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MUNICIPAL INCOME TAX

Codified Ordinances of Cleveland pt. ONE, tit. XVII, ch. 191
in effect

Codified Ordinances of Cleveland § 191.99 Penalty

§ 191.99 Penalty (a) Whoever violates any of the provisions of Sections 191.1505 or 191.2308 shall be guilty of a misdemeanor of the first degree for each violation. Each violation constitutes a separate offense. (b) Whoever violates Section 191.2309 shall be guilty of a misdemeanor of the first degree for each such disclosure. Each disclosure shall constitute a separate offense. In addition to the above penalty, any employee of the City who violates Section 191.2309 shall be guilty of an offense punishable by immediate dismissal. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0101 Purpose of Levy

§ 191.0101 Purpose of Levy (a) To provide funds for the purposes of general municipal operations, procurement of fixed assets or permanent improvements, payment of debt charges, the elimination of deficits in City funds and for all other lawful purposes, there shall be, and is hereby levied a tax on qualifying wages as defined in this chapter, on net profits, and on all other taxable income, as hereinafter provided. (b) Eight-ninths (8/9) of all monies derived from the tax so levied shall be unrestricted and may be applied to any of the purposes described in division (a) of this section. (c) One-ninth (1/9) of all monies derived from the tax so levied shall be credited to a special revenue fund to be known as the Restricted Income Tax Fund. Moneys credited to the Restricted Income Tax Fund may be applied to only the following purposes: (1) Elimination of any deficit balance in any fund of the City, provided that such deficit balance existed as of December 31, 1984, or exists at any subsequent time during a fiscal emergency period, as defined in RC 118.01; or (2) Payment of the principal of or interest or any premium on any bonds or notes issued by the City to finance the construction, purchase or acquisition of fixed assets or permanent improvements; or (3) Payment of the costs of constructing or acquiring (whether by outright purchase, lease or lease- purchase and irrespective of whether payment is made in installments or in a lump sum) of fixed assets of permanent improvements. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0301 Definitions Generally

§ 191.0301 Definitions Generally For the purposes of this chapter the terms, phrases, words and their derivatives shall have the meanings given in the next succeeding sections. The singular shall include the plural, and the masculine shall include the feminine and the neuter. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0302 Administrator

§ 191.0302 Administrator “Administrator” means the Commissioner of the Division of Taxation, who also may be referred to in this chapter as the “Tax Administrator.” (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0303 Association

§ 191.0303 Association “Association” means any partnership, limited partnership, limited liability company, limited liability partnership, Subchapter S corporation (“S corporation”) as defined in the Internal Revenue Code, or any other form of unincorporated business or enterprise taxed on a pass-through basis under the Internal Revenue Code. The terms “association,” “pass- through entity,” and “unincorporated business entity” are synonymous for purposes of this chapter and the Rules and Regulations. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0304 Board of Review

§ 191.0304 Board of Review “Board of Review” means the Board created by and constituted as provided in Section 191.2501. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0305 Business

§ 191.0305 Business “Business” means any enterprise, 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, including but not limited to the renting or leasing of property, real, personal or mixed. For purposes of determining if “business is conducted within the city,” any direct and/or indirect ownership of an interest in an association, pass-through entity or unincorporated business entity that conducts business within the City is considered included. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0306 Corporation

§ 191.0306 Corporation “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, or any unincorporated entity treated as a corporation for federal income tax purposes. “Corporation” also includes a combined company, an electric company and a telephone company, as defined in RC 5727.01. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0308 Employer

§ 191.0308 Employer “Employer” means an individual, partnership, association corporation governmental body, unit or agency, or any other entity, whether or not organized for profit, who or that employs one (1) or more persons on a qualifying wage basis. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0309 Fiscal Year

§ 191.0309 Fiscal Year “Fiscal year” means an accounting period of twelve (12) months or less ending on any day other than December 31. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0311 Net Profits

§ 191.0311 Net Profits “Net profits” mean (i) if the taxpayer is a corporation, the corporation’s “adjusted federal taxable income” as that term is defined in RC 718.01(A)(1)(a) - (f); (ii) if the taxpayer is an “association,” “pass- through entity,” or “unincorporated business entity,” “adjusted federal taxable income” as that term is defined in RC 718.01(A)(1)(g); and (iii) if the taxpayer is an individual, the individual’s profit, other than amounts specifically excluded in RC 718.01(F), required to be reported on federal Schedule C, Schedule E, or Schedule F, as provided by the Internal Revenue Service. The “net profits” of a taxpayer shall be adjusted in accordance with the provisions of this chapter and the Rules and Regulations. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.0313 Nonresident Unincorporated Business Entity

§ 191.0313 Nonresident Unincorporated Business Entity “Nonresident unincorporated business entity” means an unincorporated business entity not having an office or place of business within the City. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0314 Person

§ 191.0314 Person “Person” means individuals, firms, companies, business trusts, estates, trusts, partnerships, limited liability companies, associations, corporations, governmental entities, and any other entity. With respect to provisions of this chapter that impose or prescribe a penalty, the term “person” shall mean the owners of an association, pass-through entity and unincorporated business entity and the officers of a corporation. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0315 Place of Business

§ 191.0315 Place of Business “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 (1) or more of his or her regular employees regularly in attendance. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0317 Resident Unincorporated Business Entity

§ 191.0317 Resident Unincorporated Business Entity “Resident unincorporated business entity” means an unincorporated business entity having an office or place of business within the City. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.0318 Taxable Income

§ 191.0318 Taxable Income “Taxable income” means all qualifying wages, net profits and all other income from whatever source derived set forth in Section 191.0501, and the Rules and Regulations as taxable. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0319 Taxable Year

§ 191.0319 Taxable Year “Taxable year” means the corresponding tax reporting period as prescribed for the taxpayer under the Internal Revenue Code. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0320 Taxpayer

§ 191.0320 Taxpayer “Taxpayer” means a person subject to the tax imposed by this chapter, whether the tax is imposed on the taxable income of the entity in the hands of the entity or on the taxable income from the entity in the hands of the owners of the entity. “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. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0321 Unincorporated Business Entity

§ 191.0321 Unincorporated Business Entity “Unincorporated Business Entity” means either an “association,” “pass-through entity” or “corporation,” determined by the treatment afforded such entity for federal income tax purposes. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0501 Rate and Taxable Income

