Label
Dept. of Law
Title
Repealing various sections of Chapter 1905 of the Toledo Municipal Code, "Income Tax"; enacting new sections of Chapter 1905 of the Toledo Municipal Code, "Income Tax"; and declaring an emergency.
Body
SUMMARY & BACKGROUND:
On December 12, 2015, Council approved Ord. 576-15 commonly known as the "Tax Ordinance," due to significant changes enacted by the Ohio General Assembly in 2014 through H.B. 5. Subsequently, on September 27, 2016, Council approved Ord. 354-16 due to changes caused by S.B. 172 enacted by the General Assembly on June 14, 2016. Once again, the General Assembly purports to affect the City's Tax Code with the enactment of H.B. 49 (biennial budget bill) on June 30, 2017.
Therefore, on February 5, 2018, the City of Toledo filed suit against the State of Ohio challenging the constitutionality of H.B. 49 and H.B. 5 on 'home rule' grounds. Hundreds of other cities in Ohio, in a similar case also sued the State in Franklin Common Pleas Court. Recently, the Franklin County Court ruled for the State on February 21, 2018, which most likely will be appealed by those cities.
Nevertheless, in the event the Toledo and cities ultimately lose this challenge, this Ordinance makes various amendments necessitated by changes to state law, but contingent on their constitutionality, which Toledo does not concede.
Summary
NOW, THEREFORE, Be it ordained by the Council of the City of Toledo:
SECTION 1. That Section 1905.02(C)(1)(h) of the Toledo Municipal Code, which reads as follows:
(h) (i) Except as limited by divisions (C)(1)(h)(ii), (iii), and (iv) of this Section, deduct any net operating loss incurred by the person in a taxable year beginning on or after January 1, 2017. The amount of such net operating loss shall be deducted from net profit that is reduced by exempt income to the extent necessary to reduce municipal taxable income to zero, with any remaining unused portion of the net operating loss...
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