Return to Harrison Tax Page
Rules and Regulations Article 1
ARTICLE I
Section 1 of the Ordinance deals only with the purpose for which the tax collected will be used.
ARTICLE II
As used in these Rules and Regulations the following words shall have the meaning ascribed to them in this article, except as and if the context clearly indicates or requires a different meaning.
ADJUSTED FEDERAL TAXABLE INCOME means a C corporation’s federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, but including subsequent adjustments from required additions and deductions. Pass–through entities must compute adjusted federal taxable income as if the pass-through entity was a C corporation. This definition does not apply to any taxpayer required to file a return under Ohio Revised Code section 5745.03 or to the net profit from a sole proprietorship.
ASSOCIATION means a partnership, cooperative, limited partnership, or any form of unincorporated enterprise owned by two or more Persons.
BOARD means the Board of Review provided for by Section 13 of the Ordinance.
BUSINESS means an enterprise, cooperative activity profession or undertaking of any nature conducted for profit or ordinarily conducted for profit whether by an individual, partnership, Association, Corporation or any other entity. The ordinary administration of a decedent’s estate by the executor or administrator, and the mere custody, supervision and management of trust property under passive trust, whether intervivos or testamentary, unaccompanied by the actual operation of a Business as herein defined shall not be construed as the operation of a Business.
BUSINESS ALLOCATION means the portion of Net Profits to be apportioned to Harrison as having been made in Harrison either under separate accounting method, or under the three-factor formula of property, payroll, and sales, provided for in 183.03 of the Ordinance.
BUREAU means the Office Administering the Income Tax Ordinance.
COMMISSIONER OR TAX COMMISSIONER means the Tax Commissioner or the Deputy Tax Commissioner appointed to administer the Municipality’s Income Tax Ordinance and to direct the operation of the Municipal Income Tax Bureau.
CORPORATION means a Corporation or joint stock Association having ten or more shareholders under the laws of the United States, the State of Ohio, or any other state, territory, or foreign country or dependency.
DOMICILE means principal residence that the taxpayer intends to use for an indefinite time and to which whenever he is absent he intends to return. A domicile once acquired is presumed to continue until it is shown to have been changed. Intention to change domicile will not effect such a change unless accompanied by actual removal. Where a change of domicile is alleged, the burden of proving it rests upon the person making the allegation.
EMPLOYEE means one who works for wages, salary, commission or other type of compensation in the service of an Employer. Any Person upon whom an Employer is required to withhold for either Federal income or Social Security or on whose account payments are made under the Ohio Workmen’s Compensation law shall prima facie be an Employee.
EMPLOYER means an individual, partnership, Association, Corporation (including a Corporation not for profit), governmental agency, board, body, bureau, department, subdivision, or unit or any other entity, who or that employs one or more Persons on a salary, wage, commission or any other compensation basis whether or not such Employer is engaged in Business. It does not include a Person who employs only domestic help for such Person’s private residence.
FISCAL YEAR means an accounting period of twelve (12) months, or less, ending on any day other than December 31st. Only Fiscal Years accepted by the Internal Revenue Service for Federal income tax purposes may be used for Municipal tax purposes.
FORM 2106 means Internal Revenue Service Form 2106 filed by a taxpayer pursuant in the Internal Revenue Service Code.
FLOATER means an Employee who does not work at a Place of Business of his Employer and\or who regularly works in two or more Taxing Municipalities during the year.
GENERIC FORM means an electronic or paper form designed for reporting estimated municipal income taxes and annual municipal income tax liability or for filing a refund claim that is not prescribed by a particular municipal corporation for the reporting of that municipal corporation’s tax on income. Any municipality that requires taxpayers to file income tax returns, reports, or other documents shall accept for filing a generic form of a such a return, report, or document if the generic form once completed and filed, contains all of the information required to be submitted with the municipality’s prescribed returns, reports, or documents.
GROSS RECIEPTS – Total income of taxpayer from whatever source derived.
GROUND RENTS means payment made by a lessee to a lessor under a perpetual lease hold where the lessor neither pays the taxes on the property nor performs services of any type with respect to the property.
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 term are defied in Chapter 5701. Of the Ohio 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 or other similar games of chance.
INTERNAL REVENUE CODE means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.
INTERNET means the international computer network of both federal and nonfederal interoperable packet switched data networks, including the graphical sub-network known as the world wide web.
JOINT ECONOMIC DEVELOPMENT DISTRICT Means districts created under the Ohio Revised Code Sections 715.70 and 715.71, as amended from time to time.
LIMITED LIABILITY COMPANY means a limited liability company formed under Chapter 1705 of the Ohio Revised Code or under the laws of another state.
MUNICIPALITY means City of Harrison, Ohio.
NET PROFITS means For taxable years beginning on or after January 1, 2004 for a taxpayer other than an individual means adjusted federal taxable income and “net profit” for a taxpayer who is an individual means the individual’s profit, other than amounts described in division ( C) of section 183.03 required to be reported on schedule C, schedule E, or schedule F.
NONQUALIFED DEFERRED COMPENSATION PLAN means a compensation plan described in section 3121(v)(2)(C) of the Internal Revenue Code.
NON-RESIDENT means a Person, whether an individual, Association, Corporation or other entity, domiciled outside the City of Harrison.
THE ORDINANCE means Ordinance No. 4-82, enacted by the Council of Harrison and any amendments and supplements.
OWNER means a partner of a partnership, a member of a limited liability company, a shareholder of an S corporation, or other person with an ownership interest in a pass-through entity.
PERSON means includes, individuals, firms, companies, business trust, estates, trusts, partnerships, limited liability companies, associations, corporations, governmental entities, and any other entity.
PLACE OF BUSINESS means any BONA FIDE office (other than a mere statutory office), factory, warehouse, or other space which is occupied and used by the Taxpayer in carrying any Business activity individually or through one or more of his employees.
PRINCIPAL PLACE OF BUSINESS In the case of an Employer having its headquarters activities at a Place of Business within a Taxing Municipality, the term shall mean the Place of Business at which the headquarters is situated. In the case of an Employer not having its headquarters activities at a place of Business within a taxing Municipality, the term shall mean the largest Place of Business located in a Taxing Municipality.
QUALIFIED PLAN means a retirement plan satisfying the requirements under section 401 of the Internal Revenue Code as amended.
QUALIFIED WAGES means wages as defined in section 3121(a) of the Internal Revenue Code, without regard to any wage imitations, adjusted in accordance with section 718.03 (A) of the Ohio Revised Code.
RESIDENT means Domiciled in the Municipality.
RESIDENT UNINCORPORATED BUSINESS ENTITY means an unincorporated business entity having an office or place of business within the Municipality.
RETURNED PREPARER means any person other than a taxpayer that is authorized by a taxpayer to complete or file an income tax return, report, or other document for or on behalf of the taxpayer.
SCHEDULE C means Internal Revenue Service Schedule C filed by a taxpayer pursuant to the Internal Revenue Code.
SCHEDULE E means Internal Revenue Service schedule E filed by a taxpayer pursuant of the Internal Revenue Code.
SCHEDULE F means Internal Revenue Service schedule F filed by a taxpayer pursuant to the Internal Revenue Code.
S CORPORATION means a corporation that has made an election under subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code for its taxable year.
TAXABLE INCOME means qualifying wages paid by the Employer or Employers compensation for personal services, other income defined by statute as taxable, and /or adjusted federal taxable income from the operation of a Business, profession or other enterprise or activity adjusted in accordance with the provisions of the Ordinance and these regulations.
TAX YEAR means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code.
TAX ADMINISTRATOR means the person appointed to administer the Municipality’s Income Tax Ordinance and to direct the operation of the municipal Income Tax Department of the person executing the duties of the Tax Administrator.
TAXING MUNICIPALITY means a municipality levying a tax on income earned by Non-Residents working within such municipality and on income earned by its Residents.
TAXPAYER means an individual, Association, Corporation or other entity required by the Ordinance to file a return and/or to pay a tax. Taxpayer does not include any person that is a disregarded entity or a qualifying subchapter S subsidiary for federal income tax purposes but “Taxpayer” includes any other person who owns the disregarded entity or qualifying subchapter S subsidiary.
The singular shall include the plural and the masculine shall include feminine and the neuter.
ARTICLE III
IMPOSITION OF TAX
A. BASES:
1. Resident Employee
a. In the case of Residents, an annual tax of one percent (1%) is imposed on all salaries, wages, commissions, and other compensation earned on and after April 1, 1982. For the purpose of determining the tax on the earnings of Resident Taxpayers under Section 3, paragraph A-1 of the Ordinance, the sources of the earnings and the place or places in or at which the services were rendered, are immaterial. All such earnings wherever earned or paid are taxable.
b. The following are items which are subject to the tax imposed by Section 3, paragraph A-1 of the Ordinance:
.1 Qualifying wages, bonuses and incentive payments earned by an individual whether directly or through an agent and whether in cash or in property for services rendered during the tax period as:
.01 An officer, director or Employee of a Corporation (including charitable and other non- profit organizations), joint stock associations, or joint stock company:
.02 An Employee (as distinguished from a partner or member) of a partnership, limited partnership, or any form of unincorporated enterprise owned by two or more persons:
.03 An Employee (as distinguished from a proprietor) of a Business, trade, or profession conducted by an individual owner:
.04 An officer or Employee (whether elected, appointed or commissioned) of the United States Government, or any of its agencies; or of the State of Ohio or any of its Political subdivisions or agencies thereof; or any foreign country or dependency except as provided in Section 3 of the Ordinance;
.05 An Employee of any other entity or Person, whether based upon hourly, daily, weekly, semi-monthly, monthly, annual, unit of production or piece work rates; and whether paid by an individual, partnership, Association, Corporation (including charitable, and other non-profit Corporations), governmental administration, agency, authority, board, body, branch, bureau, department, division, sub-division, section or unit, or any other entity.
2. Commissions earned by an individual directly or through an agent and whether in cash or in property for services rendered during the effective period of the Ordinance regardless of how computed or by whom or where so ever paid.