§ 191.0501 Rate and Taxable Income For the purposes specified in Section 191.0101, on and after January 1, 1967, an annual tax of one-half of one percent (0.5%) per annum shall be imposed upon the hereinafter specified income; provided that on an after July 1, 1968, the rate of tax shall be a total of one percent (1%) per annum; and that on and after March 1, 1979, the rate of such tax shall be a total of one and five-tenths percent (1.5%) per annum; and that on and after January 1, 1981, the rate of tax shall be two percent (2%) per annum. Such tax shall be imposed upon all taxable income as follows: (a) On all qualifying wages, net profits and other taxable income earned and/or received on and after January 1, 1967 by residents of the City; (b) (1) On all qualifying wages, earned and/or received on and after January 1, 1967, by nonresidents of the City for work done or services performed or rendered within the City or attributable to the City; on all net profits earned and/or received by a nonresident from the operation or conduct of any business or profession within the City; and on all other taxable income earned and/or received by a nonresident derived from or attributable to sources, events or transactions within the City; (2) For nonresidents employed at a place of business or profession within the City, only those qualifying wages earned and/or received by such nonresident that are specifically attributable to a place or location worked that is outside the City will be treated as earned outside the City; (c) (1) On the portion attributable to the City of the net profits earned and/or received on and after January 1, 1967, of all resident associations, pass- through entities or other unincorporated business entities treated as a pass-through entity for federal income tax purposes or professions or other activities, derived from sales made, work done, services performed or rendered, and business, or other activities conducted in the City and/or derived from sales made, work done, services performed or rendered and business or other activities attributable to the City; (2) On the portion of the distributive share of the net profits earned and/or received on and after January 1, 1967, of a resident partner or owner of a resident association, pass-through entity or other unincorporated business entity treated as a pass- through entity for federal income tax purposes not attributable to the City and upon which the City’s income tax has not been imposed and levied; (d) (1) On the portion attributable to the City of the net profits earned and/or received on and after January 1, 1967, of all nonresident associations, pass- through entities or other unincorporated business entities treated as a pass-through entity for federal income tax purposes, professions or other activities, derived from sales made, work done, services performed or rendered, and business, or other activities conducted in the City and/or derived from sales made, work done, services performed or rendered and business or other activities attributable to the City, whether or not such association, pass-through entity or other unincorporated business entity treated as a pass- through entity for federal income tax purposes has an office or place of business in the City; (2) On the portion of the distributive share of the net profits earned and/or received on and after January 1, 1967, of a resident partner or owner of a nonresident association, pass-through entity or other unincorporated business entity treated as a pass- through entity for federal income tax purposes not attributable to the City and upon which the City’s income tax has not been imposed and levied from wherever such business is located; (e) On the portion attributable to the City of the net profits earned and/or received on and after January 1, 1967, of all corporations and all other entities and business activities not defined herein as associations, pass-through entity or unincorporated business entity treated as a pass-through entity for federal income tax purposes derived from sales made, work done, services performed or rendered, and business, or other activities conducted in the City, and/or derived from sales made, work done, services performed or rendered, and business, or other activities attributable to the City, whether or not such corporations, entities or business activities have an office or place of business in the City; (f) On the net profits of an electric company, combined company or telephone company apportioned and attributable to the City in accordance with RC 718.01(F)(6) and RC Chapter 5745; (g) On all income derived from prizes, awards, gaming, wagering, lotteries or other similar games of chance by a resident from whatever source and from anywhere derived; (h) On all income earned and/or received from covenants not to compete or similar agreements and on all income attributable to cancellation of indebtedness to the extent reported on the taxpayer’s federal income tax return; (i) On all guardian, executor, conservator, trustee or administrator fees earned and/or received by a taxpayer in connection with the operation or conduct of a business or profession; (j) On all other compensation, net profits and income earned and/or received by the taxpayer that is not specifically exempted from the tax imposed by this chapter as set forth in Section 191.0901 and RC 718.01(F); (k) (1) For taxable years beginning on or after January 1, 2004, the net profits from a business or profession shall be taxed only to the extent of the taxpayer’s adjusted federal taxable income except that nothing shall be construed as limiting the ability of the Tax Administrator to administer, audit, or enforce the provisions of this chapter including making all necessary adjustments and allocations to adjusted federal taxable income to produce a fair and proper allocation of net profits to the City; (2) Division (k)(1) of this section shall not apply to any taxpayer required to file a return under RC 5745.03 or to the net profits from a sole proprietorship; (l) For taxable years beginning on or after January 1, 2004, in the case of a taxpayer who has a net profit from a business or profession that is operated as a sole proprietorship, or in the case of a taxpayer who has a net profit from a business and the taxpayer is an individual, the City shall not tax or use as the base for determining the amount of the net profit that shall be considered as having a taxable situs in the City, an amount other than the net profit required to be reported on Internal Revenue Service Schedules C or F from such sole proprietorship for the taxable year; and (m) For taxable years beginning on or after January 1, 2004, in the case of a taxpayer who has a net profit from rental activity required to be reported on Internal Revenue Service Schedule E, the City shall not tax or use as the base for determining the amount of the net profit that shall be considered as having a taxable situs in the City, an amount other than the net profit from rental activities required to be reported by the taxpayer on Schedule E for the taxable year. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0502 Effective Date

§ 191.0502 Effective Date (a) The city income tax shall be levied, imposed, collected and paid on any and all qualifying wages, net profits and taxable income as provided in Section 191.0501, earned and/or received on and after January 1, 1967. (b) Chapter 192, effective January 1, 2016, and corresponding changes to RC Chapter 718, apply to municipal taxable years beginning on or after January 1, 2016. (Ord. No. 1412-15. Passed 11-23-15, eff. 1-1-16)

Codified Ordinances of Cleveland § 191.0701 Method of Determination

§ 191.0701 Method of Determination This Section does not apply to taxpayers that are subject to and required to file reports under RC Chapter 5745. (a) Except as otherwise provided in division (d) of this section, for taxable years beginning on or after January 1, 2004, the net profits from a business or profession conducted both within and without the City shall be considered as having a taxable situs in the City for purposes of imposing the city income tax to the extent of the amount determined by multiplying the entire net profits by a business allocation percent determined by the average ratio of the following: (1) The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City during the taxable period to the average original cost of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. As used in this division (a)(1), “real property” shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereof by eight (8). (2) Wages, salaries and other compensation paid during the taxable period to persons employed in the business or profession for services performed in the City to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed, excluding compensation that is not taxable by the City under RC 718.011. (3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the City to gross receipts of the business or profession during the same period from sales and services, wherever made or performed. In the event that the foregoing apportionment formula does not produce an equitable result, another basis may be substituted, under the Rules and Regulations, so as to produce an equitable result. (b) For taxable years beginning on or after January 1, 2004, no taxpayer shall use the books and records method of apportionment. Except as otherwise provided in RC 718.02 and division (a) of this section, all taxpayers shall use the statutory apportionment formula set forth in this section. (c) Except as otherwise provided in division (d) of this section, for taxable years beginning on or after January 1, 2004, the net profits from rental activity not constituting a business or profession shall be subject to tax by the City only if the property generating the net profit is located in the City. (d) This section shall not apply to individuals who are residents of the City and, except as otherwise provided in RC 718.01, the City shall impose its tax on all income earned and/or received by residents of the City from whatever source derived in accordance with Section 191.0501 of this chapter. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0702 Sales Made in the City

§ 191.0702 Sales Made in the City As used in Section 191.0701(a)(3), “sales made in the City” means: (a) All sales of tangible personal property delivered within the City regardless of where title passes if shipped or delivered from a stock of goods within the City; (b) All sales of tangible personal property delivered within the City regardless of where title passes even though transported from a point outside the City, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City, and the sales result from such solicitation or promotion; or (c) All sales of tangible personal property shipped from a place within the City to purchasers outside of the City regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0703 Total Allocation

§ 191.0703 Total Allocation Add together the percentages determined in accordance with Section 191.0701(a), or such of the aforesaid percentages as are applicable to the particular taxpayer, and divide the total so obtained by the number of percentages used in deriving the total in order to obtain the business allocation percentage referred to in Section 191.0701. A factor is applicable even though it may be allocable entirely within or without the City. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0704 Rentals

