice shall be served as
provided under section 718.18 of the Revised Code.
(B) For purposes of this chapter, any foreign corporation,
owning or using a part or all of its capital or property in a
municipal corporation, which is not authorized by the secretary of
state to transact business in this state, shall be conclusively
presumed to have designated the secretary of state as its agent
for the service of process in any action against such corporation
to recover taxes which the tax administrator for such municipal
corporation is by law required to administer. Pursuant to such
service, suit may be brought in municipal court, the common pleas
court of the county in which the municipal corporation is located,
or in any county in which such corporation owns or uses its
capital or property. Such service shall be made upon the secretary
of state by leaving with the secretary of state, or with an
assistant secretary of state, triplicate copies of such process,
together with an affidavit of the tax administrator, showing the
last known address of such corporation. Upon receipt of such
process and affidavit the secretary of state shall forthwith give
notice by certified mail to the corporation at the address
specified in the affidavit and forward together therewith a copy
of such process. The secretary of state shall retain a copy of
such process in the secretary of state's files, keep a record of
any such process served upon the secretary of state, and record
therein the time of such service and the secretary of state's
action thereafter with respect thereto.
The provisions of this section do not affect any right to
serve process upon a foreign corporation in any other manner
permitted by law.
Sec. 718.22. (A) The municipal tax policy board may, by rule,
prescribe uniform requirements as to the keeping of records and
other pertinent documents related to the liability of any person
for a tax imposed by a municipal corporation in accordance with
this chapter, and as to the filing of copies of federal income tax
returns and determinations. Such records and other documents 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.
(B) In addition to any requirements prescribed pursuant to
division (A) of this section, 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
municipal corporation or for the withholding of such tax.
Sec. 718.23. (A) The tax administrator, or any authorized
agent or employee thereof may examine the books, papers, records,
and federal 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
income tax returns at a reasonable time and place designated in
the request.
(B) The tax administrator may examine under oath any person
that the tax administrator reasonably believes has knowledge
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 income tax returns in such person's
possession or control.
No person issued written notice by the tax administrator
compelling such attendance or production of books, papers,
records, or federal income tax returns under this division shall
fail to comply.
Sec. 718.24. Nothing in this chapter shall limit the
authority of a tax administrator to perform any of the following
duties or functions, unless the performance of such duties or
functions is expressly limited by a provision of the Revised Code
or the charter or ordinances of the municipal corporation:
(A) Exercise all powers whatsoever of an inquisitorial nature
as provided by law, including, the right to inspect books,
accounts, records, and memorandums, 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
or assessments, including penalties and interest thereon,
illegally or erroneously assessed 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 718.02 of the Revised Code;
(G) Make all tax assessments, findings, determinations,
computations, 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 assessments, findings,
determinations, computations, or orders the tax administrator has
made, but the tax administrator shall not review, redetermine, or
correct any tax assessment, finding, determination, computation,
or order which the tax administrator has made as to which an
appeal or application for rehearing, review, redetermination, or
correction 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;
(I) Enter into an agreement with a taxpayer to simplify the
withholding obligations described in section 718.03 of the Revised
Code.
Sec. 718.25. 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. If a
person chooses to round amounts entered on a document, the person
shall round all amounts entered on the document.
Sec. 718.26. (A) Nothing in this chapter prohibits a tax
administrator from requiring 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) When transmitting or otherwise making use of a tax
document that contains a person's social security number, the tax
administrator shall take all reasonable measures necessary to
ensure that the number is not capable of being viewed by the
general public, including, when necessary, masking the number so
that it is not readily discernible by the general public. The tax
administrator shall not put a person's social security number on
the outside of any material mailed to the person.
(C)(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 718.27 of the Revised Code, in
addition to any applicable penalty described in section 718.99 of
the Revised Code.
(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 718.27 of the Revised Code.
(3) The penalties provided for under divisions (C)(1) and (2)
of this section may be billed and assessed 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 718.99 of the Revised Code for a violation of
section 718.35 of the Revised Code and any other penalties that
may be imposed by the tax administrator by law.
Sec. 718.27. (A) As used in this section:
(1) "Applicable law" means this chapter, the resolutions,
ordinances, codes, directives, instructions, and rules adopted by
a municipal corporation 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) "Income tax," "estimated income tax," and "withholding
tax" means any income tax, estimated income tax, and withholding
tax imposed by a municipal corporation pursuant to applicable law,
including at any time before the effective date.
(3) A "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,
employer, any agent of the employer, or any other payer pursuant
to applicable law, including at any time before the effective
date.
(4) "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.
(5) "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 three 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)(4) of this section.
(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.
(10) The effective date to which this section refers is the
effective date of ...B... of the 130th general assembly.
(B) This section applies to the following:
(1) Any return required to be filed under applicable law on
or after the effective date;
(2) Any return required to be filed before the effective date
if the return has not been filed on or before the one hundred
eightieth day after the effective date;
(3) Income tax, estimated income tax, and withholding tax
required to be paid or remitted to the municipal corporation on or
after the effective date;
(4) Income tax, estimated income tax, and withholding tax
required to be paid or remitted to the municipal corporation any
time before the effective date if the income tax, estimated income
tax, or withholding tax has not been paid or remitted on or before
the one hundred eightieth day after the effective date.
(C) Each municipal corporation levying a tax on income shall
impose on a taxpayer, employer, any agent of the employer, and any
other payer, and must attempt to collect, the interest amounts and
penalties prescribed under division (C) of this 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
municipal corporation timely and full payment or remittance of
income tax, estimated income tax, or withholding tax or to file
timely with the municipal corporation any return required to be
filed.
(1) Interest shall be imposed at the rate described in
division (A) of this section, per annum, on all unpaid income tax,
unpaid estimated income tax, and unpaid withholding tax.
(2)(a) With respect to unpaid income tax and unpaid estimated
income tax, a municipal corporation shall impose a penalty equal
to ten per cent of the amount not timely paid.
(b) With respect to any unpaid withholding tax, a municipal
corporation shall impose a penalty equal to fifty per cent of the
amount not timely paid.
(3)(a) With respect to annual income tax returns for
individuals, a municipal corporation shall impose a penalty of
twenty-five dollars for each failure to timely file each return,
regardless of the liability shown thereon.
(b) With respect to returns other than annual income tax
returns for individuals and estimated income tax returns, a
municipal corporation shall impose a 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 one hundred
fifty dollars for each failure.
(D)(1) With respect to the income taxes, estimated income
taxes, withholding taxes, and returns, no municipal corporation
shall impose, seek to collect, or collect any penalty, amount of
interest, charges, or additional fees not described in this
section.
(2) With respect to the income taxes, estimated income taxes,
withholding taxes, and returns not described in division (A) of
this section, nothing in this section requires a municipal
corporation to refund or credit any penalty, amount of interest,
charges, or additional fees that the municipal corporation has
properly imposed or collected before the effective date.
(E) Nothing in this section limits the authority of a
municipal corporation to abate or partially abate penalties or
interest imposed under this section when the tax administrator
determines, in the tax administrator's sole discretion, that such
abatement is appropriate.
(F) By the thirty-first day of October of each year the
municipal corporation shall publish the rate described in division
(A) of this section applicable to the next succeeding calendar
year.
(G) The municipal corporation may impose on the taxpayer,
employer, any agent of the employer, or any other payer the
municipal corporation's collection costs and fees, including
collection of attorney's fees and any other related fees and
charges, incurred in connection with municipal corporation's
collection activities including litigation activities and related
appeals. Nothing in this division prevents a taxpayer from seeking
reimbursement of attorney's fees and costs of appeals in
accordance with section 718.44 of the Revised Code.
