Definitions

 1:00  For purpose of these Rules and Regulations, the singular shall include the plural and the masculine shall include the feminine and the neuter with regard to the terms, phrases, words and the derivations used herein.  As used in these Rules and Regulations, the following words defined herein shall have the meaning ascribed to them in the Chapter except where the context clearly indicates or requires a different meaning.

Adjusted Federal Taxable Income means federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:

      (a) Deduct intangible income to the extent included in federal taxable income:

      (b) Add expenses incurred in the production of intangible income:

      (c) Add the amounts described in Section 5745.042 of the Revised Code, except that     "taxpayer" as used in section 5745.042 of the Revised Code has the same meaning as in this section: and:

       (d) If the taxpayer is not a C corporation and is not an individual, the taxpayer shall compute "adjusted federal taxable income" as if the taxpayer were a C corporation, but with respect to each owner-employee of the taxpayer, amounts paid or accrued to a qualified self-employed retirement plan and amounts paid or accrued to or for health insurance of life insurance shall not be allowed as a deduction. 

Administrator means the individual designated by the Ordinance, whether appointed or elected, charged with the direct responsibility to enforce the provisions of the Ordinance, regardless of the particular title assigned such individual.

 Association means a partnership, cooperative, limited partnership, joint venture or any other form of unincorporated enterprise owned by two or more persons.

 Board of Review means the Board created by and constituted as provided for in the Village of Cadiz Income Tax Ordinance.

Business means an enterprise, cooperative activity, profession or undertaking of any nature conducted for profit or ordinarily conducted for profit whether by an individual, partnership, limited liability company, association, corporation or any other entity, excluding, however, all non-profit corporations which are exempt from the payment of federal income tax.  The administration of a decedent’s estate by the executor or administrator and the mere custody, supervision and management of trust property under an intervivos or testamentary trust unaccompanied by the actual operation of a business, shall not be construed as the operation of a business.

 Business Apportionment means the portion of net profits to be allocated to the Village of Cadiz as having been made in Cadiz, either under separate accounting method, or under the three factor formula of property, payroll, and sales as provided for in the Ordinance.

 Corporation means a corporation or joint stock association organized under the laws of the United States, the State of Ohio or any other state, territory or foreign country or dependency.

 Day means a fraction of a day shall be construed as a full day.

 Domicile is that place where an individual has his true, fixed and permanent home and principle establishment and to which, whenever he is absent, he has the intention of returning.

 Employee means one who works for wages, salary, commission or other type of compensation in the service of an employer.  Generally, the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished, but also as to the details and means by which that result is accomplished.  Any person from whom an employer is required to withhold for federal income tax purposes shall prima facie be deemed an employee.

 Employer means an individual, association, corporation, partnership, limited liability company or other entity, who or that employs one or more persons on a salary, wage, commission or other compensation basis whether or not such employer is engaged in business or operated for a profit.  The term employer includes the State of Ohio, its political subdivisions and its agencies, instrumentalities, boards, bureaus, departments, etc., as well as other governmental subdivisions, agencies, instrumentalities, boards, bureaus, departments, etc., to the extent that any such body withholds tax on a mandatory or voluntary basis.  No rights, duties or obligations are imposed with respect to any such body not otherwise authorized by law.  The term employer does not include a person who employs only domestic help for such person’s private residence.

 Estimated Tax Liability means the amount that a taxpayer estimates to be his liability for the Village of Cadiz income tax for a year; prior to applying any credits, estimated tax payments or withheld taxes for a year.

 Fiscal Year means an accounting period of twelve (12) months or less ending on any day other than December 31st.  Only fiscal years accepted by the Internal Revenue Service for federal income tax purposes may be used for municipal income tax purposes.  

Form 1040 means Internal Revenue Service form 1040 & variations of US Individual Tax Return.

Form 2106 means Internal Revenue Service form 2106 file by a taxpayer pursuant to the Internal Revenue Code.

Form W-1 means Municipal form W-1 filed by employer reporting quarterly wage withholdings of employees.