§ 191.0704 Rentals (a) Rental income received by a taxpayer shall be included in the computation of net profits from business activities under divisions (c) to (e) of Section 191.0501, only if and to the extent that the rental, ownership, management or operations of the real estate from which such rentals are derived, whether so rented, managed or operated by a taxpayer individually or through agents or other representatives, constitutes a business activity of the taxpayer in whole or in part. (b) Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of one hundred twenty-five dollars ($125.00) per month, it shall be prima facie evidence that the rental, ownership, management or operation of such properties, is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax. However, in the case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross or net sales, receipts or profits, of the lessee, whether or not such rental exceeds one hundred twenty-five dollars ($125.00) per month; provided further that in the case of farm property, the owner shall be considered engaged in a business activity when he or she shares in crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds one hundred twenty-five dollars ($125.00) per month. It is provided further that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds one hundred twenty-five dollars per month ($125.00). (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.0705 Operating Loss; Carry Forward

§ 191.0705 Operating Loss; Carry Forward (a) The portion of a net operating loss sustained in any taxable year subsequent to January 1, 1967, allocable to the City may be applied against the portion of the net profit of succeeding tax years allocable to the City, until exhausted but in no event for more than five (5) taxable years immediately following the year in which the loss occurred. No portion of a net operating loss shall be carried back against net profits of any prior year. (b) The portion of net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City. (c) The Tax Administrator shall provide by Rules and Regulations the manner in which such net operating loss carry forward shall be determined. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.0901 Sources of Income Not Taxed

§ 191.0901 Sources of Income Not Taxed The tax provided for in this chapter shall not be levied on the following: (a) Military pay or allowance of members of the armed forces of the United States and of members of their reserve components, including the Ohio National Guard; (b) Income of religious, fraternal, charitable, scientific, literary, or educational institutions to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities; (c) Proceeds from welfare benefits, unemployment benefits, social security benefits; (d) Proceeds of insurance paid by reason of the death of the insured; pensions, disability benefits, annuities, or gratuities not in the nature of compensation for services rendered from whatever source derived; (e) Receipts from seasonal or casual entertainment, amusements, sports events, and health and welfare activities when any such are conducted by bona fide charitable, religious, or educational organizations and associations; (f) Alimony received; (g) Personal earnings of any natural person under eighteen (18) years of age; (h) Compensation for personal injuries or for damages to property by way of insurance or otherwise; (i) Interest, dividends, gains, and other revenue from intangible property described in RC 718.01(A)(5); (j) Gains from involuntary conversion; cancellation of indebtedness, to the extent exempt from federal income tax; interest on Federal obligations; items of income already taxed by the State that the City is specifically prohibited from taxing; and income of a decedent’s estate during the period of administration, except such income from the operation of a business; (k) An S corporation shareholder’s distributive share of net profits of the S corporation to the extent such distributive shares are allocated or apportioned to sources outside the State of Ohio other than any portion of the distributive shares of net profits that represents wages as defined in Section 3121(a) of the Internal Revenue Code or net earnings from self-employment as defined in Section 1402(a) of the Internal Revenue Service Code; (l) The rental value of a parsonage, or the rental allowance furnished as compensation and actually used for a parsonage, by a minister; (m) Compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce; (n) Compensation and net profits, the taxation of which is prohibited by the Constitution of the State or any act of the Ohio General Assembly limiting the power of the City to impose net income tax; (o) Only the income items listed in this Section 191.0901 are not subject to the tax imposed by this chapter. All other compensation, net profits and other income earned and/or received by a taxpayer shall be subject to the tax imposed by this chapter unless prohibited by State or federal law. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1101 Date for Filing Returns

§ 191.1101 Date for Filing Returns (a) Each taxpayer who engages in business or whose qualifying wages are subject to the tax imposed by this chapter, except as herein provided, shall, whether or not a city income tax is due thereon, make and file a return on or before April 30 of the year following November 28, 1966, and on or before April 30 of each year thereafter. When the return is made for a fiscal year or other period different from the calendar year, the return shall be filed within four (4) months from the end of such fiscal year or period. (b) Unless the filing exemption in division (e) of this section applies, for taxable years beginning after 2003, each taxpayer shall, whether or not a city income tax is due thereon, make and file an annual city income tax return or report on the fifteenth (15th) day of the fourth (4th) month following the end of the taxpayer’s taxable year. (c) No taxpayer shall be required to file an annual city income tax return or report prior to the filing date for the corresponding tax reporting period as prescribed for such taxpayer under the Internal Revenue Code. (d) Tax returns required to be filed under this section shall be deemed filed when postmarked by the United States Postal Service or the date of receipt recorded by authorized delivery service as defined in RC 5703.056. Tax returns otherwise delivered to the Tax Administrator during normal business hours shall be deemed filed on the date received. (e) The Tax Administrator is authorized to provide by regulation that the return of an employer, showing the amount of tax deducted by the employer from the qualifying wages of an employee, and paid by him, her or them to the Tax Administrator shall be accepted as the return required of any employee whose sole income, subject to tax under this chapter, is such qualifying wages. This filing exemption is limited to nonresident taxpayers whose sole income is qualifying wages for which the tax imposed by this chapter has been withheld and remitted to the City by the employer. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1102 Form and Content of Return

§ 191.1102 Form and Content of Return The city income tax return shall be filed with the Tax Administrator on a form prescribed by and obtainable upon request from the Tax Administrator or on a generic form in accordance with RC 718.05, setting forth: (a) The aggregate amounts of all qualifying wages, net profits and all other taxable income earned and/or received by the taxpayer during the taxable year and subject to the city income tax; (b) The amount of the tax imposed by this chapter on such qualifying wages, net profits; and all other taxable income; (c) Such other pertinent statements, schedules, information, returns, copies of federal or state tax returns or any other information as the Tax Administrator may require; and (d) In accordance with RC 718.051 and the Rules and Regulations, taxpayers subject to the city income tax on the net profits from a business or profession may file the city income tax return by using the Ohio Business Gateway. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.1103 Extension of Time for Filing Returns

§ 191.1103 Extension of Time for Filing Returns (a) Except as otherwise provided in division (g) of this section, any taxpayer who has requested an extension for filing a federal income tax return may request an extension for filing the city income tax return for the same taxable year by filing a copy of the request for federal extension with the Tax Administrator in accordance with RC 718.05 and the Rules and Regulations. Any taxpayer not required to file a federal income tax return may request an extension for filing the city income tax return in accordance with RC 718.05 and the Rules and Regulations. (b) Requests for extensions are not automatic and may be denied in accordance with RC 718.05. (c) If granted, request for extensions filed before January 1, 2004, shall extend the due date of the city income tax return for a period not less than the period of the federal extension requested. (d) For taxable years beginning after 2003, if the request for extension to file the city income tax return is granted, the extended due date shall be the last day of the month following the month to which the due date of the federal income tax return has been extended. (e) The granting of an extension to file the city income tax return does not extend the last date to pay any city income tax due without penalty or interest in accordance with Sections 191.1501 and 191.1502 of this chapter. (f) No late filing penalty shall be imposed if the city income tax return is filed on or before the due date as extended. (g) In accordance with RC 718.051 and the Rules and Regulations, taxpayers subject to the city income tax on the net profits from a business or profession that have received an extension to file the federal income tax return by using the Ohio Business Gateway will receive an extension to file the city income tax return for the same taxable year provided that, the requirements of RC 718.051 are met. In accordance with that Section, the extended due date will be the last day of the same month to which the due date for filing the federal return has been extended. (h) Extensions to file the city income tax return granted through the Ohio Business Gateway do not extend the time to pay any city income tax due without penalty or interest in accordance with Sections 191.1501 and 191.1502 of this chapter. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1104 Consolidated Returns

