CITY OF DELPHOS, OHIO
UNIFORM RULES AND REGULATIONS
TO COMPLEMENT INCOME TAX ORDINANCE #1984-39
AS AMENDED BY ORDINANCE #1989-45
ARTICLE I
Section 1 of the ordinance
deals only with the purposes for which the tax collected will be used.
ARTICLE II
DEFINITIONS
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.
ADMINISTRATOR means the
individual designated by the ordinance, whether appointed or elected, to
administer and enforce the provisions of the ordinance.
ASSOCIATION means a
partnership, cooperative, limited partnership, or any other form of
unincorporated enterprise owned by two or more persons.
THE 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 descendent’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 as used
in these regulations, means the portion of net profits to be allocated to the
City of Delphos, Ohio, hereinafter referred to as “this municipality”, as
having been made in the City of Delphos, Ohio, either under separate accounting
method, or under the three factor formula of property, payroll and sales,
provided for in Section 3 of the ordinance.
CITY means the City of
Delphos, Ohio.
CORPORATION means a
corporation or joint stock association organized under the laws of the United
States, the State of Ohio, or any other state, territory, or foreign country or
dependency.
DAY means any portion of any
calendar day.
EMPLOYEE means one who works
for wages, salary, commission or other types 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 Workers’ Compensation law
shall prima facie be an employee.
EMPLOYER means an individual,
partnership, association, corporation (including a corporation not for profit),
governmental body, unit or agency, board, body, bureau, department,
sub-division, or unit, or any other entity, who or that employs one or more
persons on a salary, wage, commission, or other compensation basis, whether or
not such employer is engaged in business.
When the employer is a corporation, the officer or employee of the
corporation having control or supervision of, or charged with the
responsibility of filing the report and making payment, is personally liable for
failure to file the report or pay the tax due as required by this
ordinance. The dissolution of a
corporation does not discharge an officer’s or employee’s liability for a prior
failure of the corporation to file returns or pay tax due.
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 the City of Delphos’s tax purposes.
GROSS RECEIPTS means total
income from any source whatsoever.
NET PROFITS means a net gain
from the operation of a business, profession, enterprise or other activity
after provision for all ordinary, reasonable and necessary expenses either paid
or accrued in accordance with the accounting system used by the taxpayer for
federal income tax purposes, without deduction of taxes imposed by this
ordinance, federal, state, and other taxes based on income exclusive of the
amount of Ohio franchise taxes computed on the net worth basis; and in the case
of an association, without deduction of salaries paid to partners, and other
owners; and otherwise adjusted to the requirements of this ordinance.
NON-RESIDENT means an
individual domiciled outside of Delphos.
NON-RESIDENT UNINCORPORATED
BUSINESS ENTITY means one not having an office or place of business within
Delphos.
THE ORDINANCE means Ordinance
No. 1984-39 as amended by Ordinance No. 1989-45 enacted by the Council of
Delphos and any amendments and supplements thereto effective January 1, 1985,
and January 1, 1990, respectively, and continuing until amended by Delphos City
Council. (Note: hereinafter this will
be referred to as “effective period of ordinance”.)
PERSONS means every natural
person, partnership, fiduciary, association, corporation, or other entity. Whenever used in a clause prescribing or
imposing a penalty, the term PERSON as applied to any unincorporated entity
shall mean the partners or members thereof, and as applied to a corporation,
the officers thereof, and in the case of any unincorporated entity or
corporation not having any partner, member or officer within the City of
Delphos, and employee or agent of such unincorporated entity or corporation who
can be found within the corporate limits of the City of Delphos.
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 on any
business activity individually or through one or more of his regular employees
regularly in attendance.
RESIDENT means an individual
domiciled in the City of Delphos.
RESIDENT UNINCORPORATED
BUSINESS ENTITY means an unincorporated business entity having an office or
place of business within the City of Delphos.
TAXABLE INCOME means wages, salaries
and other compensation paid by an employer or employers before deductions of
any kind, and/or the net profits from the operation of a business, profession
or other enterprise or activity adjusted in accordance with the provisions of
the ordinance and these regulations.
TAXABLE YEAR means the
calendar year, or the fiscal year, used as the basis on which net profits are
to be computed under the ordinance, and in the case of a return for a
fractional part of a year, the period for which such return is required to be
made.
TAXPAYER means an individual,
association, corporation or other entity required by the ordinance to file a
return and/or to pay a tax.
In all definitions and these
regulations the singular shall include the plural and the masculine shall
include the feminine and the neuter.
ARTICLE III
IMPOSITION OF TAX
A. Bases
1. Resident
Employee:
a. In the case
of residents of the City of Delphos an annual tax of one and one-half percent
(1.5%) is imposed on all salaries, wages, commissions,
and other compensation earned
during the effective period of the ordinance. For the purpose of determining the tax on
the earnings of resident taxpayers taxed under Section
3, paragraph A-1 of the
ordinance, the source 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. Salaries,
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 association, 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 of a corporation created
and owned or controlled
by 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 a taxpayer whether 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
wheresoever 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 from an employer for expenses 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
income 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
owned or part owner and
therefore subject to the tax under paragraphs A-3 or
A-4 of Section 3 of the
ordinance, they shall not be taxed under Section 3,
paragraph A-1.
.3 Fees, unless such
fees are properly includible 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 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 or sickness, are taxable.
c. 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 domestics 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.
1.
Non-Resident Employee:
a. In the case
of individuals who are not residents of the City of Delphos there is imposed
under Section 3, paragraph A-2 of the ordinance, a tax
of one and one-half percent
(1.5%) on all salaries, wages, commissions, and other compensation
earned during the
effective period of the ordinance for work done or
services performed or rendered
within the City of Delphos whether such compensation
or remuneration is received or
earned directly or through an agent and whether paid
in cash or in property. The
location of the place from which payment is made is
immaterial.
1.
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 City of
Delphos, in cases involving
compensation for personal services partly within and
partly without the City of Delphos,
see Article VI-A.6.