.01 If amounts received as a drawing account exceed the commissions earned and the excess is not subject to the demand of the Employer for repayment the tax is payable on the amounts received as a drawing account.
.02 Amounts received for an Employer for expenses, and not as compensation, and used as such by the individual receiving them are not deemed to be compensation if the Employer deducts such expenses or advances as such from his gross income for the purpose of determining his Net Profits taxable under Federal law, and the Employee is not required to include such receipts as income on his Federal tax return.
.03 If commissions are included in the net earnings of the trade, Business, profession, enterprise, or activity carried on by an unincorporated entity of which the individual receiving such commission is owner or part owner and therefore subject to the tax under paragraphs A-3 or A-4 of Section 3, paragraph A-1. In such case such net earnings shall be taxed under Section 3, paragraph A-3 of the Ordinance.
.3 Fees, unless such fees are properly includable as part of the Net Profits of a trade, Business, profession, or enterprise regularly carried on by an unincorporated entity owned or partly owned by said individual and such Net Profits are subject to the tax under Section 3, paragraph A-3 of the Ordinance.
.4 Other compensation, including tips, bonuses or gifts of any type, and including compensation paid to domestic servants, casual employees and other types of employees.
.5 Payment made to an employee by an employer as vacation pay, or wages under any other wage continuation plan during periods of absence from work are taxable when paid. Payments made by third parties (insurance companies) to an employee for sick or disability pay are taxable if the amount appears on a W-2 form and the employer has paid the premium for this insurance coverage.
.6 Losses from the operation of a business or profession are not deductible from employee's earnings but may be carried forward as provided in Article III C.
.7 Payments made to Employees by an Employer as vacation wages are taxable. Payments made to an Employee by an Employer under a wage continuation plan during periods of disability are taxable.
.8 Amount received as gambling winnings and reported on IRS Form W-2G or Form 5754 and or any other form from the Internal Revenue Service that reports winnings from gambling. Gambling includes but is not limited to bingo, keno, slot machines, casino games, horse racing, dog racing, jai alai, sweepstakes, wagering pools, lotteries, prizes and any other wagering transactions.
.9 Stock Options or other compensation received in the form of property are taxable when included on Form W-2 Form 1099 for federal purposes.
.10 Nonqualified pension plans. Contributions of (or premiums paid by) the employer in the case of nonqualified plans are taxable when made and reported on IRS Form W-2 or Form 1099.
B. Where compensation is paid or received in property, its fair market value, at the time of receipt, shall be subject to the tax and to withholding. Board, lodging and similar items received by an Employee in lieu of additional cash compensation shall be included in earnings at their fair market value.
.1 In the case of domestic and other Employees whose duties require them to live at their place of employment or assignment, board and lodging shall not be considered as wages or compensation earned.
.2 Rentals given to clergy are not to be considered as income.
2. Non-Resident Employee:
a. In the case of individuals who are not residents, there is imposed under Section 3, paragraph A-2 of the Ordinance, a tax of one percent (1%) on all qualifying wages, commissions, other compensation, and other taxable income earned or received for work done or services performed or rendered within the Municipality., whether such compensation or remuneration is received or earned directly through an agent and whether paid in cash or in property. The location of the place from which payment is made is immaterial.
b.The items subject to tax under Section 3, paragraph A-2 of the Ordinance are the same as those listed and defined in Article III-A. For the methods of computing the extent of such work or services performed within the Municipality, in cases involving compensation for personal services partly without the Municipality, see Article VI-A, 6
c.The City of Harrison shall not tax the compensation of an individual if all of the
following apply:
(1) The individual does not reside in the City of Harrison.
(2) The compensation is paid for personal services performed by the individual in the City of Harrison on twelve (12) or fewer days during the calendar year.
.
(3) In the case of an individual who is an employee, the principal place of business is located outside the City of Harrison and the individual pays tax on compensation described in (2) of this section to the City, if any, in which the employer’s principal place of business is located and no portion of that tax is refunded to the individual.
(4) The individual is not a professional entertainer or professional athlete, the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonable defined by the City of Harrison.
d.For purposes of the 12 day calculation, “Day” means any part of a 24- hour calendar day where compensation is earned in the City of Harrison.
e.Beginning with the thirteenth (13th) day, the individual shall no longer be considered an occasional entrant and is liable for taxes on income earned for the first twelve (12) days.
3. a Imposition of tax on Net Profits of Resident Unincorporated Business:
1. In the case of Resident unincorporated business, professions, enterprises, undertakings or other entitles conducted, operated, engaged in, prosecuted or carries on, irrespective of whether such taxpayer has an office or place of business in the Municipality there is imposed on and after April 1, 1982, an annual tax of one percent (1%) on the net profits attributable to the Municipality, under the formula of separate accounting method provided for in Section 3B of the Ordinance, derived from sales made, work done or any services performed or rendered and business or other activities conducted in the Municipality. For the method of computing professional profits attributable to the Municipality, see business apportionment percentage formula Article 111-B 2.
2. The tax imposed on Resident Associations or other unincorporated entities owned by two or more Persons is upon the entities rather than the individual members or owners thereof, but the tax imposed on as unincorporated Resident entity owned by one Person is upon the individual owner. (For tax on that part of a Resident owner’s distributive share of Net Profits not taxed against the entity, see Article III-A,3b.
3. The tax imposed by Section 3, paragraph A-3a of the Ordinance is imposed on all Resident unincorporated entities having Net Profits attributable to the Municipality under the business apportionment percentage formula provided for in the Ordinance, regardless of where the owner or owners of such Resident unincorporated Business entity reside. See Article III-B-2-c. 1.
4. Resident associations owned by two or more persons all of whom are Residents of the Municipality may disregard the business apportionment percentage formula provided for in the Ordinance and pay the tax on their entire Net Profits thereof. In such case, the tax paid by the entity shall constitute all tax due from the owners or members of the entity for their distributive share of such Net Profits; however, an additional return shall be required from any such owner or member having Taxable Income other than the distributive share of the Net Profits from the entity. See Article XV for credits.
5. The tax imposed shall not apply to income derived within the Municipality by any person from interstate commerce if the only business activities within the State of Ohio by or on behalf of such person, are either, or both the following.
a. Solicitation of orders by such person, or his representative, in the State of Ohio for sales of intangible personal property, which orders are sent outside of the State of Ohio for approval or rejection, and, if approved, are filled by shipment or delivery from a point outside the State of Ohio; and
b. the solicitation of orders by such person, or his representative in the State of Ohio, in the name of or for the benefit of a prospective customer of such person, if orders by such customer to such person enable such customer to fill orders resulting from such solicitation are orders described in paragraph a. above; provided, however, that the provisions of this sub-section shall not apply to any corporation which is incorporated under the laws of the State of Ohio or any individual who is domiciled in or a resident of the State of Ohio. For the purpose of this sub-section a person shall not be considered to have engaged in a business activity within the State of Ohio during any taxable year merely by reason of sales in the State of Ohio, or the solicitation of orders for sales within the State of Ohio of tangible personal property on behalf of such person by one or more independent contractors, or by reason of the maintenance of an office within the State of Ohio by one or more independent contractors whose activities on behalf of such person in the State of Ohio consist solely of making sales, or soliciting orders for sales of tangible personal property. For the purposes of this sub-section the term “ independent contractor” means a commission agent, broker, or other independent contractor who is engaged in selling, or soliciting orders for sales of tangible personal property for more than one principal and who holds himself out as such in the regular course of his business activities. For the purpose of this sub-section, the term “representative” does not include an independent contractor.
3 b. Imposition of Tax on Resident’s Distributive Share of Profits of a Resident
Unincorporated Business Entity, Not Attributable to this Municipality.
.1 A Resident individual who is sole owner of a Resident unincorporated entity shall disregard the Business Allocation Formula and pay the tax on the entire Net Profits of his Resident unincorporated Business entity. If allocation to another municipality exists, the taxpayer may qualify for credit for tax paid to another locality under. Article XV.
.2 In the case of a Resident individual partner or part owner of a Resident unincorporated entity there is imposed a tax of one percent (1%) on and after April 1, 1982, on such individual’s distributive share of Net Profits earned during the effective period of the Ordinance not attributable to the Municipality, under the business apportionment percentage formula provided for in Section 3 of the Ordinance, and not taxed against the entity See Article XV.
4. a. Imposition of Tax on Net Profits of Non-Resident Unincorporated business
.1 In the case of Non-Resident associations or other Non-Resident unincorporated entities, whether or not they have an office or any Place of Business in the Municipality, there is imposed on and after April 1, 1982, a tax of one percent (1%) on the Net Profits attributable to the Municipality under the business apportionment percentage formula provided for under Section 3 of the Ordinance.
.2 The tax imposed on Non-Resident associations or other Non-Resident unincorporated entities owned by two or more Persons is upon the entities rather than the individual members of owners thereof. (For tax on that part of a Resident owner’s distributive share of Net Profits not taxed against the entity. See Article III-A, 4b).
.3 The tax imposed by Section 3, paragraph A-3a of the Ordinance is imposed on all Non-Resident associations and other Non-Resident unincorporated entities having Net Profit attributable to the Municipality under the business apportionment percentage formula provided for in the Ordinance, regardless of where the owner or owners of such Non-Resident unincorporated business or Resident association, etc., reside.
.4 Non-Resident unincorporated entities owned by two or more persons all of whom are Residents of this Municipality may elect to disregard the business apportionment percentage formula provided for in the Ordinance and pay the tax on their entire Net Profits. In such case, the tax paid by the entity shall constitute all tax due from the owners or members of the entity for their distributive share of the Net Profits; however, a return shall be required from such owner or member having Taxable income other than the distributive share of the Net Profit from the entity. (See Article XV for credits.)
4. b. Imposition of Tax on Resident’s Share of Profits of a Non-Resident Unincorporated
Business Entity Not Attributable to this Municipality. (See Article XV for Credits.)
.1 A Resident individual who is sole owner of a Non-Resident unincorporated business entity shall. Pay the tax on his entire share of net profits of the unincorporated entity. If allocation to another municipality exists, the taxpayer may qualify for credit for tax paid to another municipality under Article XV.