Sec. 718.28. (A) As used in this section, "claim" means a
claim for an amount payable to a municipal corporation that arises
pursuant to the municipal income tax imposed in accordance with
this chapter and for which a tax administrator has delivered an
assessment to the clerk of courts as described in section 718.12
of the Revised Code.
(B) Nothing in this chapter prohibits a tax administrator
from doing either of the following if such action is in the best
interests of the municipal corporation:
(2) Extend for a reasonable period the time for payment of a
claim by agreeing to accept monthly or other periodic payments.
The agreement shall be in writing and may require security for
payment of the claim.
(C) The tax administrator shall consider the following
standards when ascertaining with respect to a claim whether a
compromise or payment-over-time agreement is in the best interests
of the municipal corporation:
(1) There exists a doubt as to whether the claim can be
collected.
(2) There exists a substantial probability that, upon payment
of the claim and submission of a timely application for refund
with respect to that payment, the tax administrator would refund
an amount that was illegally or erroneously paid.
(3) There exists an economic hardship such that a compromise
or agreement would facilitate effective tax administration.
(4) There exists a joint assessment of spouses, one of whom
is an innocent spouse, provided that any relief under this
standard shall only affect the claim as to the innocent spouse. A
spouse granted relief under section 6015 of the Internal Revenue
Code with regard to any income item is rebuttably presumed to be
an innocent spouse with regard to that income item to the extent
that income item is included in or otherwise affects the
computation of a municipal income tax or any penalty or interest
on that tax.
(5) Any other reasonable standard that the tax administrator
establishes.
(D) 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.
(E) 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.
(F) 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 interest that would have accrued
in the absence of the compromise or agreement shall continue to
accrue and be due.
Sec. 718.30. Nothing in this chapter prohibits the
legislative authority of a municipal corporation, or a tax
administrator pursuant to authority granted to the administrator
by resolution or ordinance, to adopt rules to administer an income
tax imposed by the municipal corporation in accordance with this
chapter or to audit taxpayers. Such rules shall not conflict with
or be inconsistent with any provision of this chapter or with any
rule adopted by the municipal tax policy board pursuant to section
718.42 of the Revised Code. Unless rules adopted under this
section are published and posted on the internet as described in
section 718.07 of the Revised Code, the rules may not be enforced
by the tax administrator or municipal corporation.
Sec. 718.31. (A) To carry out the purposes of laws that a
tax administrator is required to administer, the tax administrator
or any person employed by the tax administrator for that purpose,
upon demand, may inspect the books, accounts, records, and
memoranda of any person subject to those laws, and may examine
under oath any officer, agent, or employee of that person. Any
person other than the tax administrator who makes a demand
pursuant to this section shall produce the person's authority to
make the inspection.
(B) If a person receives at least ten days' written notice of
a demand made under division (A) of this section and refuses to
comply with that demand, the tax administrator may impose a
penalty on the person pursuant to section 718.27 of the Revised
Code.
(C) No person hired or retained by a tax administrator to
audit or inspect a taxpayer's books shall be paid on a contingency
basis.
Sec. 718.35. 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 a 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 municipal corporation or a tax
administrator.
With respect to such acts or conduct, no conviction shall be
had under any other section of the Revised Code or any municipal
corporation ordinance.
Sec. 718.36. (A) At or before the commencement of an audit,
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 a 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
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.
Sec. 718.37. (A) If the municipal corporation imposing a tax
in accordance with this chapter has a population greater than
thirty thousand according to the most recent decennial census or
if the tax administrator charged with the administration of the
tax is one other than a tax administrator described by division
(U)(2) of section 718.01 of the Revised Code, the tax
administrator shall appoint one or more problem resolution
officers. Each problem resolution officer shall be a new or
existing employee of the tax administrator. Problem resolution
officers shall receive and review inquiries and complaints
concerning matters that have been pending before the tax
administrator for an unreasonable length of time or to which a
taxpayer has been unable to obtain a satisfactory response after
several attempts to communicate with the person assigned by the
tax administrator to the taxpayer's case or that person's
immediate supervisor.
Nothing in this section requires that the employment duties
of an employee appointed as a problem resolution officer must be
limited solely to duties directly or indirectly related to those
duties associated with employment as a problem resolution officer,
and the employment duties of a problem resolution officer may
encompass significant duties that vary from, and are in addition
to, those duties associated with employment as a problem
resolution officer.
Matters arising in cases on appeal from an assessment of the
tax administrator or in cases certified for collection are not
reviewable by a problem resolution officer. An action taken by a
problem resolution officer is not a final order of the tax
administrator and is not appealable to the local board of tax
review.
(B) Neither a tax administrator nor a municipal corporation
shall use the amount of taxes assessed by an employee of the tax
administrator or the municipal corporation as the basis of a
production quota system for employees or the basis for evaluating
an employee's performance.
Sec. 718.38. (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 or the municipal tax
policy board.
(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 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 municipal
corporation 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 Revised Code, uncodified state law, or the
municipal corporation'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 Revised Code,
uncodified state law, or the municipal corporation'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;
(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) 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.
(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,
2013.
(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.
(J) Upon written request by a taxpayer, the municipal tax
policy board may issue an opinion in a manner similar to and
subject to the same procedures and conditions as provided in this
section. The municipal tax policy board shall issue opinions to
address only issues having relevance to taxpayers on a state-wide
basis or dealing with the generic application of this chapter.
Opinions issued by the municipal tax policy board are binding for
all tax administrators in this state with respect to the taxpayer
for whom the opinion was prepared.
(K) An opinion of the tax administrator or an opinion of the
municipal tax policy board issued under this section may not be
appealed.
Sec. 718.39. (A) A taxpayer aggrieved by an action or
omission of a tax administrator, a tax administrator's employee,
or an employee of the municipal corporation may bring an action
against the tax administrator, against the municipal corporation,
or against both, for damages in the court of common pleas of the
county in which the municipal corporation is located, if all of
the following apply:
(1) In the action or omission the tax administrator, the tax
administrator's employees, or the employee of the municipal
corporation frivolously disregards a provision of this chapter, a
rule promulgated by the municipal tax policy board under section
718.42 of the Revised Code, or an instruction of the tax
administrator;
(2) The action or omission occurred with respect to an audit
or assessment and the review and collection proceedings connected
with the audit or assessment;
(3) The tax administrator, the tax administrator's employee,
or the employee of the municipal corporation did not act
manifestly outside the scope of employment and did not act with
malicious purpose, in bad faith, or in a wanton or reckless
manner.
(B) In any action brought under division (A) of this section,
upon a finding of liability on the part of the tax administrator
or the municipal corporation, the tax administrator or the
municipal corporation shall be liable to the taxpayer in an amount
equal to the sum of the following:
(1) Compensatory damages sustained by the taxpayer as a
result of the action or omission by the tax administrator, the tax
administrator's employee, or the employee of the municipal
corporation;
(2) Reasonable costs of litigation and attorneys' fees
sustained by the taxpayer.
(C) In the awarding of damages under division (B) of this
section, the court shall take into account the negligent actions
or omissions, if any, on the part of the taxpayer that contributed
to the damages, but shall not be bound by the provisions of
sections 2315.32 to 2315.36 of the Revised Code.
(D) Whenever it appears to the court that a taxpayer's
conduct in the proceedings brought under division (A) of this
section is frivolous, the court may impose a penalty against the
taxpayer in an amount not to exceed ten thousand dollars which
shall be paid to the general revenue fund of the state.