3. a. Imposition of Tax on Net Profits of Resident
Unincorporated Businesses:
.1 In the
case of resident unincorporated businesses, professions, enterprises,
undertakings or other entities conducted, operated,
engaged in, prosecuted or carried
on, irrespective of whether such taxpayer has an office
or place of business in the
City of Delphos, there is imposed an annual tax of one
and one-half percent (1.5%)
on the net profits earned, accrued or received during
the effective period of the
ordinance attributable to the City of Delphos, under the
formula or separate
accounting method provided for in Section 3 of the
ordinance, derived from sales
made, work done or services performed or rendered and
business or other
activities conducted in the City of Delphos.
.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 an
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 City of Delphos
under the method of allocation provided for in the
ordinance, regardless of where the
owner or owners of such resident unincorporated
business entity reside.
.4 Resident
unincorporated entities owned by two or more persons all of whom are
residents of the City of Delphos shall disregard the
method of allocation 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.
1.
Imposition of Tax on
Resident’s Distributive Share of Profits of a Resident
Unincorporated Business Entity, Not Attributable to
the City of Delphos.
.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.
.2 In the case of
a resident individual partner or part owner of a resident unincorporated
entity, there is imposed an annual tax of one and
one-half percent (1.5%) on such
individual’s distributive share of net profits earned,
accrued or received during the
effective period of the ordinance not attributable to
the City of Delphos, under the
method of allocation 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 Businesses:
.1 In the case of
non-resident unincorporated businesses, professions, enterprises,
undertakings, or other activities conducted, operated,
engaged in, prosecuted or
carried on, there is imposed an annual tax of one and
one-half percent (1.5%) on the
net profits earned, accrued or received during the
effective period of the ordinance
attributable to the City of Delphos, under the formula
or separate accounting method
provided for in the ordinance.
.2 The tax
imposed on non-resident unincorporated entities owned by two or more
persons is upon the entities rather than the
individual members or 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 Non-resident
unincorporated entities owned by two or more persons all of whom are
residents of the City of Delphos may elect to
disregard the method of allocation
provided for in the ordinance and pay the tax on the
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.
1.
Imposition of Tax on
Resident’s Share of Profits of a Non-Resident Unincorporated
Business Entity Not Attributable to the City of
Delphos. See Article XV for Credits.
.1 A resident individual who is sole owner of a
non-resident unincorporated business
entity shall disregard the business allocation formula
and pay the tax on the entire net
profits of his unincorporated entity.
.2 In the case of
a resident individual partner or part owner of a non-resident
unincorporated entity, there is imposed an annual tax
of one and one-half percent
(1.5%) on such individual’s distributive share of net
profits earned, accrued or
received during the effective period of the ordinance
not attributable to the city under
the method of allocation provided for in Section 3 of
the ordinance and not taxed
against the entity by this municipality.
5. Imposition
of Tax on Net Profits of Corporations.
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 City of Delphos, there is imposed
an annual tax of one and one-half percent (1.5%) on
the net profits earned, received or
accrued during the effective period of the ordinance
attributable to the City of Delphos
under the formula or separate accounting method
provided for in the ordinance.
2.
In determining whether a
corporation is conducting a business or other activity in the
City of Delphos, the provisions of Article III-B of
these regulations shall be applicable.
3.
Corporations which are
required by the provisions of Sec 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 their 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 profits subject to the
tax imposed by the ordinance.
6.
Amplification:
In amplification of the definition contained in
Article II-A of these regulations but not
limitation thereof, the following additional
information respecting net business profits is
furnished.
a. NET PROFITS
.1 Net profits as
used in the ordinance and these regulations means net profits derived
from any business, profession or other activity or
undertaking carried on for profit or
normally carried on for profit.
.2 Net profits as
disclosed on any return filed pursuant to the provisions of the
ordinance shall be computed by the same
accounting method used in reporting net
income to the Federal Internal Revenue Service
(providing such method does not
conflict with any provisions of the ordinance). Net profits, shown on returns filed
pursuant to the ordinance must be reconciled with the
income reported to the Federal
Internal Revenue Service.
b. GROSS
RECEIPTS
.1 Gross receipts
shall include but not be limited to income in the form of commissions,
fees, 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.
.2 From gross receipts
there shall be deducted allowable expense to arrive at the net
profit subject to tax.
c. EXPENSES
.1 All
ordinary, reasonable 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 only the cost of such
demolition and the undepreciated balance thereof will
be allowed as an expense
in the year of such 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
Administrator (if the
reserve method is used), a 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 the 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 exclusive
of the amount of Ohio
franchise tax computed on the net worth basis; (3)
gift, estate or inheritance
taxes; and (4) taxes for local benefits or
improvements to property which tend to
appreciate the value thereof.
06. In
general, non-taxable income and expenses incurred in connection therewith
are not to be considered in determining net
profits. Income from intangibles by
way of dividends, interest and the like, shall not be
included if such income is
subject to taxation under the intangible personal
property laws of the State of
Ohio or is specifically exempt from taxation under
said law.
07. If the
taxpayer reports income that is nontaxable under the ordinance and such
amounts are deducted in order to reconcile the City of
Delphos return with the
taxpayer’s federal income tax return, expenses
attributable to this non-taxable
income shall not be allowed. In the absence of records showing the actual
expenses attributable to such nontaxable income, and
upon approval of the
administrator, such amount shall be deemed to equal five
percent of such
nontaxable income.
08. With
respect to certain tangible personal property used in business, the “federal
investment credit” for current year investments, as
determined for federal
income tax purposes, shall be
treated as a deduction from income with respect
to new or used property, (subject to federal tax
limitations in the case of used
property, acquired after December 31, 1961), and the
remaining costs shall be
depreciated in succeeding years on the same basis used
for federal income tax
purposes. In
the event the “Federal Investment Credit” is required to be
adjusted by reason of a sale or
other early disposition affecting the original
amount of the “Federal
Investment Credit,” such adjustment must be reported
and treated as taxable income under the ordinance in
the year of such sale or
other early disposition.
09. Capital
gains and losses from sale, exchange or other disposition of property
shall not be taken into consideration in arriving at
net profits earned. Any
amount received on a sale or other disposition of
tangible personal property used
in business, in excess of book value, shall be treated
as taxable income under the
ordinance to the extent of depreciation allowable (under
the ordinance). The
balance shall be treated as a capital gain.
10. Deductions for charitable contributions will
not be allowed as a business
deduction.
