Frequently Asked Tax Questions

1)  Does the New Boston Income Tax Ordinance levy a tax on the income I receive from interest on my savings account?
A.  No.  Section 3E4 of the Ordinance specifically exempts income from interes and dividends.

2)  Is my pension taxable under the Income Tax Ordinance?
A.  No, Section 3E1 exempts any income from any pensions or unemployment insurance.

3)  How about Social Security benefits?
A.  Under the provisions of Section 3E2 of the Ordinance, any income from Social Security benefits or private insurance companies or from Workmen’s Compensation is not taxable.

4)  Is the pay I receive for attending drill with the U.S. Reserves taxable?
A.  No.  All military pay and allowances are exempt under the provisions of Section 3E5.

5)  Will my church have to pay a tax on its Sunday collection?
A.  No, Section 3E6 exempts the income of religious, charitable, fraternal or educational organizations.

6)  I pay income taxes to the City of Portsmouth.  Do I also have to pay them to New Boston?
A.  Yes.  Section 15B of the Ordinance gives you a credit for anything paid another municipality, but since Portsmouth has a lower tax rate of 1.4 you will need to either file a local tax return with the Village of New Boston and pay the difference or better yet, get your employer to withhold the entire amount and divide it appropriately between Portsmouth City and the Village of New Boston.

7)  I travel for my company and have to pay my own expenses.  Will I be given credit for these?
A.  Yes.  So far as the Ordinance is concerned, you are treated as a business and need pay only on your net wage.

8)  As the owner of rental property, how am I better or worse off under an income tax rather than a property tax?
A.  You are much better off as under an income tax you pay only on your net profits, over $3,000, whereas under the property tax you pay the fixed rate set by the real estate levy regardless of whether you make or lose money on your rental property.

9)  Do I have to pay a tax on the profit I made on the sale of my home?
A.  No.  That is not considered as earned income and only earned income is taxable.

10)  How can I prevent everybody from knowing how much I make?
A.  Section 9D of the Ordinance imposes a penalty of up to a $500 fine and six months jail term for anyone who gives out information pertaining to your income and it also requires the firing of any employee giving out this information.

11)  My only income is from by employer here in New Boston.  How do I file?
A.  You don’t have to file.  The Regulations provide that where one’s only taxable income is from wages which are being withheld by an employer at the same tax rate, no filing is required.

12)  Do non-residents who work in New Boston have to pay the tax?
A.  Definitely.  As a matter of fact, our records show that 80% of the tax is paid by non-residents.

13)  What happens if the tax is knocked out?
A.  The Village would be a lot poorer, since most of the revenue comes from non-residents we would have to discontinue a lot of services, such as garbage collection, extra police and firemen or pass a several mill additional real estate tax levy.

14)  Can’t the revenue from non-residents be secured in another way?
A.  A municipal income tax is the only tax on non-residents ever declared legal by the courts.

15)  By what authority did Council levy the tax?
A.  Recognizing that homes could not stand the added tax burden needed to finance modern day services, the Ohio Legislature passed a law allowing municipalities to pass an income tax ordinance up to 1% without a vote of the people.

16)  I am losing money on my business.  Do I still have to pay the tax?
A.  No.  As a matter of fact, you can carry forward your loss until used up to reduce your tax liability in future years.

17)  My rental property only brings in $200 per month rent.  How much tax will I pay?
A.  None, and since your gross is less than $3,000 a year, you won’t even have to file a return.  Actually, the entire theory of a municipal income tax is to shift some of the burden of the cost of government from real estate to taxing earned income.

18)  Do I have to pay the tax for my cleaning lady?
A.  No.  Housewives do not have to withhold on domestic help, but they have to file themselves.

19)  Has the tax been tested in the courts?
A.  Yes.  The court records are full of cases in which various aspects of municipal income taxes have been upheld, such as the right to levy the tax to tax non-residents, to make employees withhold, to make Federal, State and municipal employees pay the tax, to inspect records and to fine or imprison for not complying.

20)  Do I have any right of appeal?
A.   Yes.  The Ordinance established a Board of Review with whom you may file an appeal against any order of the tax office which adversely affects you and if you want to appeal the Board’s decision, you can always go to Court.

21)  What happens if I overpay my tax?
A.  The form on which you estimate your next year’s tax provides a space where you can either ask that the overpayment be applied to your next year’s tax payment or refunded.  In fact, even if you don’t catch the overpayment, the tax office will and will credit it to your next year’s liability.