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Am. Sub. H. B. No. 5 As Re-referred to the Senate Ways and Means CommitteeAs Re-referred to the Senate Ways and Means Committee
130th General Assembly | Regular Session | 2013-2014 |
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Representatives Grossman, Henne
Cosponsors:
Representatives Amstutz, Beck, Adams, J., Blair, Brenner, Buchy, DeVitis, Hagan, C., Hood, Maag, Retherford, Roegner, Ruhl, Scherer, Sears, Terhar, Thompson, Young Speaker Batchelder
A BILL
To amend sections 709.023, 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, 5747.50,
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 718.012, 718.031, 718.052,
718.18, 718.19, 718.22 to 718.28, 718.30, 718.31,
718.35, 718.38, 718.41, and 718.99, to repeal
sections 718.01, 718.011, 718.041, 718.05, 718.06,
718.08, 718.12, and 718.14 of the Revised Code,
and to amend the version of section 5703.02 of the
Revised Code that is scheduled to take effect
January 1, 2015, 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 709.023, 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, 5747.50, 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 718.012,
718.031, 718.052, 718.18, 718.19, 718.22, 718.23, 718.24, 718.25,
718.26, 718.27, 718.28, 718.30, 718.31, 718.35, 718.38, 718.41,
and 718.99 of the Revised Code be enacted to read as follows:
Sec. 709.023. (A) A petition filed under section 709.021 of
the Revised Code that requests to follow this section is for the
special procedure of annexing land into a municipal corporation
when, subject to division (H) of this section, the land also is
not to be excluded from the township under section 503.07 of the
Revised Code. The owners who sign this petition by their signature
expressly waive their right to appeal in law or equity from the
board of county commissioners' entry of any resolution under this
section, waive any rights they may have to sue on any issue
relating to a municipal corporation requiring a buffer as provided
in this section, and waive any rights to seek a variance that
would relieve or exempt them from that buffer requirement.
The petition circulated to collect signatures for the special
procedure in this section shall contain in boldface capital
letters immediately above the heading of the place for signatures
on each part of the petition the following: "WHOEVER SIGNS THIS
PETITION EXPRESSLY WAIVES THEIR RIGHT TO APPEAL IN LAW OR EQUITY
FROM THE BOARD OF COUNTY COMMISSIONERS' ENTRY OF ANY RESOLUTION
PERTAINING TO THIS SPECIAL ANNEXATION PROCEDURE, ALTHOUGH A WRIT
OF MANDAMUS MAY BE SOUGHT TO COMPEL THE BOARD TO PERFORM ITS
DUTIES REQUIRED BY LAW FOR THIS SPECIAL ANNEXATION PROCEDURE."
(B) Upon the filing of the petition in the office of the
clerk of the board of county commissioners, the clerk shall cause
the petition to be entered upon the board's journal at its next
regular session. This entry shall be the first official act of the
board on the petition. Within five days after the filing of the
petition, the agent for the petitioners shall notify in the manner
and form specified in this division the clerk of the legislative
authority of the municipal corporation to which annexation is
proposed, the fiscal officer of each township any portion of which
is included within the territory proposed for annexation, the
clerk of the board of county commissioners of each county in which
the territory proposed for annexation is located other than the
county in which the petition is filed, and the owners of property
adjacent to the territory proposed for annexation or adjacent to a
road that is adjacent to that territory and located directly
across that road from that territory. The notice shall refer to
the time and date when the petition was filed and the county in
which it was filed and shall have attached or shall be accompanied
by a copy of the petition and any attachments or documents
accompanying the petition as filed.
Notice to a property owner is sufficient if sent by regular
United States mail to the tax mailing address listed on the county
auditor's records. Notice to the appropriate government officer
shall be given by certified mail, return receipt requested, or by
causing the notice to be personally served on the officer, with
proof of service by affidavit of the person who delivered the
notice. Proof of service of the notice on each appropriate
government officer shall be filed with the board of county
commissioners with which the petition was filed.
(C) Within twenty days after the date that the petition is
filed, the legislative authority of the municipal corporation to
which annexation is proposed shall adopt an ordinance or
resolution stating what services the municipal corporation will
provide, and an approximate date by which it will provide them, to
the territory proposed for annexation, upon annexation. The
municipal corporation is entitled in its sole discretion to
provide to the territory proposed for annexation, upon annexation,
services in addition to the services described in that ordinance
or resolution.
If the territory proposed for annexation is subject to zoning
regulations adopted under either Chapter 303. or 519. of the
Revised Code at the time the petition is filed, the legislative
authority of the municipal corporation also shall adopt an
ordinance or resolution stating that, if the territory is annexed
and becomes subject to zoning by the municipal corporation and
that municipal zoning permits uses in the annexed territory that
the municipal corporation determines are clearly incompatible with
the uses permitted under current county or township zoning
regulations in the adjacent land remaining within the township
from which the territory was annexed, the legislative authority of
the municipal corporation will require, in the zoning ordinance
permitting the incompatible uses, the owner of the annexed
territory to provide a buffer separating the use of the annexed
territory and the adjacent land remaining within the township. For
the purposes of this section, "buffer" includes open space,
landscaping, fences, walls, and other structured elements; streets
and street rights-of-way; and bicycle and pedestrian paths and
sidewalks.
The clerk of the legislative authority of the municipal
corporation to which annexation is proposed shall file the
ordinances or resolutions adopted under this division with the
board of county commissioners within twenty days following the
date that the petition is filed. The board shall make these
ordinances or resolutions available for public inspection.
(D) Within twenty-five days after the date that the petition
is filed, the legislative authority of the municipal corporation
to which annexation is proposed and each township any portion of
which is included within the territory proposed for annexation may
adopt and file with the board of county commissioners an ordinance
or resolution consenting or objecting to the proposed annexation.
An objection to the proposed annexation shall be based solely upon
the petition's failure to meet the conditions specified in
division (E) of this section.
If the municipal corporation and each of those townships
timely files an ordinance or resolution consenting to the proposed
annexation, the board at its next regular session shall enter upon
its journal a resolution granting the proposed annexation. If,
instead, the municipal corporation or any of those townships files
an ordinance or resolution that objects to the proposed
annexation, the board of county commissioners shall proceed as
provided in division (E) of this section. Failure of the municipal
corporation or any of those townships to timely file an ordinance
or resolution consenting or objecting to the proposed annexation
shall be deemed to constitute consent by that municipal
corporation or township to the proposed annexation.
(E) Unless the petition is granted under division (D) of this
section, not less than thirty or more than forty-five days after
the date that the petition is filed, the board of county
commissioners shall review it to determine if each of the
following conditions has been met:
(1) The petition meets all the requirements set forth in, and
was filed in the manner provided in, section 709.021 of the
Revised Code.
(2) The persons who signed the petition are owners of the
real estate located in the territory proposed for annexation and
constitute all of the owners of real estate in that territory.
(3) The territory proposed for annexation does not exceed
five hundred acres.
(4) The territory proposed for annexation shares a contiguous
boundary with the municipal corporation to which annexation is
proposed for a continuous length of at least five per cent of the
perimeter of the territory proposed for annexation.
(5) The annexation will not create an unincorporated area of
the township that is completely surrounded by the territory
proposed for annexation.
(6) The municipal corporation to which annexation is proposed
has agreed to provide to the territory proposed for annexation the
services specified in the relevant ordinance or resolution adopted
under division (C) of this section.
(7) If a street or highway will be divided or segmented by
the boundary line between the township and the municipal
corporation as to create a road maintenance problem, the municipal
corporation to which annexation is proposed has agreed as a
condition of the annexation to assume the maintenance of that
street or highway or to otherwise correct the problem. As used in
this section, "street" or "highway" has the same meaning as in
section 4511.01 of the Revised Code.
(F) Not less than thirty or more than forty-five days after
the date that the petition is filed, if the petition is not
granted under division (D) of this section, the board of county
commissioners, if it finds that each of the conditions specified
in division (E) of this section has been met, shall enter upon its
journal a resolution granting the annexation. If the board of
county commissioners finds that one or more of the conditions
specified in division (E) of this section have not been met, it
shall enter upon its journal a resolution that states which of
those conditions the board finds have not been met and that denies
the petition.
(G) If a petition is granted under division (D) or (F) of
this section, the clerk of the board of county commissioners shall
proceed as provided in division (C)(1) of section 709.033 of the
Revised Code, except that no recording or hearing exhibits would
be involved. There is no appeal in law or equity from the board's
entry of any resolution under this section, but any party may seek
a writ of mandamus to compel the board of county commissioners to
perform its duties under this section.
(H) Notwithstanding anything to the contrary in section
503.07 of the Revised Code, unless otherwise provided in an
annexation agreement entered into pursuant to section 709.192 of
the Revised Code or in a cooperative economic development
agreement entered into pursuant to section 701.07 of the Revised
Code, territory annexed into a municipal corporation pursuant to
this section shall not at any time be excluded from the township
under section 503.07 of the Revised Code and, thus, remains
subject to the township's real property taxes.
(I) Any owner of land that remains within a township and that
is adjacent to territory annexed pursuant to this section who is
directly affected by the failure of the annexing municipal
corporation to enforce compliance with any zoning ordinance it
adopts under division (C) of this section requiring the owner of
the annexed territory to provide a buffer zone, may commence in
the court of common pleas a civil action against that owner to
enforce compliance with that buffer requirement whenever the
required buffer is not in place before any development of the
annexed territory begins.
(J) Division (H)(12) (C)(18) of section 718.01 of the Revised
Code applies to the compensation paid to persons performing
personal services for a political subdivision on property owned by
the political subdivision after that property is annexed to a
municipal corporation under this section.
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)(1) "Municipal taxable income" means the following:
(a) For a person other than an individual, income reduced by
exempt income to the extent otherwise included in income and then,
as applicable, apportioned or sitused to the municipal corporation
under section 718.02 of the Revised Code, and further reduced by
any pre-2016 net operating loss carryforward available to the
person for the municipal corporation.