7. Rental from
Real Property
a.
Rentals received by the taxpayer are to be included only if and to the
extent that the
rental, ownership, management, or operation of the
real estate from which such rentals
are derived (whether so rented, managed, or operated
by the taxpayer individually or
through agents or other representatives) constitutes a
business activity of the taxpayer, in
whole or in part.
b. In
determining the amount of gross monthly rental of any real property, periods
during
which (by reason of vacancy or any other cause) rentals
are not received shall not be
taken into consideration by the taxpayer.
c. Rentals
received by a taxpayer engaged in the business of buying and selling real
estate
shall be considered as part of business income.
d. 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.
e. In
determining the taxable income from rentals, the deductible expenses shall be
of the
same nature, extent, and amount as are allowed by the
Internal Revenue Service for
federal income tax purposes.
f. Residents
of the City of Delphos are subject to taxation upon the net income from rental
(to the extent above specified), regardless of the
location of the real property owned.
g.
Non-residents of the City of Delphos are subject to such taxation only
if the real
property is situated within the City of
Delphos.
h.
Corporations owning or managing real estate are taxable only on that
portion of income
derived from property located in the City of Delphos.
8. Patents and
Copyrights:
a. Income from
patents or copyrights is not to be included in net profits subject to the tax
if the income from such patents or copyrights is subject
to the State Intangible tax.
Conversely, such a state intangible tax is not
deductible in determining city tax.
Such
items shall be clearly disclosed on an attachment to
be filed with the City tax return.
B. Allocation
of Business Profits.
A request to change the method of allocation must be
made in writing before the end of the
taxable year.
1. Separate
Accounting Method.
a. The net
profits allocable to the City of Delphos from business, professional or other
activities conducted in the City of Delphos by
corporations or unincorporated entities
(whether resident or non-resident) may be determined
from the records of the taxpayer
if taxpayer has bona fide records which disclose with
reasonable accuracy what portion
of his net profits is attributable to that part of his
activities conducted within the City of
Delphos.
b. If the
books and records of the taxpayer are used as the basis for apportioning net
profits rather than the business allocation
formula, a statement must accompany the
return explaining the manner in which such
apportionment is made in sufficient detail
to enable the administrator to determine whether the
net profits attributable to the City
of Delphos are apportioned with reasonable accuracy.
c. In determining the income allocable to the City of
Delphos from the books and records
of a taxpayer an adjustment may be
made for the contribution made to the production
of such income by headquarters
activities of the taxpayer, whether such headquarters is
within or without the City of Delphos.
2.
Business Allocation Percentage Method.
a. STEP1:
Ascertain the percentage which the average net book value of real and tangible
personal property, including leasehold improvements,
owned or used in the business and
situated within the City of Delphos is of the average
net book value 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.
.1 The percentage of taxpayer’s real and tangible
personal property within the City of
Delphos is determined by dividing the average net book
value of such property
within the City of Delphos (without
deduction of any encumbrances) by the average
net book value of all such property within and without
the City of Delphos. In
determining such percentage, property rented to the
taxpayer, as well as real and
tangible personal property owned by taxpayer must be
considered.
01. The net
book value of real and tangible personal property rented by taxpayer
shall be determined by multiplying gross annual rents
payable by eight (8).
02. Gross
rents means the actual sum of money or other consideration payable,
directly or indirectly by the taxpayer for 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 profits 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.
b. STEP 2:
Ascertain the percentage which the total wages, salaries, commissions and
other compensation of employees within the City of
Delphos is of the total wages,
salaries, commissions and other compensation of all
the taxpayer’s employees within
and
without the City of Delphos 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 the City
of Delphos, the amount treated as compensation for
services performed within the
City 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 the business attributable
to his efforts within the
City of Delphos.
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 the City of Delphos 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 the City of Delphos
is of his total working time.
c. STEP 3: Ascertain the percentage which the
gross receipts of the taxpayer derived from
sales made and services rendered in the City of Delphos
is of the total gross receipts,
wherever derived, during the period covered by the
return.
.1 The following sales shall be considered the City of
Delphos’s sales:
01. All sales
made through retail stores located within the City of Delphos to
purchasers within or without the City of Delphos
except such of said sales to
purchasers outside the City of Delphos that are
directly attributable to regular
solicitations made outside the City of Delphos
personally by taxpayer’s
employees.
02. All sales
of tangible personal property delivered to purchasers within the City of
Delphos if shipped or delivered from an office, store,
warehouse, factory or
place of storage located within the City of Delphos.
03. All sales
of tangible personal property delivered to purchasers within the City of
Delphos even though transported from a point outside
the City of Delphos if the
taxpayer is regularly engaged through its own
employees in the solicitation or
promotion of sales within the City of Delphos and the
sale is directly or
indirectly the result of such solicitation.
04. All sales
of tangible personal property shipped from an office, store, warehouse,
factory or place of storage within the City of Delphos
to purchasers outside the
City of Delphos if the taxpayer is not, through its
own employees, regularly
engaged in the solicitation or promotion of sales at
the places 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.
.2 In the
application of the foregoing subparagraphs 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 orders are accepted or contracts
legally consummated shall be
immaterial.
Solicitation of customers outside the City of Delphos by mail or phone
from an office, or place of business within
the City of Delphos shall not be
considered a solicitation of sales outside the City of
Delphos.
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 allocation percentage. In determining the
average percentage, a factor shall not be excluded
from the computation merely because
said factor is found to be allocable entirely outside
the City of Delphos. A factor is
excluded only when it does not exist anywhere.
e. STEP 5:
The business allocation percentage determined in Step 4 above shall be applied
to the entire taxable net profits of the taxpayer
wherever derived to determine the new
profits allocable to the City of Delphos.
3. Substitute
Method:
a. In the
event a just and equitable result cannot be obtained under the formula, the
Board,
upon application of the taxpayer or the administrator,
may substitute other factors in the
formula or prescribe other methods of allocating net
income calculated to effect a fair
and proper allocation.
b. Application
to the Board to substitute other factors in the formula or to use a different
method to allocate net profits must be made in writing
before the end of the taxable year
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 or
administrator 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 until given permission to
change by the Board of Review.
