Municipal Income Tax Administrator's Rules and Regulations

(Keyed to City Ordinance, Chapter 193)

• City Tax Info
• City Tax Ordinance

  
193.02 DEFINITIONS

BUSINESS means an enterprise, cooperative activity, profession, trade or undertaking of any nature conducted for profit or ordinarily conducted for profit, whether by an individual, proprietorship, partnership, 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 decedentís estate by the executor or administrator, and the mere custody, supervision and management of trust property under an inter vivos, or testamentary trust, unaccompanied by the actual operation of a business, shall not be construed as the operation of a business.

BUSINESS DEDUCTIONS are the ordinary and necessary expenses actually incurred in the operation of the business.

EARNED INCOME is earned when received if the taxpayer is on a cash basis or when accrued if the taxpayer is on an accrued basis. The taxpayer must use the same accounting method he/she used for Federal tax purposes.

EMPLOYEE means one who works for wages, salary, commission, or other type of compensation in the service of an employer and shall include temporary, provisional, casual, or part-time employment. 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 whom an employer is required to withhold for Federal Income Tax purposes, shall prima facie be deemed an employee.

EMPLOYEE EXPENSES. When required to travel, an employee may deduct travel expenses when not reimbursed for same.

EMPLOYER means an individual, proprietorship, association, corporation 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 as hereinbefore defined. 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 and instrumentalities, 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. EMPLOYER includes any entity who or that looks or contracts for individuals and/or groups to perform or entertain at their place of business or rents facilities for the purpose of providing such entertainment.

EMPLOYER does not include any person who employs only domestic help for such personís private residence.

EXPENSES. All ordinary and necessary expenses of doing business, including reasonable compensation paid employees, shall be allowed; but no deductions may be claimed for salary or withdrawal of a proprietor, or of the partners, members, or other owners of an unincorporated business or enterprise.

1. If not claimed as part of the cost of good sold or elsewhere in the return filed, there may be claimed and allowed a reasonable deduction for depreciation, depletion, obsolescence, losses resulting from theft or casualty, not compensated by insurance or otherwise of property used in the trade or business, but the amount may not exceed that recognized for the purpose of the Federal Income Tax. Provided, however, that loss on the sale, exchange or other disposition of depreciable property or real estate, used in the taxpayerís business shall not be allowed as a deductible expense.
2. Current amortization of emergency facilities under the provisions of the Internal Revenue Code, if recognized as such for Federal Income Tax purposes, may be included as an expense deduction hereunder.
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: 1. The tax under the ordinance; 2. Federal or other taxes based upon income; 3. Gift, estate or inheritance taxes; and 4. Taxes or assessments for direct benefits or improvements to property which tend to appreciate the value thereof.
6. In general, non-taxable income and expenses incurred in connection therewith are not to be considered in determining net profits.

FISCAL YEAR means an accounting period of 12 months or less ending on any day other than December 31. Only fiscal years accepted by the Internal Revenue Service for Federal Income Tax purposes may be used for municipal income tax purposes.

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

INDEPENDENT CONTRACTOR is a person who, while performing services for another, is not under the direction and control of such other person, as to the result to be accomplished by the work and as to the details and means by which that result is accomplished.

INTANGIBLE PROPERTY includes:

1. Shares of stock in corporations, associations, and joint stock companies.
2. Interest bearing obligations, such as notes or bonds.
3. Income from purchased annuities.
4. Royalties from patents and copyrights.

NET PROFITS means net profits derived from any business, profession or other activity or undertaking carried on for profit or normally carried on for profit. Net profits as disclosed on any tax return filed pursuant to the ordinance shall be computed by the same accounting method used in reporting net income to the Internal Revenue Service providing such method does not conflict with any provisions of the ordinance.

NON-RESIDENT is an individual, partnership, association, or other entity domiciled outside the boundaries of the City of Beachwood.