(E) Division (A) of this section does not apply to opinions
of the tax administrator or other information functions of the tax
administrator.
(F) As used in this section, "frivolous" means that the
conduct of the tax administrator, an employee of the municipal
corporation or the tax administrator, the taxpayer, or the
taxpayer's counsel of record satisfies either of the following:
(1) It obviously serves merely to harass or maliciously
injure the tax administrator, the municipal corporation, or
employees thereof if referring to the conduct of a taxpayer or the
taxpayer's counsel of record, or to harass or maliciously injure
the taxpayer if referring to the conduct of the tax administrator,
the municipal corporation, or employees thereof;
(2) It is not warranted under existing law and cannot be
supported by a good faith argument for an extension, modification,
or reversal of existing law.
Sec. 718.41. (A) A taxpayer shall file an amended return
with the tax administrator in such form as the municipal tax
policy board requires in accordance with section 718.42 of the
Revised Code if either of the following applies:
(1) Any of the facts, figures, computations, or attachments
required in the taxpayer's annual return to determine the tax due
levied by the municipal corporation in accordance with this
chapter must be altered as the result of an adjustment to the
taxpayer's federal income tax return, whether initiated by the
taxpayer or the internal revenue service, and such alteration
affects the taxpayer's tax liability under this chapter;
(2) The tax commissioner finds that the taxpayer is properly
treated as a resident of this state for the purposes of Chapter
5747. of the Revised Code. The amended return shall be filed not
later than sixty days after the adjustment has been agreed to or
finally determined for federal or state income tax purposes or any
federal or state income tax deficiency or refund, or the abatement
or credit resulting therefrom, has been assessed or paid,
whichever occurs first.
(B)(1) In the case of an underpayment, the amended return
shall be accompanied by payment of any combined additional tax due
together with interest thereon. If the combined tax shown to be
due is five dollars or less, such amount need not accompany the
amended return. An amended return required by this section is a
return subject to assessment under section 718.12 of the Revised
Code for the purpose of assessing any additional tax due under
this section, together with any applicable penalty and interest.
Except as provided under division (B)(2) of this section, the
amended return shall not reopen those facts, figures,
computations, or attachments from a previously filed return no
longer subject to assessment that are not affected, either
directly or indirectly, by the adjustment to the taxpayer's
federal or state income tax 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, an application for
refund may be filed under this division within the sixty-day
period prescribed for filing the amended return even if it is
filed beyond the period prescribed in section 718.19 of the
Revised Code if it otherwise conforms to the requirements of that
section. If the amount of the refund is five dollars or less, no
refund need be paid by the municipal corporation to the taxpayer.
Except as set forth in division (C)(2) of this section, an
application 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 718.19 of the Revised Code. Except as set forth in
division (C)(2) of this section, the application 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.
Sec. 718.42. (A) The governor shall appoint a municipal tax
policy board consisting of seven members comprised as follows:
(1) One member shall be the tax administrator of a municipal
corporation with a population greater than three hundred fifty
thousand according to the most recent decennial census;
(2) One member shall be the tax administrator of a municipal
corporation with a population greater than one hundred thousand,
but not more than three hundred fifty thousand according to the
most recent decennial census;
(3) One member shall be the tax administrator of a municipal
corporation with a population greater than fifty thousand, but not
more than one hundred thousand according to the most recent
decennial census;
(4) One member shall be the tax administrator of a municipal
corporation with a population greater than fifteen thousand, but
not more than fifty thousand according to the most recent
decennial census;
(5) One member shall be the tax administrator of a municipal
corporation with a population of not more than fifteen thousand
according to the most recent decennial census;
(6) One member shall be an employee of the regional income
tax authority;
(7) One member shall be an employee of the central collection
agency.
(B) Of the original members of the municipal income tax
policy board, two members shall be appointed to terms ending March
31, 2013, two members shall be appointed to terms ending March 31,
2014, and three members shall be appointed to terms ending March
31, 2015. Thereafter, terms of office for all members shall be
three years, commencing on the first day of April and ending on
the thirty-first day of March. Each member shall hold office from
the date of appointment until the date of the end of the term for
which the member was appointed. Any member shall continue in
office subsequent to the expiration date of the member's term
until the member's successor takes office, or until a period of
sixty days has elapsed, whichever occurs first.
One of the members of the board shall be named by the
governor as chair of the board at the time of making the
appointment of any member for a full term. No member of the board
shall receive a salary.
(C) The governor may remove any member of the municipal tax
policy board for malfeasance, misfeasance, or nonfeasance in
office, giving the member a copy of the charges against the member
and affording the member an opportunity to be publicly heard in
person or by counsel in the member's own defense upon not less
than ten days' notice. If the member is removed, the governor
shall file in the office of the secretary of state a complete
statement of all charges made against the member and the
governor's finding on the charges together with a complete report
of the proceedings. The governor's decision on the charges is
final.
A member of the municipal tax policy board who, for any
reason, ceases to meet the qualifications for the position
prescribed by division (A) of this section shall resign
immediately by operation of law.
(D) A vacancy in an unexpired term shall be filled in the
same manner as the original appointment and in such a way that the
composition of the board remains as specified in division (A) of
this section. 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
that term. No vacancy on the board shall impair the power and
authority of the remaining members to exercise all the powers of
the board.
(E) Upon application by one or more tax administrators, or as
otherwise required by this chapter, the municipal tax policy board
may adopt rules in accordance with Chapter 119. of the Revised
Code related to municipal corporations' administration and
enforcement of income taxes levied in accordance with this
chapter. A rule adopted by the municipal tax policy board shall
apply to each municipal corporation in this state. Before adopting
a rule, the municipal tax policy board may seek comments from
municipal corporations, tax practitioners, and taxpayers. One or
more municipal corporations may make applications to the municipal
tax policy board for review of any rule adopted under this
division.
(F) The municipal tax policy board may designate working
committees. The committees shall be chaired by a member of the
board, but the committee may include members not serving on the
board such as tax administrators or interested members of the
public.
(G) All forms, reports, schedules, and attachments required
to be filed pursuant to this chapter shall be prescribed and
created by the municipal tax policy board. Before prescribing and
creating such forms, the municipal tax policy board shall seek the
comments of tax administrators other than those described in
division (U)(2) of section 718.01 of the Revised Code and any
other persons the municipal tax policy board deems appropriate.
(H) Subject to division (I) of this section, the municipal
tax policy board shall prescribe the forms that the signature and
declaration, if any, shall take on any document required to be
filed with a tax administrator and or any other document required
under this chapter.
No such document need be sworn to. Any such document shall
have printed on it the following statement, which shall be
subscribed to by the person signing such return, claim, or report:
"I declare under penalties of perjury that this return or claim
(including any accompanying schedules and statements) has been
examined by me and to the best of my knowledge and belief is a
true, correct, and complete return and report."
(I) Income tax returns, reports, or other documents requiring
the signature of a tax return preparer shall be accepted by a tax
administrator if the facsimile of such a signature is provided in
lieu of a manual signature.
(J) A person may use forms other than those prescribed
pursuant to division (G) of this section if the other forms
contain all the information required to be included on such forms
by the municipal tax policy board. Such forms will be accepted as
valid forms by the tax administrator with whom the form is filed.
(K) As used in this division, "document" means any report,
return, schedule, statement, claim, or other item intended for
submission to any tax administrator or an employee thereof
concerning any tax imposed by the tax administrator in accordance
with this chapter.
The municipal tax policy board may designate which documents
promulgated by the board must be signed by tax return preparers.