C. Operating
Loss Carry Forward.
1. The portion
of a new operating loss, bases on income taxable under the ordinance,
sustained in any taxable year subsequent to January 1,
1970 allocable to the City of
Delphos may be applied against the portion of the
profits of succeeding year(s) allocable to
the City of Delphos, until exhausted, but in no event
for more than five (5) taxable years.
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 the City of Delphos,
the
portion of a net operating loss sustained shall be allocated
to the City of Delphos in the
same manner as provided herein for allocating net
profits to the City of Delphos. 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
allocation factors applicable to that year.
The
same method of accounting and allocation 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. In the case
of fiscal years beginning prior to the effective date of the ordinance, the net
operating loss deduction will be that portion of the
operating loss that the number of
months of the fiscal year after the effective date of
the ordinance bears to the total number
of months in such fiscal year.
4. A short
fiscal year (a fiscal year of less than twelve (12) months ) in cases where
there has
been a change in accounting period, where a new
taxpayer selects a short fiscal year, or
where a new taxpayer operates in the City of Delphos
for less than his full accounting
period, shall be considered as a full taxable fiscal
year.
5. 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 allocation used to determine the portion of net operating loss
allocable to the City of Delphos.
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.
6. The net
operating loss of a business which loses its identity through merger,
consolidation,
etc., shall not be allowed as a carry-forward loss
deduction to the surviving business entity.
7. In the case
of a net operating loss in the filing of consolidated returns, see Article III,
paragraph D.
D.
Consolidated Returns.
1.
Consolidated returns may be filed by a group of corporations who are
affiliated through
stock ownership.
A consolidated return must include all companies which are so affiliated
in accordance with I.R.S. regulations.
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 Administrator 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.
3. If a corporation
becomes a member of the group during the taxable year the consolidated
return must include the income for the entire taxable
year of the common parent
corporation and any subsidiaries which were members of the group for the
entire year, plus
the income of each subsidiary which becomes a member
of the group during the year for
the period beginning with the date it became a member
of the affiliated group. For the
period prior to the time any subsidiary became a
member of the group, separate returns
must be filed for that subsidiary. When a subsidiary ceases to be a member of
the
affiliated group, the consolidated return must include
the income of such subsidiary for the
period during which it was a member of the group, but
for the period after it ceases to be a
member, separate returns must be filed. If a corporation has been a member of the
affiliated group for less than one month of the
taxable year of the group, it may be
considered as not being a part of the group. Similarly, a subsidiary may be considered as
being a member of the affiliated group during the
entire taxable year of the group if the
period during which it was not a member of the group
does not exceed one month.
If a subsidiary is a member of the consolidated group
for only part of a taxable year, the
income considered to be earned in such fractional part
of the year shall be that portion of
the net income for the entire year which the number of
days it was a member of the group
bears to the total number of days in the taxable year.
4. In
determining the allocation fraction where a corporation becomes a member of the
group
or ceases to be a member of the group
during the taxable year, the property fraction (Step 1
of the formula) shall be determined on the basis of
the average net book value of the
property during the period such corporation was a
member of the group. The rental
portion of the fraction, however, shall be computed at
8 times the annual rent. The gross
receipts and wage fractions shall be based on the
actual figures.
5. All
subsidiary corporations must agree in writing to the filing of the consolidated
return, as
they will be liable for the tax as well as will be the
parent corporation.
6. The net
operating loss carryover of a corporation which filed a separate return in a
prior
year may be carried over to the
consolidated return, but will be limited in amount to the
amount of that same corporation’s net income
included in the consolidation. The net
operating loss carryover from a
separate year shall be deducted first before application of
the allocation fraction. After application of the allocation fraction, the consolidated
net
operating loss carryover allocated to the City of
Delphos shall be allowed.
7. In
consolidating the net income, the taxable income of each corporation shall be
computed
in accordance with the provisions governing the
taxable income of separate corporations,
except that there shall be eliminated unrealized
profits and losses in transactions between
members of the affiliated group.
8. In
determining expenses that are not allowable because they are allocable to
non-taxable
income, such calculations shall be based on the
consolidated net income. As an example,
inter-company dividends which are eliminated in the
consolidation will not be taken into
consideration in determining non-taxable income.
E. Exceptions.
The following shall not be considered taxable:
1. Poor
relief, unemployment insurance benefits, supplemental unemployment benefits,
old
age pensions, or similar payments received from local,
state or federal governments or
charitable or religious organizations.
2. Proceeds of
insurance, annuities, worker’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.
5. Military
pay and allowances received as a member of the armed forces of the United
States;
to include nonactive duty pay, reserve pay, and
national guard pay.
6. Any
charitable, educational, fraternal or other type of non-profit association or
organization
enumerated in Section 718.01 of the Revised Code of
Ohio which is exempt from payment
of real estate tax is exempt from payment of the tax
imposed by this ordinance.
7. Any
association or organization falling in the category listed in the preceding
paragraph not
exempt from the payment of real estate taxes is
required to file declarations and final
returns and remit the taxes levied under this
ordinance on all business activities of a type
ordinarily conducted for profit by taxpayers operating
for profit.
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 City
of Delphos under the method or methods provided above.
9. Ministers’
housing allowance.
10. Pay received for work performed at an election
precinct for amounts less than one
thousand dollars ($1000.00) during a calendar year.
11. Personal earnings of any natural person
under seventeen (17) years of age.
ARTICLE IV
EFFECTIVE PERIOD OF TAX
A. The tax
imposed by Section 3, paragraphs A-1 and A-2 of the ordinance shall be levied,
collected and paid with respect to salaries, wages,
bonuses, incentive payments, commissions,
fees, and other compensation earned during the
effective period of the ordinance.
B. The tax
imposed by Section 3, paragraphs A-3, A-4 and A-5 of the ordinance with respect
to
net profits of trades, businesses, professions,
enterprises, undertakings and other activities is on
the net profits earned during the effective period of
the ordinance.
