Municipal Issue 53

ISSUE 53 - Proposed Municipal Income Tax (Increase) City of Cleveland Heights

(Submitted by Council of the City of Cleveland Heights, Ohio)

Shall the Ordinance providing for a 0.25% levy increase on income, to a rate of 2.25% per annum, for the purpose of general municipal functions of the city, effective January 1, 2016, be passed?

A majority affirmative vote is necessary for passage.

____ FOR THE INCOME TAX INCREASE

____ AGAINST THE INCOME TAX INCREASE    

ORDINANCE NO. 90-2015 (F), An Ordinance amending Sections 157.0501 and 157.0502 of Chapter 157, “Income Tax,” of Part One (Administrative Code) of the Codified Ordinances of the City of Cleveland Heights, Ohio, to increase the municipal income tax rate from two percent (2%) to two and one-quarter percent (2.25%), effective January 1, 2016, subject to the approval of the electors of the City of Cleveland Heights; and declaring an emergency. WHEREAS, it is Council’s determination that it is necessary to increase the municipal income tax rate by one-quarter percent (0.25%) from two percent (2%) to two and one-quarter percent (2.25%) to replace revenue lost through cuts by the State of Ohio and to secure the City’s financial future. BE IT ORDAINED by the Council of the City of Cleveland Heights, Ohio, that: SECTION 1. It has been determined by the Council of the City of Cleveland Heights that it is necessary that the municipal income tax rate be increased by one-quarter percent from two percent (2%) to two and one-quarter percent (2.25%), effective January 1, 2016. SECTION 2. Subject to the approval of the electors of the City of Cleveland Heights, Ohio, as provided in Section 718.01 of the Ohio Revised Code, Chapter 157, “Income Tax,” of Part One (Administrative Code) of the Codified Ordinances of the City of Cleveland Heights, Ohio, is hereby amended, effective January 1, 2016, so that henceforth Sections 157.0501 and 157.0502 shall read as follows: 

157.0501 RATE AND INCOME TAXABLE 

An annual tax for the purposes specified in Section 157.0101 hereof shall be imposed on and after January 1, 2016 at the rate of two and one-quarter percent (2.25%) per annum upon the following:(a) On all salaries, wages, commissions or other compensation earned on and after January 1, 2016 by residents of the City of Cleveland Heights. The term “other compensation” shall include, without limitation, income in the amount of one hundred thousand dollars ($100,000.00) or more derived from gaming, wagering, schemes of chance and lotteries, including the Ohio State Lottery, earned on or after January 1, 2016 by residents of the City of Cleveland Heights. (b) On all salaries, wages, commissions and other compensation earned on or after January 1, 2016 by nonresidents of the City of Cleveland Heights for work done or services performed or rendered within the City of Cleveland Heights, provided that if a nonresident individual works in the City of Cleveland Heights on twelve or fewer days in the calendar year and the principal place of business of the individual’s employer, if applicable, is located outside the City of Cleveland Heights, then the employee shall be exempt from tax.  ) (1) On the portion attributable to the City of Cleveland Heights on the net profits earned on and after January 1, 2016 of all resident unincorporated business entities or professions or other activities derived from sales made, work done, services performed or rendered, and business or other activities conducted in the City of Cleveland Heights.  

(2) On the portion of the distributive share of the net profits earned on and after January 1, 2016 of a resident partner or owner of a resident unincorporated business entity not attributable to the City of Cleveland Heights and not levied against such unincorporated business entity by the City of Cleveland Heights. (d) (1) On the portion attributable to the City of Cleveland Heights of the net profits earned on or after January 1, 2016 of all nonresident unincorporated business entities, professions or other activities derived from sales made, work done, services performed or rendered, and business and other activities conducted in the City of Cleveland Heights, whether or not such unincorporated business entity has an office or place of business in the City of Cleveland Heights. (2) On the portion of the distributive share of the net profits earned on and after January 1, 2016 of a resident partner or owner of a nonresident unincorporated business entity not attributable to the City of Cleveland Heights and not levied against such unincorporated business entity by the City of Cleveland Heights. (e) On the portion attributable to the City of Cleveland Heights of the net profits earned on and after January 1, 2016 of all corporations derived from sales made, work done, services performed or rendered, and business or other activities conducted in the City of Cleveland Heights, whether or not such corporations have an office or place of business in the City of Cleveland Heights.

157.0502 EFFECTIVE PERIOD. Such tax shall be levied, collected and paid with respect to the salaries, wages, commissions and other compensation, and with respect to the net profits of businesses, professions or other activities, earned on and after January 1, 2016.

2 ORDINANCE NO. 90-2015 (F) 

SECTION 3. As required by Section 718.01 of the Ohio Revised Code, the amendment specified in Section 2 of this Ordinance shall take effect only if approved by the affirmative vote of the electors of the City of Cleveland Heights, Ohio who shall vote on the question at the general election on November 3, 2015. SECTION 4. Subject to the approval of the electors of Cleveland Heights of the increase in the municipal income tax rate enacted in Section 2 of this Ordinance, Sections 157.0501 and 157.0502 of the Codified Ordinances of Cleveland Heights as heretofore in effect are hereby repealed, effective January 1, 2016. SECTION 5. The purpose of said income tax, as set forth in Section 157.0101 of the Codified Ordinances of Cleveland Heights, is for general municipal functions. 

LEAGUE PLAIN SPEAK: The City of Cleveland Heights seeks a one quarter percent (0.25%) increase to the existing income tax rate of two percent (2%) per year. If passed, the total amount of income tax would be 2.25% per year. The purpose of this tax is to support general municipal functions and to replace revenue lost through cuts by the State of Ohio.