SALARIES, WAGES, COMMISSIONS, AND OTHER COMPENSATION shall include salaries, wages, commission, bonuses, incentive payments, fees and tips that may accrue to or be received by an individual, whether directly or through an agent, and whether in cash or in property for services rendered.

TAXING MUNICIPALITY means any municipal corporation levying a municipal income tax on salaries, wages, commissions, and other compensation earned by individuals, and on the net profits earned from the operation of a business, profession, or other activity.

TANGIBLE PROPERTY is all property not defined as intangible property.

WORKING DAY is one for which an employee receives compensation whether the services performed or not performed, such as Sundays, holidays, etc.

193.03 RATE AND INCOME TAXABLE

Taxable income includes:

1. Salaries, wages, bonuses, and incentive payments, wheresoever paid earned by an individual whether directly or through an agent and whether in cash or in property for services rendered during the tax period as:

1. An officer, director or employee of a corporation (including charitable and other non-profit organizations), joint stock associations, or joint stock company;
2. An employee (as distinguished from a partner or member) of a partnership, limited partnership, or any form of unincorporated enterprise owned by one or more persons;
3. An employee (as distinguished from a proprietor) of a business, trade or profession conducted by an individual owner;
4. An officer or employee (whether elected, appointed or commissioned) of the United States Government or of a corporation created and owned or controlled by the United States Government, or any of its agencies; or the State of Ohio or any of its political subdivisions or agencies thereof; or any foreign country or dependency except as provided in the section of the ordinance indicating sources of income not taxed.
5. An employee of any other entity or person, whether based upon hourly, daily, weekly, semi-monthly, monthly annual, unit of production or piecework rates; and whether paid by an individual partnership, association, corporation (including charitable and other non-profit corporations) governmental administration, agency, authority, board, body, branch, bureau, department, division, subdivision, section or unit, or any other entity.

2. Commissions earned by a taxpayer whether directly or through an agent and whether in cash or in property for services rendered during the effective period of the ordinance, regardless of how computed or by whom or wheresoever paid.

1. If amounts received as a drawing account exceed the commissions earned and the excess is not subject to the demand of the employer for repayment, the tax is payable on the amounts received as a drawing account.
2. Amounts received from an employer for expenses and used as such by the individual receiving them are not deemed to be compensation if the employer deducts such expenses or advances as such from his gross income for the purpose of determining his net profits taxable under Federal law, and the employee is not required to include such receipts as income (or has directly off-setting business expense) on his Federal Income Tax return.
3. If commissions are included in the net earnings of the trade, business, profession, enterprise, or activity, carried on by an unincorporated entity of which the individual receiving such commission is owner or part owner and therefore subject to the tax on the net profits provision of the ordinance, they shall not be taxed under the provisions relating to salaries, wages or commissions earned.

3. Fees, unless such fees are properly includible as part of the net profits of a trade, business, profession, or enterprise regularly carried on by an unincorporated entity owned or partly owned by said individual. Example of fees taxable are those received by a director or officer of a corporation.
4. Other compensation shall include:

1. Tips received by waiters and others.
2. Bonuses.
3. Gifts, gratuities in connection with employment.
4. Compensation paid to domestic servants, casual employees and other types of employees.
5. Benefits resulting from employers assuming a tax.
6. Fellowships, grants or stipends paid to a graduate student in the full amount except that any amount allocated in writing for tuition books and laboratory fees shall be excluded.
7. Dismissal pay which is demandable as a matter of right by virtue of the contract of employment.
8. Incentive payments.
9. Tax Shelter Plans - Contributions by employees to a retirement system are not deductible by such employee. If such contributions are deducted by an employer from the earnings of an employee, such amounts are subject to withholding.
      
   If an employer pays into a tax shelter plan on behalf of an employee in lieu of paying said amount as wages, said payments are considered additional compensation to the employee and are subject to withholding.

