CITY OF LOVELAND OHIO BUSINESS INCOME TAX RETURN
2003 GENERAL INSTRUCTIONS
FOR ALL BUSINESS ENTITIES INCLUDING ESTATES AND TRUSTS
BUSINESSES REQUIRED TO FILE
Each C-corporation, S-corporation, partnership, LLC, trust, estate or other business entity, other than non-profit organizations (as
determined by the I.R.S.), that have gross receipts from sales made, work done, services performed or rendered and business or other
activities (including rental activities and property, plant or equipment) in the Cit y of Loveland, whether or not such organization has
an office or place of business inside the City, is subject to Loveland income tax. If appropriate, entities may allocate their
profits/losses within and outside of the City by using the business allocation formula (Schedule Y) on page 2 of the tax form.
Schedule Y must be used if the books and records of the business entity do not accurately reflect the specific items of revenue and
expense attributable to business conducted in Loveland.
Sole propriet ors who are residents of the City of Loveland should file an Individual Income Tax return and report Schedule C or C-EZ
profits/losses on that form.
If an entity filed a return, or was required to file a tax return in previous years, but did not do any business within Loveland in calendar
or fiscal year 2003, please indicate so on a 2003 form and submit to the City of Loveland tax office on or before the regular filing
For tax years 2003 and after, any flow-through entity domiciled or having a place of business within Loveland will be taxed at the
entity level only. This rule basically affects Loveland residents who report their flow-through income (loss) on Schedule E of their
individual returns. Any loss carry forward remaining after the 2002 tax year that is attributable to a specific entity will transfer and be
recognized under the new account. Please contact the Tax Administrator for further information.
Taxable income should be computed using the starting point indicated below and inserting that amount on line 1, completing Schedule
X on page 2 of the form and inserting those amounts on lines 2A and 2B, and adding and/or subtracting as indicated to arrive at
Adjusted Net Income on line 3. Certain items of income are exempted from municipal tax by the Ohio Revised Code. These are as
follows: Capital Gains (excluding ordinary gains), Dividend income, Interest income, and other income derived from intangible
property/sources. These are reported on lines I – M of Schedule X. Certain items expensed on the federal return are disallowed as
deductions for municipal tax purposes as they are not considered ordinary, reasonable and necessary. These are as follows: Capital
Losses (excluding ordinary losses), Charitable contributions, Expenses applicable to the production of nontaxable income (at least 5%
of the amounts reported on lines J & K), and Guaranteed payments. All city and state taxes based on income are then added back in to
taxable income. All of these items are reported on lines A – F of Schedule X. Lines G and M of this schedule are for the reporting of
miscellaneous items that have been deemed taxable or deductible by Loveland city ordinance, rule, or regulation. These may include
½ of self-employment tax as reported on a sole proprietor’s federal return or certain Federal tax credits. Please contact the Tax
Administrator if you require information specific to your return. The objective of these additions and subtractions is to arrive at an
income or loss figure that is reflective of true business-related operations for the fiscal period.
Depending on type of entity and federal tax form being filed, enter the following amount from the federal tax return on line 1:
Entity Form Page Section Line # Description
C Corporation 1120 1 28 Taxable income before net operating loss deduction
C Corporation 1120A 1 24 Taxable income before net operating loss deduction
S Corporation 1120S 3 Schedule K 23 Income(Loss)
Partnership 1065 4 Analysis of Net Income/Loss 1 Net Income (Loss)
Sole Proprietor Sch C 1 31 Net Profit or (Loss)
Estates/Trusts 1041 Amount on line 1 = 0, see instructions for these
Types of entities
Attach a copy of the complete federal income tax return, including copies of supporting statements and schedules. By submitting a
complete copy, additional correspondence and questions from the tax auditor may be avoided. Please attach an itemized statement of
types of taxes and licenses deducted on the federal return. If the business takes any deductions from, or makes any additions to, their
federal taxable income on their city return that is not clearly identifiable on the federal ret urn, explanation must be attached. If you
must allocate the income (loss) and Schedule Y is not used, documentation of how the allocated figure was arrived at must be
included. ANY RETURN RECEIVED WITHOUT THE APPROPRIATE PAPERWORK CANNOT BE CONSIDERED AS
LEGALLY AND PROPERLY FILED. LATE FILING PENALTIES AND/OR DELINQUENT NOTICES MAY RESULT.
ALLOCATION FORMULA (SCHEDULE Y)
Complete this Schedule only if the business has a justifiable reason to allocate. Schedule Y may be used by entities moving into, or
out of, Loveland during the tax year. Entities that attribute 100% of each formula factor to Loveland do not need to complete
Schedule Y. Resident entities that complete Schedule Y and file income tax returns with other Ohio municipalities must attach a list
of those cities.