Form W-3 means Municipal form W-3 file by employer for year-end reconciliation of employee withholdings.

 Fundamental Changes means any substantial alteration by an employer, including liquidation, dissolution, bankruptcy and reorganizations such as merger, consolidation, acquisition, transfer or change in identity, form or organization.

Generic Form means an electronic or paper form designed for reporting estimated municipal income taxes and annual municipal income tax liability that is not prescribed by a particular municipal corporation's tax on income.

 Gross Receipts means the total revenue from any source whatsoever.  Gross receipts shall include, but not be limited to, income in the form of commissions, fees, rentals, real and tangible personal property, and other compensation for work or services performed or rendered, as well as income from sales of stock in trade.

 Income from a Pass-Through Entity means partnership income of partners, distributive shares of shareholders of an “S” corporation, membership interests of members of a limited liability company, or other distributive or proportionate ownership shares of other pass-through entities.

Intangible Income means income of any of the following types: income yield, interest, capital gains dividends, or other disposition of Intangible Property including, but not limited to: investments, deposits, money, or credits as those terms are defined in Chapter 5701 of the Revised Code, and patents, copyrights, trademarks, trade names, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation.  "Intangible income" does not include prizes, awards, or other income associated with any lottery winnings or other similar games of chance.

Internal Revenue Code means the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended.

Internet means the international computer network of both federal and nonfederal interoperable packet switched data networks, including the graphical sub network known as the World Wide Web.

Limited Liability Company means a limited liability company formed under Chapter 1705 of the Revised Code or under the laws of another state.  

Month means a fraction of a month shall be construed as a full month.

 Net Profits means the net gain from the operation of a business, profession, enterprise or other activity after deduction of all ordinary and necessary expenses paid or accrued in accordance with the accounting method used by the taxpayer for federal income tax purposes.

A. Net profits as disclosed on any return filed pursuant to the provisions of the Ordinance shall be computed by the same accounting method used in reporting net income to the Federal Internal Revenue Service (providing such method does not conflict with any provision of the Ordinance).

All ordinary and necessary expenses of doing business, including reasonable compensation paid employees, shall be allowed, but no deduction may be claimed for salary or withdrawal of a proprietor or of the partners, members or other owners of any unincorporated business or enterprise. 1. If not claimed as part of the cost of goods sold elsewhere in the return filed, there may be claimed and allowed a reasonable deduction for 4 depreciation, depletion, obsolescence, losses resulting from theft or casualty not compensated for by insurance or otherwise of property used in trade or business, but the amount may not exceed that recognized for the purposes of the federal income tax.

2. Current amortization of equipment, facilities and other property under the provisions of the Internal Revenue Code, if recognized as such for federal income tax purposes, may be included as an expense deduction hereunder.

3. Where depreciable property is voluntarily destroyed, only the cost of such demolition and the undepreciated balance thereof will be allowed as an expense in the year of such demolition to the extent allowable for federal income tax purposes.

4. Bad debts in a reasonable amount may be allowed in the year ascertained worthless and charged off; or, if the reserve method is used, a reasonable addition to the reserve may be claimed, but in no event shall the amount exceed the amount allowable for federal income tax purposes.

5. Only taxes directly connected with the business may be claimed as a deduction. If for any reason the income from property is not subject to the tax, then taxes on and other expenses of said property are not deductible. In any event, the following taxes are not deductible from income: the tax under the Ordinance, federal or other taxes based on income, gift or inheritance taxes, franchise tax, and taxes for local benefits or improvements to property which tend to appreciate the value thereof.

6. Capital gains and losses, ordinary gains or losses, as determined under the Internal Revenue Code, from sale, exchange or other disposition or property shall not be taken in consideration in arriving at net profits earned.

7. In general, non-taxable income and expenses incurred in connection therewith are not to be considered in determining net profits. 

For taxable years beginning on or after January 1, 2004 "net Profit" means adjusted federal taxable income calculated on the basis of the Internal Revenue Code. 

Non-Resident means an individual domiciled outside the boundaries of the Village of Cadiz. 