(L) The municipal tax policy board shall provide an
instructional booklet, in both printed and electronic formats, for
filing any tax returns, forms, and schedules required under this
chapter. The instructional booklet shall include a general
description of the method by which the tax is assessed and
collected and the rights and responsibilities of the taxpayer in
that process.
(M) The municipal tax policy board shall meet at least
quarterly and may meet more frequently upon motion of the chair.
The principal office of the board shall be located in Franklin
county. The board shall take such action as necessary to fulfill
the duties of the municipal tax policy board under this chapter.
The municipal tax policy board is a public body under section
121.22 of the Revised Code and a public office under section
149.43 of the Revised Code, and all records of the municipal tax
policy board are public records under section 149.43 of the
Revised Code unless the record discloses the identity of any
taxpayer.
Sec. 718.43. (A) Notwithstanding any other provision of this
chapter, the net profit of a pass-through entity is subject to
taxation in the manner prescribed in this section.
Each pass-through entity owner's share of net profit of the
pass-through entity that is subject to taxation by the municipal
corporation shall be included in the income of the owner.
For each taxable year beginning on or after January 1, 2015,
each pass-through entity having net profit apportioned or sitused
to the municipal corporation under section 718.02 of the Revised
Code for the taxable year shall collect on behalf of each owner
and remit to the tax administrator an amount equal to the tax due
on the owner's distributive share of the net profit of the
pass-through entity, whether or not distributed.
(B)(1) The tax liability for the taxable year that shall be
collected and remitted pursuant to division (A) of this section
shall be paid through estimated taxes made payable to the
municipal corporation or tax administrator on or before the
applicable payment date 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 of
the taxable year, ninety per cent of the tax liability for the
taxable year.
(2) On or before the fifteenth day of the fourth month
following the end of the pass-through entity's taxable year, every
pass-through entity subject to the collection requirement under
this section shall file an annual return with the tax
administrator and remit to the tax administrator the amount of the
taxes shown to be due on the return, less any amounts paid as
estimated payments under division (B)(1) of this section.
(C)(1) Any amount withheld under division (A) of this section
and remitted to the tax administrator shall be treated as a
payment of the tax liability or of the liability for withholding
under this section of the owner to whom the income is
distributable for the taxable year for which that owner incurred a
liability for municipal income tax.
(2) An owner may claim a refundable credit against the income
tax imposed by a municipal corporation equal to the amount
withheld by a pass-through entity with respect to net profit
distributable to the owner by the pass-through entity under
division (A) of this section. The municipal tax policy board shall
adopt rules in accordance with Chapter 119. of the Revised Code to
govern the manner by which such an owner may claim the credit.
(D) If the only source of income for an owner in a municipal
corporation is income from distributive shares in one or more
pass-through entities that withhold and report tax to the
municipal corporation in accordance with divisions (A) and (B) of
this section, the owner is not required to file a return in
accordance with section 718.05 of this section to report such
income.
(E) Any pass-through entity that is required to withhold tax
under division (A) of this section that has received an extension
to file the pass-through entity's federal tax return for
partnership or S corporation income shall not be required to
notify the municipal corporation of the federal extension and
shall not be required to file any municipal income tax return
until the last day of the month to which the due date for filing
the federal return has been extended. An extension of time to file
is not an extension of the time to pay any tax due. Upon filing
the return required in division (B) of this section the
pass-through entity shall include a copy of the federal extension
request.
Sec. 718.44. (A) If a taxpayer appeals an assessment related
to an income tax imposed by a municipal corporation, and is
unsuccessful on appeal, the taxpayer is liable to the municipal
corporation for the reasonable costs of litigation and attorneys'
fees sustained by the municipal corporation.
(B) If a taxpayer appeals an assessment related to an income
tax imposed by a municipal corporation, and is successful on
appeal, the municipal corporation is liable to the taxpayer for
reasonable costs of litigation and attorneys' fees sustained by
the taxpayer.
(C) The costs and fees described in divisions (A) and (B) of
this section may be recovered only after all appeals are
completed, upon motion to the board of tax appeals. If an appeal
results in the taxpayer being successful in part and the tax
administrator being successful in part, the board may make a
reasonable allocation of the costs and fees between the parties.
Sec. 718.04 718.50. (A) No municipal corporation other than
the municipal corporation of residence shall levy a tax on the
income of any member or employee of the Ohio general assembly
including the lieutenant governor which income is received as a
result of services rendered as such member or employee and is paid
from appropriated funds of this state.
(B) No municipal corporation other than 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. No municipal corporation other than 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.
Sec. 718.99. (A) Whoever violates section 718.35 of the
Revised Code, or section 718.03 of the Revised Code by failing to
remit municipal income taxes deducted and withheld from an
employee, is guilty of a felony of the fifth degree.
(B) Except as provided in division (C) of this section,
whoever violates division (A) of section 718.13 of the Revised
Code shall be guilty of a misdemeanor of the first degree and
shall be subject to a fine of one thousand dollars or imprisonment
for a term of up to six months, or both, unless the violation is
punishable by a municipal ordinance imposing a greater penalty or
requiring dismissal from office or discharge from employment, or
both, in which case the municipal ordinance shall govern.
(C) Any person who discloses information received from the
Internal Revenue Service in violation of division (A) of section
718.13 of the Revised Code 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, unless the violation
is punishable by a municipal ordinance imposing a greater penalty
or requiring dismissal from office or discharge from employment,
or both, in which case the municipal ordinance shall govern.
(D) Each instance of access or disclosure in violation of
division (A) of section 718.13 of the Revised Code constitutes a
separate offense.
Sec. 5703.059. (A) The tax commissioner may adopt rules
requiring returns, including any accompanying schedule or
statement, for any of the following taxes to be filed
electronically using the Ohio business gateway as defined in
section 718.051 718.01 of the Revised Code, filed telephonically
using the system known as the Ohio telefile system, or filed by
any other electronic means prescribed by the commissioner:
(1) Employer income tax withholding under Chapter 5747. of
the Revised Code;
(2) Motor fuel tax under Chapter 5735. of the Revised Code;
(3) Cigarette and tobacco product tax under Chapter 5743. of
the Revised Code;
(4) Severance tax under Chapter 5749. of the Revised Code;
(5) Use tax under Chapter 5741. of the Revised Code.
(B) The tax commissioner may adopt rules requiring any
payment of tax shown on such a return to be due to be made
electronically in a manner approved by the commissioner.
(C) A rule adopted under this section does not apply to
returns or reports filed or payments made before six months after
the effective date of the rule. The commissioner shall publicize
any new electronic filing requirement on the department's web
site. The commissioner shall educate the public of the requirement
through seminars, workshops, conferences, or other outreach
activities.
(D) Any person required to file returns and make payments
electronically under rules adopted under this section may apply to
the commissioner, on a form prescribed by the commissioner, to be
excused from that requirement. For good cause shown, the
commissioner may excuse the applicant from the requirement and
permit the applicant to file the returns or reports or make the
payments required under this section by nonelectronic means.
Sec. 5703.57. (A) As used in this section, "Ohio business
gateway" has the same meaning as in section 718.051 of the Revised
Code.
(B) There is hereby created the Ohio business gateway
steering committee to direct the continuing development of the
Ohio business gateway and to oversee its operations. The committee
shall provide general oversight regarding operation of the Ohio
business gateway and shall recommend to the department of
administrative services enhancements that will improve the Ohio
business gateway. The committee shall consider all banking,
technological, administrative, and other issues associated with
the Ohio business gateway and shall make recommendations regarding
the type of reporting forms or other tax documents to be filed
through the Ohio business gateway.