NET OPERATING LOSS
The portion of a net operating loss allocated to Loveland may be carried forward a maximum of five tax years, during which time such
loss may used to offset Loveland Taxable Income reported. No losses may be carried forward from a year when no allocation was
made to the City of Loveland or from a year that a Loveland income tax return was not properly filed. Accumulated losses will not be
carried over if a business organizes from one entity type to another.
The Loveland Business Income Tax Return is due on or before April 30 or the last day of the fourth month following the entity’s fiscal
year end. The tax office will use the postmark as evidence of timely filing.
EXTENSION OF TIME TO FILE THE TAX RETURN
A business entity may request an extension of time to file its City of Loveland tax return by mailing or faxing to the Loveland tax
office a photocopy of the Request for Extension which was filed with the Internal Revenue Service, on or before the original due date
of the return. Your tax preparer may also mail or fax a written request for extension provided it is on official letterhead. The entity
must have obtained a Federal extension. Extensions are granted for an automatic six -month period and you will receive confirmation
only upon request and by supplying a stamped, self-addressed envelope. There is no need to submit a copy of the request for
additional time to file. If the extension request is denied, a letter of explanation will be mailed. The Ohio Revised Code (Section 718)
and the Loveland tax ordinance (Section 97.17) outline several instances that may result in your request being denied. Requesting an
extension of time to file does not extend the due date for payment of 2003 taxes owed or 2004 estimated tax payments.
PENALTY AND INTEREST
Penalty and/or interest charges are imposed for late filing of complete returns, late payment of taxes and underestimation of estimated
Late filing penalty: $25.00 for the first occurrence, $50.00 for each subsequent occurrence. There is a ten business day grace period
permitted before the penalty is assessed (postmark date is used).
Interest: 1% per month, or fraction of a month, for each month the tax liability remains unpaid after it becomes due.
Underpayment of estimated tax: Penalty is 10% of the tax due in excess of $100.00 at time of filing. To avoid assessment of this
penalty the following “safe harbor” rules apply: 1) remit at least 100% of the previous year’s tax liability; 2) remit at least 90% of the
current tax year liability; or 3) have a tax liability of less than $100.00. All safe harbor rules require that estimated payments be
made on a timely basis.
Any business entity that had Loveland taxable income equal to or greater than $10,000 for 2003, and estimates taxable income to be
the same or more for 2004, is required to make estimated payments. If a declaration is not made on line 16 of the return or other
Declaration form, courtesy st atements will not be sent. For tax year 2003 and after, new rules regarding the percentage of estimated
tax required to be remitted and changes to the due dates have been enacted. Please contact the Tax Administrator or review Section
97.07(D)(2) of the Loveland tax ordinance for further information. The ordinance may be viewed or downloaded from our website,
www.lovelandoh.com, Forms and Documents Library.
ESTATES AND TRUSTS
The profits (losses) from the business operations of an estate or trust are taxable for municipal income tax purposes. The unique nature
of an estate or trust, relative to municipal income tax, makes the adjustments from federal taxable income to municipal taxable income
different from other entities using this return. Only trusts and estates having income or losses listed on lines 3, 5, 6, 7, or 8 of federal
form 1041 should be filing a Loveland income tax return. It will only be necessary to include the portions of the entity’s business
income (Schedule C, E, F or 4797 gains or losses) that are applicable to the City of Loveland on this return. All income computations
for estates and trusts are done on Schedule X and entered only on lines G and M. Line G is for the reporting of net profit (loss) from
business operations attributable to Loveland. On line M you may enter the amount of fiduciary and return fees directly associated
with Loveland business operations. If the entity conducts multiple business operations, itemize these separately on lines G and M.
Enter -0- on line 1 or leave blank. Amounts from lines G and M are entered on lines 2A and 2B, with the associated computations
resulting in Adjusted Net Income (Loss). Attach copies of the 1041 and all applicable Schedules (C, E, F, and 4797).
If line 15, 2003 Total Due is less than $2.00, no remittance need be made. Overpayments under $2.00 are not refundable; however,
such amounts may be carried over to the next year.
The Loveland tax ordinance requires any entity that compensates a nonemployee individual or other entity for services, work or sales
made submit such information to the tax office. Copies of 1099MISC or other listing that provides the same information are to be
submitted annually, on or before February 28.
References to line numbers (other than in the Table on page 1) are specific to the Loveland Business Income Tax Return form that the
How to contact our office:
513-583-3035, ext. 1 (Tax Administrator) 513-583-3037 (Fax #) www.lovelandoh.com (website)