(a) Qualifying wages and other income earned or received by residents of the City.

(1) Qualifying wages:

A. To the amount shown in Box 5 of federal form W-2, add the ordinary income portion resulting from the sale, exchange, or other disposition of a stock option; federal section 401(k) and 457 amounts, if not already included in Box 5; supplemental unemployment benefits as described in federal section 3121(v)(2)C; and wages exempt from Medicare withholding due to being employed with the employer prior to April 1, 1986.

B. From the amount shown in Box 5 of the federal form W-2, deduct amounts attributable to federal section 125 plans, if those amounts have been included as part of Box 5.

(2) Other income shall include, but not be limited to:

A. A shareholder's distributive share of net profits of an S corporation, to the extent that the distributive share represents wages as defined in federal Section 3121(a) or net earnings from self-employment as defined in federal Section 1402(a).

B. Effective 01/01/2001, total annual combined winnings over five thousand dollars ($5,000) earned or derived from gaming, wagering, lotteries, (including the Ohio State Lottery or other state lotteries) or games of chance.

(b) Qualifying wages and other income earned or received by non-residents of the City for work done or services performed or rendered in the City.

(c) Net profit from a business or profession conducted both within and without the boundaries of the City shall be considered as having a taxable situs in the City for purposes of this tax in the same proportion as the average ratio of:

(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 costs 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. Real property includes property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereupon by eight;

(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. Wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages.

(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 the foregoing apportionment formula does not produce an equitable result, another basis may, under the uniform regulation, be substituted so as to produce such result.

If the foregoing apportionment formula does not produce an equitable result, another basis may be substituted, under uniform regulation, so as to produce an equitable result.

(d) As used in this section, "SALES MADE IN THE CITY" means:

(1) All sales of tangible personal property which is delivered within the City regardless of where title passes if it is shipped or delivered from a stock of goods within the City.

(2) All sales of tangible personal property which is 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 at the place where delivery is made.

(3) All sales of tangible personal property which is shipped from a place within the City to purchasers outside 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.

(e) Net profit from rental activity, not constituting a business or profession and conducted by non-residents, is subject to net profit tax only on property located in the City of Hubbard. Rental activity shall be considered as not constituting a business or profession if gross receipts from the property are less than five thousand dollars ($5,000) per month.

(f) In determining income subject to taxation, losses from the operation of a business or profession cannot be used to reduce wages from employees or other employment compensation.

(g) The City of Hubbard does not permit loss carry-forward or carry-back.

(Ord. 25-03. Passed 10-20-03.)