5. Vacation, sickness, etc. Payments made to employees by an employer as vacation wages are taxable. Payments made to an employee by an employer, either directly or by an insurance company, under a wage continuation plan during periods of disability or sickness, are taxable. Such vacation, holiday, disability or sickness payments shall be apportioned in the same ratio as regular wages if the employee works in more than one community.
6. Where compensation is paid or received in property, its fair market value, at the time of receipt, shall be subject to the tax and to withholding. Board, lodging and similar items received by an employee in lieu of additional cash compensation shall be included in earnings at their fair market value.

1. In the case of domestics and other employees whose duties require them to live at their place of employment or assignment, board and lodging shall not be considered as taxable income.

193.08 RENTALS

1. The test of whether rental income constitutes a business activity is determined by the amount of gross rent yielded by the property or properties without regard to the number of registered owners of the property. The tax is then imposed against the business entity and not the separate owners. (e.g., husband and wife own properties, under no formal agreement, which yield in excess of $250.00 in any month of the taxable year. A business entity return must be filed indicating the tax liability).
2. In determining the amount of gross monthly rental of any real property, periods during which (by reason of vacancy or any other cause) rentals are not received shall not be taken into consideration by the taxpayer.
3. Rentals received by a taxpayer engaged in the business of buying and selling real estate shall be considered as part of business income.
4. Real property, as the term is used in this regulation, shall include commercial property, residential property, farm property, and any and all other types of real estate.
5. In determining the taxable income from rentals, the deductible expenses shall be of the same nature, extent and amount as are allowed by the Internal Revenue Service for Federal Income Tax purposes.
6. Owners of rental property who are non-residents of Beachwood whether individuals or business entities, are subject to tax only on the income from real property located in Beachwood and, in determining whether gross monthly rentals exceed $250.00 shall take into consideration only the income from such properties located within Beachwood.
7. Owners of rental property who are residents of Beachwood are subject to tax on the net income from rentals (to the extent above specified), regardless of the location of the real property owned excepting that, if any such property is located in and subject to a municipal income tax by another taxing municipality, credit shall be claimed for tax due or paid such other taxing municipality.
8. Owners of rental property who are residents of Beachwood may offset net losses against net profits from all rental property located within Beachwood and any other municipality which does not levy a similar tax.
9. Corporations owning or managing real estate are taxable only on the portion of income derived from property located in Beachwood.
10. Any person receiving rental income from commercial property must file a return whether or not there is any tax due.

193.10 SOURCES OF INCOME NOT TAXED

1. INCOME, MEMBERS OF ARMED FORCES AND CERTAIN INSTITUTIONS

1. All military pay and allowances of any member of the Armed Forces of the United States are exempt from the tax imposed by the ordinance. This exemption includes not only the military pay and allowances received by the member him/herself, but also military pay and allowances, such as dependency, allowances, received by another person by reason of the members service. Any bonus or additional compensation paid to a person by the United States, State of Ohio, or any other state for active service in the Army, Navy, or Air Force shall also be exempt from tax.
2. The income of religious, fraternal, charitable, scientific, literary, or education institutions is exempt from the tax imposed by the ordinance to the extent that such income is derived from tax exempt real estate, tax exempt tangible or intangible property or tax exempt activities. The income and profits of organizations exempt from Federal Income Tax under Section 501 (a) of the Internal Revenue Code shall be exempt from taxation under the ordinance.

2. PAYMENTS FROM GOVERNMENTS AND CERTAIN ORGANIZATIONS
     
   Poor relief, unemployment insurance benefits, old age pensions or similar payments, including disability benefits, received from local, state or Federal governments or charitable, religious or educational organizations, are exempt from the tax imposed by the ordinance. The exempted benefits include all types of payments and allowances made or given such governments or organizations for the relief or correction of poverty, unemployment, delinquency, problems of health or advanced age, lack of education and similar problems. The exempted benefits include, for example, aid to dependent children and the aged; rent, food and clothing allowances or subsidies; job training allowances; Social Security and Medicare benefits; and workerís compensation benefits.
      
