2012-27

ORDINANCE AMENDING SECTION 193.09 OF THE MARION CITY CODE, CREDIT TO TAX PAID TO OTHER MUNICIPALITIES OF THE MARION CITY CODE


WHEREAS, the Council has found a real and present need that exists for the City of Marion, Ohio to follow the course taken by similarly situated municipalities in Ohio to adjust the current credit formula. The Council herein finds it to be in the best interests of the citizens of the City of Marion to incorporate the following modifications of the existing City Code, some of the cited bases being: More uniform or equal application of the tax code, more efficient enforcement of the Code and ensuring equal application of law, and

BE IT ORDAINED by the Council of Marion, Marion County, Ohio:

Section 1. Marion City Code CHAPTER 193: MUNICIPAL INCOME TAX shall be amended to include the following additional obligation:

§ 193.09 CREDIT FOR TAX PAID TO OTHER MUNICIPALITIES.

(A) Every resident individual taxpayer who receives net profits, salaries, wages, commissions or other personal service compensation, for work done, or services performed or rendered outside of the municipality, if it be made to appear that he/she has paid a municipal income tax on such net profits, salary, wages, commission or other compensation to another municipality, shall be allowed a credit on the Municipal Income Tax of the amount so paid by him/her or in his/her behalf to such other municipality. The credit shall not exceed the tax assessed by the Municipal Income Tax on such net profit, salary, wages, commission or compensation earned in such other municipality where such tax is paid. Credit will not be allowed to the extent the individual is entitled to a refund of the municipal income tax paid to such other municipality. (Ord. 2005-80, passed 10-24-2005)

(B) (1) As used in division (B) of this section:

(a) Nonqualified deferred compensation plan means a compensation plan described in § 3121 (v)(2)(C) of the Internal Revenue Code.

(b) (i) Except as provided in division (B)(1)(b)(ii) of this section, “qualifying loss” means the excess, if any, of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan over the total amount of income the taxpayer has recognized for federal income tax purposes for all taxable years on a cumulative basis as compensation with respect to the taxpayer’s receipt of money and property attributable to distributions in connection with the nonqualified deferred compensation plan.

(ii) If, for one or more taxable years, the taxpayer has not paid to one or more municipal corporations income tax imposed on the entire amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan, then the "qualifying loss" is the product of the amount resulting from the calculation described in division (B)(1)(b)(i) of this section computed without regard to division (B)(1)(b)(ii) of this section and a fraction the numerator of which is the portion of such compensation on which the taxpayer has paid income tax to one or more municipal corporations and the denominator of which is the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.

(iii) With respect to a nonqualified deferred compensation plan, the taxpayer sustains a qualifying loss only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.

(c) "Qualifying tax rate" means the applicable tax rate for the taxable year for which the taxpayer paid income tax to the municipality with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan. If different tax rates applied for different taxable years, then the "qualifying tax rate" is a weighted average of those different tax rates. The weighted average shall be based upon the Municipal Income Tax paid each year with respect to the nonqualified deferred compensation plan.

(2) (a) Except as provided in division (B)(3) of this section, if a taxpayer has paid Municipal Income Tax in one or more taxable years on compensation deferred pursuant to a nonqualified deferred compensation plan and the taxpayer sustains a qualifying loss with respect to such nonqualified plan, the taxpayer shall be allowed a refundable credit for each qualifying loss.

(b) If a taxpayer has paid income tax to more than one municipal corporation with respect to the nonqualified deferred compensation plan, the credit shall be calculated on the basis the proportion the total Municipal Income tax paid bares to the income tax paid to all municipal corporations with respect to the nonqualified deferred compensation plan.

(c) In no case shall the credit exceed the cumulative Municipal Income Tax paid for all taxable years by the taxpayer with respect to the nonqualified deferred compensation plan.

(3) The credit allowed under division (B) of this section is allowed only to the extent the taxpayer's qualifying loss is attributable to:

(i) The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or

(ii) The employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified deferred compensation.

(C) A taxpayer shall be allowed a credit against the Municipal Income Tax for income tax paid to a joint economic development zone created under §715.691 or a joint economic development district created under §715.70, §715.71 or §715.72 of the Ohio Revised Code. The credit shall not exceed the tax assessed by the Municipal Income Tax on such net profit, salary, wages, commission or compensation earned in such joint economic development zone or joint economic development district where such tax is paid. Credit will not be allowed to the extent the individual is entitled to a refund of the income tax paid to such joint economic development zone or joint economic development district.