(b)(i) For an individual who is a resident of a municipal
corporation other than a qualified municipal corporation, income
reduced by exempt income to the extent otherwise included in
income, then reduced as provided in division (A)(2) of this
section, and further reduced by any pre-2016 net operating loss
carryforward available to the individual for the municipal
corporation.
(ii) For an individual who is a resident of a qualified
municipal corporation, Ohio adjusted gross income reduced by
income exempted, and increased by deductions excluded, by the
qualified municipal corporation from the qualified municipal
corporation's tax on or before December 31, 2013. If a qualified
municipal corporation, on or before December 31, 2013, exempts
income earned by individuals who are not residents of the
qualified municipal corporation and net profit of persons that are
not wholly located within the qualified municipal corporation,
such individual or person shall have no municipal taxable income
for the purposes of the tax levied by the qualified municipal
corporation and may be exempted by the qualified municipal
corporation from the requirements of section 718.03 of the Revised
Code.
(c) For an individual who is a nonresident of a municipal
corporation, income reduced by exempt income to the extent
otherwise included in income and then, as applicable, apportioned
or sitused to the municipal corporation under section 718.02 of
the Revised Code, then reduced as provided in division (A)(2) of
this section, and further reduced by any pre-2016 net operating
loss carryforward available to the individual for the municipal
corporation.
(2) In computing the municipal taxable income of a taxpayer
who is an individual, the taxpayer may subtract, as provided in
division (A)(1)(b)(i) or (c) of this section, the amount of the
individual's employee business expenses reportable on the
individual's form 2106 that the individual deducted for federal
income tax purposes for the taxable year, subject to the
limitation imposed by section 67 of the Internal Revenue Code. For
the municipal corporation in which the taxpayer is a resident, the
taxpayer may deduct all such expenses. For a municipal corporation
in which the taxpayer is not a resident, the taxpayer may deduct
such expenses only to the extent the expenses are related to the
taxpayer's performance of personal services in that nonresident
municipal corporation.
(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.
(b) For the purposes of division (B)(1)(a) of this section,
the distributive share of any net operating loss attributable to
an ownership interest in a pass-through entity shall be allowed as
a deduction against any net profit of the resident generated
during the same taxable year, and any net operating loss of the
resident shall be allowed as a deduction against the distributive
share of any net profit attributable to an ownership interest in a
pass-through entity generated during the same taxable year.
(c) Division (B)(1)(b) of this section does not apply with
respect to any net profit or net operating loss attributable to an
ownership interest in an S corporation unless shareholders'
distributive shares of net profits from S corporations are subject
to tax in the municipal corporation as provided in division
(C)(14)(b) or (c) of this section.
(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 any net profit of the
nonresident, but excluding the nonresident's distributive share of
the net profit or loss of only pass-through entities owned
directly or indirectly by the nonresident.
(3) For taxpayers that are not individuals, net profit of the
taxpayer;
(4) Lottery, sweepstakes, gambling and sports winnings,
winnings from games of chance, and prizes and awards. If the
taxpayer is a professional gambler for federal income tax
purposes, the taxpayer may deduct related wagering losses and
expenses to the extent 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, pensions, retirement benefit payments,
payments from annuities, and similar payments made to an employee
or to the beneficiary of an employee under a retirement program or
plan, disability payments received from private industry or local,
state, or federal governments or from charitable, religious or
educational organizations, and the proceeds of sickness, accident,
or liability insurance policies. 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)(a) Except as provided in division (C)(14)(b) or (c) of
this section, an S corporation shareholder's distributive share of
net profits of the S corporation, other than any part of the
distributive share of net profits that represents wages as defined
in section 3121(a) of the Internal Revenue Code or net earnings
from self-employment as defined in section 1402(a) of the Internal
Revenue Code.
(b) If, pursuant to division (H) of former section 718.01 of
the Revised Code as it existed before March 11, 2004, a majority
of the electors of a municipal corporation voted in favor of the
question at an election held on November 4, 2003, the municipal
corporation may continue after 2002 to tax an S corporation
shareholder's distributive share of net profits of an S
corporation.
(c) If, on December 6, 2002, a municipal corporation was
imposing, assessing, and collecting a tax on an S corporation
shareholder's distributive share of net profits of the S
corporation to the extent the distributive share would be
allocated or apportioned to this state under divisions (B)(1) and
(2) of section 5733.05 of the Revised Code if the S corporation
were a corporation subject to taxes imposed under Chapter 5733. of
the Revised Code, the municipal corporation may continue to impose
the tax on such distributive shares to the extent such shares
would be so allocated or apportioned to this state only until
December 31, 2004, unless a majority of the electors of the
municipal corporation voting on the question of continuing to tax
such shares after that date vote in favor of that question at an
election held November 2, 2004. If a majority of those electors
vote in favor of the question, the municipal corporation may
continue after December 31, 2004, to impose the tax on such
distributive shares only to the extent such shares would be so
allocated or apportioned to this state.
(d) A municipal corporation shall be deemed to have elected
to tax S corporation shareholders' distributive shares of net
profits of the S corporation in the hands of the shareholders if a
majority of the electors of a municipal corporation vote in favor
of a question at an election held under division (C)(14)(b) or (c)
of this section. The municipal corporation shall specify by
resolution or ordinance that the tax applies to the distributive
share of a shareholder of an S corporation in the hands of the
shareholder of the S corporation.
(15) To the extent authorized under a resolution or ordinance
adopted by a municipal corporation before January 1, 2015, all or
a portion of the income of individuals or a class of individuals
under eighteen years of age.
(16)(a) Except as provided in divisions (C)(16)(b), (c), and
(d) of this section, qualifying wages described in division (B)(1)
or (E) of section 718.011 of the Revised Code to the extent the
qualifying wages are not subject to withholding for the municipal
corporation under either of those divisions.
(b) The exemption provided in division (C)(16)(a) of this
section does not apply with respect to the municipal corporation
in which the employee resided at the time the employee earned the
qualifying wages.
(c) The exemption provided in division (C)(16)(a) of this
section does not apply to qualifying wages that an employer elects
to withhold under division (D)(2) of section 718.011 of the
Revised Code.
(d) The exemption provided in division (C)(16)(a) of this
section does not apply to qualifying wages if both of the
following conditions apply:
(i) For qualifying wages described in division (B)(1) of
section 718.011 of the Revised Code, the employee's employer
withholds and remits tax on the qualifying wages to the municipal
corporation in which the employee's principal place of work is
situated, or, for qualifying wages described in division (E) of
section 718.011 of the Revised Code, the employee's employer
withholds and remits tax on the qualifying wages to the municipal
corporation in which the employer's fixed location is located;
(ii) The employee receives a refund of the tax described in
division (C)(16)(d)(i) of this section on the basis of the
employee not performing services in that municipal corporation.
(17) Compensation that is not qualifying wages paid to a
nonresident individual for personal services performed in the
municipal corporation as a member of the board of directors of a
corporation on not more than twenty days in a taxable year.
(18) Compensation paid to a person for personal services
performed for a political subdivision on property owned by the
political subdivision, regardless of whether the compensation is
received by an employee of the subdivision or another person
performing services for the subdivision under a contract with the
subdivision, if the property on which services are performed is
annexed to a municipal corporation pursuant to section 709.023 of
the Revised Code on or after March 27, 2013, unless the person is
subject to such taxation because of residence. If the compensation
is subject to taxation because of residence, municipal income tax
shall be payable only to the municipal corporation of residence.
(19) Income the taxation of which is prohibited by the
constitution or laws of the United States.
Any item of income that is exempt income of a pass-through
entity under division (C) of this section is exempt income of each
owner of the pass-through entity to the extent of that owner's
distributive or proportionate share of that item of the entity's
income.
(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, or schedule F 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 division
(E)(8) of this section.
(3) For the purposes of this chapter, and notwithstanding
division (D)(1) of this section, net profit of a disregarded
entity shall not be taxable as against that disregarded entity,
but shall instead be included in the net profit of the owner of
the disregarded entity.
(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 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 the following:
(i) For a municipal corporation that levies an income tax
before January 1, 2015, any net operating loss incurred by the
person in taxable years beginning after 2015.
(ii) For a municipal corporation that does not levy an income
tax before January 1, 2015, any net operating loss incurred by the
person in taxable years beginning on or after the effective date
of the income tax.
For any municipal corporation, the amount of the net
operating loss shall be deducted from net profit reduced by exempt
income to the extent necessary to reduce municipal taxable income
to zero, with any remaining unused portion of the net operating
loss carried forward to not more than five consecutive taxable
years following the taxable year in which the loss was incurred,
but in no case for more years than necessary for the deduction to
be fully utilized.
(b) No person shall use the deduction allowed by division
(E)(8) of this section to offset qualifying wages.
(c)(i) For taxable years beginning in 2017, 2018, 2019, 2020,
or 2021, a person may not deduct, for purposes of an income tax
levied by a municipal corporation that levies an income tax before
January 1, 2015, more than fifty per cent of the amount of the
deduction otherwise allowed by division (E)(8)(a) of this section.
(ii) For taxable years beginning in 2022 or thereafter, a
person may deduct, for purposes of an income tax levied by a
municipal corporation that levies an income tax before January 1,
2015, the full amount allowed by division (E)(8)(a) of this
section.
(d) Any pre-2016 net operating loss carryforward deduction
that is available 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) and (ii) of this
section precludes a person 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) and (ii) of this section.
(9) Deduct any net profit of a pass-through entity owned
directly or indirectly by the taxpayer and included in the
taxpayer's federal taxable income unless an affiliated group of
corporations includes that net profit in the group's federal
taxable income in accordance with division (E)(3)(b) of section
718.06 of the Revised Code.
(10) Add any loss incurred by a pass-through entity owned
directly or indirectly by the taxpayer and included in the
taxpayer's federal taxable income unless an affiliated group of
corporations includes that loss in the group's federal taxable
income in accordance with division (E)(3)(b) of section 718.06 of
the Revised Code.