.2 In the case of a Resident individual partner or part owner of a Non-Resident unincorporated entity, there is imposed on and after April 1, 1982, an annual tax of one percent (1%) of such individual’s distributive share of Net Profits not attributable to the Municipality under the business apportionment percentage formula provided for in Section 3 of the Ordinance and not taxed against the entity.
5. Imposition of Tax on Net Profits of Corporation.
a. In the case of Corporations, whether domestic or foreign and whether or not such Corporations have an office or Place of Business in the Municipality, there is imposed on and after April 1, 1982, an annual tax of one percent (1%) on the Net Profits attributable to the Municipality under the business apportionment percentage formula provided for in the Ordinance.
b. In determining whether a Corporation is conducting a Business or other activity in this community, the provisions of Article III-B of these Regulations shall be applicable.
c. Corporations which are required by the provisions of Section 5727.38 to 5727.41, inclusive, of the Revised Code of Ohio, to pay an excise tax in any Taxable year as defined by the Ordinance, may exclude that part of the Gross Receipts upon which the excise tax is paid. In such case, expenses incurred in the production of such Gross Receipts shall not be deducted in computing Net Profit subject to the tax imposed by the Ordinance.
6. Amplification:
In amplification of the definition contained in Article II of these regulations, but not in limitation thereof, the following additional information respecting net business profits are furnished.
a. NET PROFITS
.1 Net profits for a taxpayer other than an individual means adjusted federal taxable income and “net profit” for a taxpayer who is an individual means the individual’s profit, other than amounts described in division (C) of section pf 183.3.required to be reported on schedule C, Schedule E, or Schedule F.
.2 ”Adjusted federal taxable income “ 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:
(a). 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.
(b). Add an amount equal to five percent (5%) of intangible income deducted under division (A) (1) (a) of this section, but excluding that portion intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code;
(c). 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:
(d) (i) Except as provided in division (A)(1)(d)(ii) 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.
(ii)Division (A)(1)(d)(I) 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.
(e) Add taxes on or measured by net income allowed as a deduction in the computation
of federal taxable income;
(f) In the case of a real estate investment trust and regulated investment company, add all amounts with respect to dividends, to, distributions to, or amounts set aside for a credited to the benefit of investors and allowed as a deduction I the computation of federal taxable income.
(g) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute adjusted federal taxable income as if the taxpayer were a C corporation, except;
(i) Guaranteed payments and other similar amounts paid or accrued to a partner, former partner, member, or former member shall not be allowed as deductible expense; and
(ii) Amounts paid or accrued to a qualified self-employed retirement plan with respect to an owner or owner-employee of the taxpayer, amounts paid or accrued to or for health insurance for an owner or owner-employee, and amounts paid or accrued to or for life insurance for an owner or owner-employee shall not be allowed as a deduction.
Nothing in division (A)(1) of this section shall be construed as allowing the taxpayer to add or deduct any amount more than once or shall be construed as allowing any taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.
Nothing in this chapter shall be construed as limiting or removing the ability of any municipal corporation to administer, audit, and enforce the provisions of its municipal income tax.
b. GROSS RECEIPTS
.1 Gross Receipts shall not include but not be limited to income in the form of commissions, fees, capital gains, rentals from real and tangible personal property, and other compensation for work or services performed or rendered as well as income from sales of stock in trade.
c. EXPENSES
.1 All ordinary and necessary expenses of doing business, including reasonable compensation paid Employees, shall be allowed but no deduction may be claimed for
salary or withdrawal of a proprietor or of the partners, members, or other owners of an unincorporated Business or enterprise.
.01 If not claimed as part of the cost of goods sold or elsewhere in the return filed, there may be claimed and allowed a reasonable deduction for depreciation, depletion, obsolescence, losses resulting from theft or casualty, not compensated for by insurance or otherwise of property used in the trade or Business, but the amount may not exceed that recognized for the purpose of the Federal income tax. Provided, however, that loss on the sale, exchange or other disposition of depreciable property or real estate, used in the Taxpayer’s Business shall not be allowed as a deductible expense.
.02 Current amortization of emergency facilities under the provisions of the Internal Revenue Code, if recognized as such for Federal income tax purposes, may be included as an expense deduction hereunder.
.03 Where depreciable property is voluntarily destroyed the only cost of such demolition of the building, less any increase in the value of the land caused by such demolition, will be allowed as an expense and may be completely taken in the year of demolition to the extent allowable for Federal income tax purposes.
.04 Bad debts in a reasonable amount may be allowed in the year ascertained worthless and charged off, or at the discretion of the Commissioner (if the reserve method is used), as reasonable addition to the reserve may be claimed, but in no event shall the amount exceed the amount allowable for Federal income tax purposes
.05 Only taxes directly connected with the Business may be claimed as a deduction. If for any reason the income from property is not subject to tax, then taxes on and other expenses of said property are not deductible. In any event, the following taxes are not deductible from income: (1) the tax under the Ordinance; (2) Federal or other taxes based upon income; (3) Gift, estate or inheritance taxes; and (4) Taxes for local benefit or improvements to property which tend to appreciate the value thereof. (5) self-employment taxes for unincorporated businesses or other entities, including credit for employment taxes as allowed for Federal tax purposes.
.06 If the taxpayer reports income that is non-taxable under Chapter 183 and such amounts are deducted in order to reconcile the municipal return with the taxpayer’s federal return, expenses attributable to this non-taxable income shall not be allowed as a deduction form the remaining taxable income. The expenses attributable to such non-taxable income shall be:
.07 5 percent of the non-taxable income. Non-taxable income given capital gain treatment on the federal return, from which attributable expenses were already deducted, is not subject to the foregoing.
.08 An Employee is paid on a commission or other compensation basis and who pays his business expense from his commissions or other compensation, without reimbursement from his employer may deduct from his gross commissions or other compensations, business expenses allowed by the Internal Revenue Service for Federal income tax purposes but only to the extent said expenses are incurred in earnings commissions or other compensations subject to the tax imposed by the ordinance. Business expenses allowed shall be those expenses allowed to be claimed on the Federal Form “2106” and upon the request of the Tax Commissioner, verifiable supporting schedules and/or receipts. No expenses claimed on Federal Form “Schedule A, Itemized Deductions” shall be allowed and failure to produce the supporting schedules and/or receipts upon request by the tax Commissioner shall result in disallowance of the expenses in question.
.09 Income from the sale of, or lease of mineral rights are not taxable and expenses or loss in connection therewith are not deductible for tax purposes except in cases where taxpayer conducts the activities by which the minerals are extracted from the land.
.10 Funds allocated by an employer to employees' retirement are not taxable to the employee if the employee has no vested right in the money so allocated.
.11 Expenses incurred while attending educational courses may not be deducted form wages.
.12 No deduction shall be allowed for self-employed health insurance against income as allowed for Federal or State Tax purposes for unincorporated entities or the like.
7. Rental from real property
a. The rental of real estate is ordinarily a Business activity, and the income from such rentals is taxable.
b. Rentals received by a Taxpayer engaged in the Business of buying and selling real estate shall be considered as part of Business income.
c. Real property, as the term is used in this Regulation, shall include commercial property, residential property, farm property, and any and all other types of real estate.
d. In determining the Taxable Income for rentals, the deductible expenses shall be of the same nature, extent and amount as are allowed by the Internal Revenue Services for Federal income tax purposes.
e. Residents of the Municipality are subject to taxation upon the net income from rentals (to the extent above specified), regardless of the location of the real property owned. However, if any such property is located outside the Municipality, and is subject to another municipal income tax, credit shall be claimed in accordance with section 183.14
f. Non-Residents of the Municipality are subject to such taxation only if the real property is situated within the Municipality.
g. All landlords are required to furnish the Tax Commissioner by the last day of January, April, July and October a list of any tenants who have moved either in or out of any property owned by them in this Municipality during the immediately preceding quarter, together with the date of such move and the former tenants current address. Any owner, manager, or person in control of the real estate who fails to make the report of lessees, tenants, or occupants of premises under their control as required shall be fined up to a maximum of one hundred dollars ($100.00).
h. Businesses owning or managing real estate are taxed only on that portion of income derived from property located in the Municipality.
8. Royalties
Income in the form of royalties is taxable if taxpayer’s activities produced the publication or other product, the sale of which produces the royalties.
9. Gambling Winnings.
Gambling winnings as reported on Internal Revenue Service Form W-2G, form 5754 and or any other forms required by the Internal Revenue Service that reports winnings form gambling.
B. APPORTIONMENT OF BUSINESS PROFITS.
Business Apportionment Percentage Formula
a. STEP 1: Ascertain the percentage which the original cost of real and tangible personal property, including leasehold improvements, owned or used in the Business and situated within Harrison is of the original cost of all real and tangible personal property, including leasehold improvements, owned or used in the business wherever situated, during the period covered by the return.
.01 The percentage of Taxpayer’s real and tangible personal property within Harrison is determined by dividing the average net book value of such property within Harrison (without deduction of any encumbrances by the average net book value of all such property within and without Harrison. In determining such percentage property rented to the Taxpayer as real and tangible personal property must be considered.
.02 The original cost of real and tangible personal property rented by taxpayer shall be determined by multiplying gross annual rents by eight (8).
.03 Gross rents means the actual sum of money or other consideration payable, directly or indirectly, by the Taxpayer for the use or possession of property and includes:
.001 Any amount payable for the use or possession of real and tangible personal property or any part thereof, whether designated as a fixed sum of money or as a percentage of sales profit or otherwise:
.002 Any amount payable as additional rent or in lieu of rent such as interest, taxes, insurance, repairs, or other amounts required to be paid by the terms of a lease or other arrangement.