§ 191.1104 Consolidated Returns (a) Filing of consolidated returns may be permitted or required in accordance with the Rules and Regulations prescribed by the Tax Administrator. A consolidated return may be filed by any affiliated group of corporations subject to the tax imposed by this chapter if that affiliated group filed for the same taxable year a consolidated return for federal income tax purposes pursuant to Section 1501 of the Internal Revenue Code. If an affiliated group of corporations subject to the tax imposed by this chapter is required to file a consolidated return or files a consolidated return in accordance with this section, the affiliated group of corporations must continue to file consolidated returns including that group of corporations and any other group of corporations included in the federal consolidated filing group for all subsequent taxable years that the group files a consolidated tax return for federal tax purposes unless, on or before the due date for filing the city income tax return for the taxable year, the affiliated group obtains written permission from the Tax Administrator to file separate returns for that year. (b) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the City constituting a portion only of its total business, the Tax Administrator shall require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the City. If the Tax Administrator finds that net profits are not properly allocated to the City by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates or transactions with such division, branch, factory, office, laboratory or activity or by some other method, the Tax Administrator shall make such allocation to produce a fair and proper allocation of net profits to the City. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.1105 Amended Returns

§ 191.1105 Amended Returns (a) Where necessary an amended return shall be filed in order to report additional income and pay any additional city income tax due, or claim a refund of city income tax overpaid, subject to the requirements, limitations, or both, contained in Sections 191.1701 to 191.1703, 191.1902 and 191.1903. Such amended return shall be on a form prescribed by and obtainable upon request from the Tax Administrator. A taxpayer may not change the method of accounting, filing status or method of apportionment of the net profits after the due date for filing the original city income tax return. (b) Within three (3) months from the final determination of any federal tax liability affecting the taxpayer’s city tax liability, such taxpayer shall make and file an amended city return showing income subject to the city income tax based upon such final determination of federal tax liability, and pay any additional city income tax shown due thereon or make claim for refund of any over payment. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1301 Payment of Tax on Filing of Return

§ 191.1301 Payment of Tax on Filing of Return (a) The taxpayer making a city income tax return shall, at the time of the filing thereof, pay to the Tax Administrator the amount of taxes shown as due thereon. However, where any portion of the tax so due has been deducted at the source pursuant to the provisions of Section 191.1302, or where any portion of the tax has been paid by the taxpayer pursuant to the provisions of Section 191.1303, or where an income tax has been paid to another municipality, credit for the amount so paid in accordance with Section 191.1902, 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 the return. (b) Subject to the limitations set forth in Section 191.1702, any taxpayer who has overpaid the amount of tax to which the City is entitled under the provisions of this chapter may have such overpayment applied against any subsequent liability hereunder or, at his or her 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 assessed, collected or refunded. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1302 Collection at Source

§ 191.1302 Collection at Source (a) In accordance with this chapter, and the Rules and Regulations, each employer, agent of any employer or other payer within or doing business within the City who employs one (1) or more persons shall deduct when any qualifying wages are earned and/or received by the taxpayer, the amount of city income tax imposed by Section 191.0501 on the gross qualifying wages earned and/or received by the taxpayer and except as otherwise provided in divisions (f) and (g) of this section shall, on or before the twentieth day of the month following the close of each calendar quarter make a return and pay to the Tax Administrator the amount of city income taxes so deducted from such qualifying wages, subject to the provisions of divisions (c) to (e) of this section. Returns shall be on a form or forms prescribed by or acceptable to the Tax Administrator, and shall be subject to the Rules and Regulations prescribed therefor by the Tax Administrator. Such employer shall be liable for the payment of the city income tax required to be deducted and withheld, whether or not such taxes have in fact been withheld. (b) Each employer, agent of any employer or other payer in collecting the city income tax shall be deemed to hold the same, until payment is made by such employer, agent of any employer or other payer to the City, as a trustee for the benefit of the City and any such tax collected by such employer, agent of any employer or other payer from his or her employees shall, until the same is paid to the City, be deemed a trust fund in the hands of such employer, agent of any employer or other payer. Each employer, agent of any employer and other payer shall be liable for the payment of city income tax required to be deducted and withheld, whether or not such taxes have in fact been withheld. (c) Each employer, agent of any employer or other payer who deducts and withholds city income tax of one hundred dollars ($100.00) or more per month shall pay to the Tax Administrator before the twentieth of the following month the amount of taxes so deducted on a monthly basis beginning with the first month the employer, agent of any employer or other payer exceeds one hundred dollars ($100.00) in city income taxes withheld. (d) Payments shall be reported on a form or forms prescribed by and obtainable upon request from the Tax Administrator. (e) No employer, agent of an employer or other payer shall be required to withhold the city income tax on qualifying wages or other taxable income paid to domestic servants employed by such employer or other payer exclusively in or about such employer or other payer’s residence, even though such residence is in the City, but such employee shall be subject to all of the requirements of this chapter. (f) (1) Any person who shall employ or contract for the services of any entertainer, entertainment act, sports event, promotional booth, special event, band, orchestra, rock group, theatrical performance; or (2) Any person who, acting as a promoter, booking agent or employer, engages the services of, or arranges the appearance of any entertainer, entertainment act, sports event, band, orchestra, rock group, theatrical performance in the City, and who makes any payment arising from said appearance in the City shall be deemed to be an employer and shall, for purposes of the collection of the city income tax, be required to withhold, report and remit as required by this section to the Tax Administrator the city income tax at the rate provided in Section 191.0501 hereof, on the gross amount so paid to the entertainer, athlete, etc. on completion of the engagement for the services performed in the City. The reports required by this section shall be made and filed on forms prescribed by and obtainable from the Tax Administrator. (g) Any person, as defined in Section 191.0314, who rents facilities to any entertainer, entertainment act, sport event, promotional booth, special event, band, orchestra, rock group, theatrical performance for use in performing services in the City, and who makes any payment arising from said use of facilities shall be deemed to be an employer and shall, for purposes of the collection of the city income tax, be required to withhold, report and remit as required by this section to the Tax Administrator the city income tax at the rate provided in Section 191.0501 hereof based on the gross amount so paid to the entertainer, athlete, etc. on completion of the engagement for the services performed in the City. The reports required by this section shall be made and filed on forms prescribed by and obtainable from the Tax Administrator. (h) For taxable years beginning after 2003, no employer or agent of an employer or other payer shall be required to withhold tax with respect to any amount other than qualifying wages. Nothing in this section prohibits an employer from withholding tax on a basis greater than qualifying wages. (i) Every employer, agent of an employer or other payer required to withhold and remit the city income tax in accordance with this chapter, shall be directly liable to the City for the payment of such tax, whether or not actually withheld or collected. (j) For taxable years beginning after 2003, no employer is required to make any withholding with respect to an individual’s disqualifying disposition of an incentive stock option if, at the time of the disqualifying disposition, the individual is not an employee of the corporation with respect to whose stock the option has been issued. (k) (1) An employee is not relieved from liability for paying the city income tax by the failure of the employer to withhold the tax as required by this Section 191.1302 or the employer’s exemption from the requirement to withhold the tax. (2) The failure of an employer to remit to the City the tax withheld relieves the employee from liability for that tax unless the employee colluded with the employer in connection with the failure to remit the tax withheld. (l) In accordance with RC 718.051, the Rules and Regulations of the State Tax Commissioner, this chapter and the Rules and Regulations, any employer subject to this Section 191.1302 may report the amount of city income tax withheld from qualifying wages and remit such amounts by using the Ohio Business Gateway. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1303 Declarations of Income Not Collected at Source

