You will normally have to remit two types of city taxes: the net profits tax and (if you have employees) the employee withholding tax. The first is the tax due on profits of your business, whether your business is a sole proprietorship, corporation or partnership. Incidentally, all net profits earned by S-corporations are taxed at the corporate level. As such, the individual shareholders of S-corps are not taxed. All businesses, with the exception of sole proprietorships, file their city taxes using the Business Questionnaire.
Sole proprietorships file by reporting their Federal Schedule C income on the proprietor’s individual city return, if reporting tax to more than two cities; they must complete Schedule Y - Business allocation formula. Additional information is available in the return instructions.
To remit the second type of tax, the tax withheld from your employees’ wages, you will need to establish a withholding account with us. You do this by filing a Business Registration, which is a simple questionnaire. Employers are liable for all city withholding taxes that should have been withheld from their employee’s wages even if those taxes were not, in fact, withheld. Because of this obligation, you’ll want to make sure you call (937) 645-7350 to request a copy of the Business Registration form.
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As of July 1, 2010, the income tax rate is one and one half percent (1.5%). Generally, gross income (including income which is deferred for State and Federal purposes) and business net profits are taxable at the local level. A list of taxable items is available on our return instructions.