(D) If income tax or withholding tax is erroneously paid to anther municipality and refund of the erroneous payment by the other municipality is barred by the passage of time, the taxpayer or withholding agent will be given credit for the erroneous payment. The credit shall not exceed the tax assessed by the Municipal Income Tax on the income or wages on which the erroneous payment was made.

shall be amended to read as follows:


§ 193.09 CREDIT FOR TAX PAID TO OTHER MUNICIPALITIES.

(A) Every resident individual taxpayer who receives net profits, salaries, wages, commissions or other personal service compensation, for work done, or services performed or rendered outside of the municipality, if it be made to appear that he/she has paid a municipal income tax on such net profits, salary, wages, commission or other compensation to another municipality(ies), shall be allowed a 50 % (fifty percent) credit on the Municipal Income Tax of the amount so paid by him/her or in his/her behalf to such other municipality. The credit shall not exceed the tax assessed by the Municipal Income Tax on such net profit, salary, wages, commission or compensation earned in such other municipality(ies) where such tax is paid. Credit will not be allowed to the extent the individual is entitled to a refund of the municipal income tax paid to such other municipality(ies). (Ord. 2005-80, passed 10-24-2005)

(B) (1) As used in division (B) of this section:

(a) Nonqualified deferred compensation plan means a compensation plan described in § 3121 (v)(2)(C) of the Internal Revenue Code.

(b) (i) Except as provided in division (B)(1)(b)(ii) of this section, “qualifying loss” means the excess, if any, of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan over the total amount of income the taxpayer has recognized for federal income tax purposes for all taxable years on a cumulative basis as compensation with respect to the taxpayer’s receipt of money and property attributable to distributions in connection with the nonqualified deferred compensation plan.

(ii) If, for one or more taxable years, the taxpayer has not paid to one or more municipal corporations income tax imposed on the entire amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan, then the "qualifying loss" is the product of the amount resulting from the calculation described in division (B)(1)(b)(i) of this section computed without regard to division (B)(1)(b)(ii) of this section and a fraction the numerator of which is the portion of such compensation on which the taxpayer has paid income tax to one or more municipal corporations and the denominator of which is the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.

(iii) With respect to a nonqualified deferred compensation plan, the taxpayer sustains a qualifying loss only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.

(c) "Qualifying tax rate" means the applicable tax rate for the taxable year for which the taxpayer paid income tax to the municipality with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan. If different tax rates applied for different taxable years, then the "qualifying tax rate" is a weighted average of those different tax rates. The weighted average shall be based upon the Municipal Income Tax paid each year with respect to the nonqualified deferred compensation plan.

(2) (a) Except as provided in division (B)(3) of this section, if a taxpayer has paid Municipal Income Tax in one or more taxable years on compensation deferred pursuant to a nonqualified deferred compensation plan and the taxpayer sustains a qualifying loss with respect to such nonqualified plan, the taxpayer shall be allowed a refundable credit for each qualifying loss.

(b) If a taxpayer has paid income tax to more than one municipal corporation with respect to the nonqualified deferred compensation plan, the credit shall be calculated on the basis the proportion the total Municipal Income tax paid bares to the income tax paid to all municipal corporations with respect to the nonqualified deferred compensation plan.

(c) In no case shall the credit exceed the cumulative Municipal Income Tax paid for all taxable years by the taxpayer with respect to the nonqualified deferred compensation plan.

(3) The credit allowed under division (B) of this section is allowed only to the extent the taxpayer's qualifying loss is attributable to:

(i) The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or

(ii) The employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified deferred compensation.

(C) A taxpayer shall be allowed a credit against the Municipal Income Tax for income tax paid to a joint economic development zone created under §715.691 or a joint economic development district created under §715.70, §715.71 or §715.72 of the Ohio Revised Code. The credit shall not exceed the tax assessed by the Municipal Income Tax on such net profit, salary, wages, commission or compensation earned in such joint economic development zone or joint economic development district where such tax is paid. Credit will not be allowed to the extent the individual is entitled to a refund of the income tax paid to such joint economic development zone or joint economic development district.

(D) If income tax or withholding tax is erroneously paid to anther municipality(ies) and refund of the erroneous payment by the other municipality(ies) is barred by the passage of time, the taxpayer or withholding agent will be given credit for the erroneous payment. The credit shall not exceed the tax assessed by the Municipal Income Tax on the income or wages on which the erroneous payment was made.

Section 2. This Ordinance shall take effect and be in force from and after the earliest period allow by law.


______________________________
Dave Edwards
Approved: President of Council


________________________
Mayor Scott Schertzer


Attest:

________________________
Clerk of Council