If the taxpayer is not a C corporation, is not a disregarded
entity, and is not an individual, the taxpayer shall compute
adjusted federal taxable income under this section as if the
taxpayer were a C corporation, except guaranteed payments and
other similar amounts paid or accrued to a partner, former
partner, shareholder, former shareholder, member, or former member
shall not be allowed as a deductible expense unless such payments
are in consideration for the use of capital and treated as payment
of interest under section 469 of the Internal Revenue Code or
United States treasury regulations. Amounts paid or accrued to a
qualified self-employed retirement plan with respect to a partner,
former partner, shareholder, former shareholder, member, or former
member of the taxpayer, amounts paid or accrued to or for health
insurance for a partner, former partner, shareholder, former
shareholder, member, or former member, and amounts paid or accrued
to or for life insurance for a partner, former partner,
shareholder, former shareholder, member, or former member shall
not be allowed as a deduction.
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.
(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 domiciled in the
municipal corporation as determined under section 718.012 of the
Revised Code.
(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 disregarded entity.
(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) of this section as this
section existed on December 31, 2004.
(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.
(N) "Pass-through entity" means a partnership not treated as
an association taxable as a C corporation for federal income tax
purposes, a limited liability company not treated as an
association taxable as a C corporation for federal income tax
purposes, an S corporation, or any other class of entity from
which the income or profits of the entity are given pass-through
treatment for federal income tax purposes. "Pass-through entity"
does not include a trust, estate, grantor of a grantor trust, or
disregarded entity.
(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 member.
(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.
(e) Any amount that is exempt income.
(2) Add the following amounts:
(a) Any amount not included in wages solely because the
employee was employed by the employer before April 1, 1986.
(b) Any amount not included in wages because the amount
arises from the sale, exchange, or other disposition of a stock
option, the exercise of a stock option, or the sale, exchange, or
other disposition of stock purchased under a stock option 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 H.B. 5 of the 130th general assembly.
(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 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.
(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 2106" means internal revenue service form 2106
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) "Disregarded entity" means a single member limited
liability company, a qualifying subchapter S subsidiary, or
another entity if the company, subsidiary, or entity is a
disregarded entity for federal income tax purposes.
(CC) "Generic form" means an electronic or paper form
designed for reporting taxes withheld by an employer, agent of an
employer, or other payer, estimated municipal income taxes, or
annual municipal income tax liability or for filing a refund
claim.
(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) "Net operating loss" means a loss incurred by a person
in the operation of a trade or business. "Net operating loss" does
not include unutilized losses resulting from basis limitations,
at-risk limitations, or passive activity loss limitations.
(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) "Written determination by the tax administrator"
means a written ruling by a tax administrator in response to a
written request by a taxpayer regarding the taxpayer's municipal
income tax liability, including tax, penalty, interest, or any
combination thereof, 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 of the Revised Code
and that has "written determination" printed in all capital
letters in a font size no smaller than eighteen point at the top
of the first page of the written ruling.
(2) "Written determination by the tax administrator" does not
include a denial, in whole or in part, of a taxpayer's refund
claim based on an originally filed annual tax return, a billing
statement notifying a taxpayer of current or past-due balances
owed to the municipal corporation, a tax administrator's request
for additional information, a notification to the taxpayer of
mathematical errors, or a tax administrator's other written
correspondence to a person or taxpayer.
(QQ) "Taxpayer rights and responsibilities" means the rights
provided to taxpayers in sections 718.11, 718.12, 718.18, 718.19,
718.23, 718.38, 5717.011, and 5717.03 of the Revised Code and the
responsibilities of taxpayers to file, report, withhold, remit,
and pay municipal income tax and otherwise comply with Chapter
718. of the Revised Code and resolutions, ordinances, and rules
adopted by a municipal corporation for the imposition and
administration of a municipal income tax.
(RR) "Qualified municipal corporation" means a municipal
corporation that, by resolution or ordinance adopted on or before
December 31, 2011, adopted Ohio adjusted gross income, as defined
by section 5747.01 of the Revised Code, as the income subject to
tax for the purposes of imposing a municipal income tax.
(SS)(1) "Pre-2016 net operating loss carryforward" means any
net operating loss incurred in a taxable year beginning before
January 1, 2016, to the extent such loss was permitted, by a
resolution or ordinance of the municipal corporation that was
adopted by the municipal corporation before January 1, 2016, to be
carried forward and utilized to offset income or net profit
generated in such municipal corporation in future taxable years.
(2) For the purpose of calculating municipal taxable income,
any pre-2016 net operating loss carryforward may be carried
forward to any taxable year, including taxable years beginning in
2016 or thereafter, for the number of taxable years provided in
the resolution or ordinance or until fully utilized, whichever is
earlier.
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 other
temporary worksite in this state at which the employer provides
services for more than twenty days during the calendar year.
"Worksite location" does not include the home of an employee.
(7) "Principal place of work" means the fixed location to
which an employee is required to report for employment duties on a
regular and ordinary basis. If the employee is not required to
report for employment duties on a regular and ordinary basis to a
fixed location, "principal place of work" means the worksite
location 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), (E), and (F) 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 or 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)(1) Except as provided in division (D)(2) of this section,
if, during a calendar year, the number of days an employee spends
performing personal services in a municipal corporation exceeds
the twenty-day threshold described in division (B)(1) of this
section, the employer shall withhold and remit tax to that
municipal corporation for any subsequent days in that calendar
year on which the employer pays qualifying wages to the employee
for personal services performed in that municipal corporation.
(2) An employer required to begin withholding tax for a
municipal corporation under division (D)(1) of this section may
elect to withhold tax for that municipal corporation for the first
twenty days on which the employer paid qualifying wages to the
employee for personal services performed in that municipal
corporation. The employer shall make the election on the annual
tax return the employer files with the municipal corporation under
section 718.05 or 718.06 of the Revised Code. Taxes withheld and
paid by such an employer during those first twenty days to the
municipal corporation in which the employee's principal place of
work is located are refundable to the employee.
(E) Without regard to the number of days in a calendar year
on which an employee performs personal services in any municipal
corporation, an employer shall withhold municipal income tax on
all of the employee's qualifying wages for a taxable year and
remit that tax only to the municipal corporation in which the
employer's fixed location is located if the total gross receipts
of the employer for the preceding taxable year were less than five
hundred thousand dollars.
To determine whether an employer meets the requirements of
division (E) of this section for a taxable year, a tax
administrator may require the employer to provide the tax
administrator with the employer's federal income tax return for
the preceding taxable year.
(F) Divisions (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.
Sec. 718.012. (A)(1) As used in this chapter, "domicile"
means the principal residence that an individual intends to use
for an indefinite period of time and to which, whenever absent,
the individual intends to return. An individual is domiciled in a
municipal corporation for all or part of a taxable year if, based
on the factors described in division (B) of this section and any
other factor the tax administrator considers relevant or which
demonstrates an intent to return, the tax administrator reasonably
concludes that the individual is domiciled in the municipal
corporation for all or part of the taxable year.
(2) An individual may rebut the conclusion of domicile
described in division (A)(1) of this section only if, based on the
factors described in division (B) of this section and any other
factor the individual considers relevant, the individual
establishes by a preponderance of the evidence that the individual
was not domiciled in the municipal corporation for all or part of
the taxable year.
(B) The factors that a tax administrator may consider when
determining whether an individual is domiciled in a municipal
corporation for all or part of a taxable year include, but are not
limited to, the following:
(1) The location of law firms, accounting firms, health care
providers, and similar professionals utilized by the individual or
the individual's spouse;
(2) The location of organizations described in section 501(c)
of the Internal Revenue Code to which the individual or the
individual's spouse make contributions or other payments or in
which they participate as a congregant, member, board member,
committee member, adviser, or consultant;
(3) The location, place of business, or place of organization
or incorporation of a corporation, partnership, limited liability
company, or other business venture or entity in which the
individual or the individual's spouse is a shareholder or limited
partner or for which the individual or individual's spouse is a
member of the board of directors;
(4) The location of the individual's friends, dependents as
defined in section 152 of the Internal Revenue Code, and family
members other than the individual's spouse;
(5) The location of educational institutions that are
attended by the individual's dependents as defined in section 152
of the Internal Revenue Code or from which the individual or the
individual's spouse or dependents claimed the benefit of in-state
tuition rates available only to individuals domiciled in the
state;
(6) The location of all businesses at which the individual or
the individual's spouse makes purchases of tangible personal
property;
(7) Whether the individual is registered to vote, or has
voted, in the municipal corporation during the taxable year;
(8) The location at which the individual acquired or renewed
the individual's Ohio driver's license, or the location at which
the individual's vehicle is registered, for the taxable year;
(9) The place of employment of the individual or the
individual's spouse.
(10) The location of any real property owned or leased by the
individual or the individual's spouse.
(11) The address used by the individual or the individual's
spouse on federal or state tax returns, bills, invoices, credit
card statements, utility bills, and other mailings for the taxable
year.
(C) A taxpayer has only one domicile. A domicile once
acquired is presumed to continue until it is shown to have been
changed. When a taxpayer alleges a change of domicile, the
taxpayer bears the burden of proof of demonstrating the change as
provided in division (A)(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. 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)(B) 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, tangible personal or real
property shall include property rented or leased by the taxpayer
and the value of such property shall be determined by multiplying
the annual rental thereon by eight;
(2) Wages, salaries, and other compensation paid during the
taxable period to 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 from which taxes are
not required to be withheld under section 718.011 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 it is determined by a preponderance of the
evidence that 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 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 use an alternative apportionment method on
the taxpayer's tax return, provided the taxpayer notifies the tax
administrator before filing the return. A taxpayer may not use an
alternative apportionment method, an alternative method of
accounting, or an alternative method of filing on a timely filed
amended tax return without notifying the tax administrator before
filing the return. An alternative apportionment method shall apply
only to the taxable years included in the taxpayer's notification
to the tax administrator.