ARTICLE V
RETURN AND PAYMENT OF THE TAX
A. Date and
Requirement for Filing:
1. On or
before April 30th of the year following the effective date of the
ordinance and each
year thereafter, every person subject to the
provisions of Section 3, paragraphs A-1 to A-5,
inclusive, of the ordinance shall, except as
hereinafter provided, make and file with the
administrator, a return on a form prescribed by and
obtainable upon request from the
administrator, or a generic form which must contain
all of the information requested on the
tax form as provided by the administrator, whether or
not a tax be due.
2. 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 from the end of each
fiscal year or other period.
3. 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 salaries, wages,
commissions and other personal service compensation,
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
administrator may require.
4. Where an
employee’s entire earnings for the tax period are paid by a resident employer
or
resident employers, and the one and one-half percent
(1.5%) tax thereon has in each
instance been withheld and deducted by the employer or
employers from the gross amount
of the entire earnings of such employee-taxpayer, and
where the resident employer of such
employee has filed a report or return in which such
employee’s entire and only earnings are
reported to the administrator, and where such employee
has no taxable income other than
such earnings, and the tax so withheld has been paid
to the administrator. The
administrator is hereby authorized to accept such
report or returns provided by the
employer, unless otherwise specified, as the return
required of any such employee.
5. 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 wages, salaries, or commissions are subject to
withholding.
6. Any
taxpayer who received taxable income not subject to withholding under the
ordinance
must file a return.
7. Any taxpayer
having income, wages, or other compensation for which a return must be
filed, and also having net profits from a business
covering the same or a different period, is
required to file only one return.
8. Trustees of
active trusts are required to file returns and pay the tax on the taxable
income
thereof.
9. Except as
provided for herein, 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 allocable
to the City of Delphos and the tax paid thereon. However, any resident partner or resident
member of the unincorporated entity is required to
make a return and pay the tax in
accordance with Article III-A3b.2 of these
regulations.
10. A husband and wife may, in any tax year,
elect to file separate or joint returns.
11. Operating losses from business or
professional activities, the profits of which would be
taxable under
the ordinance, may be offset against salaries, wages, commissions and other
personal
service compensation or against net profits from other business or professional
activities. To the extent that
such losses are offset they shall not be allowable as an
operating loss
carry forward under Section 3c of the ordinance or Article III-C of the
regulations.
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, less reasonable
allowable expenses incurred subject to the tax, earned
from each employer, taxable net
profits and other pertinent information as the
administrator may require.
2. Where
figures of total income, total deductions, and net profits are included, as
shown by a
federal return, any items of income as are not subject
to the City of Delphos’s tax and
unallowable expenses shall be eliminated in
determining net income subject to the City of
Delphos. In
the absence of records showing the actual unallowable expenses, such
expenses shall be determined in accordance with
Article III A-6.c.1-07. of these
regulations.
The fact that any taxpayer is not required to file a federal tax return
does not
relieve him from filing the City of Delphos’s 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 the City of
Delphos, a report of such change shall be filed by the
taxpayer within three (3) months
after receipt of the final notice from the Federal
Internal Revenue Service or final court
decision.
4. If a change
in federal income tax liability results in a reduction of taxes due and paid to
the
City of Delphos, a claim for refund shall be filed
with the administrator as prescribed in
Section 11 of the ordinance and Article XI-B of these
regulations.
C. Extensions
1. Upon
written request of the taxpayer on or before the date for filing the return,
and for
good cause shown, or upon receipt of a copy of the
Federal Internal Revenue Service
extension granted the taxpayer, the administrator 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. Whenever he deems
necessary, the administrator may require a tentative
return accompanied by payment of the
estimated tax.
No penalty 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 have been met.
2. Information
returns, schedules and statements 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 a return shall, at the time of the filing thereof, pay to the
administrator
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 City of Delphos 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
one dollar ($1.00) 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/or limitations contained in Section 11 and
12. Such amended return shall be on a
form
obtainable on request from the administrator. 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 from the final determination of any federal tax liability
affecting
the taxpayer’s City of Delphos tax liability, such taxpayer
shall make and file an amended
City of Delphos return showing income subject to the
City of Delphos’s tax based upon
such final determination of federal tax liability, and
pay any 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. Except as
otherwise provided herein, it is the duty of each employer within or doing
business within the City of Delphos, who employs one
or more persons whether as an
employee, officer, director, or otherwise, to deduct
each time any compensation is paid the
tax of one and one-half percent (1.5%) from:
a. The gross
amount of all salaries, wages, bonuses, incentive payments, fees, commissions
or other forms of compensation paid to residents of
the City of Delphos, 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 the City of Delphos.
2. All
employers within or doing business within the City of Delphos 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 residents of Delphos, were
performed outside of the City of Delphos.
3. Employers
who do not maintain a permanent office or place of business in the City of
Delphos, but who are subject to tax on net profits
attributable to Delphos, under the
method of allocation provided for in the ordinance,
are considered to be employers within
Delphos and subject to the requirement of withholding.
4. The mere
fact that the tax is not withheld will not relieve the employee 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 administrator, 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 Articles V and VII of the
regulations.
6. Where a
non-resident receives compensation for personal services rendered or performed
partly within and partly without Delphos, the
withholding employer shall deduct, withhold
and remit the tax on that portion of the compensation
which is earned within Delphos 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 Delphos bears to the
total volume of business transacted by him within and
outside Delphos.
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 Delphos is of the total number of working
hours.
c. The fact
that non-resident employees are subject to call at any time does not permit the
allocation of pay for time worked within Delphos on a
seven-day per week basis. The
percentage of time worked in Delphos will be computed
on the basis of a forty-hour
week unless the employer notifies the administrator
that a greater or lesser number of
hours per week is worked.
d. The
occasional entry into Delphos of a non-resident employee who performs the
duties
for which he is employed primarily outside the city,
shall not be deemed to take such
employee out of the class of those rendering their
services entirely outside Delphos.
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 Delphos and has
no knowledge to the contrary, shall be relieved of the
responsibility of withholding the tax
on personal service compensation paid to such employee
for services rendered or work
done outside Delphos by such employee, provided,
however, that such employer must
withhold the tax on all personal service compensation
paid such employee after the
administrator notifies said employer in writing that
such employee is a resident of Delphos.
All employees are required to notify the employer of
any change of residence and the date
thereof.
