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City of Cleveland Codified Ordinances, Chapter #198
PART ONE — ADMINISTRATIVE CODETitle XVII — TaxationChapter 198 — Motor Vehicle Lessor TaxComplete to June 30, 2007
Note: Pursuant to Section 1 of Ord. No. 532-91, Chapter 198 shall take effect April 1, 1991.
This chapter shall be known and cited as the "motor vehicle lessor tax chapter" and the tax herein imposed shall be known and cited as the "motor vehicle lessor tax."
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
(a) For the purposes of this chapter, when any of the following words or terms are used herein they shall have the meaning or construction ascribed to them in this section:
(1) "City" means the City of Cleveland, Ohio.
(2) "Commissioner" means the Commissioner of Assessments and Licenses or his authorized representative.
(3) "Division" means the Division of Assessments and Licenses of the City of Cleveland.
(4) "Leasing" or any similar term means any transfer of the possession (regardless of whether or not such possession is exclusive) or the right to possession of a motor vehicle to a user for a valuable consideration.
(5) "Lessor" means any person who, in connection with a trade or business conducted by such person, leases a motor vehicle directly to lessee. In a multiparty transaction, the lessor is the person who transfers the motor vehicle to the lessee. A person who merely finances or underwrites a leasing transaction, without doing more, is not a lessor for purposes of this chapter.
(6) "Limousine for hire" means any motor vehicle which is used in the business of operating for hire as a chauffeur-driven vehicle that secures or accepts passengers within the City and that does not secure or accept passengers for hire on the public streets or in public or quasi-public places.
(7) "Motor vehicle" means any motor vehicle as defined in division (B) of RC 4501.01, except motor vehicles of gross weight of six thousand (6,000) pounds or greater.
(8) "Public hack" means any motor vehicle whose owner or driver secures or accepts passengers for hire within the City on the public streets or quasi-public places.
(9) "Rental period" means the term of the lease as specified in the lease. A lease renewal denotes an additional rental period. A lease extension does not denote an additional rental period.
(10) "Tax" means the motor vehicle license tax imposed pursuant to Section 198.03.
(b) In this chapter, unless the context otherwise requires, words in the singular number include the plural, and in the plural include the singular, words of the masculine gender include the feminine and the neuter, and when the sense so indicates, words of the neuter gender may refer to any gender.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
(a) For the purpose of providing funds for general municipal operations, procurement of fixed assets or permanent improvements, payment of debt charges, the elimination of deficits in City funds, contributions for recreational, cultural, and extracurricular programs in the Cleveland Public Schools, and for all other lawful purposes, an excise tax is hereby imposed upon the privilege of leasing motor vehicles within the City to a lessee. Such tax shall be imposed upon the lessor and shall be in the amount of three dollars ($3.00) per vehicle per rental period for any lease entered into or renewed after April 1, 1991 and before April 1, 1992; four dollars ($4.00) per vehicle per rental period for any lease for which the total lease amount exceeds sixteen dollars ($16.00) entered into or renewed after April 1, 1992, and before August 1, 1995; and six dollars ($6.00) per vehicle per lease for which the total lease amount exceeds twenty-five dollars ($25.00) for any lease entered into or renewed on or after August 1, 1995. The lessor shall not divide a transaction into multiple leases to avoid tax liability under this division.
(b) Any tax herein imposed is in addition to any other taxes authorized by law.
(c) The lessor shall be required to pay this tax to the Commissioner as provided in division (e) of this section. The lessor shall be allowed to pass this tax along to his lessees as a separate charge on his rental bills or invoices.
(d) This tax shall not apply to any lessor who is a governmental body; nor shall it apply to any lessor upon whom the imposition of the tax would violate the United States Constitution or the Constitution of the State of Ohio; nor shall it apply to the lease of limousines for hire or public hacks.
