What is municipal income tax?
A tax that is generally imposed on: Qualifying wages, salaries, and other compensation earned by residents of the City and by nonresidents working in the City. Net profits of a business, both incorporated and unincorporated, attributable to activities in the City or, if that cannot be determined, net profits apportioned using equal weighting of property, payroll, and sales inside the municipal corporation relative to those factors for the business everywhere. Qualifying wages are all payments to a person or business for employment, including cash value of all benefits paid in any medium other than cash. State law requires a flat rate within a City. The rate is determined locally. The maximum rate without voter approval is 1%. Collection of municipal income tax is made through employer withholdings, individual quarterly estimated payments, and annual returns.
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