(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 in which
the sale originated. For the purposes of this division, a sale of
property originates in a municipal corporation if, regardless of
where title passes, the property meets any of the following
criteria:
(a) The property is shipped to or delivered within the
municipal corporation from a stock of goods located within the
municipal corporation.
(b) The property is delivered within the municipal
corporation from a location outside the municipal corporation,
provided the taxpayer is regularly engaged through its own
employees in the solicitation or promotion of sales within such
municipal corporation and the sales result from such solicitation
or promotion.
(c) The property is shipped from a place within the municipal
corporation to purchasers outside the municipal corporation,
provided that the taxpayer is not regularly engaged in the
solicitation or promotion of sales at the place where delivery is
made.
(2) Gross receipts from the sale of services shall be sitused
to the municipal corporation to the extent that such services are
performed in the municipal corporation.
(3) To the extent included in income, gross receipts from the
sale of real property located in the municipal corporation shall
be sitused to the municipal corporation.
(4) To the extent included in income, gross receipts from
rents and royalties from real property located in the municipal
corporation shall be sitused to the municipal corporation.
(5) Gross receipts from rents and royalties from tangible
personal property shall be sitused to the municipal corporation
based upon the extent to which the tangible personal property is
used in the municipal corporation.
(E) The net profit of an individual 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 and the municipal corporation in which the
taxpayer that receives the net profit resides.
(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)(1) Except as provided in division (F)(2) of this section,
commissions received by a real estate agent or broker relating to
the sale, purchase, or lease of real estate shall be sitused to
the municipal corporation in which the real estate is located. Net
profit reported by the real estate agent or broker shall be
allocated to a municipal corporation based upon the ratio of the
commissions the agent or broker received from the sale, purchase,
or lease of real estate located in the municipal corporation to
the commissions received from the sale, purchase, or lease of real
estate everywhere in the taxable year.
(2) An individual who is a resident of a municipal
corporation that imposes a municipal income tax shall report the
individual's net profit from all real estate activity on the
individual's annual tax return for that municipal corporation. The
individual may claim a credit for taxes the individual paid on
such net profit to another municipal corporation to the extent
that such a credit is allowed under the municipal income tax
ordinance, or rules of the municipal corporation of residence.
(G) If, in computing a taxpayer's adjusted federal taxable
income, the taxpayer deducted any amount with respect to a stock
option granted to an employee, and if the employee is not required
to include in the employee's income any such amount or a portion
thereof because it is exempted from taxation under divisions
(C)(12) and (R)(1)(d) of section 718.01 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 this section.
(H) When calculating the ratios described in division (A) of
this section for the purposes of that division or division (B) of
this section, the owner of a disregarded entity shall include in
the owner's ratios the property, payroll, and gross receipts of
such disregarded entity.
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 section 718.011 of the Revised Code or division
(D) or (F) of this section. An employer, agent of an employer, or
other payer shall deduct and withhold the tax from qualifying
wages on the date that the employer, agent, or other payer
directly, indirectly, or constructively pays the qualifying wages
to, or credits the qualifying wages to the benefit of, the
employee.
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)(1) Except as provided in division (B)(2) of this section,
an employer, agent of an employer, or other payer shall remit to
the tax administrator of a municipal corporation the greater of
the income taxes deducted and withheld or the income taxes
required to be deducted and withheld by the employer, agent, or
other payer according to the following schedule:
(a) Taxes required to be deducted and withheld shall be
remitted monthly to the tax administrator if the total taxes
deducted and withheld or required to be deducted and withheld by
the employer, agent, or other payer on behalf of the municipal
corporation in the preceding calendar year exceeded two thousand
three hundred ninety-nine dollars, or if the total amount of taxes
deducted and withheld or required to be deducted and withheld on
behalf of the municipal corporation in any month of the preceding
calendar quarter exceeded two hundred dollars.
Payment under division (B)(1)(a) 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.
(b) Any employer, agent of an employer, or other payer not
required to make payments under division (B)(1)(a) of this section
of taxes required to be deducted and withheld shall make quarterly
payments to the tax administrator not later than the fifteenth day
of the month following the end of each calendar quarter.
(2) Notwithstanding division (B)(1) of this section, a
municipal corporation may require, by resolution, ordinance, or
rule, an employer, agent of an employer, or other payer to do any
of the following:
(a) Remit taxes deducted and withheld semimonthly to the tax
administrator if the total taxes deducted and withheld or required
to be deducted and withheld 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 year exceeded one thousand dollars. The payment under
division (B)(2)(a) of this section shall be made so that the
payment is received by the tax administrator not later than one of
the following:
(i) 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;
(ii) 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.
(b) Remit electronically to the tax administrator on the
following business day all taxes deducted and withheld on behalf
of the municipal corporation if on any day the total amount of
such taxes withheld but not remitted is at least one hundred
thousand dollars.
(c) Make payment by electronic funds transfer to the tax
administrator of all taxes deducted and withheld on behalf of the
municipal corporation if the employer, agent of an employer, or
other payer that is required to make payments electronically for
the purpose of paying federal taxes withheld on payments to
employees under section 6302 of the Internal Revenue Code, 26
C.F.R. 31.6302-1, or any other federal statute or regulation. The
payment of tax by electronic funds transfer under this division
does not affect an employer's, agent's, or other payer's
obligation to file any return as required under this section.
(C) An employer, agent of an employer, or other payer shall
make and file a return showing the amount of tax withheld by the
employer, agent, or other payer from the qualifying wages of each
employee and remitted to the tax administrator. 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 last day of February of each year, an
employer shall file a withholding reconciliation return with the
tax administrator listing the names, addresses, and social
security numbers of all employees from whose qualifying wages tax
was withheld or should have been withheld for the municipal
corporation during the preceding calendar year and of all
employees from whose qualifying wages tax was not withheld for the
municipal corporation during the preceding calendar year as a
result of those wages qualifying as exempt income under division
(C)(16) of section 718.01 of the Revised Code, the amount of tax
withheld, if any, from each such employee, the total amount of
qualifying wages paid to such employee during the preceding
calendar year, and other information as may be required by the tax
administrator.
(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.
(K) A tax administrator shall consider any tax withheld by an
employer at the request of an employee when such tax is not
otherwise required to be withheld by this chapter to be tax
required to be withheld and remitted for the purposes of this
section.
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) 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, the ordinance or resolution
levying the tax, as adopted or amended by the legislative
authority of the municipal corporation, shall include 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 the
provisions of this chapter;
(4) Whether, and the extent to which, a credit, as described
in division (D) of this section, will be allowed against the tax;
(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.
(B) 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 may continue to levy the
tax at the rate specified in the original ordinance or resolution,
provided that such rate continues in effect as specified in the
original ordinance or resolution.
(C)(1) No municipal corporation shall tax income at other
than a uniform rate.
(2) Except as provided in division (B) 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.
(D) 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 paid to other municipal corporations, in
this state or elsewhere, by the resident or by a pass-through
entity owned, directly or indirectly, by a resident, on the
resident's distributive or proportionate share of the income of
the pass-through entity. A municipal corporation is not required
to refund taxes not paid to the municipal corporation.
(E) 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.
(F) 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. (A) 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 (D) 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.
(B) If an individual is deceased, any return or notice
required of that individual shall be completed and filed by that
decedent's executor, administrator, or other person charged with
the property of that decedent.
(C) If an individual is unable to complete and file a return
or 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.
(D) Returns or notices required of an estate or a trust shall
be completed and filed by the fiduciary of the estate or trust.
(E) No municipal corporation shall deny spouses the ability
to file a joint return.
(F)(1) Each return required to be filed under this section
shall contain the signature of the taxpayer or the taxpayer's duly
authorized agent and of the person who prepared the return for the
taxpayer, and shall include the taxpayer's social security number
or taxpayer identification number. Each return shall be verified
by a declaration under penalty of perjury.
(2) A tax administrator may require any taxpayer who is an
individual to include, with each annual return, amended return, or
application for refund required under this section, complete
copies of any of the following that are applicable to the
taxpayer: all of the taxpayer's Internal Revenue Service form W-2,
"Wage and Tax Statements," including all information reported on
the taxpayer's federal W-2, as well as taxable wages reported or
withheld for any municipal corporation; any Internal Revenue
Service form 1099-MISC received by the taxpayer, schedule K1, form
2106, schedule C, schedule E, and schedule F; and pages one and
two of the taxpayer's Internal Revenue Service form 1040. An
individual taxpayer who files the annual return required by this
section electronically shall provide paper copies of any of the
foregoing to the tax administrator upon the tax administrator's
request.
(3) A tax administrator may require any taxpayer that is not
an individual to include, with each annual net profit return,
amended net profit return, or application for refund required
under this section, complete copies of any of the following that
are applicable to the taxpayer: the taxpayer's Internal Revenue
Service form 1041, form 1065, form 1120, form 1120-REIT, form
1120F, form 1120S, schedule D, schedule E, schedule M-3, form
1125-A, form 4562, form 8825, form 8903, and form 8949; supporting
statements for "other income," "taxes and licenses," "other
deductions," and "other costs" reported on the foregoing forms and
schedules; the method of accounting and allocation used to
determine the income allocable to the municipal corporation; and,
if the taxpayer is a pass-through entity, any Internal Revenue
Service K-1 schedules issued or received by the taxpayer or a
schedule summarizing the information contained on such K-1
schedules, Internal Revenue Service forms 1096, the taxpayer's
federal consolidated schedules if filing a consolidated return
pursuant to section 718.06 of the Revised Code, and the taxpayer's
net operating loss carry forward schedule providing for each year
in which the net operating loss was sustained, the method of
accounting and allocation used to determine the portion of net
operating loss allocable to the taxing municipal corporation, the
amount of net operating loss used as a deduction in prior years,
and the amount of net operating loss claimed as a deduction in the
current year.