.04 A residence may not be considered an office unless a portion thereof is used exclusively for business purposes and is reached by a separate entrance in an exterior wall does not serve as the entrance to the balance of the building.
b. STEP 2: Ascertain the percentage which the Gross Receipts of the Taxpayer derived from sales made and services rendered in Harrison is of the total Gross Receipts wherever derived during the period covered by the return. If the sales are apportioned percentage is less than one hundred percent (100%), a statement shall be submitted with the return indicating: (1) other municipalities to which sales are apportioned; (2) percentage of sales apportioned to each municipality; (3) whether or not a return was field and tax paid on the sales apportioned to each other municipal tax was filed and paid on the sales apportioned to each municipality. Failure to submit this statement (or when the statement indicates non other municipal tax was filed and paid), shall result in all sales being considered as sales of the Municipality.
.1 The following sales shall be considered Harrison sales:
.01 All sales made through retail stores located within Harrison to purchasers within or without this Municipality except such of said sales to purchasers outside this Municipality that are directly attributable to regular solicitations made outside this Municipality personally by Taxpayer’s employees.
.02 All sales of tangible personal property delivered to purchasers within this Municipality if shipped or delivered from an office, store, warehouse, factory, or place of storage located within Harrison.
.03 All sales of tangible personal property delivered to purchasers within this Municipality even though transported from a point outside this Municipality if the Taxpayer is regularly engaged through its own Employees in the solicitation or promotion of sales within Harrison and the sale is directly or indirectly the result of such solicitation.
.04 All sales of personal property shipped from an office store warehouse, factory or place of storage within the Municipality to purchasers outside the Municipality if the Taxpayer is not, through its own employees regularly engaged in the solicitation or promotion of sales at the place of delivery.
.05 Charges for work done or services performed incident to a sale whether or not included in the price of the property shall be considered gross receipts from such sale.
.06 In the application of the foregoing sub-paragraphs a carrier shall be considered the agent of the seller, regardless of the FOB point or other conditions of the sale, and the place at which the orders are accepted or contracts legally consummated shall be immaterial, solicitation of customers outside Harrison by mail or phone from an office, or place of business within the Municipality shall not be considered a solicitation of sales outside this Municipality.
.07 Non-resident professional persons shall use the factor of Harrison billings over total billings.
c. STEP 3: Ascertain the percentage which the total wages, salaries, commissions and other compensation of Employees within Harrison is of the total wages, salaries, commissions and other compensation of all the Taxpayer’s Employees within and without Harrison during the period covered by the return.
.1 Salaries and reasonable compensation paid owners or credited to the account of owners or partners during the period covered by the return are considered wages for the purpose of this computation.
.2 Wages, salaries, and other compensation shall be computed on the cash or accrual basis in accordance with the method of accounting used in the computation of the entire net income of the Taxpayer.
.3 In the case of an Employee who performs services both within and without this Municipality the amount treated as compensation for services performed within the Municipality shall be deemed to be;
.01 In the case of an Employee whose compensation depends directly on the volume of Business secured by him, such as a salesman on a commission basis, the amount received by him for he Business attributable to his efforts with Harrison.
.02 In the case of an Employee whose compensation depends on other results achieved, the proportion of the total compensation received which the value of his services within this Municipality bears to the value of all his services; and
.03 In the case of an Employee compensated on a time basis, the proportion of the total amount received by him which his working time within this Municipality is of his total working time.
.04 Provided, however, all Employees regularly connected with or working out of a Place of Business maintained by the Taxpayer in the municipality who performs 75% or more of their services within the Municipality considered Employees within the Municipality.
.4 Non-resident professional persons shall use the factor of days spent within Harrison to total working days.
All Employees regularly connected with or working out of a Place of Business maintained by the Taxpayer outside the Municipality who performs 25% or less of their services within the Municipality shall be considered Employees outside the Municipality. (The provisions of this sub-paragraph are not applicable in determining the tax liability of a Non-Resident who works in and outside the Municipality.)
d. STEP 4: Add the percentages determined in accordance with Steps 1, 2 and 3 or such of the aforesaid percentages as may be applicable to the particular Taxpayer’s Business and divide the total so obtained by the number of percentages used in ascertaining said total. The result so obtained is the Business apportionment percentage. In determining the average percentage, a factor shall not be excluded from the computation merely because said factor is found to be apportioned entirely in or outside the Municipality. A factor is excluded only when it does no exist anywhere.
e. STEP 5: The Business apportionment percentage determined in Step 4 above shall be applied to the entire taxable Net Profits of the Taxpayer wherever derived to determine the Net Profits apportioned to Harrison.
3. Substitute Method.
a. In the event a just and equitable result cannot be obtained under the business apportionment percentage formula, the Tax Commissioner, upon application of the Taxpayer , may substitute other factors in the business apportionment percentage formula or prescribe other methods of apportioning net income calculated to effect a fair and proper apportionment.
Application to the Tax Commissioner to substitute other factors in the business apportionment percentage formula or to use a different method to apportion Net Profits must be made in writing and shall state the specific grounds on which the substitution of factors or use of a different method is requested and the relief sought to be obtained. A copy thereof shall be served at the time of filing upon the Taxpayer as the case may be. No specific form need be followed in making such application. Once a Taxpayer has filed under a substitute method he must continue to so file unless given permission to change by Tax Commissioner
c. the decision of the Tax Commissioner on subsections (3)(a) and (b) hereof may be appealed by the taxpayer to the Board of Review, which shall have the power to adjust, modify, or overrule such decision to the Tax Commissioner
4. Professional and Personal Service.
a. In the case of professional people and others furnishing personal services, if their only Place of Business is within the Municipality all their Net Profits shall prima facie be attributable to the Municipality.
C. OPERATING LOSS CARRY-FORWARD
1. The portion of a net operating loss, based on income taxable under the Ordinance, sustained in any taxable year subsequent to April 1, 1982, allocable to Harrison may be applied against the portion of the profit of succeeding years apportionment factors to Harrison until exhausted, but in no event more than three (3) years immediately following the year in which the loss was sustained. No portion of a net operating loss shall be carried back against Net Profits of any prior year.
2. In the event Net Profits are allocated both within and without Harrison the portion of a net operating loss sustained shall be allocated to Harrison in the same manner as provided here for allocating Net Profits to Harrison. The portion of a net operating loss to be carried forward shall be determined in the year the net operating loss is sustained, on the basis of the apportionment factors applicable to that year.
The same method of accounting and apportionment must be used in the year to which an operating loss is carried as was used in the year in which the operating loss was sustained.
3. A short Fiscal year ( a Fiscal Year is less than twelve (12) months) brought about by a change in accounting period, a new Taxpayer selecting a short Fiscal Year, or a Taxpayer operating in Harrison for less than his full accounting period, shall be considered as a full taxable Fiscal Year for the purposes of Losses carry-forward.
4. In any return in which a net operating loss deduction is claimed; a schedule should be attached showing:
a. Year in which net operating loss was sustained.
b. Method of accounting and apportionment used to determine portion of net operating loss apportioned to Harrison.
c. Amount of net operating loss used as a deduction in prior years.
d. Amount of net operating loss claimed as a deduction in current year.
5. The net operating loss of a Taxpayer which loses its identity through merger, consolidation, etc., shall not be allowed as a carry-forward loss deduction to the surviving or new Taxpayer.
6. In the case of a net operating loss sustained by Taxpayers filing a consolidation return, see Article III, paragraph D.
.7 A loss form the operation of a business or profession may be offset against net profit from other business or professional activities in the amount of the loss commensurate with the portion of profits, if profits existed, with respect to which credit could not be claimed for tax paid to another municipality.
8. Losses from the operation of a farm, determined in accordance with accounting methods used by taxpayer for Federal income tax purposes, shall be allowable as an offset to net profit as set forth herein.
D. CONSOLIDATED RETURNS:
1. Consolidated returns may be filed by a group of corporations who are affiliated through stock ownership if that affiliated group filed for the same tax period a consolidated return for Federal income tax purposes pursuant to Section 1501 of the internal Revenue Code. A consolidated return must include all companies which are so affiliated.
2. Once a consolidated return has been filed for any taxable year the consolidated group must continue to file consolidated returns in subsequent years unless:
a. Permission in writing is granted by the Commissioner to file separate returns.
b. A new corporation other than a corporation created or organized by a member of the group has become a member of the group during the taxable year.
c. A corporation member of the group is sold or exchanged. Liquidating a corporation or merging one of the corporations of the group into another will not qualify the group for filing separate returns.
E. EXCEPTIONS The following shall not be considered taxable:
1. Poor relief, unemployment insurance benefits, supplemental unemployment benefits, old age pension or similar payments received from local, state or federal government or charitable or religious organizations.
2. Proceeds of insurance, annuities, workmen’s compensation insurance, social security benefits, pensions, compensation for damages for personal injuries and like reimbursement, not including damages for loss of profits.
3. Compensation for damage to property by way of insurance or otherwise.
4. Interest and dividends from intangible property and distribution from a decedent’s estate or a trust.
5. Military pay and allowance received as a member of the armed forces of the United States.
6. Any charitable, educational, fraternal or other type of non-profit association or organization enumerated in Section 718 of the Revised Code of Ohio which is exempt from payment of real estate taxes is exempt from payment of the tax imposed by this Ordinance, but only to the extent enumerated in said section.
7. Any Association or organization falling in the category listed in the preceding paragraph is required to file declarations and final returns and remit the taxes levied under this Ordinance on all Net Profits from activities, the income for which is not specifically exempt from taxation in Section 718 of the Revised Code of Ohio.
8. Where such non-profit Association or organization conducts income producing Business both within and without the corporate limits, it shall calculate its profits allocable to the municipality under the method or methods provided above.
9. Compensation earned by itinerants.
10. Income from fellowship is exempt only when given for attendance as a student at a recognized college or university.
11. Compensation paid under section 3501.28 or 3501.36 of the Ohio Revised Code to a person serving as a precinct official, to the extent that such compensation does not exceed one thousand dollars ($1000) annually. Such compensation in excess of one thousand dollars may be subjected to taxation. The payer of such compensation is not required to withhold City tax from that compensation.
12. Compensation paid to an employee of a transit authority, regional transit authority, or regional transit commission created under Chapter 306 of the Ohio Revised Code for operating a transit bus or other motor vehicle for the authority or commission in or through the City, unless the bus or vehicle is operated on a regularly scheduled route, the operator is subject to such a tax by reason of residence or domicile in the City, or the headquarters of the authority or commission is located within the City.