Non-Resident Unincorporated Business Entity means an unincorporated business entity not having an office or place of business within the Village of Cadiz.

 Ordinance means the Income Tax Ordinance enacted by the Village of Cadiz Council and any amendments and supplements thereto.  

Other Payer means any person that pays an individual any item included in the taxable income of the individual, other than the individual's employer or that employer's agent.

Owner means a partner of a partnership, a shareholder of an “S” corporation, a member of a limited liability company, or other person with an ownership interest in a pass-through entity.

 Pass-Through Entity means a partnership, “S” corporation, limited liability company or any other class of entity the income or profits from which are given pass-through treatment under the Internal Revenue Code.

 Person means every natural person, partnership, fiduciary, association, corporation, or other entity.  Whenever used in a clause prescribing or imposing a penalty, the term “person” as applied to an unincorporated entity shall mean the partners or members thereof, and as applied to a corporation, the officers thereof, and in the case of any unincorporated entity or corporation not having any partner, member or officer within this municipality, any employee or agent of such unincorporated entity or corporation who can be found within the corporate limits of the Village of Cadiz.

 Place of Business means any bona fide office (other than a mere statutory office), factory, warehouse or other space which is occupied and used by the taxpayer in carrying on any business activity individually or through one or more of his regular employees in attendance.

 Real Property as the term is used in these Regulations, shall include commercial property, residential property, farm property and any and all types of real estate.

 Resident means an individual domiciled in the Village of Cadiz at any time during the taxable year.

Resident Unincorporated Business Entity means an unincorporated business entity having an office or place of business within the Village of Cadiz.  

Return Preparer means any person other than a taxpayer that is authorized by a taxpayer to complete or file an income tax return, report, or other document for or on behalf of the taxpayer.

 “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.  

Schedule C means Internal Revenue Service Schedule C filed by a taxpayer pursuant to the Internal Revenue Code.

 Taxable Income means wages, salaries and other compensation paid by an employer or employers before deductions of any kind and/or the net profits from the operation of a business, profession or other enterprise or activity adjusted in accordance with the provisions of the Ordinance.  

Taxable Income for Net Profits Tax Return this change is effective for taxable year 2004, and begins with Federal Taxable Income (herein referred to as FTI) before net operating losses and special deductions, (currently line 28 of the federal form 1120) and then makes the following adjustments:

i. Deduct intangible income to the extent it is included in FTI.

ii. Add 5% of the amount deducted as intangible income, but not the portion of the intangible income related to the sale, exchange or disposition of property described in section 1221 of the Internal Revenue Code (IRC);

iii. Add any losses allowed in the computation of FTI if the losses relate to the sale, exchange or disposition of property described in section 1221 or 1231 of IRC;

iv. Except for depreciation recapture described in section 1245 or 1250 of IRC, deduct income and gain included in FTI to the extent the income and gain relate to the sale, exchange or disposition of an asset described in section 1221 or 1231 of IRC;

v. Add taxes on or measured by net income allowed as a deduction in the computation of FTI;

vi. In the case of a real estate investment trust or regulated investment company, add all dividends, distributions, or amounts set aside for the benefit of investors and allowed as a deduction in the computation of FTI;

vii. In the case of a taxpayer that is not a C corporation and is not an individual, the taxpayer shall compute FTI as if the taxpayer were a C corporation and, in addition to the above adjustments, shall not be allowed a deduction for guaranteed payments to a qualified self-employed retirement plan, payments for health or life insurance for an owner or owner-employee, or federal self-employment tax.

viii. Uses apportionment formula to apportion profit to each municipality using an equally weighted formula of property, payroll, and sales (the property factor uses original cost instead of net book value). If the apportionment formula does not produce an equitable result, another basis may be substituted, under uniform regulations

 Taxable Year means the calendar year or the fiscal year used as the basis on which net profits are to be computed under the Ordinance, and in the case of a return for a fractional part of a year, the period for which such return is required to be made.

 Taxpayer means a person (whether an individual, association, corporation or other entity) required by the Ordinance to file a return or pay a tax.