A taxpayer that is not an individual and that files an annual
net profit return electronically through the Ohio business gateway
or in some other manner shall either mail the documents required
under this division to the tax administrator at the time of filing
or, if electronic submission is available, submit the documents
electronically through the Ohio business gateway. The department
of taxation shall publish a method of electronically submitting
the documents required under this division through the Ohio
business gateway on or before January 1, 2015. The department
shall transmit all documents submitted electronically under this
division to the appropriate tax administrator.
(4) A tax administrator may require that each annual
withholding reconciliation return required to be filed under this
chapter include complete copies of any of the following that are
applicable: an information return for each employee from whom
municipal income tax has been withheld that specifies the
municipal corporation for which the tax is withheld and all
information required for federal income tax reporting purposes on
Internal Revenue Service form W-2 or its equivalent.
(5) Pursuant to section 718.24 of the Revised Code, the tax
administrator may request, and the taxpayer shall provide, any
information, statements, or documents required by the municipal
corporation to determine and verify the taxpayer's municipal
income tax liability. The requirements imposed under division (E)
of this section apply regardless of whether the taxpayer files on
a generic form or on a form prescribed by the tax administrator.
(G)(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 federal individual income tax
returns and notices under section 6072(a) of the Internal Revenue
Code. The taxpayer shall complete and file the return or notice on
forms prescribed by the tax administrator or on generic forms,
together with remittance made payable to the municipal corporation
or tax administrator. No remittance is required if the amount
shown to be due is ten dollars or less.
(2) Any taxpayer that has requested an extension for filing a
federal income tax return may request an extension for the filing
of a municipal income tax return. The taxpayer shall make the
request by filing a copy of the taxpayer's request for a federal
filing extension through the Ohio business gateway or directly
with the tax administrator. The request for extension shall be
filed not later than the last day for filing the municipal income
tax return. The extended due date of the municipal income tax
return shall be the last day of the month following the month to
which the due date of the federal income tax return has been
extended. A municipal corporation may deny a taxpayer's request
for extension only if the taxpayer fails to timely file the
request, fails to file a copy of the request for the federal
extension, owes the municipal corporation any delinquent income
tax, penalty, or interest, or has failed to file any required
income tax return for a prior tax period. An extension of time to
file under this division is not an extension of the time to pay
any tax due unless the tax administrator grants an extension of
that date.
(3) If a taxpayer does not request and obtain a federal
extension as described in division (G)(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. The
request for extension shall be filed not later than the last day
for filing the municipal income tax return. The extended due date
of the municipal income tax return shall be the last day of the
month following the month to which the tax administrator estimates
the due date of the federal income tax return would have been been
extended had the taxpayer requested and obtained a federal
extension. The tax administrator's estimate shall be based on
federal income tax return extensions granted based on other
similar requests.
(4) Upon good cause shown, the tax administrator may extend
the period for filing any notice or return.
(5) 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.
(6) 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.
(7) 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.
(H)(1) For taxable years beginning after 2014, a municipal
corporation shall not require a taxpayer to remit tax with respect
to net profits if the amount due is less than ten dollars.
(2) Any taxpayer not required to remit tax to a municipal
corporation for a taxable year pursuant to division (H)(1) of this
section shall file with the municipal corporation an annual net
profit return under division (F)(3) of this section.
(I) This division shall not apply to payments required to be
made under division (B)(1)(a) or (2)(a) of section 718.03 of the
Revised Code. Except as provided in section 718.08 of the Revised
Code:
(1) If any report, claim, statement, or other document
required to be filed, or any payment required to be made, within a
prescribed period or on or before a prescribed date under this
chapter is delivered after that period or that 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.
"The date of postmark" means, in the event there is more than one
date on the cover, the earliest date imprinted on the cover by the
postal service.
(2) If a payment is required to be made by electronic funds
transfer, the payment is considered to be made when the payment is
credited to an account designated by the tax administrator for the
receipt of tax payments, except that, when a payment made by
electronic funds transfer is delayed due to circumstances not
under the control of the taxpayer, the payment is considered to be
made when the taxpayer submitted the payment.
(J) 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.
(K) Each return required by a municipal corporation to be
filed in accordance with this section shall include a box that the
taxpayer may check to authorize another person, including a tax
return preparer who prepared the return, to communicate with the
tax administrator about matters pertaining to the return. The
return or instructions accompanying the return shall indicate that
by checking the box the taxpayer authorizes the tax administrator
to contact the preparer or other person concerning questions that
arise during the examination or other review of the return and
authorizes the preparer or other person only to provide the tax
administrator with information that is missing from the return, to
contact the tax administrator for information about the
examination or other review of the return or the status of the
taxpayer's refund or payments, and to respond to notices about
mathematical errors, offsets, or return preparation that the
taxpayer has received from the tax administrator and has shown to
the preparer or other person.
(L) 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 ordinance,
resolution, or rules adopted by the municipal corporation or tax
administrator, and provided that the taxpayer or tax return
preparer filing the generic form otherwise complies with the
provisions of this chapter and of the municipal corporation
ordinance or resolution governing the filing of returns, reports,
or documents.
(M) When income tax returns, reports, or other documents
require the signature of a tax return preparer, the tax
administrator shall accept a facsimile of such a signature in lieu
of a manual signature.
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 tax return, or extension for filing
a municipal income tax return, and may make payment of amounts
shown to be due on such returns, by using the Ohio business
gateway.
(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.
The commissioner shall not adopt rules under this division
that conflict with the requirements of section 718.05 of the
Revised Code.
(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) Within sixty days after a request by 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. The tax commissioner may not
impose a fee or charge to defray the costs of providing such data,
including costs associated with the inspection, review,
production, photocopying, or transmission of that data.
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.
(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 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 or interest in connection with those
taxes for the extension period. The tax administrator shall not
include any period of extension granted under division (C)(2)(a)
of this section in calculating the penalty or interest due on any
unpaid tax.
(D) For each taxable year to which division (A), (B), or (C)
of this section applies to a taxpayer, the provisions of divisions
(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) "Affiliated group of corporations" means an affiliated
group as defined in section 1504 of the Internal Revenue Code.
"Affiliated group of corporations" does not include an incumbent
local exchange carrier primarily engaged in the business of
providing local exchange telephone service in this state, or any
member of such a carrier's affiliated group that is an incumbent
local exchange carrier primarily engaged in the business of
providing local exchange telephone service, other than cellular
radio service, outside this state.
(2) "Consolidated federal income tax return" means a
consolidated return filed for federal income tax purposes pursuant
to section 1501 of the Internal Revenue Code.
(3) "Consolidated federal taxable income" means the
consolidated taxable income of an affiliated group of
corporations, as computed for the purposes of filing a
consolidated federal income tax return, before consideration of
net operating losses or special deductions. "Consolidated federal
taxable income" does not include income or loss of an incumbent
local exchange carrier primarily engaged in the business of
providing local exchange telephone service in this state, or
income or loss of any member of such a carrier's affiliated group
that is an incumbent local exchange carrier primarily engaged in
the business of providing local exchange telephone service, other
than cellular radio service, outside this state.
(4) "Incumbent local exchange carrier" has the same meaning
as in section 4927.01 of the Revised Code.
(5) "Local exchange telephone service" has the same meaning
as in section 5727.01 of the Revised Code.
(B)(1) For taxable years beginning on or after January 1,
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 of corporations is subject to the municipal income tax in
that taxable year and if the affiliated group of corporations
filed a consolidated federal income tax return with respect to
that taxable year. The election is binding for a five-year period
beginning with the first taxable year of the initial election
unless a change in the reporting method is required under federal
law. The election continues to be binding for each subsequent
five-year period unless the taxpayer elects to discontinue filing
consolidated municipal income tax returns under division (B)(2) of
this section or a taxpayer receives permission from the tax
administrator. The tax administrator shall approve such a request
for good cause shown.
(2) An election to discontinue filing consolidated municipal
income tax returns under this section must be made in the first
year following the last year of a five-year consolidated municipal
income tax return election period in effect under division (B)(1)
of this section. The election to discontinue filing a consolidated
municipal income tax return is binding for a five-year period
beginning with the first taxable year of the election.
(3) An election made under division (B)(1) or (2) of this
section is binding on all members of the affiliated group of
corporations subject to a municipal income tax.
(C) A taxpayer that is a member of an affiliated group of
corporations that filed a consolidated federal income tax return
for a taxable year shall file a consolidated municipal income tax
return for that taxable year if the tax administrator determines,
by a preponderance of the evidence, that intercompany transactions
have not been conducted at arm's length or that there has been a
distortive shifting of income or expenses with regard to
allocation of net profits to the municipal corporation. A taxpayer
that is required to file a consolidated municipal income tax
return for a taxable year shall file a consolidated municipal
income tax return for all subsequent taxable years unless the
taxpayer receives written permission from the tax administrator to
file a separate return or a taxpayer has experienced a change in
circumstances.
(D) A taxpayer shall prepare a consolidated municipal income
tax return in the same manner as is required under the United
States department of treasury regulations that prescribe
procedures for the preparation of the consolidated federal income
tax return required to be filed by the common parent of the
affiliated group of which the taxpayer is a member.
(E)(1) Except as otherwise provided in divisions (E)(2) and
(3) of this section, corporations that 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 filing 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 the net profit or loss of a pass-through entity is
included in an affiliated group of corporations' consolidated
federal taxable income for a taxable year, the corporation filing
a consolidated municipal income tax return shall do one of the
following with respect to that pass-through entity's net profit or
loss for that taxable year:
(a) Exclude the pass-through entity's net profit or loss from
the consolidated federal taxable income of the affiliated group
and, for the purpose of making the computations required in
section 718.02 of the Revised Code, exclude the property, payroll,
and gross receipts of the pass-through entity in the computation
of the affiliated group's net profit sitused to a municipal
corporation. If the entity's net profit or loss is so excluded,
the entity shall be subject to taxation as a separate taxpayer on
the basis of the entity's net profits that would otherwise be
included in the consolidated federal taxable income of the
affiliated group.