§ 191.1303 Declarations of Income Not Collected at Source Every person who anticipates earning and/or receiving any taxable income which is not subject to Section 191.1302, or who engages in any business, profession, enterprise or activity subject to the tax imposed by Section 191.0501 shall file a declaration setting forth such estimated income or the estimated profit or loss from such business activity together with the estimated tax due thereon, if any. However, if a person’s income is wholly from qualifying wages from which the city income tax will be withheld and remitted to the City in accordance with Section 191.1302, such person need not file a declaration. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1304 Filing of Declaration

§ 191.1304 Filing of Declaration (a) For taxable years beginning after 2003, the declaration required by Section 191.1303 shall be filed on or before April 15 of each year during the effective period set forth in Section 191.0502 or on or before the fifteenth day of the fourth month following the date the taxpayer becomes subject to tax for the first time. (b) For taxable years beginning after 2003, for those taxpayers reporting on a fiscal year or period other than a calendar year, the declaration required by Section 191.1303 shall be filed on or before the fifteenth day of the fourth month after the beginning of each fiscal year or period. (c) In accordance with RC 718.051, the Rules and Regulations of the State Tax Commissioner, this chapter, and the Rules and Regulations, any taxpayer subject to the city income tax on the net profits from a business or profession may file declarations of estimated net profits and pay estimated city tax due thereon by using the Ohio Business Gateway. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1305 Form of Declaration

§ 191.1305 Form of Declaration (a) The declaration required by Section 191.1303 shall be filed upon forms prescribed by and obtainable from the Tax Administrator, or acceptable generic form, and credit shall be taken for City income tax to be withheld from any portion of such income. In accordance with the provisions of Section 191.1902, credit may be taken for city income tax to be paid to or withheld and remitted to another taxing municipality. (b) The original declaration, or any subsequent amendment thereof, may be increased or decreased on or before any subsequent quarterly payment date as provided for herein. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1306 Payment to Accompany Declaration

§ 191.1306 Payment to Accompany Declaration (a) For taxpayers who are individuals, the declaration of estimated city income tax required by Section 191.1303, shall be accompanied by a payment of at least twenty-two and one-half percent (22.5%) of such taxpayer’s estimated city income tax for the taxable year, and at least twenty-two and one-half percent (22.5%) of such estimated city income tax shall be paid on or before each of the last day of the seventh, tenth and thirteenth months after the beginning of the taxable year. (b) For taxpayers that are not individuals, the declaration of estimated city income tax required by Section 191.1303, shall be accompanied by a payment of at least twenty-two and one-half percent (22.5%) of such taxpayer’s estimated city income tax for the taxable year, and at least twenty-two and one-half percent (22.5%) of such estimated city tax shall be paid on or before each of the fifteenth day of the sixth, ninth and twelfth months after the beginning of the taxable year. (c) No declaration shall be deemed filed unless accompanied by the required payment of estimated city income tax. (d) Declarations required to be filed by Section 191.1303 shall be deemed filed when the declaration with required payment are post-marked by the United States Postal Service or the date of receipt recorded by authorized delivery service as defined in RC 5703.056. Declarations otherwise delivered with the required payment to the Tax Administrator during normal business hours shall be deemed filed on the date received. (e) A declaration of estimated city income tax may be amended at any time, in accordance with the Rules and Regulations. In the event that an amended declaration has been filed, the unpaid balance shown due thereon shall be paid in equal installments on or before the remaining payment dates set forth in this section. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1307 Annual Return

§ 191.1307 Annual Return For taxable years beginning after 2003, the annual city income tax return required to be filed after filing such declaration or amended declaration shall be filed on or before the fifteenth day of the fourth month following the end of the taxpayer’s taxable year (calendar or fiscal year). Any balance of city income tax remaining due in accordance with Section 191.1301 shall be remitted with the city income tax return. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1501 Interest on Unpaid Tax

§ 191.1501 Interest on Unpaid Tax All city income taxes imposed and all monies withheld or required to be withheld by employers under the provisions of this chapter and remaining unpaid after they become due shall bear interest at the rate of one and one-half percent (1.5%) per month or fraction thereof. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1502 Penalties on Unpaid Tax

§ 191.1502 Penalties on Unpaid Tax In addition to interest as provided in Section 191.1501, penalties are imposed on all city income tax remaining unpaid after it becomes due as follows: (a) For failure to pay city income taxes due other than taxes withheld: one and one-half percent (1.5%) of such outstanding tax per month for each month that the tax remains outstanding or fraction thereof; (b) For failure to file an annual city income tax return by the due date or extended due date: a minimum of twenty-five dollars ($25.00); (c) For failure to remit city income taxes withheld or required to be withheld from employees: ten percent (10%) of the outstanding unremitted tax per month or fraction thereof for each month that the unremitted tax remains outstanding; and (d) In accordance with the Rules and Regulations, the Tax Administrator may impose such other interest and penalty assessment as the Tax Administrator deems necessary for the administration and enforcement of the provisions of this chapter. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1503 Exceptions to Penalties

§ 191.1503 Exceptions to Penalties A penalty shall not be assessed on an additional tax assessment made by the Tax Administrator when a city income tax return has been filed in good faith and the tax paid thereon within the time prescribed by Section 191.1101 provided that the additional tax assessment shall be paid within the time prescribed by the Tax Administrator for payment of such additional tax; and provided further, that in the absence of fraud, neither penalty nor interest shall be assessed on any additional city income tax assessment resulting from a federal audit, providing an amended city income tax return is filed and the additional city income tax is paid within three (3) months after a final determination of the federal income tax liability. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1504 Abatement of Interest and Penalty

§ 191.1504 Abatement of Interest and Penalty Upon recommendation of the Tax Administrator, the Board of Review may abate penalty or interest, or both, or upon a written appeal by the taxpayer upon the refusal of the Tax Administrator to recommend abatement of penalty, interest, or both, the Board may nevertheless abate penalty or interest, or both, for reasonable cause shown. The Rules and Regulations may authorize the Tax Administrator to abate penalty, interest, or both, for reasonable cause shown in certain circumstances. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.1505 Violations