3. INSURANCE AND ANNUITY PROCEEDS, CERTAIN EMPLOYEE BENEFITS AND GIFTS

1. Proceeds of insurance paid by reason of the death of the insured, gratuities not in the nature of compensation for services rendered, pensions, disability benefits (not under a wage continuation plan), retirement benefits, and annuities are exempt from the tax imposed by the ordinance, irrespective of the source from which derived. The exemption includes inheritances, scholarships, and student grants-in-aid, but not fellowships. Disability benefits include the proceeds of health and accident insurance and similar benefits. Benefits under a wage continuation plan are not exempt. Death benefits, pensions, retirement benefits, annuities and similar payments made to an employee or to the beneficiary of an employee under a retirement program or plan (whether formal or informal) after termination of employment are exempt from the tax; however, supplemental unemployment benefits are not exempt from taxation although not subject to withholding. Payments for longevity are not exempt.
2. Gifts not in connection with services rendered or work performed, are exempt.

1. Religious Offerings - These items, which are goodwill offerings made by individuals for the performance of religious ceremonies such as baptisms, weddings, funerals, etc. received by clergymen are considered unearned income and are not taxable.
2. Cash or property received under a will or under Statue of Descent and Distribution is not taxable.

4. RECEIPTS OF CERTAIN ORGANIZATIONS AND ASSOCIATIONS
     
   Receipts from seasonal or casual entertainment, amusement, sports events, and health and welfare activities, when any such are conducted by charitable, religious or educational organizations or associations are exempt from the tax imposed by the ordinance. This exemption refers only to the receipts of the organization and not to the compensation of employees.
      
5. ALIMONY
     
   Alimony received is exempted from the tax imposed by the ordinance. Support payments made by one spouse for the benefit of the other spouse or children in connection with any divorce or separation, whether or not awarded by the court, shall be deemed alimony for purposes of this exemption.
       
6. GENERAL
      
   No person shall be exempt from the imposition of this income tax unless specifically excluded or exempted by the laws of the State of Ohio or this ordinance. Upon request of the Administrator, any person who claims exemption from tax under the ordinance shall provide detailed information to show the basis of such claim. The information shall be furnished on a form supplied by the Administrator and be returned within thirty (30) days after receipt of the request.

193.11 WHEN RETURNS REQUIRED TO BE MADE

1. On or before April 30th of the year following the effective date of the ordinance and on or before April 30th of each year thereafter, every person subject to the rate and income taxable provisions of the ordinance shall, except as herein provided, make and file with the Administrator, a return on a form prescribed by and obtainable upon request from the Administrator, whether or not a tax be due.
2. If the return is made for a fiscal year or any period less than a year, said return shall be made within four (4) months from the end of each fiscal year or other period.

193.12 FORM AND CONTENT OF RETURN

1. Every person subject to the provisions of the rate and income taxable section of the ordinance shall file a return setting forth the aggregate amount of salaries, wages, commissions and other personal service compensation, net profits from business or other activities, including the rental from use of real and tangible personal property, and other income taxable under the ordinance, for the period covered by the return and such other pertinent facts and information in detail as the Administrator may require.
2. Only an employee who has incurred business expenses as permitted by Federal regulation (i.e. Form 2106) may claim such deductions even though all or part of wages, salaries, or commissions are subject to withholding.
3. Except as otherwise provided, a return must be filed by an employee who has taxable income not subject to withholding under the ordinance.
4. Any taxpayer having income wages, or other compensation for which a return must be filed, and also having net profits from a business, may report the wage income and business operation on the same return. However, business losses cannot be offset against the wage or non-business income, losses are to be treated in accordance with Article 193.09.
5. Except as otherwise provided, the tax is on the unincorporated business, partnership, or association as an entity, whether resident or non-resident and a return is required disclosing the net profits allocable to Beachwood. 
6. Trustees of trusts and executors and administrators of estates having taxable income are required to file and pay the tax thereon.
7. In returns filed hereunder, there shall be set forth the aggregate amount of the salaries, wages, bonuses, incentive payments, commissions, fees and other compensation subject to the tax earned from each employer, taxable net profits and other pertinent information as the Administrator may require.
8. Where figures of total income, total deductions, and net profits are included as shown by a Federal return then any items of income as are not subject to municipal tax and unallowable expenses shall be eliminated in determining net income subject to municipal tax. The fact that any taxpayer is not required to file a Federal return does not relieve him from filing a municipal income tax return provided he has income as defined in the rate and income taxable provisions of the ordinance.
9. If a change in Federal income tax liability, as finally determined by the Federal Internal Revenue Service or by a judicial decision, results in an additional amount of tax payable to Beachwood, a report of such change shall be filed by the taxpayer within three (3) months from the final determination of the Federal tax liability.
10. If a change in Federal income tax liability results in a reduction of taxes owed and paid to Beachwood, a claim for refund shall be filed with the Administrator.