(e) Except as provided herein, the lessor shall pay this tax on a monthly basis, with the tax due on motor vehicles leased within the month by the last day of the following month. A remittance return shall accompany each monthly payment. The format of such remittance return shall be prescribed by the Commissioner, and such return shall include the number of motor vehicles leased within that month and any other reasonable information the Commissioner deems necessary. The remittance returns shall be filed and signed by the Lessor under penalty as provided in Section 198.99 of this chapter. If in the second quarter of a given calendar year, the lessor's tax liability pursuant to this division averages less than one hundred dollars ($100.00) per month, then the lessor may, at the lessor's option, in lieu of filing monthly tax returns and making monthly tax remittances, pay in each of the three subsequent quarters an amount equal to the tax liability in the second quarter. A remittance form prescribed by the Commission, with requirements similar to the monthly remittance return referred to above, shall be signed and filed by the lessor with his annual payment.
(Ord. No. 1025-A-95. Passed 6-29-95, eff. 6-29-95)
(a) Any tax not paid when due shall bear interest at the rate of two percent (2%) per month, or fraction thereof, until the tax is paid.
(b) In addition to any interest charges, any tax not paid when due shall subject the lessor failing to pay such tax to a ten percent (10%) late payment penalty, unless a late filing penalty is due as provided in division (c) below. This penalty shall be calculated upon the amount of tax underpaid.
(c) In addition to any interest charges, any remittance return not filed when due shall subject the lessor failing to file such to a ten percent (10%) late filing penalty calculated upon the total tax liability due for such filing period.
(d) Any payment or return not physically received by the Commissioner by the due date shall be considered late.
(e) All payments received shall first be applied to penalty due, then interest due and finally the tax due for the period the payment is made for.
(f) The lessor shall be required to pay all tax, interest and penalty due from him, except that if the Commissioner finds that any late payment or late filing was due to reasonable cause, the penalty for such shall not apply.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
(a) Every lessor subject to the tax imposed herein shall keep accurate and complete books and records of his leasing business which will include invoices, rental agreements, annual inventories of motor vehicles available for rental and other pertinent papers and documents. All such books and records which are required to be kept by this chapter shall be kept in the English language and shall, at all times during business hours of the day, be subject to inspection by the Commissioner or his duly authorized agents and employees.
(b) It shall be presumed that all leases of motor vehicles occur at the lessor's place of business and are subject to tax under this chapter until the contrary is established. The burden of proving that a lease is not taxable hereunder shall be upon the lessor.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
The Commissioner is hereby empowered to adopt, promulgate, and to enforce, rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the provisions of this chapter, including provisions for the reexamination, correction and amendment of all returns. The Commissioner, or any agent or employee designated in writing by him, is hereby authorized to examine the books and records of any lessor during regular business hours, in order to verify the accuracy of any return made, or if no return was made to ascertain the tax imposed by this chapter.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
(a) If it shall appear to the Commissioner that any person has violated any provision of this chapter or any rule or regulation promulgated hereunder, or if the amount of any tax payment is incorrect in that it does not include all taxes payable for such calendar month or period, or if the Commissioner shall find that the collection of any taxes which have accrued but are not yet due will be jeopardized by delay, and declares said taxes to be immediately due and payable, or if it shall appear to the Commissioner that he has made any final assessment which did not include taxes payable for the periods involved, or if it appears to the Commissioner that any person has, by reason of any act or omission or by operation of law, become liable for the payment of any taxes, interest or penalties not originally incurred by him, the Commissioner may in any of the above events determine and assess the amount of such taxes or deficiency, as the case may be, together with the interest and penalties due and unpaid, and immediately serve notice upon such person of such determination and assessment and make a demand for payment of the tax together with interest and penalties thereon. If the person incurring any such liability has died, such assessment may at the discretion of the Commissioner be made against his personal representatives. Such determination and assessment by the Commissioner shall be final at the expiration of twenty (20) days from the date of the service of such written notice thereof and demand for payment, unless such person shall have filed with the Commissioner a written protest and a petition for a hearing, specifying its objections thereto. Upon the receipt of such petition within the twenty (20) days allowed, the Commissioner shall fix the time and place for a hearing and shall notify the petitioner thereof. The Commissioner may amend his determination and assessment at any time before it becomes final. In the event of such amendment the person affected shall be given notice thereof and an opportunity to be heard in connection therewith. At any hearing held as herein provided, the determination and assessment that has been made by the Commissioner shall be prima facie correct and the burden shall be upon the protesting person to prove that it is incorrect. Upon the conclusion of such hearing a decision shall be made by the Commissioner either cancelling, increasing, modifying or affirming such determination and assessment and notice thereof given to the petitioner.