13. The income of a public utility when that public utility is subject to the tax levied under section 5727.24 or 5727.30 of the Ohio Revised Code, except a Municipal corporation may tax the following the income of an electric company or combined company, as defined in section 5727.01 of the Ohio Revised Code, may be taxed by a municipal corporation subject to Chapter 5745 of the Ohio Revised Code.
a. The income of an electric company or combined company.
b. The income of a telephone company.
14. An S corporation shareholder’s distributive share of net profits or losses of the S
Corporation.
15. Compensation attributable to a plan or program described in section 125 of the Internal Revenue Code.
16 The rental value of a home furnished to a minister of the gospel as part of his
compensation, or the rental allowance paid to a minister of the gospel as part of his compensation, to the extent used by him to rent or provide a home pursuant to section 107 of the Internal Revenue Code.
ARTICLE IV
EFFECTIVE PERIOD OF TAX
A. The tax imposed by the Ordinance is levied, collected and paid with respect to all income and net profits, subject to the tax, earned on and after April 1, 1982.
ARTICLE V
RETURN AND PAYMENT OF THE TAX
A. DATE AND REQUIREMENT FOR FILING:
1. On or before April 30th of each year beginning with the year 1983, every Person subject to the provisions of Section 3, paragraph A-1 to A-5 inclusive, of the Ordinance shall, except as hereinafter provided, make and file with the Commissioner, a return on a form prescribed by the Commissioner, whether or not a tax be due. The City of Harrison shall accept a generic form of any return, report, or document required to be filed if the generic form, once completed and filed, contains all the information required to be submitted with the City of Harrison’s prescribed return, reports or documents, and if the taxpayer or return preparer filing the generic form otherwise complies with the rules or ordinances of the City of Harrison governing the filing of returns, reports or documents. To constitute a valid form the following information must be included:
A. Income Tax Return. A generic income tax return must contain the following to be accepted as a valid City of Harrison income return:
1. Taxpayer’s Social Security or Federal Employer Identification number
2. Schedules X, Y, and Z for the business return.
3. The Credit section must show:
(a) Tax withheld by employer for Harrison
(b) Tax paid to the City/ Village of ______not to exceed 1 %.
(c) Estimated taxes paid during the current year.
(d) Prior year overpayments
4.A line indicating amounts for penalty, interest, late fees and total line for these amounts.
5. A statement as follows: I certify I have examined this return including accompanying schedule and statements, and declare that it is true, correct and the figures used herein are accurate. If prepared by a person other than the taxpayer, the declaration is based on all information which the preparer has any knowledge.
6. All applicable federal schedules, forms and statements.
2. A taxpayer on a fiscal year accounting basis for federal income tax purposes shall, beginning with his first fiscal year, any part of which falls within the effective period hereof file his return within four (4) months for the end of such fiscal year or period.
3. The Tax Commissioner may provide by regulation that the return of an employer or employers, showing the amount of tax deducted by said employer or employers from the salaries, wages, commissions or other compensation of an employee, and paid by him to the Tax Commissioner, shall be accepted as the return required of any employee whose sole income, subject to tax under this Chapter is such qualifying wages, commissions or other compensation and other taxable income are subject to withholding..
4. If the return is made for a Fiscal Year or any period less than a year, said return shall be made within four (4) months form the end of each Fiscal Year or other period.
5. The Return shall be accompanied by payment of any taxes due thereon.
6. All taxes due under the provisions of this Ordinance for net profits attributable to 1982 shall be calculated on not less than three-quarters (3\4%) of the entire income for such year, regardless of when such income was earned or received.
7. Every Person subject to the provisions of Section 3 of the Ordinance shall, except as hereinafter provided file a return setting forth the aggregate amount of qualifying wages, commissions and other compensation, and other taxable income, Net Profits from Business or other activities, including the rental from use of real and personal property, and other income taxable under the Ordinance, received for the period covered by the return and such other pertinent facts and information in detail as the Commissioner may require.
9. An Employee who is permitted to deduct Business expenses from gross wages, salaries, or commissions must file a return in order to claim such deductions even though all or part of such qualifying wages, commissions and other taxable income are subject to withholding.
10. Any Taxpayer who received Taxable Income not subject to Withholding under the Ordinance must file a return.
11. Any Taxpayer having income, wages, or other compensation for which a return must be filed, and also having Net Profits from a Business is required to file only one return.
12. Trustees are required to file returns on the trusts and give the name and address of the beneficiaries, even though the latter individually pays the tax.
13. Except as provided for therein, the tax is on the partnership or Association as an entity whether Resident or Non-Resident and a return is required disclosing the Net Profits apportioned to the Municipality and the tax paid thereon. However, any Resident partner or Resident member of an unincorporated entity is required to make a return and pay the tax in accordance with Article III-A-3b. 2 of these regulations.
14. A husband and wife may file a joint return either when engaged in the same or separate businesses, but may not deduct business losses of either from compensation paid by an employer.
15. Executors and administrators are liable for the payment of any taxes due by a deceased from an estate of said deceased.
B. INFORMATION REQUIRED AND RECONCILIATION WITH FEDERAL RETURNS
1. In returns filed hereunder, there shall be set forth the aggregate amount of salaries, wages, bonuses, incentive payments, commissions, fees and other compensation subject to tax earned from each Employer, taxable Net Profits, and other pertinent information as the Commissioner may require.
2. Where figures of total income, deductions, and Net Profits are included, as shown by a Federal return, any items of income which are not subject to Harrison tax and unallowable expenses shall be eliminated in determining net income subject to Harrison tax. The fact that any Taxpayer is not required to file a Federal tax return does not relieve him from filing a tax return.
3. If a change in Federal income tax liability, made by the Federal Internal Revenue Service, or by a judicial decision, results in an additional amount of tax payable to this Municipality, a report of such change shall be filed by the Taxpayer within three (3) months after receipt of the final notice form the Federal Internal Revenue Service or final Court decision, see Article XI-B-2..
4. If a change in Federal income tax liability results in a reduction of taxes owed and paid to this Municipality, a claim for refund shall be filed with the Commissioner as prescribed in Section 11 of the Ordinance and Article XI-C of these regulations.
C. EXTENSIONS.
1. Upon written request of the Taxpayer made on or before the date for filing the return and for good cause shown, the Commissioner may extend the time for filing such return for a period of not to exceed six (6) months, or to one (1) month beyond any extension requested of or granted by the Federal Internal Revenue Service. The Commissioner may require a tentative return accompanied by payment of the estimated tax. The granting of an extension for filing a City of Harrison income tax return does not extend the last date for payment of the tax; hence, penalty and interest may apply to any unpaid tax during the period of extension at the rate set out by Section 10 Article X. No penalty or interest will be assessed in those cases in which the return is filed and the final tax paid within the period as extended provided all other filing and payment requirements of the Ordinance has been met. Any extension by the Tax Commissioner shall be granted with the understanding that declaration filing and payment requirements have been fulfilled; however, if, upon further examination it then becomes evident that declaration filing and payment requirements have not been fulfilled, penalty and interest may be assessed in full and in the same manner as though no extension had been granted. The taxpayer shall make the request by filing a copy of the taxpayer’s request for a federal filing extension with the Tax Commissioner. Any taxpayer not required to file a federal income tax return may request an extension for filing a City of Harrison Tax return in writing. The City of Harrison may deny a taxpayer’s request for extension if the taxpayer:
(1) fails to timely file the request;
(2) fails to file a copy of the federal extension request (if applicable)
(3) owes the City of Harrison any delinquent income tax or any penalty, interest, assessment or other charge for the late payment or nonpayment of income tax;
(4) has failed to file any required income tax return, report or other related document for a prior tax period.
2. Information returns, schedules and statement needed to support tax returns are to be filed within the time limits set forth for filing the tax returns.
D. PAYMENT WITH RETURN.
1. The Taxpayer making the return shall, at the time of the filing thereof, pay to the Commissioner the amount of taxes shown as due thereon; provided, however, that where any portion of the tax so due shall have been deducted at the source pursuant to the provisions of Section 6 of the Ordinance, or where any portion of said tax shall have been paid by the Taxpayer pursuant to the provisions of Section 7 of the Ordinance, or where an income tax has been paid to another municipality, credit for the amount so paid in accordance with Section 15 hereof, shall be deducted from the amount shown to be due and only the balance, if any, shall be due and payable at the time of filing said return.
2. A Taxpayer who has overpaid the amount of tax to which the Municipality is entitled under the provisions of the Ordinance may have such overpayment applied against any subsequent liability hereunder or at his election indicated on the return, such overpayment (or part thereof) shall be refunded, provided that no additional taxes or refunds of less than five dollar ($5.00) shall be collected or refunded.
E. AMENDED RETURNS.
1. Where necessary an amended return must be filed in order to report additional income and pay any additional tax due, or claim a refund of tax overpaid, subject to the requirements and limitations contained in Section11 and 12 of the Ordinance a taxpayer may not change the method of accounting or apportionment of Net Profits after the due date for filing the original return.
2. Within three (3) months the final determination of any Federal tax liability affecting the Taxpayer’s Municipal tax liability, such Taxpayer shall make and file an amended Municipal return showing income subject to the Municipal tax based upon such final determination of Federal tax liability, and pay an additional tax shown due thereon or make claim for refund of any overpayment.
ARTICLE VI
COLLECTION OF TAX AT THE SOURCE
A. DUTY OF WITHHOLDING.
1. It is the duty of each Employer who employs one or more Persons whether as an Employee, officer, director or otherwise, on a salary, wage or other personal service compensation basis, to deduct each time any such compensation is paid to an Employee the tax imposed by the ordinance on such qualifying wage, due by said Employer to said Employee. However, the Commissioner shall have the authority to grant to Employers with one Resident Employees, permission for said Employees to file individually. The tax shall be deducted by the Employer from:
a. The gross amount of all salaries, wages, bonuses, incentive payments, fees, commissions or other forms of compensation paid to residents of this Municipality, regardless of the place where the services are rendered; and
b. All compensation paid Non-Residents for services rendered, work performed or other activities engaged in within Harrison.
c. An employer is liable for the payment of the tax required to be deducted and withheld, whether or not such tax in fact has been withheld.