10. A City
of Delphos employer required to withhold the tax from a City of Delphos
resident
for work done or services performed in another
municipality, and who does so withhold
and remit to such other municipality, shall be
relieved from the requirement of withholding
the City of Delphos tax from such City of Delphos
resident, except where the rate of tax
for such other municipality is less than the rate of
tax imposed by this ordinance. In such
case the employer shall withhold and remit the
difference to the City of Delphos.
11. 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.
12. On and
after January 1, 2001, compensation paid to an individual for personal services
performed within the City of Delphos, if the
individual does not reside in the City of
Delphos, performs such personal services in the City
of Delphos on twelve or fewer days in
the calendar year and, if the individual is an
employee, the principal place of business of the
employer is located outside of the City of Delphos,
the employer is exempt from
withholding the tax from such employee.
Beginning January 1, 2001, a non-resident employer who
engages in business inside the
City of Delphos will not be required to withhold and
pay the tax from the income of their
employees working inside the City of Delphos unless
the total amount of tax required to be
deducted and withheld on account of all of the
employer’s employees or all of the other
payer’s payees exceeds one hundred fifty dollars
($150.00) for a calendar year beginning
on or after that date.
If the total amount of tax required to be deducted and
withheld on account of all of the
non-resident employer’s employees or all of the payer’s
payees exceeds one hundred fifty
dollars ($150.00) for a calendar year, the City of
Delphos will require the employer, agent
or other payer to deduct and withhold taxes in each
ensuing year even if the amount
required to be deducted and withheld in each of those
ensuing years is one hundred fifty
dollars ($150.00) or less.
A non-resident employer, agent of such an employer, or
other payer that is not situated in
the municipal corporation is required to deduct and
withhold taxes for an ensuing year, and
the total amount of tax required to be deducted and
withheld in each of three (3)
consecutive ensuing years is one hundred fifty dollars
($150.00) or less, the City of
Delphos shall not require the employer, agent, or
other payer to deduct and withhold taxes
in any year following the last of those consecutive
years unless the amount required to be
deducted and withheld in any such following year
exceeds one hundred fifty dollars
($150.00).
B. Return and
Payment of Tax Withheld and Status of Employers.
1. The
deductions from salaries, wages, and other compensation required to be made by
employers are to begin with the compensation earned on
and after the effective date of the
ordinance.
The employer (in addition to any return required to be
filed with respect to his own
earnings or net profits) shall, on or before the last
day of the month next following each
quarterly period, make a return and pay to the
administrator the full amount of the tax so
deducted or withheld with respect to compensation paid
all of his employees subject to the
tax under the ordinance. Provided, however, the administrator may require to remit the
withholding taxes at more frequent intervals.
The return required to be filed under this article
shall be made on a form furnished by or
obtainable on request from the administrator.
2. If more
than the amount of tax required to be deducted by the ordinance is withheld
from
employee’s pay, such excess may be refunded by the
employer or the administrator,
depending upon the circumstances and the time when the
over-withholding is determined
as follows:
a. Current
employees
.1 If the
over-withholding is discovered in the same quarterly period the employer shall
make the necessary adjustment directly with the
employee and the amount to be
reported on the return as withheld shall be the
corrected amount;
.2 If the
over-withholding is discovered in a subsequent period of the same calendar
year the employer may make proper adjustment with the
employee. In such case the
return for the period in which the adjustment is made
shall indicate the total amount
actually withheld, the amount of the adjustment
deducted therefrom, and the
corrected amount reported on the return;
.3 If the
over-withholding is discovered in the following year, the employer should
notify the administrator of such over-withholding and
the circumstances thereof.
Upon proper verification the administrator shall refund
to the employee the amount
of such excess withholding; upon request of the
taxpayer.
b. Former
employees:
.1 In case too
much has been withheld from an employee who is no longer employed
by the employer, the employer shall notify the
administrator of the amount and
circumstances of such over-withholding and the
administrator shall then refund to
the employee the amount of such
excess withholding; upon request of the taxpayer.
.2 If
the error is discovered by the employee such employee shall file a claim with
the
administrator and, upon verification thereof by the
employer, the administrator shall
refund to the employee the amount of such excess
withholding; upon request of the
taxpayer.
c.
Non-Residents Employed Outside of the City:
.1 Where an employer has withheld the tax from all
wages of a non-resident of Delphos
and such non-resident has been employed outside of
Delphos for all or a part of the
time, such employee shall file a claim with the
administrator covering such erroneous
withholding and the administrator shall, upon
verification thereof by the employer,
refund to the employee the amount of such excess
withholding; upon request of the
taxpayer.
d.
Insufficient Withholding:
.1 If less
than the amount of tax required to be deducted is withheld from an employee,
such deficiency shall be withheld from subsequent
wages. However, if the
employee-employer relationship has terminated,
the employer shall notify the
administrator of such deficiency and the reason
therefore.
3. Every
employer is deemed to be a trustee for the City of Delphos 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.
4. Every such
employer is required to deduct and withhold the tax at the source is liable
directly to Delphos for payment of such tax whether
actually collected from such employee
or not.
5. On or
before the 31st day of January, following any calendar year in which
such deductions
have been made by any employer, such employer shall
file with the administrator, in the
form prescribed by the administrator, an information
return for each employee from whom
Delphos income tax has been withheld, showing the
name, address and social security
number of the employee, the total amount of
compensation paid during the year and the
amount of Delphos’s income tax withheld from such
employee.
6. The gross
compensation to be reported for each employee shall be for the full twelve (12)
calendar months of the year or such portion thereof as
the employee reported on was
employed.
7. All
payments not subject to withholding shall be reported on forms as required by
the
administrator.
8. In addition
to such information returns, and at the time the same are filed, such employer
shall file with the administrator a form to enable the
administrator 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 remittances
made pursuant to the ordinance.
C. 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 part of
a cent shall be disregarded unless it
amounts to 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 be
expected to have taxable income, the tax on which is
not or will not be withheld by an
employer or employers. Where required such declaration shall be filed within four (4)
months after the beginning of the taxable 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.
3. A
declaration of estimated tax which is less than 80% of the tax as shown on the
final
return shall not be considered filed in good faith.
B. Date of
Filing:
1. A person or
other entity conducting a business not previously subject to the tax, or whose
employer does not withhold the tax, shall file a
declaration within four (4) months after the
date he becomes subject to the tax.