§ 191.1505 Violations No person shall: (a) Fail, neglect, or refuse to make any return or declaration required by this chapter; or (b) Knowingly make any incomplete, false, or fraudulent return; or (c) Willfully fail, neglect, or refuse to pay the tax, penalties or interest imposed by this chapter; or (d) Fail, neglect, or refuse to withhold city income tax from his or her employees; or (e) Refuse to permit the Tax Administrator or any duly authorized agent or employee to examine his or her books, records, papers, and federal income tax returns relating to the income or net profits of a taxpayer; or (f) Fail to appear before the Tax Administrator and to produce his or her books, records, papers or Federal income tax returns relating to the income or net profits of a taxpayer upon order or subpoena of the Tax Administrator; or (g) Refuse to disclose to the Tax Administrator any information with respect to such person’s income or net profits or, in the case of a person responsible for maintaining information relating to his or her employers’ income or net profits, such person’s employer’s income or net profits; or (h) Fail to comply with the provisions of this chapter or any order or subpoena of the Tax Administrator authorized hereby; or (i) To avoid imposition or collection of city income tax, willfully give to an employer or prospective employer false information as to his or her true name, correct social security number and residence address, or willfully fail to promptly notify an employer or a prospective employer of any change in residence address and date thereof; or (j) Fail, as an employer, agent of an employer, or other payer, to maintain proper records of employees residence addresses, total wages paid and city tax withheld, or to knowingly give the Tax Administrator false information; or (k) Fail to remit or cause to be remitted the city income tax withheld from all qualifying wages of employees to the City as required by Section 191.1302; or (l) Willfully fail, neglect, or refuse to make any payment of estimated city income tax for any taxable year or part of any taxable year in accordance with Section 191.1306; or (m) Attempt to do anything whatsoever to avoid the payment of the whole or any part of the tax, penalties or interest imposed by this chapter. (n) For purposes of this Section 191.1505, any violation that does not specify a culpable mental state or intent, shall be one of strict liability and no culpable mental state or intent shall be required for a person to be guilty of that violation. (o) For purposes of this Section 191.1505, the term “person” shall, in addition to the meaning prescribed in Section 191.0314, include in the case of a corporation, association, pass-through entity or unincorporated business entity not having any resident owner or officer within the city, any employee or agent of such corporation, association, pass-through entity or unincorporated business entity who has control or supervision over or is charged with the responsibility of filing the city income tax returns and making the payments of the city income tax as required by Section 191.1101, 191.1302 and Section 191.1306. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1506 Limitation of Prosecution

§ 191.1506 Limitation of Prosecution Prosecutions for an offense made punishable under this chapter shall be commenced within three (3) years after the commission of the offense, except that in the case of fraud, failure to file a return, or the omission of twenty-five percent (25%) or more of the taxable income required to be reported, prosecutions shall be commenced within six (6) years after the commission of the offense. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1507 Failure to Procure Tax Forms

§ 191.1507 Failure to Procure Tax Forms The failure of any employer, other payer, taxpayer or person to receive or procure a city income tax return, declaration or other required form shall not excuse such employer, other payer, taxpayer or person from making any information return, or city income tax return or declaration, from filing such return, or from paying the city income tax due. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1701 Unpaid Taxes Recoverable as Other Debts

§ 191.1701 Unpaid Taxes Recoverable as Other Debts All taxes imposed by this chapter shall be collectible, together with any interest and penalties thereon, as other debts of like amount are recoverable, including, but not limited to, collection by suit. Any suit shall be brought within three (3) years after the city income tax was due or the return was filed, whichever is later. Except in the case of fraud, of omission of twenty-five percent (25%) or more of taxable income required to be reported, or of failure to file a return, no additional assessment shall be made after three (3) years from the time the city income tax was due or the city income tax return was filed, whichever is later. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1702 Refund of Taxes Erroneously Paid

§ 191.1702 Refund of Taxes Erroneously Paid (a) 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 within three (3) months after the final determination of the federal tax liability, whichever is later. (b) No interest shall be paid by the City on any refunded overpayment of city income tax if the overpayment is refunded within ninety (90) days after the due date for filing the city income tax return or ninety (90) days after the complete return is filed, whichever is later. For purposes of computing the payment of interest on overpayments, no amount of city income tax for any taxable year shall be treated as having been paid before the date on which the city income tax return for that taxable year was due, without regard to any extension of time for filing that return. Interest on any overpayment of city income tax shall be paid at the rate of interest prescribed by RC 718.12 and RC 5703.47. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.1703 Amounts of Less than One Dollar

§ 191.1703 Amounts of Less than One Dollar Amounts of less than one dollar ($1.00) shall not be collected or refunded. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.1902 Cleveland Resident Subject to Income Tax in Other Municipality

§ 191.1902 Cleveland Resident Subject to Income Tax in Other Municipality (a) When a resident is subject to and has paid a municipal income tax in another municipality on the same income taxable under this chapter, regardless of whether such other municipality allows a credit to its residents, and the rate of Cleveland’s municipal income tax is less than two and one-half percent (2.5%), such resident may claim a credit of the amount of income tax paid to the other municipality, but not in excess of fifty percent (50%) of the tax imposed by this chapter. When a resident is subject to and has paid a municipal income tax in another municipality on the same income taxable under this chapter regardless of whether such other municipality allows a credit to its residents and the rate of Cleveland’s municipal income tax is two and one-half percent (2.5%) or more, such resident may claim a credit of the amount of income tax paid to the other municipality which credit shall not exceed the tax assessed by this chapter on the resident’s taxable income subject to tax by another municipality. (b) In the event a resident is entitled to credit for taxes paid another municipality, such resident is required to file a return on a form in such manner as the Tax Administrator may prescribe. (c) Assignment of any claim for refund to which a resident may be entitled from another municipality shall be tentatively accepted as payment of that portion of city income tax represented by such assignment. However, if satisfactory evidence is offered that the taxpayer is entitled to the claim covered by the assignment, such taxpayer shall not be deprived of credit therefor because of fault or neglect on the part of either municipality. (d) In the event such resident fails, neglects or refuses to file such return or form as is prescribed by the Tax Administrator, such resident shall not be entitled to such credit and shall be considered in violation of this chapter for failure to file a return and make payment of taxes due hereunder. (e) A resident owner of a pass-through entity that does not conduct business in the City and that has paid an income tax to another municipality may claim a credit equal to the lesser of (i) the resident owner’s proportionate share of the amount, if any, of income tax paid by the pass-through entity to another municipality in the State; or (ii) the resident owner’s proportionate share of the amount of city income tax that would be imposed on the pass-through entity if the pass-through entity conducted business in the City. (f) In no case shall the amount of the credit allowed under division (e) of this section exceed the tax assessed by this chapter on the resident owner’s taxable income subject to tax by another municipality. (g) The credits provided in RC 718.021 and RC 718.121 shall be available to residents, if applicable. (h) Except as otherwise provided in RC 718.021, RC 718.121 and RC 718.14, this chapter and the Rules and Regulations, where a nonresident is subject to the tax imposed by this chapter and is subject to tax on the same taxable income in the municipality where such nonresident resides, no credit against the city income tax levied by this chapter shall be allowed. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.1903 Claim for Credit

§ 191.1903 Claim for Credit Any claim for credit for taxes paid by a resident to another municipality on the same income taxable under this chapter or claim for or assignment of any refund due to the credit provided for in Section 191.1902, must be filed with the Tax Administrator on a form acceptable to the Tax Administrator within three (3) years from the due date of the city income tax return. If the resident, fails, neglects, or refuses to file such claim for refund or credit within the time prescribed by this section, such failure, neglect, or refusal shall render such credit, claim for refund, or assignment null and void and the resident shall be liable for the full amount of tax assessed by this chapter, together with interest and penalties. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2001 Deposit of Funds