193.13 CONSOLIDATED RETURNS

1. Consolidated returns may be filed by a group of corporations who are affiliated through stock ownership. For a subsidiary corporation to be included in a consolidated return, 80% of its stock must be owned by the other members of the affiliated group. A consolidated return must include all companies which are so affiliated, along with all required schedules and amount and manner of determining income subject to municipal income tax.
2. Once a consolidated return has been filed for any taxable year the consolidated group must continue to file consolidated returns in subsequent years unless:

1. Permission in writing is granted by the Administrator to file separate returns, or;
2. A new corporation other than a corporation created or organized by a member of the group has become a member of the group during the taxable year, or;
3. A corporate member of the group is sold or exchanged. Liquidating a corporation or merging one of the corporations of the group into another will not qualify the group for filing separate returns.

3. If a corporation becomes a member of the group during the taxable year, the consolidation return must include the income for the entire taxable year of the common parent corporation and any subsidiaries which were members of the group for the entire year, plus the income of each subsidiary becomes a member of the group during the year for the period beginning with the date it became a member of the affiliated group. For the period prior to the time any subsidiary became a member of the group, separate returns must be filed for that subsidiary. When a subsidiary ceases to be a member of the affiliated group, the consolidated return must include the income of such subsidiary for the period during which it was a member of the group; but for the period after it ceases to be a member, separate returns must be filed. If a corporation has been a member of the affiliated group for less than one month of the taxable year of the group, it may be considered as not being part of the group.
4. Similarly, a subsidiary may be considered as being a member of the affiliated group during the entire taxable year of the group if the period during which it was not a member of the group does not exceed one month.
5. If a subsidiary is a member of the consolidated group for only part of a taxable year, the income considered to be earned in such fractional part of the year shall be that portion of the net income for the entire year which the actual number of calendar days it was a member of the group bears to the total number of days in the taxable year, except when actual figures are available.
6. In determining the allocation fraction where a corporation becomes a member of the group or ceases to be a member of the group during the taxable year, the property fraction (Step 1 of the formula) shall be determined on the basis of the average net book value of the property during the period such corporation was a member of the group. The rental portion of the fraction, however, shall be computed at eight (8) times the annual rent. The gross receipts and wage fractions shall be based on the actual figures.
7. All subsidiary corporations must agree in writing to the filing of the consolidated return as they will be liable for the tax as well as will be the parent corporation.
8. The net operating loss carryover of a corporation which filed a separate return in a prior year may by carried over to a consolidated return year to the extent permitted by the Internal Revenue Code, but not to exceed the limitation of the operating loss-carry forward provision of the ordinance.
9. For purposes of this rule, to the extent that the loss can only be carried forward to the same corporations taxable per income, the net income attributable to Beachwood in a year a loss is being utilized shall be computed by using only the same corporationís net income and allocation method.
10. In consolidating the net income, the taxable income of each corporation shall be computed in accordance with the provisions governing the taxable income of separate corporations except that there shall be eliminated unrealized profits and losses in transactions between members of the affiliated group.
11. In determining expenses that are not allowable because they are allocable to non-taxable income, such calculations shall be based on the consolidated net income.

