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INSTRUCTIONS FOR FORM L-NP
GENERAL INSTRUCTIONS declaration and the remaining amount will be billed to you in three equal
installments. If the estimate is left blank, an estimate will be created for
FILING REQUIREMENT - Every corporation, partnership, trust, or estate— you based on your prior year tax liability and municipal allocation. If no
whether a resident or non-resident—that conducts business in Lakewood estimate is required, enter zero (0) on Line 16.
must file a return and pay tax on the net profit.
WHAT CONSTITUTES NET PROFITS – Net profits are based on Adjusted Quarterly payments of estimated tax must be made to Lakewood if your
Federal Taxable Income. Ohio Revised Code Section 718.01 created a total tax liability is at least $200. If your estimated payments are not 90%
uniform definition of taxable income for net profit returns. In the case of of the tax due or are not equal to or greater than your prior year’s total
a taxpayer that is not a C Corporation and is not an individual (i.e. pass- tax liability, you will be subject to penalty and interest charges.

through entities), federal taxable income shall be computed as though
the taxpayer was a C Corporation. Please see Ohio Revised Code Section SPECIFIC INSTRUCTIONS

718.01 (“ORC 718.01”), available via the State of Ohio website at LINE 1 – Place here your taxable federal income per attached tax return
https://codes.ohio.gov/ohio-revised-code/ for more information. (Form 1120 – pg. 1, Line 28; Form 1120-A – pg. 1, Line 24; Form 1120S – pg. 4,
HOW TO TREAT A NET LOSS – The net operating loss (NOL) sustained prior to Line 18; Form 1065 – pg. 5, Line 1; Form 1041 – pg. 1, Line 17). Returns will
2018, allocable to Lakewood, may be applied against the profit of succeeding not be accepted unless accompanied by a copy of the entire federal tax
year(s) allocable to Lakewood, until exhausted, but in no event for more than return .
five (5) taxable years. The NOL shall not be carried back against net profits of LINE 2 – Enter amount from Schedule W, Line P.
any prior year. The NOL sustained shall be allocated to Lakewood in the same LINE 3 – Line 1 plus or minus Line 2.
manner as provided herein for allocation of net profits to Lakewood. The
NOL of a business which loses its identity through merger, consolidation, etc. LINE 4 – If applicable, enter amount from Schedule X, Line 5.
shall be allowed as a loss carryforward deduction to the surviving business LINE 5 – Multiply Line 3 by Line 4.
entity to the extent permitted by the Internal Revenue Service. LINE 6 – Loss may be carried forward for a maximum of five years, or until
WHEN & WHERE TO FILE – File with the City of Lakewood – Division of exhausted, whichever is earlier. Loss may not be carried back.
Municipal Income Tax Office located at 12805 Detroit Avenue, Suite 1,
Lakewood, Ohio 44107 on or before the fifteenth day of the fourth month LINE 7 – Subtract Line 6 from Line 5. This is your Lakewood taxable income.
following the end of the entity’s tax year. If the due date falls on a Saturday, LINE 8 – Multiply Line 7 by 1.5% or .015.
Sunday, or legal holiday, file by the next business day. LINE 9 – Enter estimate payments made to Lakewood for this taxable year.
METHOD OF PAYMENT – Checks or money orders should be made payable to Estimated tax payments can be verified by calling (216) 529-6620.
CITY OF LAKEWOOD – DIVISION OF TAX. Amounts $10.00 or less need not
LINE 10 – Enter unused credit from prior year(s) overpayment(s).
be remitted. There will be a $30.00 charge for dishonored checks.
Visa, MasterCard, Discover, or American Express may also be used for LINE 11 – Add Lines 9 and 10.
payment of municipal income tax. To charge the amount of tax due, LINE 12 – Subtract Line 11 from Line 8 and proceed to Line 15. This is your
complete the Pay By Credit Card – MasterCard/Visa/Discover/American tax due. If $10.00 or less, enter zero (0) and proceed to Line 13.
Express box next to the signature lines on the front of the tax return. LINE 13 – If Line 11 is greater than Line 8, and not $10.00 or less, you have
EXTENSION(S) OF TIME TO FILE – A federal extension will extend the overpaid. Subtract Line 8 from Line 11 and enter the amount on Line 13.
municipal due date to the due date to which the federal return is extended.
A copy of the federal extension must be filed with the Lakewood Division of LINE 14 – If there is an overpayment on Line 13, enter the amount you want
credited and/or refunded on the appropriate line. Proceed to Line 16.
Municipal Income Tax by the extended due date.
ROUNDING OFF TO WHOLE DOLLARS is permitted. Eliminate any amount LINE 15 – If Line 8 is greater than Line 11, and not $10.00 or less, you have a
less than fifty cents and increase any amount from fifty cents through ninety- balance due. Subtract Line 11 from Line 8 and enter the amount on Line 15.