§ 191.2001 Deposit of Funds All monies collected by the Tax Administrator under the provisions of this chapter shall be kept in a fund segregated from and not commingled with any other funds from any sources whatsoever. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2002 Monthly Report of Undistributed Balance

§ 191.2002 Monthly Report of Undistributed Balance The Tax Administrator shall prepare and furnish to Cleveland City Council each month a statement containing the following information: (a) Total undistributed balance from the previous month; (b) Actual income for the month of the report including a summary of the amount of delinquent taxes, penalties and interest collected for that month; (c) Disbursements made during the month, identifying to whom and from which collection period. (d) Undistributed balance and indicate thereon: (1) Current income in the process of collection for current distribution; (2) Current income reserved for collection agency expenses; (3) Funds belonging to nonparticipating municipalities and period of collection of the fund; (4) Sources of balance of fund, if any. For the purpose of this section “current income” means income received during the preceding three (3) month period; “current distribution” means quarterly distribution, and “source of funds” means the period of time during which funds were collected. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2101 Disbursement of Funds Collected

§ 191.2101 Disbursement of Funds Collected The funds collected under the provisions of this chapter shall be disbursed in the following manner: (a) First, such part thereof as shall be necessary to defray all expenses of collecting the city income tax levied by this chapter shall be paid. (b) The balance remaining after payment of the expenses referred to in division (a) hereof shall be deposited in the General Fund for Municipal purposes set forth in Section 191.0101. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2301 Receipt and Records of Tax

§ 191.2301 Receipt and Records of Tax The Tax Administrator shall collect and receive the tax imposed by this chapter in the manner prescribed herein from the taxpayers, keep an accurate record thereof, and report all monies so received. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2302 Enforcement of Collection

§ 191.2302 Enforcement of Collection The Tax Administrator shall enforce payment of all income taxes owing to the City, keep accurate records for a minimum of five (5) years, showing the amount due from each taxpayer required to file a declaration of estimated municipal income tax and make any return, or both, including returns of taxes withheld and show the dates and amounts of payments thereof. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2303 Authority to Make and Enforce Regulations

§ 191.2303 Authority to Make and Enforce Regulations (a) The Tax Administrator is hereby charged with the enforcement of the provisions of this chapter and is hereby empowered, subject to the approval of the Board of Review, to adopt and promulgate and to enforce and interpret rules and regulations relating to any matter or thing pertaining to the collection of taxes and the administration and enforcement of the provisions of this chapter, including provisions for the re-examination and correction of returns. (b) Upon the request of a taxpayer or employer subject to this chapter, the Tax Administrator is empowered to issue Administrative Rulings interpreting this chapter and the Rules and Regulations. Those Administrative Rulings shall be binding and effective upon issuance as to the taxpayer or employer requesting the Ruling. Administrative Rulings may be appealed to the Board of Review. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2304 Authority to Arrange Installment Payments

§ 191.2304 Authority to Arrange Installment Payments (a) The Tax Administrator is authorized to arrange for the payment of unpaid taxes, interest and penalties on a schedule of installment payments, not to exceed twelve (12) months, when the taxpayer has proved to the Tax Administrator that, due to certain hardship conditions, he or she 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 or her under this chapter. (b) 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 Sections 191.1701 and 191.1505 shall apply. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2305 Authority to Determine Amount of Tax Due

§ 191.2305 Authority to Determine Amount of Tax Due In any case where a taxpayer has failed to file a return or has filed a city income tax return which does not show the proper amount of tax due, the Tax Administrator may determine the amount of city income tax appearing to be due the City from the taxpayer and may send to such taxpayer a written statement showing the amount of tax so determined, together with interest and penalties thereon, if any. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2306 Investigations

§ 191.2306 Investigations The Tax Administrator, or any authorized agent, representative or employee, is authorized to examine the books, papers, records and federal income tax returns of any employer or of any taxpayer or any person subject to, or whom the Tax Administrator believes is subject to the provisions of this chapter, for the purpose of verifying the accuracy of any return made, or, if no return was made, to ascertain the tax or withholding due under this chapter. Every such employer, supposed employer, taxpayer or supposed taxpayer is directed and required to furnish within fifteen (15) days upon written request by the Administrator, or his or her duly authorized agent, representative, or employee, the means, facilities and opportunities for making such examinations and investigations as are hereby authorized. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2307 Authority to Compel Production of Records

§ 191.2307 Authority to Compel Production of Records The Tax Administrator is hereby authorized to order any person presumed to have knowledge of the facts to appear before him or her and may examine such person, under oath, concerning any income which was or should have been reported or withheld for city income tax purposes or any transaction tending to affect such income, and for this purpose may compel the production of books, papers, records and federal income tax returns and the attendance of all persons before him or her, whether as parties or witnesses, whenever he or she believes such persons have knowledge of such income or information pertinent to such inquiry. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2308 Refusal to Produce Records

§ 191.2308 Refusal to Produce Records The refusal to produce books, papers, records and federal income tax returns, or the refusal to submit to such examination by any employer or persons subject or presumed to be subject to the city income tax or by any officer, agent or employee of a person subject to the city income tax or required to withhold such tax or the failure of any person to comply with the provisions of this chapter, including this section, or with an order or subpoena of the Tax Administrator is a violation of this chapter punishable in accordance with Section 191.99. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2309 Confidential Nature of Information; Disclosure of Returns and Return Information

§ 191.2309 Confidential Nature of Information; Disclosure of Returns and Return Information (a) Any information gained as a result of returns, investigations, hearings or verifications required or authorized by this chapter or RC Chapter 718 shall be confidential and no person shall disclose such information except in accordance with a proper judicial order or in connection with the performance of that person’s official duties or the official business of the City as authorized by this chapter. (b) The Tax Administrator may furnish copies of returns filed under this chapter to the Internal Revenue Service and to the State Tax Commissioner. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2310 Taxpayer Required to Retain Records

§ 191.2310 Taxpayer Required to Retain Records Every taxpayer shall retain all records necessary to compute his or her city income tax liability for a period of five (5) years from the date his or her city income tax return is filed or the city income taxes required to be withheld are paid. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2311 Authority to Contract for Central Collection Facilities

§ 191.2311 Authority to Contract for Central Collection Facilities The Tax Administrator is authorized to enter into an agreement on behalf of the City with any other municipality or village for the purpose of administering the city income tax laws of the other municipality or village as its agent and for the purpose of providing a central collection facility for the collection of the city income tax on behalf of the other municipality or village. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2312 Withholding Taxes from Federal Employees

§ 191.2312 Withholding Taxes from Federal Employees The Tax Administrator is authorized to enter into an agreement on behalf of the City with the United States Secretary of the Treasury for the purpose of withholding city income or employment taxes from the compensation of federal employees whose regular place of federal employment is within the territorial jurisdiction of the City. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2501 Board of Review Established

§ 191.2501 Board of Review Established A Board of Review, consisting of the Director of Public Utilities, or a person or employee in the Department of Public Utilities designated by him or her, the Director of Law, or an Assistant Director of Law designated by him or her and a member of Council to be elected by that body, is hereby created and shall be maintained to hear appeals by taxpayers of decisions and Administrative Rulings issued by the Tax Administrator regarding a municipal income tax obligation that is subject to appeal as provided in RC 718.11, this chapter or the Rules and Regulations. The Board shall select, each year for a one (1) year term, one (1) of its members to serve as Chairman and one (1) to serve as Secretary. 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 191.2309 with reference to the confidential character of information required to be disclosed by this chapter shall apply to such matters as may be heard before the Board on appeal. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2502 Board to Approve Regulations and Hear Appeals