2. All employers within or doing business within the Municipality are required to make the collections and deductions specified in this article, regardless of the fact that the services on account of which any particular deduction is required, as to Resident of this Municipality were performed outside Municipality.
3. Employers who do not maintain a permanent office or Place of Business in this Municipality, but who are subject to tax on Net Profits attributable to this Municipality, under the method of business apportionment percentage formula provided for in the Ordinance, are considered to be Employers within this Municipality and subject to the requirements of withholding.
4. The mere fact that the tax is not withheld will not relieve the Employees of the responsibility of filing a return and paying the tax on the compensation paid. If the Employer has withheld the tax and failed to pay the tax withheld to the Commissioner, the Employee is not liable for the tax so withheld.
5. Commissions and fees paid to professional men, brokers and others who are independent contractors, and not Employees of the payer, are not subject to withholding or collection of the tax at the source. Such Taxpayers must in all instances file a declaration and return and pay the tax pursuant to the provisions of the Ordinance and Article V and VII of the Regulations.
6. Where a Non-Resident receives compensation for personal services rendered or performed partly within and partly without the Municipality, the withholding Employer shall deduct, withhold and remit the tax on that portion of the compensation which is earned within the Municipality in accordance with the following rules of apportionment:
a. If the Non-Resident is a salesman, agent or other Employee whose compensation depends directly on the volume of Business transacted or chiefly effected by him, the deducting and withholding shall attach to the portion of the entire compensation which the volume of Business transacted or chiefly effected by the Employee within the Municipality bears to the total volume of Business transacted by him within and outside the Municipality.
b. The deducting and withholding of personal service compensation of other Non-Resident employees, including officers of Corporations shall attach to the proportion of the personal service compensation of such Employee which the total number of his working hours within the Municipality is of the total number of workings hours.
c. The fact that Non-Resident employees are subject to call at any time does not permit the apportionment of pay for time worked within the Municipality on a seven-day per week basis. The percentage of time worked in the Municipality will be computed on the basis of a forty hour week unless the Employer notifies the Commissioner that a greater or less number of hours per week is worked.
.1 The determination of tax liability of non-residents working in and out of the corporation limits is to be computed on the formula of the total number of days worked during the dividing by the total number of days worked in the Municipality divided by the total number of days worked during the year an the resulting percentage applied to the total annual income from wages including vacation pay, sick, and personnel.
d. Wages of Itinerants are not subject to withholding.
e. If an employer is located within the Municipality, all non-resident employees who report to the Municipal location are taxable to the Municipality unless the employer is withholding tax for other taxing municipalities where the employee’s work is performed. For purposes of determining the tax liability of nonresident employees who report to the Municipal location and who perform their work in non-taxing locations, a flat percent (20%) will be used as the percent of time in the Municipality, provided the wages were withheld correctly.
7. An Employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions.
8. An Employer required to withhold the tax on compensation paid to an Employee shall, in determining the amount on which the tax is to be withheld, ignore any amount allowed and paid to the Employee for expenses necessarily and actually incurred by the Employee in the actual performance of his services, provided such expenses are incurred in earning compensation, including commissions, and are not deducted as a Business expense by the Employee under Article III of these Regulations.
9. An Employer whose records show that an Employee is a Non-Resident of the Municipality and has no knowledge to the contrary, shall be relived of the responsibility of withholding the tax on personal service compensation paid to such Employee for services rendered or work done outside the Municipality by such employee, provided, however, that such Employer must withhold the tax on all personal service compensation paid such Employee after the Commissioner notifies said Employer in writing that such Employee is a Resident of this Municipality. All Employees are required to notify the Employer of any change of residence and the date thereof.
10. The Commissioner shall have authority to enter into agreement with other Taxing Municipalities permitting an Employer to withhold the entire tax on the wages of a Floater either for the Taxing Municipality in which the Employer has his Principal Place of Business or the Taxing Municipality in which the Employee resides.
11. Each employer within, or doing business with the Municipality, who employs one or more persons on a salary, wage, commission, or other compensation basis shall deduct the amount of taxes set forth in Section III at the time of the payment of such qualifying wages shall make a return and pay the Tax commissioner the amount of taxes so deducted and according to the following payment schedule. Monthly payments of taxes withheld shall be made by an employer if said deductions exceed $200.00 per month. Withheld taxes of $200.00 or less per month shall be made quarterly. Quarterly withheld taxes are due by the end of the month succeeding the deduction period. Monthly withheld taxes are due on or by the fifteenth (15th) day of the month. Said return shall be on a form or forms prescribed by or acceptable to the Tax Commissioner and shall be subject to the rules and regulations prescribed therefore by the Tax Commissioner.
B. EMPLOYER DEEMED TRUSTEE OF TAXES WITHHELD.
1.Every Employer is deemed to be a trustee for this Municipality in collecting and holding the tax required under the Ordinance to be withheld and the funds so collected by such withholding are deemed to be trust funds.
2. Every such Employer required to deduct and withhold the tax at the source is liable directly to this Municipality for payment of such tax whether actually collected from such Employee or not.
C. RESPONSIBILITY OF OFFICERS FOR COLLECTING TAX.
1. It shall be the responsibility jointly and severally, of the President and Treasurer of each corporation required to withhold taxes on employees qualify wages to see that all taxes so withheld are paid to the Municipality in accordance with the provisions of the Ordinance. In the event taxes withheld by a corporation from the salaries of its employees are not paid to the Municipality in accordance with the provisions of the Ordinance, the President and Treasurer of said corporation shall each be criminally liable under the provisions of Section 12 hereof.
D. RETURN AND PAYMENT OF TAX WITHHELD AND STATUS OF EMPLOYERS.
1. The Commissioner may require an employer to file returns of and to remit taxes withheld more frequently than quarterly in cases where the Employer will be present within the corporate limits of the Municipality for a period of less than one year.
The return (Form W-1) required to be filed under this article shall be made on a form prescribed by or acceptable to the Commissioner. A generic form is acceptable if it complies with the rules or ordinances of the City of Harrison.
2. If more than the amount of tax required to be deducted by the Ordinance is withheld from the Employee’s pay, the excess shall be refunded by the Employer to the Employee. If less than the amount of tax required to be deducted is deducted and withheld by the Employer in any pay period or pay periods, the deficiency shall be deducted in subsequent pay periods.
3. On or before February 28th following any calendar year, in which deductions have been made by an Employer, such Employer shall file with the Commissioner, in the form prescribed by the Commissioner, an information return for each Employee from whom Harrison Income Tax has been withheld, showing the name and address of the Employee, the total amount of compensation paid during the year and the amount of Harrison Income Tax withheld from such Employee.
4. In addition to such information returns, and at the time the same are filed, such Employer shall file with the Commissioner Form W-3 to enable the Commissioner to reconcile the sum total of compensation paid and taxes withheld as disclosed by information return W-2, or list of Employees, and prior returns and remittance made pursuant to the Ordinance.
E. WITHHOLDING NOT REQUIRED ON DOMESTICS.
1. No Person shall be required to withhold the tax on the wages or other compensation paid domestic servants employed exclusively in or about such person’s residence, but such Employee shall be subject to all of the requirements of the Ordinance.
F. FRACTIONAL PARTS OF CENT:
In deducting and withholding the tax at the source and in payment of any tax due under the Ordinance, a fractional of a cent shall be disregarded unless it amounts one-half cent (1/2c) or more in which case it shall be increased to one cent (1c)
ARTICLE VII
DECLARATIONS
A. REQUIREMENT OF FILING.
1. A declaration of estimated tax shall be filed by every Taxpayer who may reasonably expect to have Taxable Income, the tax on which is not or will be withheld by an Employer or Employers. Where required such declaration shall be filed within four (4) months after the beginning of the tax year.
2. A Taxpayer’s final return for the preceding year may be used as the basis for computing his declaration of estimated tax for the current year. In the event a Taxpayer has not previously been required to file a return, a declaration of estimated tax on anticipated income shall be filed in good faith.
B. DATE OF FILING.
1. In the year 1982 such declaration shall be filed on or before July 31st or within four months of the beginning of the taxpayer’s fiscal year.
2. Beginning with the year 1983, a person or other entity conducting a Business not previously subject to tax, or whose Employer does not withhold the tax, shall file a declaration on or before April 15th, or on or before the fifteenth (15th) day of the fourth (4th) month following after either the start of his fiscal year or when he first becomes subject to the provisions of this section.
C. FORM FOR FILING AND DATES OF PAYMENTS.
1. Such declaration shall be filed upon a form prescribed by or acceptable to the
Tax Commissioner. A generic form is accepted if it complies with the rules or ordinances of the City. Credit shall be taken in said declaration for Harrison tax to be withheld from any portion of such income and for income taxes to be paid another taxing Municipality for which credit is allowed against the Harrison tax under Section 15 hereof.
2. Beginning with the year 1983, a declaration of estimated tax to be paid the municipality shall be accompanied by a payment of at least twenty-two and one half percent (22.5%) of the estimated tax, less credit for taxes withheld or paid to another municipality, and at least a similar amount shall be paid on or before the last day of the seventh, tenth and thirteenth month after the beginning of the tax year. In the year 1982 such declaration shall be accompanied by at least one-third (1\3) of the estimated tax and an equal amount shall be paid by the last day of October and January, 1983.
3. The original estimate of tax liability or any subsequent amendment thereof may be increased or decreased by filing an amended declaration on or before any quarterly payment date. Such amendment may be made on the regular declaration form or on back of any quarterly notice form (Q-1).
4. No penalty or interest or charge against a taxpayer for the late payment or nonpayment of estimated tax liability in either of the following circumstances:
a. The taxpayer is an individual who resides in the municipal corporation but was no domiciled there on the first day of January of the current calendar year.
b. The taxpayer has remitted an amount at least equal to one hundred per cent (100%) of the taxpayer’s tax liability for the preceding year as shown on the return filed by the taxpayer for the proceeding year, provided that the return for the preceding year reflected a twelve-month period and the taxpayer filed a return for the preceding year.