(C) The committee shall consist of:
(1) The following members, appointed by the governor with the
advice and consent of the senate:
(a) Not more than four representatives of the business
community;
(b) Not more than one representative three representatives of
municipal tax administrators; and
(c) Not more than two tax practitioners.
(2) The following ex officio members:
(a) The director or other highest officer of each state
agency that has tax reporting forms or other tax documents filed
with it through the Ohio business gateway or the director's
designee;
(b) The secretary of state or the secretary of state's
designee;
(c) The treasurer of state or the treasurer of state's
designee;
(d) The director of budget and management or the director's
designee;
(e) The state chief information officer or the officer's
designee;
(f) The tax commissioner or the tax commissioner's designee;
and
(g) The director of development or the director's designee;
and
(h) The chair of the municipal tax policy board or the
chair's designee.
An appointed member shall serve until the member resigns or
is removed by the governor. Vacancies shall be filled in the same
manner as original appointments.
(D) A vacancy on the committee does not impair the right of
the other members to exercise all the functions of the committee.
The presence of a majority of the members of the committee
constitutes a quorum for the conduct of business of the committee.
The concurrence of at least a majority of the members of the
committee is necessary for any action to be taken by the
committee. On request, each member of the committee shall be
reimbursed for the actual and necessary expenses incurred in the
discharge of the member's duties.
(E) The committee is a part of the department of taxation for
administrative purposes.
(F) Each year, the governor shall select a member of the
committee to serve as chairperson. The chairperson shall appoint
an official or employee of the department of taxation to act as
the committee's secretary. The secretary shall keep minutes of the
committee's meetings and a journal of all meetings, proceedings,
findings, and determinations of the committee.
(G) The committee may hire professional, technical, and
clerical staff needed to support its activities.
(H) The committee shall meet as often as necessary to perform
its duties.
Sec. 5717.011. (A) As used in this chapter, "tax
administrator" has the same meaning as in section 718.01 of the
Revised Code.
(B) Appeals from a municipal final determination of a local
board of appeal tax review created under section 718.11 of the
Revised Code may be taken by the taxpayer or the tax administrator
to the board of tax appeals or, but may not be taken by the
taxpayer or the tax administrator to a court of common pleas as
otherwise provided by law. If the taxpayer or the tax
administrator elects to make an appeal to the board of tax appeals
or court of common pleas, the appeal shall be taken by the filing
of a notice of appeal with the board of tax appeals or court of
common pleas, the municipal local board of appeal tax review, and
the opposing party. The notice of appeal shall be filed within
sixty days after the day the appellant receives notice of the
decision final determination issued under section 718.11 of the
Revised Code. The notice of appeal may be filed in person or by
certified mail, express mail, or authorized delivery service as
provided in section 5703.056 of the Revised Code. If the notice of
appeal is filed by certified mail, express mail, or authorized
delivery service as provided in section 5703.056 of the Revised
Code, the date of the United States postmark placed on the
sender's receipt by the postal service or the date of receipt
recorded by the authorized delivery service shall be treated as
the date of filing. The notice of appeal shall have attached
thereto and incorporated therein by reference a true copy of the
decision issued under section 718.11 of the Revised Code and shall
specify the errors therein complained of, but failure to attach a
copy of such notice and incorporate it by reference in the notice
of appeal does not invalidate the appeal.
(C) Upon the filing of a notice of appeal with the board of
tax appeals, the municipal local board of appeal tax review shall
certify to the board of tax appeals a transcript of the record of
the proceedings before it, together with all evidence considered
by it in connection therewith. Such appeals may be heard by the
board at its office in Columbus or in the county where the
appellant resides, or it may cause its examiners to conduct such
hearings and to report to it their findings for affirmation or
rejection. The board may order the appeal to be heard upon the
record and the evidence certified to it by the tax administrator,
but upon the application of any interested party the board shall
order the hearing of additional evidence, and the board may make
such investigation concerning the appeal as it considers proper.
(D) If an issue being appealed under this section is
addressed in a municipal corporation's ordinance or regulation,
the tax administrator, upon the request of the board of tax
appeals, shall provide a copy of the ordinance or regulation to
the board of tax appeals.
Sec. 5717.03. (A) A decision of the board of tax appeals on
an appeal filed with it pursuant to section 5717.01, 5717.011, or
5717.02 of the Revised Code shall be entered of record on the
journal together with the date when the order is filed with the
secretary for journalization.
(B) In case of an appeal from a decision of a county board of
revision, the board of tax appeals shall determine the taxable
value of the property whose valuation or assessment by the county
board of revision is complained of, or in the event the complaint
and appeal is against a discriminatory valuation, shall determine
a valuation which shall correct such discrimination, and shall
determine the liability of the property for taxation, if that
question is in issue, and the board of tax appeals' decision and
the date when it was filed with the secretary for journalization
shall be sent by the board to all persons who were parties to the
appeal before the board, to the person in whose name the property
is listed, or sought to be listed, if such person is not a party
to the appeal, to the county auditor of the county in which the
property involved in the appeal is located, and to the tax
commissioner.
In correcting a discriminatory valuation, the board of tax
appeals shall increase or decrease the value of the property whose
valuation or assessment by the county board of revision is
complained of by a per cent or amount which will cause such
property to be listed and valued for taxation by an equal and
uniform rule.
(C) In the case of an appeal from a review, redetermination,
or correction of a tax assessment, valuation, determination,
finding, computation, or order of the tax commissioner, the order
of the board of tax appeals and the date of the entry thereof upon
its journal shall be sent by the board to all persons who were
parties to the appeal before the board, the person in whose name
the property is listed or sought to be listed, if the decision
determines the valuation or liability of property for taxation and
if such person is not a party to the appeal, the taxpayer or other
person to whom notice of the tax assessment, valuation,
determination, finding, computation, or order, or correction or
redetermination thereof, by the tax commissioner was by law
required to be given, the director of budget and management, if
the revenues affected by such decision would accrue primarily to
the state treasury, and the county auditors of the counties to the
undivided general tax funds of which the revenues affected by such
decision would primarily accrue.
(D) In the case of an appeal from a municipal final
determination of a local board of appeal tax review created under
section 718.11 of the Revised Code, the order of the board of tax
appeals and the date of the entry thereof upon the board's journal
shall be sent by the board to all persons who were parties to the
appeal before the board.
(E) In the case of all other appeals or applications filed
with and determined by the board, the board's order and the date
when the order was filed by the secretary for journalization shall
be sent by the board to the person who is a party to such appeal
or application, to such persons as the law requires, and to such
other persons as the board deems proper.
(F) The orders of the board may affirm, reverse, vacate,
modify, or remand the tax assessments, valuations, determinations,
findings, computations, or orders complained of in the appeals
determined by the board, and the board's decision shall become
final and conclusive for the current year unless reversed,
vacated, or modified as provided in section 5717.04 of the Revised
Code. When an order of the board becomes final the tax
commissioner and all officers to whom such decision has been sent
shall make the changes in their tax lists or other records which
the decision requires.
(G) If the board finds that issues not raised on the appeal
are important to a determination of a controversy, the board may
remand the cause for an administrative determination and the
issuance of a new tax assessment, valuation, determination,
finding, computation, or order, unless the parties stipulate to
the determination of such other issues without remand. An order
remanding the cause is a final order. If the order relates to any
issue other than a municipal income tax matter appealed under
sections 718.11 and 5717.011 of the Revised Code, the order may be
appealed to the court of appeals in Franklin county. If the order
relates to a municipal income tax matter appealed under sections
718.11 and 5717.011 of the Revised Code, the order may be appealed
to the court of appeals for the county in which the municipal
corporation in which the dispute arose is primarily situated.