§ 191.2502 Board to Approve Regulations and Hear Appeals All Rules and Regulations and amendments or changes thereto, which are adopted by the Tax Administrator under the authority conferred by this chapter, must be approved by the Board of Review before the same become effective. The Board shall hear and pass on appeals from any Administrative Ruling or decision issued by the Tax Administrator. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2503 Right of Appeal

§ 191.2503 Right of Appeal In accordance with RC 718.11 and Rules and Regulations, any person dissatisfied with any Administrative Ruling or decision of the Tax Administrator that is made under the authority conferred by this chapter may appeal therefrom to the Board of Review within thirty (30) days from the announcement of such Administrative Ruling or decision by the Tax Administrator. The Board shall, on hearing, have jurisdiction to affirm, reverse or modify any such ruling or decision, or any part thereof. Such appeal shall be deemed filed when postmarked by the United States Postal Service or the date of receipt recorded by authorized delivery service as defined in RC 5703.056. Appeals otherwise delivered to the Tax Administrator during normal business hours shall be deemed filed on the date received. In accordance with the procedures set forth in RC 5717.011, for matters relating to taxable years beginning on or after January 1, 2004, the taxpayer or Tax Administrator may appeal decisions of the Board of Review to the State Board of Tax Appeals or a court of common pleas as otherwise provided by law. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2701 Declaration of Legislative Intent

§ 191.2701 Declaration of Legislative Intent If any sentence, clause, section or part of this chapter, or any tax imposed against, or exemption from tax granted to, any taxpayer or forms of income specified herein is found to be unconstitutional, illegal or invalid, such unconstitutionality, illegality or invalidity shall affect only such clause, sentence, section or part of this chapter so found and shall not affect or impair any of the remaining provisions, sentences, clauses, sections or other parts of this chapter. It is hereby declared to be the intention of Council that this chapter would have been adopted had such unconstitutional, illegal or invalid sentence, clause, section or part thereof not been included in this chapter. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.2702 Collection of Tax after Termination of Chapter

§ 191.2702 Collection of Tax after Termination of Chapter (a) This chapter shall continue effective insofar as the levy of taxes is concerned until repealed, and insofar as the collection of taxes levied hereunder and actions and proceedings for collecting any tax so levied or enforcing any provisions of this chapter are concerned, it shall continue effective until all of the taxes levied in the aforesaid period are fully paid and any and all suits and prosecutions for the collection of taxes or for the punishment of violations of this chapter have been fully terminated, subject to the limitations contained in Sections 191.1701 to 191.1703 and 191.1505 to 191.1507. (b) Annual returns due for all or any part of the last effective year of this chapter shall be due on the date provided in Sections 191.1101 and 191.1302, as though the same were continuing. (Ord. No. 2393-66. Passed 11-28-66, eff. 11-28-66)

Codified Ordinances of Cleveland § 191.030101 Adjusted Federal Taxable Income

§ 191.030101 Adjusted Federal Taxable Income “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 set forth in RC 718.01(A)(1). (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.030102 Administrative Rulings

§ 191.030102 Administrative Rulings “Administrative Rulings” mean the rulings issued by the Tax Administrator, upon the request of a taxpayer or employer, interpreting this chapter and the Rules and Regulations. Administrative Rulings shall be binding and effective upon issuance as to the taxpayer or employer requesting the ruling. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.030401 Board of Tax Appeals

§ 191.030401 Board of Tax Appeals “Board of Tax Appeals” means the state board created pursuant to RC 5703.02. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031001 Intangible Income

§ 191.031001 Intangible Income “Intangible income” means that income specified in RC 718.01(A)(5) including any of the following types of income: income yield, interest, capital gains, dividends, or other income arising from the ownership, sale, exchange or other disposition of intangible property including, but not limited to, investments, deposits, money or credits as those terms are defined in RC Chapter 5701, 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, attributable to or derived from any lottery winnings or other similar games of chance. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031002 Internal Revenue Code

§ 191.031002 Internal Revenue Code “Internal Revenue Code” means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031201 Nonresident Owner

§ 191.031201 Nonresident Owner “Nonresident owner” means an individual domiciled outside the City who has a direct or indirect ownership interest in an association, pass-through entity or unincorporated business entity that conducts business in the city or a corporation that has a direct or indirect ownership interest in an association, pass- through entity or unincorporated business entity that conducts business in the City. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031301 Ohio Revised Code

§ 191.031301 Ohio Revised Code “Ohio Revised Code” means the codified statutes of the State of Ohio, as amended. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031302 Other Payer

§ 191.031302 Other Payer “Other payer” means any person, other than an individual’s employer or the employer’s agent, that pays an individual any amount included in the federal gross income of the individual. (Ord. No. 2067-05. Passed 11-28-05, eff. 12-5-05)

Codified Ordinances of Cleveland § 191.031303 Owner

§ 191.031303 Owner “Owner” means an individual, partner, member, or any other person having an ownership interest in an association, pass-through entity, or unincorporated business entity. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031304 Pass-Through Entity

§ 191.031304 Pass-Through Entity “Pass-through entity” means a partnership, limited liability company, S corporation or any other type of entity the income or profits of which are given pass- through treatment under the Internal Revenue Code. “Income from a pass-through entity” includes partnership income of partners, membership interests of members of a limited liability company, distributive shares of shareholders of an S corporation, or other distributive or proportionate ownership shares of income from other pass-through entities. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031501 Qualifying Wages

§ 191.031501 Qualifying Wages “Qualifying wages” means wages, as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted as provided in division (A)(2) of RC 718.03. “Qualifying wages” includes compensation attributable to a nonqualified deferred compensation plan or program as defined in Section 3121(v)(2)(C) of the Internal Revenue Code and compensation arising from the sale, exchange or other disposition of a stock option, the exercise of a stock option, or the sale, exchange or other disposition of stock purchased by the stock option. “Qualifying wages” does not include compensation deferred before January 1, 2004, to the extent that the deferred compensation does not constitute “qualifying wages” when paid or distributed. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031601 Resident Owner

§ 191.031601 Resident Owner “Resident owner” means an individual domiciled in the City who has an interest in an association, pass-through entity or unincorporated business entity. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031701 Rules and Regulations

§ 191.031701 Rules and Regulations “Rules and Regulations” mean the Rules and Regulations promulgated by the Tax Administrator and approved by the Board of Review. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031702 S Corporation

§ 191.031702 S Corporation “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. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)

Codified Ordinances of Cleveland § 191.031801 Taxable Situs

§ 191.031801 Taxable Situs “Taxable Situs” means that portion of a taxpayer’s net profits attributable to the City where the taxpayer conducts a business or profession both within and without the City, determined in accordance with RC 718.02. (Ord. No. 2208-04. Passed 12-13-04, eff. 12-17-04)
Source: City of Cleveland, Ohio, Codified Ordinances and City Charter (American Legal Publishing, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/cleveland/latest/cleveland_oh/0-0-0-7222Fetched: 11/1/2026

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