(b) Include the pass-through entity's net profit or loss in
the consolidated federal taxable income of the affiliated group
and, for the purpose of making the computations required in
section 718.02 of the Revised Code, include the property, payroll,
and gross receipts of the pass-through entity in the computation
of the affiliated group's net profit sitused to a municipal
corporation. If the entity's net profit or loss is so included,
the entity shall not be subject to taxation as a separate taxpayer
on the basis of the entity's net profits that are included in the
consolidated federal taxable income of the affiliated group.
(F) Corporations filing 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.
(G) Each corporation filing a consolidated municipal income
tax return is jointly and severally liable for any tax, interest,
penalties, fines, charges, or other amounts imposed by a municipal
corporation in accordance with this chapter on the corporation, an
affiliated group of which the corporation is a member for any
portion of the taxable year, or any one or more members of such an
affiliated group.
(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 for any taxable year
beginning before January 1, 2020, 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; and a summary of taxpayers' rights and
responsibilities. 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 to a municipal
corporation for the taxable year, after allowing any credit to
which the taxpayer is entitled, and after applying any estimated
tax payment, withholding payment, or credit from another taxable
year.
(B)(1) Every taxpayer shall make a declaration of estimated
taxes for the current taxable year, on the form prescribed by the
tax administrator, if the amount payable as estimated taxes is
more than one hundred dollars. For the purposes of this section:
(a) Taxes withheld from compensation shall be considered as
paid to the municipal corporation for which the taxes were
withheld 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) An overpayment of tax applied as a credit to a subsequent
taxable year is deemed to be paid on the date of the postmark
stamped on the cover in which the payment is mailed or, if the
payment is made by electronic funds transfer, the date the payment
is submitted. As used in this division, "date of the postmark"
means, in the event there is more than one date on the cover, the
earliest date imprinted on the cover by the postal service.
(c) 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 to the municipal corporation for which the taxes were
withheld on the date the taxes are withheld from the taxpayer's
winnings.
(2) Taxpayers filing joint returns shall file joint
declarations of estimated taxes. A taxpayer may amend a
declaration under rules prescribed by the tax administrator. A
taxpayer having a taxable year of less than twelve months shall
make a declaration under rules prescribed by the tax
administrator.
(3) The declaration of estimated taxes shall be filed on or
before the date prescribed for the filing of municipal income tax
returns under division (G) of section 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 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 declaration has been filed, the unpaid
balance shown due on the amended declaration shall be paid in
equal installments on or before the remaining payment dates.
(3) On or before the fifteenth day of the fourth month of the
year following that for which the declaration or amended
declaration was filed, an annual return shall be filed and any
balance which may be due shall be paid with the return in
accordance with section 718.05 of the Revised Code.
(D)(1) In the case of any underpayment of any portion of a
tax liability, penalty and interest shall be imposed pursuant to
section 718.27 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.
(E)(1) An underpayment of any portion of tax liability
determined under division (D) of this section shall be due to
reasonable cause and the penalty imposed by this section shall not
be added to the taxes for the taxable year if any of the following
apply:
(a) The amount of estimated taxes that were paid equals at
least ninety per cent of the tax liability for the current taxable
year, determined by annualizing the income received during the
year up to the end of the month immediately preceding the month in
which the payment is due.
(b) The amount of estimated taxes that were paid equals at
least one hundred per cent of the tax liability shown on the
return of the taxpayer for the preceding taxable year, provided
that the immediately preceding taxable year reflected a period of
twelve months and the taxpayer filed a return with the municipal
corporation under section 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 the taxable 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. There is no limit on the number of
terms that a member may serve if the member is reappointed by the
legislative authority. 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 written determination by the tax administrator
issues a decision regarding a municipal income tax obligation that
is subject to appeal as provided in this section or in an
ordinance or regulation of the municipal corporation is issued,
the tax administrator shall notify the taxpayer in writing at the
same time of the taxpayer's right to appeal the decision and of
written determination, the manner in which the taxpayer may appeal
the decision ruling, and the address to which the appeal should be
directed.
(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 a
written determination by the tax administrator may appeal the
decision ruling 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 ruling
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 ruling.
(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 a written determination by the tax administrator
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 a written determination by the tax
administrator or any part of that decision
ruling. The board
shall issue a final decision on the appeal within ninety days
after the board's final hearing on the appeal, and send a copy of
its final decision by ordinary mail to all of the parties to the
appeal within fifteen days after issuing the decision. The
taxpayer or the tax administrator may appeal the board's decision
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.
Sec. 718.12. (A)(1)(a) Civil actions to recover municipal
income taxes and penalties and interest on municipal income taxes
shall be brought within the later of:
(i) Three years after the tax was due or the return was
filed, whichever is later; or
(ii) One year after the conclusion of the qualifying deferral
period, if any.
(b) The time limit described in division (A)(1)(a) of this
section may be extended at any time if both the tax administrator
and the employer, agent of the employer, other payer, or taxpayer
consent in writing to the extension. Any extension shall also
extend for the same period of time the time limit described in
division (C) of this section.
(2) As used in this section, "qualifying deferral period"
means a period of time beginning and ending as follows:
(a) Beginning on the date a person who is aggrieved by a
written determination by the tax administrator files with a local
board of tax review the request described in section 718.11 of the
Revised Code. That date shall not be affected by any subsequent
decision, finding, or holding by any administrative body or court
that the local board of tax review with which the aggrieved person
filed the request did not have jurisdiction to affirm, reverse, or
modify the written determination by the tax administrator or any
part of that determination.
(b) Ending the later of the sixtieth day after the date on
which the decision of the local board of tax review becomes final
or, if any party appeals from the decision of the local board of
tax review, the sixtieth day after the date on which the decision
of the local board of tax review is either ultimately affirmed in
whole or in part or ultimately reversed and no further appeal of
either that affirmation, in whole or in part, or that reversal is
available or taken.
(B) Prosecutions for an offense made punishable under a
resolution or ordinance imposing an income tax shall be commenced
within three years after the commission of the offense, provided
that in the case of fraud, failure to file a return, or the
omission of twenty-five per cent or more of income required to be
reported, prosecutions may be commenced within six years after the
commission of the offense.
(C) A claim for a refund of municipal income taxes shall be
brought within the time limitation provided in section 718.19 of
the Revised Code.
(D) Interest shall be allowed and paid on any overpayment by
a taxpayer of any municipal income tax obligation from the date of
the overpayment until the date of the refund of the overpayment,
except that if any overpayment is refunded within ninety days
after the final filing date of the annual return or ninety days
after the completed return is filed, whichever is later, no
interest shall be allowed on the refund. For the purpose of
computing the payment of interest on amounts overpaid, no amount
of tax for any taxable year shall be considered to have been paid
before the date on which the return on which the tax is reported
is due, without regard to any extension of time for filing that
return. Interest shall be paid at the interest rate described in
division (A)(5) of section 718.27 of the Revised Code.
(E) Within sixty days after the final determination of any
federal or state tax liability affecting the taxpayer's municipal
tax liability, that taxpayer shall make and file an amended
municipal return showing income subject to the municipal income
tax based upon such final determination of federal or state tax
liability, and pay any additional municipal income tax shown due
thereon or make a claim for refund of any overpayment, unless the
tax or overpayment is less than ten dollars.
(F)(1) Notwithstanding the fact that an appeal is pending,
the petitioner may pay all or a portion of the written
determination by the tax administrator 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
written determination by the tax administrator 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 written determination 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 division (D) of this
section.
(G) No civil action to recover municipal income tax or
related penalties or interest shall be brought during either of
the following time periods:
(1) The period during which a taxpayer has a right to appeal
the imposition of that tax or interest or those penalties;
(2) The period during which an appeal related to the
imposition of that tax or interest or those penalties is pending.
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.
Sec. 718.18. (A)(1) Subject to division (B) of this section,
a copy of each written determination by the tax administrator
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 a written
determination by the tax administrator, the tax administrator may
deliver the determination 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 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
written determination by the tax administrator shall be sent by
ordinary mail and considered served. If the ordinary mail is
subsequently returned because of an undeliverable address, the
determination remains appealable within sixty days after the
determination's postmark.
(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, serves a written
determination by the tax administrator on the person to whom the
determination is directed, the person may protest the ruling of
that determination by filing an appeal with the local board of tax
review within sixty days after the receipt of service. The
delivery of a written determination of the tax administrator under
division (B)(1)(a) of this section is prima facie evidence that
delivery is complete and that the determination is served.
(2) If mailing of a written determination by a tax
administrator by certified mail is returned for some cause other
than an undeliverable address, the tax administrator shall resend
the written determination by ordinary mail. The written
determination shall show the date the tax administrator sends the
written determination and include the following statement:
"This written determination by the tax administrator is
deemed to be served on the addressee under applicable law ten days
from the date this written determination was mailed by the tax
administrator as shown on the written determination, 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 written determination was completed ten days
after the tax administrator sent the written determination by
ordinary mail and that the written determination 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 written determination by the tax administrator was sent
was not an address with which the person was associated at the
time the tax administrator originally mailed the written
determination 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 written determination 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 written
determination 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 written determination 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 a written determination by
the tax administrator 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 a written
determination by a tax administrator by personal service.
(E) Collection actions taken upon any written determination
by the tax administrator 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 written determination 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 a written
determination of the tax administrator, except when the reason for
nondelivery is because the addressee fails to acknowledge or
accept the determination.
Sec. 718.19. (A) Upon receipt of a refund application, the
tax administrator of a municipal corporation, in accordance with
this section, shall refund to employers, agents of employers,
other payers, or taxpayers, with respect to any income or
withholding tax levied by the municipal corporation:
(1) Overpayments of more than ten dollars;
(2) Amounts in excess of ten dollars paid erroneously.
(B) Except as otherwise provided in this chapter,
applications for refund shall be filed with the tax administrator,
on the form prescribed by the tax administrator within three years
after the tax was due or paid, whichever is later. The tax
administrator may require an applicant to file with the
application any documentation that substantiates the applicant's
claim for a refund.