(H) At the request of any person that filed an appeal subject
to this section, the decision or order of the board of tax appeals
issued pursuant to division (B), (C), (D), or (E) of this section
shall be sent by certified mail at the requestor's expense.
Sec. 5739.12. (A)(1) Each person who has or is required to
have a vendor's license, on or before the twenty-third day of each
month, shall make and file a return for the preceding month in the
form prescribed by the tax commissioner, and shall pay the tax
shown on the return to be due. The return shall be filed
electronically using the Ohio business gateway, as defined in
section 718.051 718.01 of the Revised Code, the Ohio telefile
system, or any other electronic means prescribed by the
commissioner. Payment of the tax shown on the return to be due
shall be made electronically in a manner approved by the
commissioner. The commissioner may require a vendor that operates
from multiple locations or has multiple vendor's licenses to
report all tax liabilities on one consolidated return. The return
shall show the amount of tax due from the vendor to the state for
the period covered by the return and such other information as the
commissioner deems necessary for the proper administration of this
chapter. The commissioner may extend the time for making and
filing returns and paying the tax, and may require that the return
for the last month of any annual or semiannual period, as
determined by the commissioner, be a reconciliation return
detailing the vendor's sales activity for the preceding annual or
semiannual period. The reconciliation return shall be filed by the
last day of the month following the last month of the annual or
semiannual period. The commissioner may remit all or any part of
amounts or penalties that may become due under this chapter and
may adopt rules relating thereto. Such return shall be filed
electronically as directed by the tax commissioner, and payment of
the amount of tax shown to be due thereon, after deduction of any
discount provided for under this section, shall be made
electronically in a manner approved by the tax commissioner.
(2) Any person required to file returns and make payments
electronically under division (A)(1) of this section may apply to
the tax commissioner on a form prescribed by the commissioner to
be excused from that requirement. For good cause shown, the
commissioner may excuse the person from that requirement and may
permit the person to file the returns and make the payments
required by this section by nonelectronic means.
(B)(1) If the return is filed and the amount of tax shown
thereon to be due is paid on or before the date such return is
required to be filed, the vendor shall be entitled to a discount
of three-fourths of one per cent of the amount shown to be due on
the return.
(2) A vendor that has selected a certified service provider
as its agent shall not be entitled to the discount if the
certified service provider receives a monetary allowance pursuant
to section 5739.06 of the Revised Code for performing the vendor's
sales and use tax functions in this state. Amounts paid to the
clerk of courts pursuant to section 4505.06 of the Revised Code
shall be subject to the applicable discount. The discount shall be
in consideration for prompt payment to the clerk of courts and for
other services performed by the vendor in the collection of the
tax.
(C)(1) Upon application to the tax commissioner, a vendor who
is required to file monthly returns may be relieved of the
requirement to report and pay the actual tax due, provided that
the vendor agrees to remit to the commissioner payment of not less
than an amount determined by the commissioner to be the average
monthly tax liability of the vendor, based upon a review of the
returns or other information pertaining to such vendor for a
period of not less than six months nor more than two years
immediately preceding the filing of the application. Vendors who
agree to the above conditions shall make and file an annual or
semiannual reconciliation return, as prescribed by the
commissioner. The reconciliation return shall be filed
electronically as directed by the tax commissioner, and payment of
the amount of tax shown to be due thereon, after deduction of any
discount provided in this section, shall be made electronically in
a manner approved by the commissioner. Failure of a vendor to
comply with any of the above conditions may result in immediate
reinstatement of the requirement of reporting and paying the
actual tax liability on each monthly return, and the commissioner
may at the commissioner's discretion deny the vendor the right to
report and pay based upon the average monthly liability for a
period not to exceed two years. The amount ascertained by the
commissioner to be the average monthly tax liability of a vendor
may be adjusted, based upon a review of the returns or other
information pertaining to the vendor for a period of not less than
six months nor more than two years preceding such adjustment.
(2) The commissioner may authorize vendors whose tax
liability is not such as to merit monthly returns, as ascertained
by the commissioner upon the basis of administrative costs to the
state, to make and file returns at less frequent intervals. When
returns are filed at less frequent intervals in accordance with
such authorization, the vendor shall be allowed the discount
provided in this section in consideration for prompt payment with
the return, provided the return is filed and payment is made of
the amount of tax shown to be due thereon, at the time specified
by the commissioner, but a vendor that has selected a certified
service provider as its agent shall not be entitled to the
discount.
(D) Any vendor who fails to file a return or to pay the full
amount of the tax shown on the return to be due in the manner
prescribed under this section and the rules of the commissioner
may, for each such return, be required to forfeit and pay into the
state treasury an additional charge not exceeding fifty dollars or
ten per cent of the tax required to be paid for the reporting
period, whichever is greater, as revenue arising from the tax
imposed by this chapter, and such sum may be collected by
assessment in the manner provided in section 5739.13 of the
Revised Code. The commissioner may remit all or a portion of the
additional charge and may adopt rules relating to the imposition
and remission of the additional charge.
(E) If the amount required to be collected by a vendor from
consumers is in excess of the applicable percentage of the
vendor's receipts from sales that are taxable under section
5739.02 of the Revised Code, or in the case of sales subject to a
tax levied pursuant to section 5739.021, 5739.023, or 5739.026 of
the Revised Code, in excess of the percentage equal to the
aggregate rate of such taxes and the tax levied by section 5739.02
of the Revised Code, such excess shall be remitted along with the
remittance of the amount of tax due under section 5739.10 of the
Revised Code.
(F) The commissioner, if the commissioner deems it necessary
in order to insure the payment of the tax imposed by this chapter,
may require returns and payments to be made for other than monthly
periods.
(G) Any vendor required to file a return and pay the tax
under this section whose total payment for a year equals or
exceeds the amount shown in division (A) of section 5739.122 of
the Revised Code is subject to the accelerated tax payment
requirements in divisions (B) and (C) of that section. For a
vendor that operates from multiple locations or has multiple
vendor's licenses, in determining whether the vendor's total
payment equals or exceeds the amount shown in division (A) of that
section, the vendor's total payment amount shall be the amount of
the vendor's total tax liability for the previous calendar year
for all of the vendor's locations or licenses.
Sec. 5739.124. (A) If required by the tax commissioner, a
permit holder required to make payments under section 5739.032 of
the Revised Code shall file all returns and reports
electronically. The commissioner may require the permit holder to
use the Ohio business gateway, as defined in section 718.051
718.01 of the Revised Code, or any other electronic means approved
by the commissioner, to file the returns and reports, or to remit
the tax, in lieu of the manner prescribed under section 5739.032
of the Revised Code.
(B) A person required under this section to file reports and
returns electronically may apply to the tax commissioner to be
excused from that requirement. Applications shall be made on a
form prescribed by the commissioner. The commissioner may approve
the application for good cause.
(C)(1) If a person required to file a report or return
electronically under this section fails to do so, the tax
commissioner may impose an additional charge not to exceed the
following:
(a) For each of the first two failures, five per cent of the
amount required to be reported on the report or return;
(b) For the third and any subsequent failure, ten per cent of
the amount required to be reported on the report or return.