(b) Whenever any person shall fail to pay any tax as herein provided, the Director of Law shall, upon the request of the Commissioner, bring or cause to be brought an action to enforce the payment of said tax on behalf of the City in any court of competent jurisdiction.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
(a) Whenever it appears that an amount of tax, interest or penalty has been paid in error to the division by the person paying such tax (hereinafter referred to as "taxpayer"), whether such amount be paid through a mistake of fact or an error of law other than an error resulting from the tax, any of its provisions or its application being declared invalid or unconstitutional, not later than three (3) years from the date upon which such payment was made, such taxpayer may file a claim for credit or refund with the division on forms provided by the Commissioner for that purpose. No credit or refund shall be allowed for any amount paid by such taxpayer unless it appears that he bore the burden of such amount and did not shift the burden to another person.
(b) Any credit or refund that is allowed under this section shall be without interest.
(c) A claim for credit or refund shall be considered to have been filed with the division on the date upon which it is received by the division, and receipt of any claim for credit or refund filed under this section shall be acknowledged by the Commissioner or any designated person on his behalf, said receipt to describe the claim in sufficient detail as to identify it, and to state the date upon which the claim was received by the Commissioner.
(d) As soon as practicable after a claim for credit or refund is filed, the Commissioner, or his designee, shall examine the same and determine the amount of credit or refund due, if any, and shall issue a notice of tentative determination of claim and notify the claimant of such determination. If the claimant disagrees with the determination, he shall file a protest and challenge thereto within twenty (20) days after the date of notice of tentative determination of claim has been mailed to him. Upon receipt of such protest within the twenty (20) days allowed, the Commissioner, or his designee, shall fix the time and place for a hearing thereof, giving notice to the claimant thereof, not less than seven (7) days prior thereto. At any hearing held as herein provided, the tentative determination of claim shall be prima facie correct and the burden shall be upon the claimant to prove that it is incorrect. Upon the conclusion of the hearing, a decision shall be made by the Commissioner and notice thereof given to the claimant. In the event no protest or challenge to the tentative determination of claim is filed within the twenty (20) day period hereinabove set forth, said notice shall thereafter become and operate as a final determination.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
Whenever notice is required by this chapter, such notice may be given by the United States registered or certified mail, addressed to the person concerned at his last known address, and proof of such mailing shall be sufficient for the purposes of this chapter. Notice of any hearing provided for by this chapter shall be so given not less than seven (7) days prior to the day fixed for a hearing. Following the initial contact of a person represented by an attorney, the division shall not contact the person concerned but shall only contact the attorney representing the person concerned.