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) 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.
(D) As used in this section, "withholding tax" has the same
meaning as in section 718.27 of the Revised Code.
Sec. 718.22. (A) A tax administrator 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) A tax administrator, or any authorized agent
or employee thereof may examine the books, papers, records, and
federal and state income tax returns of any employer, taxpayer, or
other person that is subject to, or that the tax administrator
believes is subject to, the provisions of this chapter for the
purpose of verifying the accuracy of any return made or, if no
return was filed, to ascertain the tax due under this chapter.
Upon written request by the tax administrator or a duly authorized
agent or employee thereof, every employer, taxpayer, or other
person subject to this section is required to furnish the
opportunity for the tax administrator, authorized agent, or
employee to investigate and examine such books, papers, records,
and federal and state income tax returns at a reasonable time and
place designated in the request.
(B) The 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. The person may be assisted or represented
by an attorney, accountant, bookkeeper, or other tax practitioner
at any such hearing or examination. This division does not
authorize the practice of law by a person who is not an attorney.
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, memorandums, and federal and state income tax
returns, to examine persons under oath, to issue orders or
subpoenas for the production of books, accounts, papers, records,
documents, and testimony, to take depositions, to apply to a court
for attachment proceedings as for contempt, to approve vouchers
for the fees of officers and witnesses, and to administer oaths;
provided that the powers referred to in this division of this
section shall be exercised by the tax administrator only in
connection with the performance of the duties respectively
assigned to the tax administrator under a municipal corporation
income tax ordinance or resolution adopted in accordance with this
chapter;
(B) Appoint agents and prescribe their powers and duties;
(C) Confer and meet with officers of other municipal
corporations and states and officers of the United States on any
matters pertaining to their respective official duties as provided
by law;
(D) Exercise the authority provided by law, including orders
from bankruptcy courts, relative to remitting or refunding taxes,
including penalties and interest thereon, illegally or erroneously
imposed or collected, or for any other reason overpaid, and, in
addition, the tax administrator may investigate any claim of
overpayment and make a written statement of the tax
administrator's findings, and, if the tax administrator finds that
there has been an overpayment, approve and issue a refund payable
to the taxpayer, the taxpayer's assigns, or legal representative
as provided in this chapter;
(E) Exercise the authority provided by law relative to
consenting to the compromise and settlement of tax claims;
(F) Exercise the authority provided by law relative to the
use of alternative apportionment methods by taxpayers in
accordance with section 718.02 of the Revised Code;
(G) Make all tax 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 findings, determinations, computations, or orders the tax
administrator has made, but the tax administrator shall not
review, redetermine, or correct any tax finding, determination,
computation, or order which the tax administrator has made as to
which an appeal has been filed with the local board of tax review
or other appropriate tribunal, unless such appeal or application
is withdrawn by the appellant or applicant, is dismissed, or is
otherwise final;
(H) Destroy any or all returns or other tax documents in the
manner authorized by law;
(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 imposed in the same manner as
the tax or fee with respect to which the identifying information
is sought and are in addition to any applicable criminal penalties
described in section 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 January 1, 2015.
(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 January 1, 2015.
(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 five per cent. The rate shall apply
for the calendar year next following the July of the year in which
the federal short-term rate is determined in accordance with
division (A)(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.
(B)(1) This section applies to the following:
(a) Any return required to be filed under applicable law for
taxable years beginning on or after January 1, 2015;
(b) Income tax, estimated income tax, and withholding tax
required to be paid or remitted to the municipal corporation on or
after January 1, 2015.
(2) This section does not apply to returns required to be
filed or payments required to be made before January 1, 2015,
regardless of the filing or payment date. Returns required to be
filed or payments required to be made before January 1, 2015, but
filed or paid after that date shall be subject to the ordinances
or rules, as adopted before January 1, 2015, of the municipal
corporation to which the return is to be filed or the payment is
to be made.
(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 fifteen 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 January 1, 2015.
(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 post-judgment collection costs and fees,
including attorney's fees.
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.
(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.
(C) The tax administrator may 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 an economic hardship such that a compromise
or agreement would facilitate effective tax administration.
(3) There exists a joint liability among 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.
(4) 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 penalties or 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. Such rules shall not conflict with or be inconsistent
with any provision of this chapter. All rules adopted under this
section shall be published and posted on the internet as described
in section 718.07 of the Revised Code.
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, memoranda,
and federal and state income tax returns 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
examine 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.
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.
(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,
2015.
(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) An opinion of the tax administrator issued under this
section may not be appealed.
Sec. 718.41. (A) A taxpayer shall file an amended return
with the tax administrator in such form as the tax administrator
requires if any of the facts, figures, computations, or
attachments required in the taxpayer's annual return to determine
the tax due levied by the 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. If a
taxpayer intends to file an amended consolidated municipal income
tax return, the taxpayer shall notify the tax administrator before
filing the amended return.
(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 ten dollars or less, such amount need not accompany the
amended return. 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 that
are not affected, either directly or indirectly, by the adjustment
to the taxpayer's federal or state income tax return unless the
applicable statute of limitations for civil actions or
prosecutions under section 718.12 of the Revised Code has not
expired for a previously filed return.
(2) The additional tax to be paid shall not exceed the amount
of tax that would be due if all facts, figures, computations, and
attachments were reopened.
(C)(1) In the case of an overpayment, an application for
refund may be filed under this division within the period
prescribed by section 718.12 of the Revised Code 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 ten
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. 718.04 718.50. (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) Except as provided in division (B) of this
section, whoever violates section 718.35 of the Revised Code,
division (A) of section 718.13 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, 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 or resolution imposing a greater penalty or requiring
dismissal from office or discharge from employment, or both, in
which case the municipal ordinance or resolution shall govern.
(B) 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.
(C) Each instance of access or disclosure in violation of
division (A) of section 718.13 of the Revised Code constitutes a
separate offense.
(D) Nothing in this chapter prohibits a municipal corporation
from prosecuting offenses which are made punishable under a
municipal ordinance or resolution levying an income tax and for
which no other penalty is provided under this chapter.
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;
(6) Commercial activity tax under Chapter 5751. of the
Revised Code;
(7) Financial institutions tax under Chapter 5726. of the
Revised Code;
(8) Motor fuel receipts tax under Chapter 5736. of the
Revised Code;
(9) Horse-racing taxes under Chapter 3769. 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 selected from a list of candidates
provided by the Ohio municipal league; 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.
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 decision 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 may 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, and
subject to section 5703.021 of the Revised Code with respect to
appeals assigned to the small claims docket, 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 issued under section 718.11 of the
Revised Code. An appeal filed with a court of common pleas is
governed by the Rules of Civil Procedure and other rules of
practice and procedure applicable to civil actions. For an appeal
filed with the board of tax appeals, the notice of appeal may be
filed in person or by certified mail, express mail, facsimile
transmission, electronic transmission, or by 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 with the board. If notice of appeal is filed by
facsimile transmission or electronic transmission, the date and
time the notice is received by the board shall be the date and
time reflected on a timestamp provided by the board's electronic
system, and the appeal shall be considered filed with the board on
the date reflected on that timestamp. Any timestamp provided by
another computer system or electronic submission device shall not
affect the time and date the notice is received by the board. 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, 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) A notice of appeal for an appeal filed with the board of
tax appeals shall contain a short and plain statement of the
claimed errors in the decision of the municipal local board of
appeal tax review showing that the appellant is entitled to relief
and a demand for the relief to which the appellant claims to be
entitled. An appellant may amend the notice of appeal once as a
matter of course within sixty days after the certification of the
transcript. Otherwise, an appellant may amend the notice of appeal
only after receiving leave of the board or the written consent of
each adverse party. Leave of the board shall be freely given when
justice so requires.
(D) 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.
An appeal may proceed pursuant to section 5703.021 of the Revised
Code on the small claims docket if the appeals qualifies under
that section.
(E) 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 decision 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 requirements imposed under this section are in
addition to the municipal income tax withholding requirements
under section 718.031 of the Revised Code.
(H) 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.
(H) The requirements imposed under this section are in
addition to the municipal income tax withholding requirements
under section 718.031 of the Revised Code.
Sec. 5747.50. (A) As used in this section:
(1) "County's proportionate share of the calendar year 2007
LGF and LGRAF distributions" means the percentage computed for the
county under division (B)(1)(a) of section 5747.501 of the Revised
Code.
(2) "County's proportionate share of the total amount of the
local government fund additional revenue formula" means each
county's proportionate share of the state's population as
determined for and certified to the county for distributions to be
made during the current calendar year under division (B)(2)(a) of
section 5747.501 of the Revised Code. If prior to the first day of
January of the current calendar year the federal government has
issued a revision to the population figures reflected in the
estimate produced pursuant to division (B)(2)(a) of section
5747.501 of the Revised Code, such revised population figures
shall be used for making the distributions during the current
calendar year.
(3) "2007 LGF and LGRAF county distribution base available in
that month" means the lesser of the amounts described in division
(A)(3)(a) and (b) of this section, provided that the amount shall
not be less than zero:
(a) The total amount available for distribution to counties
from the local government fund during the current month.
(b) The total amount distributed to counties from the local
government fund and the local government revenue assistance fund
to counties in calendar year 2007 less the total amount
distributed to counties under division (B)(1) of this section
during previous months of the current calendar year.
(4) "Local government fund additional revenue distribution
base available during that month" means the total amount available
for distribution to counties during the month from the local
government fund, less any amounts to be distributed in that month
from the local government fund under division (B)(1) of this
section, provided that the local government fund additional
revenue distribution base available during that month shall not be
less than zero.
(5) "Total amount available for distribution to counties"
means the total amount available for distribution from the local
government fund during the current month less the total amount
available for distribution to municipal corporations during the
current month under division (C) of this section.