2. Those taxpayers
having a fiscal year or period differing from the calendar year shall file a
declaration within four (4) months after the start of
each fiscal year or period.
C. Form for
Filing:
1. Such
declaration shall be filed upon a form or forms furnished by, or obtainable
from the
administrator.
Provided, however, credit shall be taken for Delphos’s tax to be
withheld
from any portion of such income. In accordance with the provisions of Section
15 of the
ordinance, credit may be taken for tax to be withheld
and remitted to another taxing
municipality.
2. 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 as set forth in Article VII-D.1. Such amendment may be made on the
regular declaration form or on the back of any
quarterly notice.
D. Dates of
Payments:
1. The
estimated tax may be paid in full with the declaration or in equal installments
on or
before the last day of the fourth, seventh, tenth and
thirteenth month after the beginning of
the taxable year.
Corporations, partnerships, or other like business entities must remit
the
estimated tax on the fifteenth day of the fourth month
of the taxpayer’s taxable year and the
fifteenth day of the sixth month, the
fifteenth day of the ninth month, and the fifteenth day
of the twelfth month of the taxpayer’s taxable year.
2. The
declaration must be accompanied by at least 22.5% of the estimated tax shown
due
thereon.
3. 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
one dollar ($1.00).
ARTICLE VIII
DUTIES OF THE ADMINISTRATOR
A. Collection
of Tax and Retention of Records:
1. It shall be
the duty of the Income Tax Administrator 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 monies so received.
2. It shall be
the duty of the administrator to enforce payment of all taxes owing Delphos, to
keep accurate records for a minimum of five (5) years
showing the amount due from each
taxpayer required to file a declaration and/or make
any return, including taxes withheld, and
to show the dates and the amounts of payments thereof.
B. Enforcement
Provisions:
1. The
administrator 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 or any
amendment thereof relating to any
matter or thing pertaining to the administration and enforcement
of the ordinance. The
administrator 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 administrator in writing all
the facts involved and the ruling sought.
3. These
regulations, together with all amendments and supplements hereto and all
changes
herein, will be on file at the office of the
administrator and will be open to public
inspection.
4. The
administrator 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
administrator that, due to certain hardship
conditions, he is unable to pay the full amount of
the tax due.
Such authorization shall not be granted until 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 Administrator:
1. Whenever
the administrator has been 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 of such
determination, together with the interest and
penalties as prescribed 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. Subject to
the consent of the Board of Review or pursuant to regulation approved by said
Board, the administrator shall have the power to
compromise any interest or penalty, or both,
imposed by Section 10 of the ordinance.
ARTICLE IX
EXAMINATION OF BOOKS AND RECORDS, INFORMATION SO
OBTAINED
CONFIDENTIAL: PENALTY
A.
Investigations by Administrator:
1. The
administrator, or his duly authorized agent, is authorized to examine the
books, papers,
records and federal income tax returns of any
employer, taxpayer or person subject to the
ordinance, or whom the administrator believes is
subject to the provisions of the ordinance,
for the purpose of verifying the accuracy of any
return made; or, if no return was made,
to ascertain the tax due under the ordinance.
2. An employer
or taxpayer shall furnish, within ten (10) days following a written request by
the Administrator, 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
administrator, 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 administrator 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
administrator’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 administrator.
3. The
administrator 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 administrator 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 notice
shall be served by the administrator, 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 an employer, supposed employer, taxpayer,
or supposed taxpayer, or the refusal of
any such person to appear before the administrator 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
Section12 of the ordinance.
D.
Confidential Nature of Examinations:
Any information gained as a result of any returns,
investigations, verifications or hearings
before the administrator 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 shall be guilty of a misdemeanor
punishable by a maximum fine of Five Hundred
Dollars ($500.00) or imprisonment for not more than
six (6) months, or both.
In addition to the above penalty, any employee of the
City of Delphos who violates the
provisions of this section relative to the disclosure
of confidential information shall be guilty of
an offense punishable by immediate dismissal.
E. 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.
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 the ordinance and
remaining unpaid after they have become due shall bear
interest, in addition to the amount
of the unpaid tax or withholdings, at the rate of one
percent (1%) per month or fraction
thereof.
B. Penalties: In
addition to interest as provided in paragraph A hereof, penalties based on the
unpaid tax are hereby imposed as follows:
1. For failure
to pay taxes due, other than taxes withheld: one and one-half percent (1.5%)
per
month or fraction thereof.
2. For failure
to remit taxes withheld from employees: five percent (5%) per month or fraction
thereof.
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 the receipt of notice of any
proposed imposition of interest and penalties within which
to file a written protest or
explanation with the administrator. 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 administrator shall
withdraw the assessment or he shall adjust or reaffirm
the assessment and it shall then
become final.
D. Appeal from
Assessment:
1. Upon
recommendation of the administrator, the Board of Review may abate penalty or
interest, or both, or upon an appeal from the refusal
of the administrator to recommend
abatement of penalty and/or interest, the Board may
nevertheless abate penalty or interest,
or both.
ARTICLE XI
COLLECTION OF UNPAID TAXES AND REFUND OF OVERPAYMENTS
A. Unpaid Sums
- Civil Suit:
1. In addition
to any criminal penalties which may be imposed pursuant to Section 12 of the
ordinance, all taxes imposed by Section 3 of the
ordinance and not paid when due, shall be
collectible, together with any interest and penalties
thereon, 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
and/or remit, become liable to the
municipality in a civil suit to enforce the payment of
the deficiency created by such failure.
2. No
additional assessment shall be made by the administrator 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 income
required to be
reported shall be considered a substantial omission.
3. In those
cases in which the Commissioner of Internal Revenue and the taxpayer have
executed a waiver of the federal statute of limitations,
the period within which an
assessment may be made by the administrator is
extended to one (1) year from the time of
final determination of federal tax liability.
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 the tax was due or the return
was filed, or three (3) months after the
determination of the 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 administrator, and has paid all
taxes, penalties and interest from any given year
shown to be due.
3.
Overpayments will be either refunded or credited to the taxpayer’s
current year’s liability at
his option.
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 become due.
b. To his
current estimated liability.
