Municipal Net Profit Return Form - Ohio Division Of Taxation (Page 2 of 2) in pdf

City oF beDForD

inStruCtionS For preparinG MuniCipal net proFit return

General inStruCtionS

FilinG reQuireMent: Every corporation, rental property, partnership, trust or estate, whether

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a resident or non-resident that conducts a business in Bedford must file a return and pay tax on

reconciliation with Federal income tax return

the net profit.

what ConStituteS net proFitS: Net profits shall be determined on the basis of the infor-

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mation used for federal income tax purposes, adjusted to the requirements of the Ordinance of

Is used for the purpose of making adjustments when total income

Bedford. Expenses attributable to non-taxable income are not deductible. Gains and losses from

(Line 1) includes income not taxable and/or items not deductible for municipal purposes. Enter

the sale or exchange of capital assets to the extent recognized as capital gains or losses for

the amounts of any such items in Schedule X and carry totals (Line F and Line K) respectively to

federal income tax purposes, are not to be considered in arriving at net profits.

Lines (2A) and (2B). Line A – Capital losses from the sale, exchange or other disposition of

how to treat a net loSS: Effective January 1, 2009, the City will not allow Net Operating

property shall not be taken into consideration in arriving at net profits earned. Line B – if you have

deducted non-taxable (Line R); expenses attributable to this non-taxable income shall not be

Carry forwards. No portion of a net operating loss shall be carried back against net profits of any

allowed as a deduction from the remaining taxable income. Line C – would include federal, state,

prior year. The portion of a net operating loss sustained shall be allocated to Bedford in the same

local and other taxes based on income.

manner as provided herein for allocating net profits.

when to File: On or before April 15th following the close of the calendar year. If the return is

made for a fiscal year or any period less than a year, file within four (4) months from the end of

Based on equity. The difference between the equity method and income method should be

the fiscal year or other period.

recorded on Line C.

where to File: Forms must be filed at the tax department. The City of Bedford, P.O. Box

92636, Cleveland, Ohio 44190.

LINE N – Capital gains from the sale, exchange or other disposition of property shall not be taken

extenSionS oF tiMe to File: for good cause may be granted by the Administrator. Make

into consideration in arriving at net profits earned. However, refer to Schedule D instructions, Line

written request on or before the due date, stating reason.

J – would include items listed in the general instructions as Federal Income Not Taxable, as well

rounDinG oFF to whole DollarS is permitted. Eliminate any amount less than fifty cents

as compensation or like reimbursement for damages (except for loss of profits). Involuntary

conversion, cancellation of indebtedness, income of a decedent’s income already taxable by the

and increase any amount from fifty cents through ninety-nine cents to the next higher dollar.

State of Ohio, from which Bedford specifically prohibited from taxing.

penaltieS anD intereSt are imposed for failure to file a return or pay the tax due. Failure to

pay your tax due by filing deadline is considered to be past due and your account is subject to

Collection at your expense. Penalty – $25.00 and interest – 1 1/2% per month.

business allocation Formula

SpeCiFiC inStruCtionS

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heaDinG – Print your company name, address, federal identification number plainly, or make

A business allocation formula consisting of the average of property,

gross receipts and wages paid, may be used by business entities not required to pay tax on entire

needed corrections if already imprinted.

net profits, by reason of doing business both within and outside Bedford. However, if the books

line 1 – Place your taxable income as shown on your federal form or schedule attached, 1065

and records of the taxpayers shall disclose with reasonable accuracy the net profits and attribut-

Filers use amount shown as ordinary Income.

able to Bedford, then only that portion shall be considered as having a taxable status in Bedford.

lineS (2a), (2b), anD (2C) – are used to make adjustments when Line 1 includes income not

The total allocation to all entites must equal 100%.

taxable and/or items not deductible for municipal tax purposes. Schedule X is used to reconcile

income as used for federal purposes by subtracting such income items that are not taxable for

SPECIAL NOTE: Sales and gross receipts in Bedford (Step 3) mean;

municipal purposes and adding back deductions used for federal purposes which are not allow-

able for city purposes. Enter the amounts of any such items in Schedule X, and carry the totals

of Schedule X, Lines (G) and (R) respectively to Lines (2A) and (2B). The difference between Lines

1. All sales of tangible personal property which is shipped from Bedford to purchasers outside

(2A) and (2B) is to be entered on Line (2C). Also see instructions for Schedule X.

of Bedford regardless of where title passes if the taxpayer is not, through its own employees,

line (3a) – is the result of Line 1 plus Line (2A) less Line (2B).

regularly engaged in the solicitation or promotion of sales at the place where delivery is made.

line (3b) – The income tax ordinance recites a formula (Schedule Y) to determine the percent-

age of income attributable to Bedford by business entities conducting business activity both

2. All sales of tangible personal property which is delivered within Bedford regardless of where

within and outside Bedford. If Schedule Y is used, bring the average percentage from Line 5 of

title passes even though transported from a point outside Bedford, if the taxpayer is regularly

Schedule Y to the % line of Line (3B). Multiply Line (3A) by this percentage and enter the result

engaged through its own employees in the solicitation and the sales result from such solicitation

on Line (3B).

or promotion.

line 4 – is the amount on Line (3A) or (3B).

line 5 – Enter here tax liability for income shown on Line 4.

3. All sales of tangible personal property which is delivered within Bedford regardless of where

line (6a) – Enter here estimate payments made to Bedford for this taxable year.

title passes, if shipped or delivered form a stock of goods with Bedford.

line (6b) Enter credit from prior year(s) (overpayment you indicated on the prior return to be

credited against this year’s tax).

line (6C) – is the total of Lines (6A) and (6B).

line (7a) – If Line 5 is greater than Line (6C) the difference should be entered here.

Remittance in this amount must accompany the return when filed. If this amount is less than $5,

you do not have to pay.

line (7b) – If Line (6C) is greater than Line 5 the difference should be entered here. This amount

will be transferred as a credit towards next year’s tax unless you request a refund. Refunds of less

than $5 are not made.

Current estimated Payments and Credits

regarding Net Profits Tax are available

on our web site –

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buSineSS alloCation ForMula (See instruction)

A. Located

B. Located in

C. Percentage

Everywhere

Bedford

(B/A)

Step 1

Average value of real and tangible personal property...........................................$ _____________________

$_____________________

Gross annual rentals multiplied by 8 .....................................................................$ _____________________

$_____________________

Total step 1 ............................................................................................................$ _____________________

$_____________________

______________

Step 2

Total wages, salaries, commissions and other compensation

of all employees.....................................................................................................$ _____________________

$_____________________

________________%

Step 3

Gross receipts from sales and work or services performed

(See Instructions) ...................................................................................................$ _____________________

$_____________________

________________%

Step 4

Total percentages ...................................................................................................

________________%

Step 5

Average percentage (Divide total percentages by number of percentages used – enter on line 3B, Page 1) .........................................................................................

_____%

Municipal Net Profit Return Form - Ohio Division Of Taxation Page 2

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