D. AMENDED DECLARATION.
1. An amended declaration must be filed on or before the last day of the month following the close of the taxpayer’s tax year if it appears that the original declaration made for such fiscal year underestimated the taxpayer’s income by ten percent (10%) or more. If it appears that the original declaration and payments made for such year underestimated the tax-payer’s income by ten percent (10%) or more the difference between seventy percent (90%) of said taxpayer’s tax liability and the amount of estimated tax he actually paid on or before January 15th or the date fixed by regulation, whichever is applicable, shall be subject to the Interest and penalty provisions of Section 10 hereof.
2. In the event an amended declaration has been filed the unpaid balance shown due thereon shall be paid in equal installments over the remaining payment dates.
E. FINAL RETURNS REQUIRED.
1. The filing of a declaration does not relieve the Taxpayer of the necessity of filing a final return even though there is no change in the declared tax liability. A final return must be filed to obtain a refund of any overpayment of over five dollars $5.00.
ARTICLE VIII
DUTIES OF THE TAX COMMISSIONER
A. COLLECTION OF TAX AND RETENTION OF RECORDS.
1. It shall be the duty of the Commissioner to receive the tax imposed by the Ordinance in the manner prescribed herein from the Taxpayers to keep an accurate record thereof, and to report all moneys so received.
2. It shall be the duty of the Tax Commissioner to collect and receive the tax imposed by this Ordinance in the manner prescribed therein, and to keep an accurate record thereof, and to report all moneys so received.
3. It shall be the duty of the Commissioner to enforce payment of all taxes owing the Municipality, to keep accurate records for a minimum of six (6) years showing the amount due from each Taxpayer required to file a declaration or make any return, including taxes withheld, and to show the dates and amounts of payments thereof.
B. ENFORCEMENT PROVISIONS.
1. The Commissioner is charged with the administration and enforcement of the provisions of the Ordinance and is, subject to the approval of the Board of Review, empowered to adopt, promulgate, and enforce rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the Ordinance. The Commissioner has the authority to correct or adjust any return submitted, when a correction or adjustment is necessary to accomplish the intent of the Ordinance.
2. Any Taxpayer or Employer desiring a special ruling on any matter pertaining to the Ordinance or these Rules and Regulations, should submit to the Commissioner in writing all the facts pertinent to the matter on which the ruling is sought.
3. These regulations, together with all amendments and supplements hereto and all changes herein, will be on file at the office of the Commissioner and will be open to public inspection.
4. The Commissioner is authorized to arrange for the payment of unpaid taxes, interest and penalties on a schedule of installment payments, when the Taxpayer has proved to the Commissioner that, due to certain hardship conditions, he his unable to pay the full amount of the tax due. Such authorization shall not be granted until the proper returns are filed by the Taxpayer for all amounts owed by him under the Ordinance.
5. Failure to make any deferred payment when due, shall cause the total unpaid amount, including penalty and interest, to become payable on demand and the provisions of Section 11 and 12 of the Ordinance shall apply.
C. ESTIMATION OF TAX BY COMMISSIONER.
1. Whenever the Commissioner has be unable to secure information from the Taxpayer as to his Taxable Income for any year, he may determine the amount of tax appearing to be due and assess the Taxpayer upon the basis for such determination, together with interest and penalties as prescribed in in Section 10 of the Ordinance.
2. Such determination of tax may be adjusted upon submission by the Taxpayer of actual records from which his tax may be computed.
D. COMPROMISE AUTHORITY.
1. Subject to policies laid down by the Board of Review, the Commissioner is authorized to compromise any assessments of interest and penalties.
ARTICLE IX
EXAMINATION OF BOOKS AND RECORDS, INFORMATION
SO OBTAINED CONFIDENTIAL: PENALTY
A. INVESTIGATIONS BY COMMISSIONER.
1. The Commissioner, or his duly authorized agent, is authorized to examine the books, papers, tenant listings, records and Federal income tax returns of any Employer, Taxpayer or Person subject to the Ordinance, or whom the Commissioner believes is subject to the provisions of the Ordinance, for the purpose of verifying the accuracy of any return made; or, if no return is made, to ascertain the tax due under the Ordinance.
2. An Employer or supposed Employer and every Taxpayer shall furnish, within ten (10) days following a written request by the Commissioner, or his duly authorized agent, the means, facilities and opportunity for making examinations and investigations authorized by the Ordinance.
B. SUBPOENA OF RECORDS AND PERSONS
1. The Commissioner, or any person acting in his capacity, is authorized to examine any person, under oath, concerning any income which was, or should have been, returned for taxation, or any transaction tending to affect such income. The Commissioner may compel the production of books, papers and records and the attendance of all persons before him whether as parties or witnesses, whenever he believes such persons have knowledge of the facts concerning any supposed income or supposed transaction of the Taxpayer.
2. The Commissioner’s order to examine any document mentioned in the preceding paragraph shall state whether the examination is to be at the office of the Taxpayer or at the office of the Commissioner.
3. The Commissioner may order the appearance before him, or his duly authorized agent, of any party whom he believes to have any knowledge of a Taxpayer’s income or withholdings, or any information pertaining to the Taxpayer under investigation, whether or not the individual so ordered has actual custody of the records of the Taxpayer being investigated. The Commissioner is specifically authorized to order the appearance of the local manager or representative of any Taxpayer.
4. Persons required to attend any hearings shall be notified not less than ten (10) days prior to the time of the hearing. The notice shall show the time and place of the hearing and what books, papers or records the witness is to make available at such hearing.
5. The notices shall be served by the Commissioner, or his duly authorized agent, by delivering it to the person named personally, or by leaving the notice at his usual Place of Business or residence, or by mailing it to the person by registered mail, return receipt requested, addressed to his usual Place of Business or residence.
C. PENALTY FOR NON-COMPLIANCE.
Refusal by any Employer, supposed Employer, Taxpayer, or supposed Taxpayer, or the refusal of any such person to appear before the Commissioner or his duly authorized agent, to submit to such examination and to produce the records requested constitutes a misdemeanor punishable by fine or imprisonment, or both, as prescribed by Section 12 of the Ordinance.
D. RETENTION OF RECORDS.
All Employers and Taxpayers are required to keep such records as will enable the filing of true and accurate returns whether of taxes withheld at the source or of taxes payable upon earnings or Net Profits, or both. Such records shall be preserved for a period of not less than five (5) years from the date the final return is filed and paid or the withholding taxes are paid.
E. CONFIDENTIAL NATURE OF EXAMINATIONS.
Any information gained as a result of any returns, investigations, verifications or hearings before the Commissioner or the Board, required by the Ordinance or authorized by these rules and regulations shall be confidential and no disclosure thereof shall be made except for official purposes or as ordered by a court of competent jurisdiction. Any person divulging such information in violation of this section shall be fined not more than Five Hundred ($500.00) Dollars and imprisoned not more than sixty (60) days or both, for each offense. In addition to the above penalty, any employee of the Municipality who violates the provisions of this section relative to the disclosure of confidential information shall be guilty of an offense punishable by immediate dismissal.
ARTICLE X
INTEREST & PENALTIES
A. INTEREST.
1. Except as provided in paragraph C of this article, all taxes imposed and all monies withheld or required to be withheld by Employers under the provisions of this Ordinance and remaining unpaid after they have become due shall bear interest, in addition to the amount of the unpaid tax or withholdings such interest shall be 8% per annum. For purposes of this section, the tax required to be shown on the shall be reduced by the amount of any part of the tax which is paid on or before the date, including extensions of thereof prescribed for filing the return. (ord 42-99 passed 11-16-99)
B. PENALTIES.
In addition to interest as provided in Paragraph A hereof, penalties for failure to pay taxes and to withhold and remit taxes pursuant to the provisions of the Ordinance are hereby imposed as follows:
1. If any taxpayer or employer required to file a return by this chapter fails to make and file the return by the dates prescribed therein, including any extension of time granted by the Tax Commissioner, whether or not a tax is due, unless it is shown that the failure is due to reasonable cause, and not to willful neglect, a penalty of $25.00 shall be assessed by the Tax Commissioner. If any employer or taxpayer fails to pay the amount of tax required to be paid under Section 183.05 by the dates described therein, unless it is shown that the failure is due to reasonable cause and not a willful neglect, a penalty of 5% of the tax required to be shown on the return shall be assessed by the Commissioner for each month or fraction thereof elapsing between the date prescribed for payment, including extensions, and the date of payment.
C. EXCEPTIONS.
1. No penalty shall be assessed on additional taxes found on audit to be due when a return was timely filed in good faith and the tax paid thereon within the prescribed time.
2. In the absence of fraud neither penalty nor interest shall be assessed on any additional taxes resulting from a Federal audit for Federal income tax purposes provided an amended return is filed and the additional tax paid within three (3) months after final determination of the Federal tax liability.
3. A Taxpayer or Employer shall have thirty (30) days after receipt of notice of any proposed imposition of interest and penalties within which to file a written protest or explanation with the Commissioner. If no protest or explanation is filed within the prescribed time, the proposed imposition of interest and penalties shall become and be the final assessment. Upon filing of a written protest or explanation the Commissioner shall determine the assessment which may or may not be the same as the proposed assessment.
D. APPEAL FROM ASSESSMENT.
1. Upon recommendation of the Commissioner, the Board of Review may abate penalty or interest, or both, or upon an appeal from the refusal of the Commissioner to recommend abatement of penalty and interest the Board may nevertheless abate penalty or interest, or both.
ARTICLE XI
COLLECTION OF UNPAID TAXES AND REFUND OF OVERPAYMENTS
A. UNPAID SUMS- A CIVIL DEBT.
1. All taxes imposed by the Ordinance and not paid when due become, together with interest and penalties thereon, a debt due the Municipality from the Taxpayer and are recoverable as are other debts by civil suit. Employers who are required, under Section 6 of the Ordinance, to withhold and remit the taxes required to be withheld at the source, and who fail to withhold or remit, become liable to the Municipality in a civil action to enforce the payment of the debt created by such failure.