All hearings provided for in this chapter shall be at a location determined by the Commissioner.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
Any officer or employee of any corporation subject to the provisions of this chapter who has the control, supervision or responsibility of filing returns and making payment of the amount of tax herein imposed and who wilfully fails to file such return or to make such payment to the division shall be personally liable for such amounts, including interest and penalties thereon, in the event that after proper proceedings for the collection of such amounts, as provided in this chapter, such corporation is unable to pay such amounts to the division; and the personal liability of such officer or employee as provided herein shall survive the dissolution of the corporation.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
Any person required to pay the tax imposed by this chapter and who sells or transfers his business of leasing motor vehicles or a major part of the assets of such business, other than a sale of assets (including inventory) in the ordinary and usual course of such business, is required to file a notice of such intended sale or transfer with the division at least forty-five (45) days prior to the date of such sale or transfer, setting forth the name of the seller or transferor, purchaser or transferee, a description of the property or business sold, the amount of the purchase or transfer price and such other information as the Commissioner may reasonably request. Within thirty (30) days after such sale or transfer, such seller or transferor shall file any remittance returns and pay any tax due and not paid up to the date of sale or transfer. At least forty-five (45) days before the sale or transfer referred to above takes place, the purchaser or transferee shall also file a notice of intended sale or transfer with the division, setting forth the same information as required in the seller's or transferor's notice and further requesting that the division perform an audit of the seller's or transferor's books and records or do whatever else is necessary to determine how much tax is due up to the date of sale or transfer. The purchaser's or transferee's notice may be made in conjunction with the seller's or transferor's notice. If the purchaser or transferee fails to file the notice as required herein, the purchaser or transferee shall be personally liable to the division for the amount of tax, interest and penalty owed by the seller or transferor to the division up to the amount of the reasonable value of the property acquired by the purchaser or transferee. If a notice is filed, the division shall notify both the seller (or transferor) and the purchaser (or transferee) of the amount to be withheld from the purchase or transfer price to cover all taxes, interest and penalties due under this chapter and unpaid up to the date of sale or transfer. The purchaser or transferee shall withhold this amount from the purchase or transfer price or if payment of money or property is not involved, he shall withhold the performance that constitutes consideration for the sale or transfer, until the seller or transferor produces a receipt from the division showing that such tax, interest and penalty had been paid or a certificate from the division showing no tax is due. The purchaser or transferee is relieved of any duty to withhold from the purchase or transfer price and shall have no liability for tax, interest or penalty due hereunder from the seller or transferor, if the division fails to notify the purchaser or transferee of such amount claimed due at least five (5) days before the date of such sale or transfer. If the purchaser or transferee is notified by the division of the amount to be withheld for the purchase or transfer price and does withhold such amount, the purchaser's or transferee's liability for any tax, interest or penalty hereunder shall be limited to the amount withheld. If the purchaser or transferee fails to withhold from the purchase or transfer price the amount requested by the division, the purchaser or transferee shall be liable for any tax, interest or penalty due in excess of any amount withheld, but not exceeding the amount of the reasonable value of the property acquired by him. The purchaser or transferee shall pay over to the division any amount withheld hereunder upon notification of the refusal of the seller or transferor to pay any tax, interest or penalty due hereunder and upon notification of the division's claim against the purchaser or transferee for any such month. Nothing in this section shall be construed to relieve the seller or transferor of his liability for tax, interest and penalty due from him, except that any payments received from the purchaser or transferee as provided herein shall reduce such liability payable to the division.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
Appeals from any ruling of the Commissioner hereunder shall be made to the Board of Appeals established pursuant to Charter Section 76-6 in the same manner as other appeals to the Board. The Board shall have authority to annul, modify or affirm any such ruling appealed from, in conformity with the intent and purpose of this chapter.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
All proceeds resulting from the imposition of this tax including interest and penalties shall be deposited in the general fund of the City.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
This chapter shall apply to any lease entered into or renewed after April 1, 1991.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
Any person found guilty of violating, disobeying, neglecting, or refusing to comply with any of the provisions of this chapter except when otherwise specifically provided, upon conviction thereof shall be fined not less than fifty dollars ($50.00) nor more than two hundred dollars ($200.00) for the first offense and not less than three hundred dollars ($300.00) nor more than five hundred dollars ($500.00) for the second and each subsequent offense in any one hundred eighty (180) day period. A person who commits repeated offenses in excess of three (3) within any one hundred eighty (180) day period is guilty of a misdemeanor of the first degree. A separate and distinct offense shall be regarded as committed each day upon which said person shall combine any such violation, or permit any such violation to exist, after notification thereof.
(Ord. No. 532-91. Passed 3-18-91, eff. 3-22-91)
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