nine cents to the next higher dollar. LINE 16 – Enter the amount from Line 8. Your 2023 tax liability is used to
PENALTY AND INTEREST – In accordance with the law, penalty and interest determine your 2023 tax estimate. If you anticipate earning more income
will be charged for failing to file a return and pay taxes, including estimated (wage and/or non-wage) in 2023, use Form L-ES to determine your 2023
estimate. Quarterly payments of estimated tax must be made if the

taxes, when they are due. anticipated tax due amount is $200.00 or more.
DECLARATION OF ESTIMATED MUNICIPAL TAX ON NET PROFITS – A
Declaration of Estimated Income Tax on Net Profits is required by LINE 17 – Multiply Line 16 by 25% or .25.

municipal ordinance and must be filed by the following: LINE 18 – Enter amount from Line 14. This is the 2022 credit to be applied to
1. All corporations (including S Corps and LLCs) whose income is the first quarter estimate.
derived from sales made, work done, services performed or
rendered, and business or other activities conducted in Lakewood, LINE 19 – Add Lines 15, 17, and subtract Line 18. This is the amount due to
the City of Lakewood. Amounts $10.00 or less need not be paid. Make your
whether or not such income results in a net profit.
check or money order payable to the CITY OF LAKEWOOD – DIVISION OF
2. All resident or non-resident partnerships, limited partnerships, TAX.
estates, or trusts which expect a profit or loss derived from sales
made, work done, services performed or rendered, and business or SIGNATURE – Sign and date your return before submitting it to the City
other activities conducted in Lakewood. of Lakewood. A return is not “filed” within the meaning of the law, until
The estimate is due on the 15 day of the fourth month following the end signed by the taxpayer or an agent legally authorized to sign for such th
of the entity’s tax year. For your convenience, you may pay the full taxpayer. If someone other than the taxpayer prepares the return, this
amount of total estimated tax due (Line 16) with this declaration. person should sign the return.
Otherwise, ¼ of the estimated tax due must be remitted with this

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SCHEDULE INSTRUCTIONS FOR FORM L-NP
SCHEDULE W – RECONCILIATION WITH FEDERAL Line 1, Column B – The average original cost of all real and tangible personal
INCOME TAX RETURN PER ORC 718 property owned or used by the taxpayer except leased or rented real property
physically located within Lakewood city limits.

This schedule is used for the purpose of making adjustments when total federal Line 2, Column A – Gross rental amount paid regardless of physical location
taxable income (FTI) on Line 1 includes income not taxable and/or items not multiplied by 8.
deductible for municipal purposes. Enter the amounts of any such items in
Line 2, Column B – Gross rental amount paid for property located within
Schedule W and carry total (Line P) to Line 2. Lakewood city limits multiplied by 8.
LINE A – Non-deductible capital losses incurred from the sale or exchange of
Line 3, Column A – Add Line 1, Column A and Line 2, Column A.
capital or other assets per ORC 718.01(E)(3).
LINE B – Expenses not attributable to the sale, exchange, or other disposition of Line 3, Column B – Add Line 1, Column B and Line 2, Column B.
IRS Section 1221 property per ORC 718.01(E)(2). Use actual expenses or Line K Line 3, Column C – Line 3, Column B divided by Line 3, Column A. If the amount is
multiplied by 5% (.05). zero, enter N/A on this line.
LINE C – Includes federal, state, local, and other taxes paid or accrued based on Line 4, Column A – The total gross receipt from sales made, work performed,
income per ORC 718.01(E)(10). and/or services rendered regardless of physical location.
LINE D – Guaranteed payments to partners – applies only if guaranteed payments SPECIAL NOTE: “Sales” and “gross receipts” in Lakewood (Line 4) mean:
to partners/members had not been included within net profits under C.C.C.  All sales or tangible property which is shipped from Lakewood to
361.09. purchasers outside of Lakewood, regardless of where title passes,
LINE E – Charitable Contributions – Non-Corporate business entities should report through its own employees regularly engaged in the solicitation or
any contributions over the 10% corporate limitation. Non-corporate businesses promotion of sales at the place where delivery is made.
may carry forward any unused contributions as if they were C-Corporations. A  All sales of tangible personal property which is delivered within
schedule should be provided to show how your deduction was calculated and Lakewood, regardless of where title passes, even though transported
identify any portion that was carried forward from prior years. (NOTE: Deduction from a point outside Lakewood, if the taxpayer is regularly engaged
is limited to 10% of city taxable income before consideration for any charitable through its employees in the solicitation and the sales resulting from
such solicitation or promotion.
contribution deduction)

