Business Income Tax Facts

The Village of West Union has enacted a local income tax on the net profits of all businesses located within the Village of West Union, or conducting business within the limits of West Union. Beginning on January 1, 2008 the West Union Income Tax rate is 1% (.01) based on the net profits of a business. The previous West Union tax rate of 1/2%) was effective from January 1, 2002 to December 31, 2007. All business transactions that originate within West Union are subject to this income tax regardless of the final destination of the product or service. If a business has locations both within and outside the limits of West Union, only the portion of net income attributable to the West Union location is subject to this tax.

 

Definitions

Declaration of Estimated Tax - an estimate of the net profit for the current calendar (fiscal) year. Use last year's amount of net profit rounded to the nearest $100. Multiply the estimated net profits by 1% (.01). Indicate the amount of any tax credit from previous year(s). Subtract the tax credits (if any) from your estimated West Union tax liability to determine the balance of your estimated tax due. You may pay the full amount of this estimate when filing your return; otherwise, you must multiply the total by 90% then divide by 4 to determine your quarterly amount due. Pay the 1st quarter with your tax return. The Income Tax Bureau will send notices when each quarterly installment becomes due.

Employee - one who works for wages, salary, commission or other type of compensation in the service of an employer.

Employer - an individual, partnership, corporation, non-profit entity, governmental agency or other association that employs one or more persons on a salary, wage, commission or other compensation. An employer does not include a person who employs only domestic help for such person's private residence. Filing Deadline - the last date for submitting your West Union Income Tax return is April 15 (or the I.R.S. due date) and the W-3 Annual Employer Reconciliation is January 31 of each year. The filing deadline for W-1 Employer Report of Taxes Withheld is fifteen (15) days following the month or quarter being reported.

Itinerant Business (12 Day Occasional Entry Rule) - any non-resident business who provides products or services for a period of less than 12 days in a calendar year inside the limits of the Village of West Union. Itinerant businesses are not subject to the West Union Income Tax.

Non-Taxable Income - proceeds from capital gains, except for ordinary gains, interest income, dividends and other nontaxable income.

Net Operating Loss - a business net operating loss can be carried forward up to three (3) years and applied towards business profit. Net operating losses cannot be carried backward against prior net profits or used to offset any earned earned wages.

Rental Income - the net profits from the rental of residential or commercial rental units is subject to the West Union Income Tax.

Tax Extension - an extension for filing your tax return for filers who are unable to meet the regular deadline. A valid extension request extends the due date for filing a return six (6) months from the original due date of the return.

Taxable Gross Income - all income received from products sold and/or services rendered in which the sale of said products or services originated within the limits of West Union regardless of the final destination of the products or services.

Taxable Net Profits - includes the net gain from a business, or profession including those pertaining to capital gains and losses of a business after deduction of all ordinary and necessary expenses without deduction of salaries paid to partners or owners of a business.

Business Tax Forms

FR - Business Return - annual business income tax return due by April 15 or four and a half (4.5) months after the end of the fiscal year.

Q1 - Quarterly Installment of Estimated Tax - statement of estimated tax due each quarter (April 15, June 15, September 15, and December 15) based on the previous year's tax return.

W1 - Employer's Report of Taxes Withheld - monthly or quarterly report of West Union tax withheld from employee's wages. Employers with monthly payroll of over $5,000 per month are required to file this form monthly.

W3 - Withholding Tax Reconciliation - annual return used to reconcile the amount of employee tax withheld with the total taxable wages paid to West Union.

Current Residency List - a listing of current residents of rental property filed with the Income Tax Bureau.

Tax Bureau Services Tax Consultations - The Income Tax Bureau will provide any business with assistance or answer questions regarding the West Union Income Tax. In addition, a special appointment can be arranged upon request.

Substitution of Forms - The Income Tax Bureau will accept a substitute tax form if the substitute form contains essentially the same information as the original form.

 

Questions?...

Who has to file a Business West Union Tax Return (Form FR)? - Any business located inside or conducting business inside West Union except Itinerant businesses (see definitions).

Our business is located inside West Union, but all of our sales are to locations outside of West Union, do we still need to file a West Union tax return? Yes, all business transactions that originate in West Union are subject to the West Union income tax regardless of the final destination of the product.

What should be done if a business has one (or more) locations located outside the Village of West Union? The business will need to determine what portion of net profit was generated from the West Union location and pay the proper amount of tax.

Our business operates on a fiscal year, what should we do? Please inform the West Union Income Tax Bureau of your fiscal year and file your annual return within four and a half (4.5) months following the end of your fiscal year.

How do we request an extension for filing an annual return? In order to receive an extension for filing your West Union tax return, you must request a federal extension first, then send a letter requesting a West Union tax extension and include a copy of your federal extension filed. You will be granted a six (6) months extension from the original due date of the tax return. Please note however, that in order to avoid any late penalties, you will be required to pay at least 90% of your expected tax liability when you file a request for an extension.

What are the office hours of the Income Tax Bureau? During tax season (January 29 – April 15) the Tax Administrator is present in the Village Clerk's office at 33 Logans Lane Tuesdays 3:00 p.m. – 6:00 p.m. and Saturdays 8:00 a.m. to 2:00 p.m.

If you have any additional questions regarding the West Union Income Tax, please call 937-217-8855 and leave a message. Your call will be returned as soon as possible.