193.17 COLLECTION AT SOURCE

1. It is the duty of each employer who employs one or more persons on a salary wage, commission or other compensation basis to deduct each time any such compensation is paid to an employee subject to the ordinance, the tax at the current rate from such salary, wage, bonus, incentive payment, commission or other compensation due by said employer to said employee. Except as otherwise provided, the tax shall be deducted by the employer from:

1. The gross amount of all salaries, wages, bonuses, incentive payments, commission, or other form of compensation paid to employees who are residents of Beachwood regardless of he place where the services are rendered.
2. All compensation paid to employees who are non-residents of Beachwood for services rendered, work performed, or other activities engaged in to earn such compensation within Beachwood.

2. Employers who do not maintain a permanent office or place of business in Beachwood, but who are subject to tax or net profits under the ordinance, are considered to be employers within Beachwood subject to the requirement of withholding.
3. The mere fact that the tax is not withheld will not relieve the employee of the responsibility of filing a return and paying the tax on the compensation received.
4. Commissions and fees paid to professional men, brokers, and others who are independent contractors and not employees of the payor, are not subject to withholding or collection of the tax at the source. Such taxpayers must in all instances file returns and pay the tax pursuant to the provisions of the ordinance requiring quarterly reporting and payments.
5. Where a non-resident receives compensation for personal services rendered or performed partly within and partly outside Beachwood, the withholding employer shall deduct, withhold and remit the tax on that portion of the compensation, which is earned within Beachwood in accordance with the following rules of apportionment:

1. If the non-resident is a salesman, agent or other employee whose compensation on the basis of commissions depends directly on the volume of business transacted by him/her, the deduction and withholding shall attach to the portion of the entire compensation which the volume of business transacted by the employee within Beachwood bears to the volume of business transacted by him/her within and outside Beachwood.
2. The deduction and withholding of personal service compensation of all other employees (including officers of corporations) shall attach to the portion of the personal service compensation of such employee which the total number of working days employed within Beachwood bears to the total number of working days employed within and outside Beachwood.
3. If it is impossible to apportion the earnings as provided above, because of (a) the peculiar nature of the services of the employee or (b) the unusual basis of compensation, apportionment shall be made in accordance with the facts and the tax deducted and withheld accordingly. With respect to each such employee (or group of employees similarly or identically circumstanced) the employer shall furnish the Administrator a detailed statement of facts.
4. Allocation is not necessary where services performed outside Beachwood are incidental or occasional.
5. Important elements in determining place of employment include:

1. The employeeís base of operations ñ the place from which he/she starts to work and customarily returns.
2. The place where an employee receives his mail or his instructions.

6. Allocations of less than 10% may be disregarded for withholding purposes.

6. An employer shall withhold the tax on the full amount of any advances made to an employee on account of commissions (but not then on the commission also).
7. No person shall be required to withhold the tax on the wages or other compensation paid domestic servants employed exclusively in or about such personís residence, but such employee shall be subject to all of the requirements of the ordinance.
8. If more than the amount of tax required to be deducted by the ordinance is withheld from an employeeís pay, such excess may be refunded by the employer or the Administrator, depending upon the circumstances and the time when the over-withholding is determined as follows:

1. Current Employees:

1. If the over-withholding is discovered in the same quarterly period the employer shall make the necessary adjustment directly with the employee and the amount to be reported on the quarterly Form BT-1 as withheld shall be the corrected amount;
2. If the over-withholding is discovered in a subsequent quarter of the same calendar year, the employer may make proper adjustment with the employee. In such case, Form BT-1 for the quarter in which the adjustment is made shall reflect the total amount actually withheld for the quarter and the amount of the adjustment deducted therefrom.
3. If the over-withholding is discovered in the following year, the employer should notify the Administrator or such over-withholding and the circumstances thereof. Upon proper verification, the Administrator shall refund to the employee the amount of such excess withholding.