(B) On or before the tenth day of each month, the tax
commissioner shall provide for payment to each county an amount
equal to the sum of:
(1) The county's proportionate share of the calendar year
2007 LGF and LGRAF distributions multiplied by the 2007 LGF and
LGRAF county distribution base available in that month, provided
that if the 2007 LGF and LGRAF county distribution base available
in that month is zero, no payment shall be made under division
(B)(1) of this section for the month or the remainder of the
calendar year; and
(2) The county's proportionate share of the total amount of
the local government fund additional revenue formula multiplied by
the local government fund additional revenue distribution base
available during that month.
Money received into the treasury of a county under this
division shall be credited to the undivided local government fund
in the treasury of the county on or before the fifteenth day of
each month. On or before the twentieth day of each month, the
county auditor shall issue warrants against all of the undivided
local government fund in the county treasury in the respective
amounts allowed as provided in section 5747.51 of the Revised
Code, and the treasurer shall distribute and pay such sums to the
subdivision therein.
(C)(1) As used in division (C) of this section:
(a) "Total amount available for distribution to
municipalities during the current month" means the product
obtained by multiplying the total amount available for
distribution from the local government fund during the current
month by the aggregate municipal share.
(b) "Aggregate municipal share" means the quotient obtained
by dividing the total amount distributed directly from the local
government fund to municipal corporations during calendar year
2007 by the total distributions from the local government fund and
local government revenue assistance fund during calendar year
2007.
(2) On or before the tenth day of each month, the tax
commissioner shall provide for payment from the local government
fund to each municipal corporation an amount equal to the product
derived by multiplying the municipal corporation's percentage of
the total amount distributed to all such municipal corporations
under this division during calendar year 2007 by the total amount
available for distribution to municipal corporations during the
current month.
(3) Payments received by a municipal corporation under this
division shall be paid into its general fund and may be used for
any lawful purpose.
(4) The amount distributed to municipal corporations under
this division during any calendar year shall not exceed the amount
distributed directly from the local government fund to municipal
corporations during calendar year 2007. If that maximum amount is
reached during any month, distributions to municipal corporations
in that month shall be as provided in divisions (C)(1) and (2) of
this section, but no further distributions shall be made to
municipal corporations under division (C) of this section during
the remainder of the calendar year.
(5) Upon being informed of a municipal corporation's
dissolution, the tax commissioner shall cease providing for
payments to that municipal corporation under division (C) of this
section. The proportionate shares of the total amount available
for distribution to each of the remaining municipal corporations
under this division shall be increased on a pro rata basis.
(D) Each municipal corporation which has in effect a tax
imposed under Chapter 718. of the Revised Code shall, no later
than the thirty-first day of August of each year, certify to the
tax commissioner, on a form prescribed by the commissioner, the
total amount of income taxes tax revenue collected and refunded by
such municipal corporation pursuant to such chapter during the
preceding calendar year, arranged by the type of income from which
the revenue was collected or the refund was issued. The municipal
corporation shall also report the amount of income tax revenue
collected and refunded on behalf of a joint economic development
district or a joint economic development zone that levies an
income tax administered by the municipal corporation and the
amount of such revenue distributed to contracting parties during
the preceding calendar year. The tax commissioner may withhold
payment of local government fund moneys pursuant to division (C)
of this section from any municipal corporation for failure to
comply with this reporting requirement.
Sec. 5751.07. (A) Any person required to file returns under
this chapter 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 tax periods the person so
fails, the greater of twenty-five dollars or five per cent of the
amount of the payment that was required to be remitted;
(b) For the third and any subsequent tax periods the person
so fails, the greater of fifty dollars or 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.
(D) The tax commissioner may adopt rules necessary to
administer this section.
Section 2. That existing sections 709.023, 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, 5747.50, 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. That the version of section 5703.02 of the
Revised Code that is scheduled to take effect January 1, 2015, be
amended to read as follows:
Sec. 5703.02. There is hereby created the board of tax
appeals, which shall exercise the following powers and perform the
following duties:
(A) Exercise the authority provided by law to hear and
determine all appeals of questions of law and fact arising under
the tax laws of this state in appeals from decisions, orders,
determinations, or actions of any tax administrative agency
established by the law of this state, including but not limited to
appeals from:
(1) Actions of county budget commissions;
(2) Decisions of county boards of revision;
(3) Actions of any assessing officer or other public official
under the tax laws of this state;
(4) Final determinations by the tax commissioner of any
preliminary, amended, or final tax assessments, reassessments,
valuations, determinations, findings, computations, or orders made
by the tax commissioner;
(5) Adoption and promulgation of rules of the tax
commissioner.
(B) Appoint a secretary of the board of tax appeals, who
shall serve in the unclassified civil service at the pleasure of
the board, and any other employees as are necessary in the
exercise of the powers and the performance of the duties and
functions that the board is by law authorized and required to
exercise, and prescribe the duties of all employees, and to fix
their compensation as provided by law;
(C) Maintain a journal, which shall be open to public
inspection and in which the secretary shall keep a record of all
of the proceedings and the vote of each of its members upon every
action taken by it;
(D) Adopt and promulgate, in the manner provided by section
5703.14 of the Revised Code, and enforce all rules relating to the
procedure of the board in hearing appeals it has the authority or
duty to hear, and to the procedure of officers or employees whom
the board may appoint; provided that section 5703.13 of the
Revised Code shall apply to and govern the procedure of the board.
Such rules shall include, but need not be limited to, the
following:
(1) Rules governing the creation and implementation of a
mediation program, including procedures for requesting, requiring
participation in, objecting to, and conducting a mediation;
(2) Rules requiring the tax commissioner, county boards of
revision, and municipal local boards of appeal tax review created
under section 718.11 of the Revised Code to electronically file
any transcript required to be filed with the board of tax appeals,
and instructions and procedures for the electronic filing of such
transcripts.
(3) Rules establishing procedures to control and manage
appeals filed with the board. The procedures shall include, but
not be limited to, the establishment of a case management schedule
that shall include expected dates related to discovery deadlines,
disclosure of evidence, pre-hearing motions, and the hearing, and
other case management issues considered appropriate.
Section 4. That the existing version of section 5703.02 of
the Revised Code that is scheduled to take effect January 1, 2015,
is hereby repealed.
Section 5. Sections 3 and 4 of this act take effect on
January 1, 2015.
Section 6. This act applies to 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 7. (A) There is hereby created the Municipal Income
Tax Net Operating Loss Review Committee for the purpose of
evaluating and quantifying the potential fiscal impact to
municipal corporations levying an income tax requiring such
municipal corporations to allow taxpayers to carry forward net
operating losses for five years. The Committee is a public body
for the purposes of section 121.22 of the Revised Code.
(B) The Committee shall be composed of the following members:
(1) Two members of the House of Representatives who are not
of the same political party, appointed by the Speaker of the House
of Representatives;
(2) Two members of the Senate who are not of the same
political party, appointed by the President of the Senate;
(3) Three members representing municipal income taxpayers,
appointed by the Speaker of the House of Representatives;
(4) Three members representing municipal corporations that
levy an income tax in calendar year 2015, appointed by the
President of the Senate;
(5) One member appointed by the Governor, who shall serve as
the chairperson of the Committee.
The appointing authorities shall appoint members of the
Committee not later than March 1, 2014. An appointed member shall
serve until the member resigns or is removed by the member's
appointing authority. Vacancies shall be filled in the same manner
as original appointments. A vacancy on the committee does not
impair the right of the other members to exercise all the
functions of the Committee.
The Committee shall meet for the first time on or before
March 1, 2014. Thereafter, the Committee shall meet at the call of
the chairperson. 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 to approve the report issued by the
Committee under division (E) of this section. Members of the
Committee shall not be compensated or reimbursed for members'
expenses.
(C) On or before July 1, 2014, the Committee shall prescribe
a method that municipal corporations shall use to estimate the
difference between the municipal corporation's actual or projected
municipal income tax revenue in 2012, 2013, 2014, 2015, 2016,
2017, and 2018 and the actual or projected municipal income tax
revenue that would have resulted in each of those years if the
municipal corporation allowed net operating loss to be carried
forward for five years for losses incurred in 2011, 2012, and
2013.
(D) On or before December 31, 2014, each municipal
corporation that levies an income tax in 2011, 2012, or 2013 shall
report to the Municipal Income Tax Net Operating Loss Review
Committee the difference between the municipal corporation's
actual or projected municipal income tax revenue in 2012, 2013,
2014, 2015, 2016, 2017, and 2018 and the actual or projected
municipal income tax revenue that would have resulted in each of
those years if the municipal corporation allowed net operating
loss to be carried forward for five years for losses incurred in
2011, 2012, and 2013, as estimated by the method prescribed by the
Committee under division (C) of this section.
(E) If the Municipal Income Tax Net Operating Loss Review
Committee receives reports from a representative sample, then the
Committee shall review the information reported by municipal
corporations under division (D) of this section and calculate the
total of the revenue effects reported by such municipal
corporations. On or before May 1, 2015, the Committee shall issue
a written report to the Speaker and Minority Leader of the House
of Representatives and the President and Minority Leader of the
Senate reporting the Committee's findings and estimated revenue
impact of requiring municipal corporations levying an income tax
to allow net operating loss to be carried forward for five years.
The report shall contain recommendations to address revenue
shortfalls, which may include, but which shall not be limited to,
the use of supplemental funds from the Local Government Fund to
mitigate those shortfalls.
(F) Nothing in this section delays or otherwise affects the
taxable years to which division (E)(8) of section 718.01 of the
Revised Code, as enacted by this act, apply as prescribed in that
division.
(G) The Municipal Income Tax Net Operating Loss Review
Committee shall cease to exist on May 1, 2015.
(H) As used in this section, "representative sample" includes
the cities of Cleveland and Columbus, five cities or villages with
a higher ratio of business taxpayers to resident individual
taxpayers relative to the state average, and five cities or
villages with a higher ratio of resident individual taxpayers to
business taxpayers relative to the state average.
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