LINE F – Non-corporate business entities may be limited to the corporate All sales of tangible personal property which is delivered within
limitations for IRS Section 179 expense deduction in accordance with ORC Lakewood regardless of where title passes, if shipped or delivered from
a stock of goods within Lakewood.
718.01(E)(10).
LINE G – For use by taxpayers that are not C Corporations and are not individuals. Line 4, Column B – The total gross receipt from sales made, work performed,
Ohio law prohibits taxpayers that are not C Corporations and not individuals from and/or services rendered within Lakewood city limits.
claiming a deduction for payments to a qualified self-employed retirement plan, Line 4, Column C – Line 4, Column B divided by Line 4, Column A. If the amount is
payments for health or life insurance for an owner or owner-employee, or federal zero, enter N/A on this line.
self-employment tax. Report all such payments here. Line 5, Column A – The total wages, salaries, and other compensation paid to W2
LINE H – Other expenses not deductible (with documentation and/or employees regardless of physical location for services performed except
explanation). compensation exempt from municipal taxation under ORC 718.011 and 718.021.
LINE I – Add Lines A through H and enter amount on Line I. Line 5, Column B – The total wages, salaries, and other compensation paid to W2
LINE J – Non-deductible gains incurred from the sale or exchange of capital or employees within Lakewood city limits for services performed except
compensation exempt from municipal taxation under ORC 718.011 and 718.021.
other assets per ORC 718.01 (E)(4)(a).
NOTE: Wages, salaries, and other compensation earned at a qualifying
LINE K – Interest income. remote employee or owner’s qualifying remote work location may be
LINE L – Dividend income. sitused to a qualifying reporting location under ORC 718.021. If making
LINE M – Income from patents, trademarks, and copyrights – Do not include this election, note that it applies to all municipalities and the ORC
718.021 Election box on page 1 of Form L-NP must be checked.
royalty income derived from land which is fully taxable for city purposes.
Line 5, Column C – Line 5, Column B divided by Line 5, Column A. If the amount is
LINE N – Other exempt income (attach documentation and/or explanation).
zero, enter N/A on this line.
LINE O – Add Lines J through N and enter amount on Line O.
Line 6, Column C – Add the percentages listed in Column C for Lines 3, 4, and 5.
LINE P – Subtract Line O from Line I and enter the net amount on Line P. Enter
this amount on Page 1, Line 2. Line 7, Column C – Divide the total percentage by the number of factors
(percentages) used. Enter this amount on Page 1, Line 4.
SCHEDULE X – REQUIRED MULTI-CITY NET Example 1 – Line 5, Column A shows no wages companywide. If
PROFIT ALLOCATION Column C shows 30%, 60%, and N/A for Lines 3, 4, and 5 respectively,

Provide a completed L-NP Schedule X to properly allocate your taxable city divide 90% (30% + 60%) by 2 (since only two lines have factors).
income. In order to promote uniformity and consistency in the calculation of the Example 2 – Line 5, Column A reports wages companywide. None of
net profits, it is the City of Lakewood’s policy to strictly interpret changes in ORC the wages are earned in Lakewood. Line 5, Column C should be
718.02. reported at 0%. If Column C shows 30%, 60%, and 0% for Lines 3, 4,
NOTE: Check the ORC 718.021 Election box on page 1 of Form L-NP if and 5 respectively, divide 90% (30% + 60%) by 3 (since all three lines
the taxpayer has elected to apportion income based on the guidelines have factors – zero is considered a factor).

in ORC 718.021 and will be situsing any payroll, property, or sales from SCHEDULE Z – PARTNERSHIP DISTRIBUTIVE
a qualifying remote employee or owner at that individual’s qualifying
SHARE OF NET INCOME
remote work location to that individual’s qualifying reporting location.
Line 1, Column A – The average original cost of all real and tangible personal Must be completed by all partnerships and associations filing returns. Amounts
property owned or used by the taxpayer except leased or rented real property shown in this schedule must correspond with amounts reported on your Federal
Partnership Form. Attach an additional schedule if you need more space.
regardless of its physical location.

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