2. Former Employees:

1. In case too much has been withheld from an employee who is no longer employed by the employer, the employer shall notify the Administrator of the amount and circumstances of such over-withholding; and the Administrator, after verification, shall then refund to the employee the amount of such excess withholding or;
2. If the error is discovered by the employee, such employee shall file a claim with the Administrator; and, upon verification thereof by the employer, the Administrator shall refund to the employee the amount of such excess withholding.

9. Insufficient Withholding - if less than the amount of tax required to be deducted is withheld from an employee, such deficiency shall be withheld from subsequent wages paid in the same calendar year. However, if the employee-employer relationship has terminated, or if the deficiency was for a prior year, the employer shall notify the Administrator of such deficiency, the reason therefore, and in a separate return pay the withholding deficiency.
10. On or before the 31st day of January, following any calendar year in which such deductions have been made on any employer, such employer shall file with the Administrator a copy of Federal Form W-2 for each employee from whom municipal income tax has been withheld, showing the name, address and social security number of the employee, the total amount of taxable compensation paid during the year and the amount of municipal income tax withheld for such employees.
11. In addition, such employer shall file with the Administrator Form ET-3 to enable the Administrator to reconcile the sum total of compensation paid and taxes withheld as disclosed by the total of the W-2ís. The ET-3 shall also reconcile to prior remittances and returns filed by the employer for such tax year with respect to taxes withheld.

193.18 DECLARATIONS OF INCOME NOT COLLECTED AT SOURCE

1. A declaration of estimated tax shall be filed by every taxpayer who anticipates receiving taxable income.
2. Taxpayerís final return for the preceding year may be used as the basis for computing his declaration of estimated tax for the current year, or he may use the same figures used for estimating the Federal income tax adjusted to exclude any income or deductions not taxable or permissible under the municipal income tax ordinance. In the event a taxpayer has not previously been required to file a return, a declaration of estimated tax on anticipated income shall be filed in good faith.
3. Those taxpayers reporting on a calendar year basis shall file a declaration of estimated tax on or before April 30 of each year or within four (4) months of the date the taxpayer becomes subject to the tax for the first time.
4. Those taxpayers reporting on a fiscal year basis shall file a declaration of estimated tax within four (4) months of the date the taxpayer becomes subject to the tax for the first time.
5. Declaration of estimated tax shall be filed on a form furnished by and obtainable from the Administrator.
6. The original estimate of tax liability may be increased or decreased on quarterly payment forms.
7. The estimated tax may be paid in full with the first declaration of estimated tax in each tax year or in equal installments on or before the last day of the fourth, sixth, ninth and twelfth months of the taxable year.
8. The declaration of estimated tax must be accompanied by at least one-fourth (1/4) of the estimated tax shown due thereon.
9. The filing of a declaration of estimated tax does not relieve the taxpayer of the necessity of filing a final return even though there is no change in the declared tax liability.

193.25 PENALTIES ON UNPAID TAX

1. Penalty and interest charges will be assessed for underpaying the estimated tax when the amount actually paid ñ if any ñ is less than 80% of the tax shown on the final return. The penalty and interest for underpaying estimated taxes shall be figured separately for each installment.
2. In addition to any other charges for interest and/or penalties which may be applicable, a charge of Five Dollars ($5.00) shall be added to the tax due when any check in payment of taxes is returned unpaid by the bank. This charge is to offset the cost of additional bookkeeping and processing and is made irrespective of any charge which may be levied against the maker by his bank. Notice by the Administrator to the taxpayer that a check has been returned unpaid is not required nor is notice of the above charge required. The tender of payment shall not be considered as received as long as this charge has not been paid.
3. The minimum charge for interest and penalties shall be $3.00.

193.26 EXCEPTIONS

A taxpayer or employer shall have thirty (30) days after receipt of notice of any proposed imposition of interest and penalties within which to file a written protest or explanation with the Administrator. If no protest or explanation is filed within the prescribed time, the proposed imposition of interest and penalties shall become and be the final assessment. Upon filing of written protest or explanation, the Administrator shall determine the assessment which may or may not be the same as the proposed assessment.