(2) The charges authorized under division (C)(1) of this
section are in addition to any other charge or penalty authorized
under this chapter, and shall be considered as revenue arising
from taxes imposed under this chapter. An additional charge may be
collected by assessment in the manner prescribed by section
5739.13 of the Revised Code. The commissioner may waive all or a
portion of such a charge and may adopt rules governing such
waiver.
Sec. 5741.122. (A) If required by the tax commissioner, a
person required to make payments under section 5741.121 of the
Revised Code shall file all returns and reports electronically.
The commissioner may require the person to use the Ohio business
gateway, as defined in section 718.051 718.01 of the Revised Code,
or any other electronic means approved by the commissioner, to
file the returns and reports, or to remit the tax, in lieu of the
manner prescribed under section 5741.121 of the Revised Code.
(B) A person required under this section to file reports and
returns electronically may apply to the tax commissioner to be
excused from that requirement. Applications shall be made on a
form prescribed by the commissioner. The commissioner may approve
the application for good cause.
(C)(1) If a person required to file a report or return
electronically under this section fails to do so, the tax
commissioner may impose an additional charge not to exceed the
following:
(a) For each of the first two failures, five per cent of the
amount required to be reported on the report or return;
(b) For the third and any subsequent failure, ten per cent of
the amount required to be reported on the report or return.
(2) The charges authorized under division (C)(1) of this
section are in addition to any other charge or penalty authorized
under this chapter, and shall be considered as revenue arising
from taxes imposed under this chapter. An additional charge may be
collected by assessment in the manner prescribed by section
5741.13 of the Revised Code. The commissioner may waive all or a
portion of such a charge and may adopt rules governing such
waiver.
Sec. 5747.063. (A)(1) If a person's winnings at a casino
facility are an amount for which reporting to the internal revenue
service of the amount is required by section 6041 of the Internal
Revenue Code, as amended, the casino operator shall deduct and
withhold Ohio income tax from the person's winnings at a rate of
four per cent of the amount won and shall deduct and withhold
municipal income tax from the person's winnings at the rate of tax
of the municipal corporation in which the casino facility is
located. A person's amount of winnings shall be determined each
time the person exchanges amounts won in tokens, chips, casino
credit, or other prepaid representations of value for cash or a
cash equivalent. The casino operator shall issue, to a person from
whose winnings an amount has been deducted and withheld, a receipt
for the amount deducted and withheld, and also shall obtain from
the person additional information that will be necessary for the
casino operator to prepare the returns required by this section.
(2) If a person's winnings at a casino facility require
reporting to the internal revenue service under division (A)(1) of
this section, the casino operator also shall require the person to
state in writing, under penalty of falsification, whether the
person is in default under a support order.
(B) Amounts deducted and withheld by a casino operator are
held in trust for the benefit of the state and municipal
corporations, as applicable.
(1) On or before the tenth day of each month, the casino
operator shall file a return electronically with the tax
commissioner and the tax administrator of the municipal
corporation, as applicable, identifying the persons from whose
winnings amounts were deducted and withheld, the amount of each
such deduction and withholding during the preceding calendar
month, the amount of the winnings from which each such amount was
withheld, the type of casino gaming that resulted in such
winnings, and any other information required by the tax
commissioner. With the return, the casino operator shall remit
electronically to the commissioner and the tax administrator of
the municipal corporation, as applicable, all the amounts deducted
and withheld during the preceding month.
(2)(a) A casino operator shall maintain a record of each
written statement provided under division (A)(2) of this section
in which a person admits to being in default under a support
order. The casino operator shall make these records available to
the director of job and family services upon request.
(b) A casino operator shall maintain copies of receipts
issued under division (A)(1) of this section and of written
statements provided under division (A)(2) of this section and
shall make these copies available to the tax commissioner upon
request.
(c) A casino operator shall maintain the information
described in divisions (B)(2)(a) and (b) of this section in
accordance with section 5747.17 of the Revised Code and any rules
adopted pursuant thereto.
(3) Annually, on or before the thirty-first day of January, a
casino operator shall file an annual return electronically with
the tax commissioner and the tax administrator of the municipal
corporation, as applicable, indicating the total amount deducted
and withheld during the preceding calendar year. The casino
operator shall remit electronically with the annual return any
amount that was deducted and withheld and that was not previously
remitted. If the identity of a person and the amount deducted and
withheld with respect to that person were omitted on a monthly
return, that information shall be indicated on the annual return.
(4)(a) A casino operator who fails to file a return and remit
the amounts deducted and withheld is personally liable for the
amount deducted and withheld and not remitted. The commissioner
and the tax administrator of the municipal corporation, as
applicable, may impose a penalty up to one thousand dollars if a
return is filed late, if amounts deducted and withheld are
remitted late, if a return is not filed, or if amounts deducted
and withheld are not remitted. Interest accrues on past due
amounts deducted and withheld at the rate prescribed in section
5703.47 of the Revised Code. The commissioner and the tax
administrator of the municipal corporation, as applicable, may
collect past due amounts deducted and withheld and penalties and
interest thereon by assessment under section 5747.13 of the
Revised Code as if they were income taxes collected by an
employer.
(b) If a casino operator sells the casino facility or
otherwise quits the casino business, the amounts deducted and
withheld and any penalties and interest thereon are immediately
due and payable. The successor shall withhold an amount of the
purchase money that is sufficient to cover the amounts deducted
and withheld and penalties and interest thereon until the
predecessor casino operator produces either a receipt from the
commissioner and the tax administrator of the municipal
corporation, as applicable, showing that the amounts deducted and
withheld and penalties and interest thereon have been paid or a
certificate from the commissioner and the tax administrator of the
municipal corporation, as applicable, indicating that no amounts
deducted and withheld or penalties and interest thereon are due.
If the successor fails to withhold purchase money, the successor
is personally liable for payment of the amounts deducted and
withheld and penalties and interest thereon, up to the amount of
the purchase money.
(C)(1) Annually, on or before the thirty-first day of
January, a casino operator shall issue an information return to
each person with respect to whom an amount has been deducted and
withheld during the preceding calendar year. The information
return shall show the total amount deducted from the person's
winnings by the casino operator during the preceding calendar
year.
(2) Annually, on or before the thirty-first day of January, a
casino operator shall provide to the commissioner a copy of each
information return issued under division (C)(1) of this section
for the preceding calendar year. The commissioner may require that
the copies be transmitted electronically.
(D) Amounts deducted and withheld shall be allowed as a
credit against payment of the tax imposed by section 5747.02 of
the Revised Code and shall be treated as taxes paid for purposes
of section 5747.09 of the Revised Code. This division applies only
to the person for whom the amount is deducted and withheld.
(E) The failure of a casino operator to deduct and withhold
the required amount from a person's winnings does not relieve the
person from liability for the tax imposed by section 5747.02 of
the Revised Code with respect to those winnings. And compliance
with this section does not relieve a casino operator or a person
who has winnings at a casino facility from compliance with
relevant provisions of federal tax laws.
(F) The commissioner and the tax administrator of the
municipal corporation, as applicable, shall prescribe the form of
the receipt and returns required by this section. The director of
job and family services shall prescribe the form of the statement
required by this section.
(G) The commissioner may adopt rules that are necessary to
administer this section.
Sec. 5747.064. (A) As used in this section, "video lottery
terminal" has the same meaning as in section 3770.21 of the
Revised Code.