2. No additional assessment shall be made by the Commissioner after three (3) years from the time the return was due or filed, whichever is later. Provided, however, there shall be no period of limitation on such additional assessments in the case of a return that omits a substantial portion of income, or filing a false or fraudulent return to evade payment of the tax, or failure to file a return. Failure to report 25% or more of gross income shall be considered a substantial omission.
B. REFUNDS AND OVERPAYMENTS.
1. Taxes erroneously paid shall not be refunded unless a claim for refund is made within three (3) years from the date on which such payment was made, or the return was due, or three (3) months after the determination of Federal income tax liability, whichever is later.
2. No refund shall be made to any Taxpayer until he has complied with all provisions of the Ordinance and has furnished all information required by the Commissioner.
3. Overpayments will be either refunded or credited to the Taxpayer’s current year’s liability where no election has been made by the Taxpayer, overpayments of any year’s taxes shall be applied as follows:
a. To taxes owed for any previous years in the order in which such taxes became due.
b. To his current estimated tax liability.
C. LIMITATION.
Where the total amount due or refund claimed for a tax year is less than five dollars $5.00 such amount shall not be collected or refunded, but may be credited to the succeeding year’s declaration if requested.
ARTICLE XII
VIOLATIONS, PENALTIES
A. ENUMERATION OF VIOLATIONS.
Any person who shall
1. fail, neglect or refuse to make any return or declaration or listing, including quarterly reports pertaining to the rental by or removal of tenants from rental property required by the Ordinance; or
2. make an incomplete, false or fraudulent return; or
3. fail, neglect or refuse to withhold the tax from his Employees and remit such withholdings to the Commissioner; or
4. fail, neglect or refuse to pay the tax, penalties or interest imposed by the Ordinance; or
5. refuse to permit the Commissioner or any duly authorized agent or Employee to examine his or his Employer’s books, records, papers, and Federal income tax returns; or
6. fail to appear before the Commissioner and to produce his or his Employer’s books, records, papers, or Federal income tax returns upon order or subpoena of the Commissioner; or
7. refuse to disclose to the Commissioner any information with respect to such person’s or such person’s Employer’s income or Net Profits; or
8. fail to comply with the provisions of the Ordinance or any order or subpoena of the Commissioner; or
9. fail, neglect, or refuse to make any payment on the estimated tax for any year as required by Section 7 of the Ordinance; or
10. fail as President or Treasurer of a corporation, to cause the tax withheld from the wages of the employees of such corporation pursuant to the Ordinance to be paid to the Municipality in accordance with the provisions of Section 6 of the Ordinance; or
11. attempt to do anything whatever to avoid the payment of the whole or any part of the tax, penalties, or interest imposed by this Ordinance, shall be guilty of a misdemeanor of the third degree and shall be fined not more than Five Hundred Dollars ($500.00) or imprisoned not more than sixty (60) days, or both, for each offense.
B. PROSECUTIONS.
All criminal prosecutions under this section must be commenced within three (3) years, and all civil actions within five (5) years following the date in which the final return for a taxable year was due, or five (5) years from the time of any offense complained of.
C. FAILURE TO RECEIVE FORMS-NOT A DEFENSE.
The failure of any Employer or person to receive or procure a return, declaration or other required form shall not excuse him from making any information return, return or declaration, from filing such form, or from paying the tax.
ARTICLE XIII
BOARD OF REVIEW
A. COMPOSITION.
A Board of Review shall consist of three citizens; who shall be appointed by the Mayor with the consent of Council. The individual acting as the local administrator of the tax shall act as secretary of the Board. Board members shall receive such compensation as Council may determine.
B. PROCEDURE.
A majority of the members of the Board shall constitute a quorum. The Board shall adopt its own procedural rules and shall keep a record of its transactions. Such records are not public records available for inspection under Section 149.43 of the Ohio Revised Code. Any hearing by the Board may be conducted privately and the provisions of Section 9 of the Ordinance with reference to the confidential character of information required to be disclosed by the Ordinance shall apply to such matters as may be heard before the Board on appeal. Hearing requested by a taxpayer before a Board of Review created pursuant to this section are not meetings of a public body subject to Section 121.22 of the Ohio Revised Code. All rules and regulations and amendments or changes thereto, which are adopted by the Commissioner under the authority conferred by the Ordinance, must be approved by the Board of Review before the same ruling or decision of the Commissioner, and, at the request of the Taxpayer or Commissioner, is empowered to substitute alternate methods of allocation.
C. APPEALS
1. Whenever the Tax Commissioner issues a decision regarding an income tax obligation that is subject to appeal as provided in this section , or in an ordinance or regulation of the City of Harrison, the Tax Commissioner shall notify the taxpayer at the same time of the taxpayer’s right to appeal the decision and of the manner in which the taxpayer may appeal the decision. An appeal from a ruling of the Commissioner by a Taxpayer or Employer is effected by filing a notice of appeal with the Board in the Commissioner’s Office, within thirty (30) days after the announcement of the Commissioner’s ruling or decision from which the appeal is taken. A copy of such notice of appeal must be filed with the Commissioner. Any person dissatisfied with any ruling or decision of the Tax Commissioner and who has filed with the City of Harrison the required returns or other documents pertaining to the municipal income tax obligation at issue in the decision may appeal the decision to the Board of Review by filing a request with the Board. The request shall be in writing, shall state with particularity why the decision should be deemed incorrect or unlawful, and shall be filed within 30 days from the announcement of such ruling or decision by the Tax Commissioner. The imposition of penalty and interest as prescribed in the codified ordinance of the City of Harrison is not a sole basis for an appeal. The Board of Review shall schedule a hearing within forty-five (45) days after receiving the request, unless the taxpayer may appear before the Board and may be represented by an attorney at law, certified public accountant or other representative.
2. The Board, by a majority vote, may affirm, modify or reverse, in whole or in part any such ruling or decision of the Commissioner. The Board shall issue a decision on the appeal within ninety (90) days after the Board’s final hearing on the appeal, and send notice of its decision by ordinary mail to the petitioner within fifteen (15) days after issuing the decision. (1993 code 98.12) The taxpayer or the Tax Commissioner may appeal the Board’s decision as provided in section 5717.011 of the Ohio Revised Code.
3. Hearings before the Board shall be private unless the Taxpayer requests a public hearing.
ARTICLE XIV
USE OF FUNDS
NO REGULATIONS ON THIS SECTION AS IT IS A POLICY MATTER FOR COUNCIL.
ARTICLE XV
CREDIT ALLOWED FOR THE TAX PAID IN ANOTHER MUNICIPALITY
A. LIMITATION.
1. Where a Resident of this Municipality is subject to a municipal income tax in another municipality he shall not pay a total municipal income tax on the same income greater than the tax imposed at the higher rate.
B Credit for tax paid to another municipality of to a Joint Economic Development District.
1. Where a resident of the city is subject to a municipal income tax in another municipality or in a Joint Economic Development District, he shall not pay a total municipal income tax on the same income greater than the tax imposed at the higher rate.
2.Every taxpayer who resides in the city but receives net profits, salaries, wages, commission, other compensation, and other income from a resident or nonresident business entity or association of which he is a partner or owner, for work done or services performed or rendered outside of the city, if it is made to appear that he or such business entity has paid a municipal or a Joint Economic Development District income tax on or with respect to the same income taxable under this chapter to another municipality or to a Joint Economic Development District, shall be allowed a credit against the tax imposed by this chapter in the amount so paid by him, in his behalf or by such business entity, to the other municipality or to a Joint Economic Development District. In no event, however, shall any municipal income tax or any Joint Economic Development District income tax to the extent paid to another municipality or to a Joint Economic Development District and allowed as a credit hereunder be deductible in computing the net profit of such taxpayer or such business entity. In addition, the credit shall not exceed the tax assessed by this chapter on income earned in such other municipality or municipalities or Joint Economic Development District(s) where the tax is paid. Except as provided of this section, if tax or withholding is paid to a municipal corporation on income or wages, and if a second municipal corporation imposes 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 a such income or wages, equal to the tax or withholding paid to the first municipal corporation with respect to a such income or wages. 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 this section shall be calculated using the tax rate in effect in the second municipal corporation.
3. A claim for refund or credit under this section shall be made in such manner as the Tax Commissioner may, by regulation, provide.
C. Requirement For Joint Economic Development Districts.
1.Specific provisions of this chapter may be modified as they apply to Joint Economic Development Districts if the modifications are passed by Council in an ordinance which either specifically approves a Joint Economic Development District contract or specifically amends this chapter.
B. CREDITS TO RESIDENTS.
Resident individuals of this Municipality who are required to pay and do pay, a tax to another municipality on salaries, wages, commissions or other compensation for work done or services performed in such other municipality, or on Net Profits from Businesses, professions or other activities conducted in such other municipality, may claim a credit of the amount of tax paid by them or on their behalf from the same taxable period to such other municipality but only to the extent of the tax imposed by this Ordinance on such compensation or Net Profits.
C. METHOD OF APPLYING FOR CREDIT.
1. No Credit will be give unless the Taxpayer claims such on his final return or other form prescribed by the Commissioner, and presents such evidence of the payment of a similar tax to another municipality, as the Commissioner may require.
2. A refund must be claimed by the taxpayer or his employer within three (3) years of the date of filing the final return for the year for which such refund is claimed. The Commissioner shall prescribe rules for verification.
D. A statement satisfactory to the Commissioner from the taxing authority of the municipality to which the taxes are paid that a Harrison Resident or his Employer is paying the tax shall be considered as fulfilling the requirement of this article.
ARTICLE XVI
SAVINGS CLAUSE
These Rules and Regulations contain changes from the Rules and Regulations adopted from previous years in an effort to affect uniform administrations of municipal income taxes throughout Ohio, and changes in these Regulations from those of previous years do not imply any intent to effect a substantial change in the Rules and Regulations, but are merely changes in form.
ARTICLE XVII
AMENDMENTS & SUPPLEMENTS
A. From time to time amendments and supplements to these regulations may be issued by the Commissioner.
Back to top