C. Limitation:
Where the total amount due or refund claimed for a tax
year is less than one dollar ($1.00)
such amount shall not be collected or refunded.
ARTICLE XII
VIOLATIONS - PENALTIES
A. Any person
who shall:
1. Fail,
neglect or refuse to make any return or declaration required by the ordinance;
or
2. Make any
incomplete, false or fraudulent return; or
3. Willfully fail,
neglect or refuse to pay the tax, penalties or interest imposed by this
ordinance; or
4. Willfully
fail, neglect or refuse to withhold the tax from his employees or remit such
withholding to the administrator; or
5. Refuse to
permit the administrator or any duly authorized agent or employee to examine
his
books, records, papers and federal income tax returns
relating to the income or net profits
of a taxpayer; or
6. Fail to appear
before the administrator and to produce his books, records, papers or federal
income tax returns relating to the income or net
profits of a taxpayer upon order or
subpoena of the administrator; or
7. Refuse to
disclose to the administrator any information with respect to the income or net
profits of a taxpayer; or
8. Fail to
comply with the provisions of the ordinance or any order or subpoena of the
administrator authorized hereby; or
9. Give to an
employer false information as to his true name, correct social security number
and residence address, or fail to promptly notify an
employer any change in residence
address and date thereof; or
10. Fail to use ordinary diligence in
maintaining proper records of employees’ residence
addresses, total wages paid and Delphos’s
income tax withheld or to knowingly give the
administrator false information; 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 the ordinance.
Shall be guilty of a misdemeanor and shall be fined
not more than Five Hundred Dollars
($500.00) or imprisoned not more than six (6)
months or both, for each offense.
B.
Prosecutions:
Prosecutions for an offense made punishable under this
Section or any other provision of this
ordinance shall be commenced within three (3) years
after the commission of the offense,
provided that in the case of fraud, failure to file a
return, or the omission of twenty-five percent
(25%) or more of income required to be reported, prosecutions may be commenced
within six (6) years after the commission of the
offense.
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, declaration or return,
from filing such form, or from paying the tax.
ARTICLE XIII
BOARD OF REVIEW OR APPELLATE AUTHORITY
A.
Composition:
A Board of Review, consisting of the Chairman of the
Finance Committee of the City Council,
a disinterested citizen appointed by the Mayor and the
City Director of Law, is hereby created.
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. Any hearing by the Board
may be conducted privately and the provisions of
Section 9 hereof 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.
B. Duties:
All rules and regulations and amendments or changes
thereto, which are adopted by the
administrator under the authority conferred by the ordinance,
must be approved by the Board
of Review before the same become effective. The Board shall hear and pass on appeals
from
any ruling or decision of the administrator, and, at
the request of the taxpayer or administrator,
is empowered to substitute alternate methods of
allocation.
C. Appeals:
1. An appeal
from a ruling of the administrator by a taxpayer or employer is effected by
filing
a notice of appeal with the Board within thirty (30)
days after the announcement of the
administrator’s ruling or decision from which the
appeal is taken. A copy of such notice
of
appeal must be filed with the administrator, and shall
state why the decision should be
deemed incorrect or unlawful.
The Board shall schedule a hearing within forty-five
(45) days after receiving the request,
unless the taxpayer waives a hearing. If the taxpayer does not waive the hearing,
the
taxpayer may appear before the Board and may be
represented by any person of his/her
choosing.
2. The Board,
by a majority vote, may affirm, modify, or reverse, in whole or in part, any
such ruling or decision of the
administrator. 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.
3. Hearing
before the board shall be private unless the taxpayer requests a public
hearing.
ARTICLE XIV
USE OF FUNDS
NO REGULATION ON THIS SECTION AS IT IS A POLICY MATTER
FOR COUNCIL.
ARTICLE XV
CREDIT ALLOWED FOR TAX PAID IN ANOTHER MUNICIPALITY
A. Credits to
Residents:
When the taxable income of a resident of the City of
Delphos, Ohio, is subject to a municipal
income tax in another municipality on the same taxable
income, such resident shall be allowed
a credit of three-fourths of one percent (.0075) of
any income taxed by another municipality.
B. Method of
Applying for Credit:
1. No credit
will be given unless the taxpayer claims such on his final return or other form
prescribed by the administrator, and presents such
evidence of the payment of a similar tax
to another municipality, as the administrator may
require.
2. A statement
satisfactory to the administrator from the taxing authority of the municipality
to
which the taxes are paid that a City of Delphos
resident or his employer is paying the tax
shall be considered as fulfilling the requirement of
this article.
ARTICLE XVI
SAVING CLAUSE
NO REGULATION AS THIS SECTION PERTAINS TO THE LEGALITY
OF THE ORDINANCE AND NOT TO ITS ADMINISTRATION
ARTICLE XVII
COLLECTION OF TAX AFTER TERMINATION OF ORDINANCE
A. Authority
to Collect after Termination of Ordinance:
The tax imposition provisions of the ordinance are
effective until the ordinance is repealed,
subject, however, to the provisions of Section 11 of
the ordinance with respect to the limitation
of time within which an additional assessment may be
made.
B. Payment of
Taxes:
1. Taxes due
and unpaid on account of compensation paid or received and on account of
profits earned in the last effective year of the
ordinance or any part thereof which remains
unpaid on April 30th, are payable in full
on or before the dates specified in Sections 5 and 6
of the ordinance and Articles 5 and 6 of these
regulations, and all final returns and
withholding reports must be filed on or before that
date, unless extended by the
administrator.
2. For
purposes of collection of delinquent or unpaid taxes, actions or proceedings
for such
collection and/or the collection of interest and
penalties thereon, or enforcing any
provisions of the ordinance (including
prosecutions under the criminal sections of the
ordinance and including appeals before the Board of
Review), the ordinance remains in
full force and effect until such time as all taxes
accruing during the term of the ordinance
shall have been fully paid, and all actions, suits,
prosecutions, appeals and other judicial or
administrative proceedings relative to the collection
or payment of such taxes, have been
finally terminated.
APPROVED BY THE BOARD OF REVIEW: signed Clayton P.
Osting
signed Temi Cano
signed Gene Dray
Date
12/1/2000