(B) If a person's prize award from a video lottery terminal
is an amount for which reporting to the internal revenue service
of the amount is required by section 6041 of the Internal Revenue
Code, as amended, the lottery sales agent shall deduct and
withhold Ohio income tax from the person's prize award at a rate
of four per cent of the amount won and shall deduct and withhold
municipal income tax from the person's winnings at the rate of tax
of the municipal corporation in which the video lottery terminal
facility is located. The lottery sales agent shall issue, to a
person from whose prize award an amount has been deducted or
withheld, a receipt for the amount deducted and withheld, and also
shall obtain from the person additional information that will be
necessary for the lottery sales agent to prepare the returns
required by this section.
(C) Amounts deducted and withheld by a lottery sales agent
are held in trust for the benefit of the state and municipal
corporations, as applicable.
(1) On or before the tenth day of each month, the lottery
sales agent shall file a return electronically with the tax
commissioner and the tax administrator of the municipal
corporation, as applicable, identifying the persons from whose
prize awards amounts were deducted and withheld, the amount of
each such deduction and withholding during the preceding month,
the amount of the prize award from which each such amount was
withheld, and any other information required by the commissioner
and the tax administrator of the municipal corporation, as
applicable. With the return, the lottery sales agent shall remit
electronically to the commissioner and the tax administrator of
the municipal corporation, as applicable, all the amounts deducted
and withheld during the preceding month.
(2) A lottery sales agent shall maintain a record of all
receipts issued under division (B) of this section and shall make
those records available to the commissioner and the tax
administrator of the municipal corporation, as applicable, upon
request. Such records shall be maintained in accordance with
section 5747.17 of the Revised Code and any rules adopted pursuant
thereto.
(3) Annually, on or before the thirty-first day of January, a
lottery sales agent shall file an annual return electronically
with the tax commissioner and the tax administrator of the
municipal corporation, as applicable, indicating the total amount
deducted and withheld during the preceding calendar year. The
lottery sales agent shall remit electronically with the annual
return any amount that was deducted and withheld and that was not
previously remitted. If the identity of a person and the amount
deducted and withheld with respect to that person were omitted on
a monthly return, that information shall be indicated on the
annual return.
(4)(a) A lottery sales agent who fails to file a return and
remit the amounts deducted and withheld is personally liable for
the amount deducted and withheld and not remitted. The
commissioner and the tax administrator of the municipal
corporation, as applicable, may impose a penalty of up to one
thousand dollars if a return is filed late, if amounts deducted
and withheld are remitted late, if a return is not filed, or if
amounts deducted and withheld are not remitted. Interest accrues
on past due amounts deducted and withheld at the rate prescribed
in section 5703.47 of the Revised Code. The commissioner and the
tax administrator of the municipal corporation, as applicable, may
collect past due amounts deducted and withheld and penalties and
interest thereon by assessment under section 5747.13 of the
Revised Code as if they were income taxes collected by an
employer.
(b) If a lottery sales agent ceases to operate video lottery
terminals, the amounts deducted and withheld and any penalties and
interest thereon are immediately due and payable. A successor of
the lottery sales agent that purchases the video lottery terminals
from the agent shall withhold an amount of the purchase money that
is sufficient to cover the amounts deducted and withheld and
penalties and interest thereon until the predecessor lottery sales
agent produces either a receipt from the tax commissioner and the
tax administrator of the municipal corporation, as applicable,
showing that the amounts deducted and withheld and penalties and
interest thereon have been paid or a certificate from the
commissioner and the tax administrator of the municipal
corporation, as applicable, indicating that no amounts deducted
and withheld or penalties and interest thereon are due. If the
successor fails to withhold purchase money, the successor is
personally liable for payment of the amounts deducted and withheld
and penalties and interest thereon, up to the amount of the
purchase money.
(D)(1) Annually, on or before the thirty-first day of
January, a lottery sales agent shall issue an information return
to each person with respect to whom an amount has been deducted
and withheld during the preceding calendar year. The information
return shall show the total amount deducted from the person's
prize award by the lottery sales agent during the preceding year.
(2) Annually, on or before the thirty-first day of January, a
lottery sales agent shall provide to the tax commissioner and the
tax administrator of the municipal corporation, as applicable, a
copy of each information return issued under division (D)(1) of
this section for the preceding calendar year. The commissioner and
the tax administrator of the municipal corporation, as applicable,
may require that such copies be transmitted electronically.
(E) Amounts deducted and withheld shall be allowed as a
credit against payment of the tax imposed by section 5747.02 of
the Revised Code and shall be treated as taxes paid for purposes
of section 5747.09 of the Revised Code. This division applies only
to the person for whom the amount is deducted and withheld.
(F) The failure of a lottery sales agent to deduct and
withhold the required amount from a person's prize award does not
relieve the person from liability for the tax imposed by section
5747.02 of the Revised Code with respect to that income.
Compliance with this section does not relieve a lottery sales
agent or a person who has a prize award from compliance with
relevant provisions of federal tax laws.
(G) The commissioner and the tax administrator of the
municipal corporation, as applicable, shall prescribe the form of
the receipt and returns required by this section and the
commissioner may promulgate any rules necessary to administer the
section.
Sec. 5751.07. (A) Any person required to file returns for a
calendar quarter shall remit each tax payment, and, if required by
the tax commissioner, file the tax return or the annual report,
electronically. The commissioner may require taxpayers to use the
Ohio business gateway as defined in section 718.051 718.01 of the
Revised Code to file returns and remit the tax, or may provide
another means for taxpayers to file and remit the tax
electronically.
(B) A person required by this section to remit taxes or file
returns electronically may apply to the tax commissioner, on the
form prescribed by the commissioner, to be excused from that
requirement. The commissioner may excuse a person from the
requirements of this division for good cause.
(C)(1) If a person required to remit taxes or file a return
electronically under this section fails to do so, the commissioner
may impose a penalty not to exceed the following:
(a) For either of the first two calendar quarters the person
so fails, five per cent of the amount of the payment that was
required to be remitted;
(b) For the third and any subsequent calendar quarters the
person so fails, ten per cent of the amount of the payment that
was required to be remitted.
(2) The penalty imposed under division (C)(1) of this section
is in addition to any other penalty imposed under this chapter and
shall be considered as revenue arising from the tax imposed under
this chapter. A penalty may be collected by assessment in the
manner prescribed by section 5751.09 of the Revised Code. The tax
commissioner may abate all or a portion of such a penalty.
Section 2. That existing sections 715.013, 718.02, 718.03,
718.04,
718.051, 718.07, 718.09, 718.10, 718.11, 718.121, 718.13,
5703.059, 5703.57, 5717.011, 5717.03, 5739.12, 5739.124, 5741.122,
5747.063, 5747.064, and 5751.07 and sections 718.01, 718.011,
718.041, 718.05, 718.06, 718.08, 718.12, and 718.14 of the Revised
Code are hereby repealed.
Section 3. This act is effective for municipal taxable years
beginning on or after January 1, 2015. For municipal taxable years
beginning before January 1, 2015, tax administrators may continue
to administer, audit, and enforce the income tax of a municipal
corporation under Chapter 718. and ordinances and resolutions of
the municipal corporation as that chapter and those ordinances and
resolutions existed before January 1, 2015.
Section 4. If the Municipal Tax Policy Board does not, as
charged under section 718.42 of the Revised Code, create and
furnish the forms, reports, schedules, and attachments required to
be filed under Chapter 718. of the Revised Code before January 1,
2015, each tax administrator shall create required forms, reports,
schedules, and attachments and furnish the documents for use with
the tax administrator until the Municipal Tax Policy Board creates
and furnishes the necessary documents.
Section 5. Notwithstanding Section 3 of this act, the
governor shall make initial appointments to the Municipal Tax
Policy Board not later than fifteen days after the effective date
of this act.
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