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                                          2023 NET PROFIT INCOME TAX 

                     FORM 27 INSTRUCTION BOOKLET 

Filing Requirements                                                                                  Alternate Method 
Every corporation,  partnership,  trust,  or  estate  that  conducts  business  in  a  RITA          Check this box if you are requesting a method other than the prescribed three 
municipality must  file  a  return  and  pay  tax  on net profit earned in the municipality.  A      factor  formula  for  apportioning  net  profits.  The  request  must  be  in  writing, 
disregarded entity or qualifying subchapter S subsidiary for federal income tax purposes             attached  to this  return,  and contain an explanation as to why an  alternate 
is not considered the “taxpayer” under Ohio law.  Instead, the “taxpayer” includes any               method is being requested.    
other person who owns the disregarded entity or qualifying subchapter S subsidiary. 
                                                                                                     Small Employer 
When to File                                                                                         Check this box if the taxpayer is a small employer.  A small employer is an Ohio 
Generally,  a  business  must  file  its  income  tax return  on  or  before  the  fifteenth  (15th) employer that had total gross revenue of less than $500,000.  A small employer 
day of the fourth (4th) month following the end of the taxpayer’s taxable year.                      does not include the federal  government, any state government, including  any 
Note: Calendar year end filers due April 15, 2024.                                                   state agency or instrumentality; any political subdivision; or any entity treated as 
                                                                                                     a  government for financial  accounting and reporting  purposes.  See  ORC 
                                                                                                     §718.01 (TT).
Where to File 
Forms may be mailed with payment to:  RITA, P.O. Box 94582, Cleveland, OH 44101-
4582; without payment to:  RITA, P.O. Box 89475, Cleveland, OH 44101-6475; or with                   ORC 718.021 Election 
refund to: RITA, P.O. Box 94652, Cleveland, OH 4410-4652.  Please visit ritaohio.com                 Check this box if electing to apportion income based on the guidelines in ORC 
for office locations and business hours.                                                             718.021  and will be  situsing any payroll,  property or  sales  from a qualifying 
                                                                                                     remote employee or owner at the individual’s qualifying remote work location to 
                                                                                                     that individual’s qualifying reporting location.  
When a Return is Not Required 
Nonprofits (as  defined  in  IRC  Section  501c)  are  not  required  to  file  an annual return 
if a copy of the  organization’s  approved  IRS determination letter is  on file  with  RITA.        Line 1. Federal Taxable Income 
However,  should  a  nonprofit  have  unrelated  business  income, said  nonprofit  is               Indicate your C Corporation Federal Taxable Income (“FTI”), or the equivalent on 
required to file a municipal return and pay tax thereon.                                             Line  1.  Refer  to  the  AFTI  worksheet  found  on  Page  3  of  Form  27  or  at 
                                                                                                     ritaohio.com to determine the starting point for FTI. A taxpayer that is not a C 
                                                                                                     Corporation and is not an individual, must compute FTI as if the taxpayer were 
Extensions of Time to File                                                                           a C Corporation. 
Effective  with tax  year 2023 for calendar  year filers  (effective tax  year 2022 for fiscal 
year filers) a federal extension extends the municipal due date to the fifteenth day of the 
eleventh month after the last day of the taxable year.  For tax years prior to 2023 for              Line 3B.  Checkbox 
calendar year filers and 2022 for fiscal filers, a federal extension extends the municipal           Check this  box  when using  different  Net Operating Loss  amounts  for  different 
due date to the fifteenth day of the tenth month after the last day of the taxable year to           municipalities and attach your Net Operating Losses worksheet.  
which the return relates.  It is not necessary to file a copy of the federal extension with 
RITA by the annual filing due  date.    Attach  a  copy  of  the  federal  extension  when           For Tax Year 2023, only two RITA municipalities allow a net operating loss to be 
filing the Net Profit annual return on or before the     extended due  date.  If you have            carried forward greater than five (5) years for tax years beginning prior to 1/1/17. 
not requested or received a federal extension you may receive an extension for the filing            JEWETT  allows  a  net  operating  loss  to  be  carried  forward  for  a  maximum  of 
of the Net Profit annual return by completing Form 20-EXT Net Profit Estimated Income                seven (7) years for tax years beginning prior to 1/1/17. 
Tax  and/or  Extension  of  Time  to  File  which  is  due by  the  annual  filing  due  date.  An 
extension to file is not an extension to pay – the tax owed must be paid by the annual               MCDONALD allows a net operating loss to be carried forward for a maximum of 
filing due date. Remit Form 20-EXT to pay the tax balance due.                                       ten (10) years for tax years beginning prior to 1/1/17.  
        Extensions of time to file have no effect on the due dates of estimated                      A municipality specific worksheet or schedule is required to support a net 
        taxes. If the return is on extension, use Form 20-EXT to pay first quarter                   operating loss carryforward claimed on the return. 
       estimated taxes on or before the fifteenth (15th) day of the fourth (4th) 
        month of the tax year.  
Caution                                                                                              Line 3Bi.  This line is intentionally left blank 

Rounding Off to Whole Dollars                                                                        Line  3Bii.  Pre-Apportioned Losses from 
A business may round off cents on its return and schedules. Eliminate any amount less                Tax Years Beginning on or  After 1/1/18 
than fifty cents and increase any amount from fifty cents through ninety-nine cents to the 
next higher dollar.                                                                                  Utilized in this Tax Year   
                                                                                                     Enter the total amount of pre-apportioned net operating loss being used. If you 
                                                                                                     select the Line 3B checkbox and used different amounts of a net operating loss 
Penalty and Interest                                                                                 for various municipalities, enter the greatest value amount of the net operating 
In  accordance  with  the law,  penalty and interest is charged  on taxes  (including                loss used on this Line. Attach the Net Operating Loss schedule to the form for 
estimated taxes) paid late, even if an extension of time to file is granted. Penalties may           additional support documentation.  
also be charged for failing to file a  return  when due. A fee will be charged to your 
account  for  a dishonored check or  a check/electronic debit  that  cannot be 
processed.    RITA  may  choose  to  redeposit  your  returned  item  electronically.                Line 3C. Percent Allocable to RITA 
Additionally,  you understand  and  agree that we may collect a returned item                        If the business operates strictly within one RITA municipality, enter 100% as the 
processing fee as allowed by state law. Electronic filers assume all responsibility                  percentage  on  Line  3C.  Otherwise,  enter  the  total  average  percentage  from 
for the accuracy of the information submitted and are, therefore, subject to any                     Page 4, Schedule Y, Step 5. The Ohio Revised Code requires that Schedule Y 
charged fees described above for any errors.                                                         be the default method used to determine the percentage of income attributable 
                                                                                                     to  RITA  municipalities  by  business  entities  conducting  business  activity  both 
                                                                                                     within and outside RITA municipalities. 
Uniform Definition of Net Profit 
Ohio  law  provides  a  uniform  definition  of  taxable  income  for  net  profit  tax  returns,    Line 4 Amount Subject to Municipal Income 
“Adjusted Federal Taxable  Income”  (AFTI). This definition can  be  found under Ohio 
Revised Code (ORC) §718.01. Refer to the AFTI worksheet found on Page 3 of Form 27                   Tax 
or  at ritaohio.com  to  determine  AFTI  as  it  pertains  to  a  taxpayer  that  is  not  a C      Enter the amount of Line 3b(iii) multiplied by 3C (the percentage) on Line 4. Note 
Corporation and is not an individual, and who must compute Federal Taxable Income                    if you checked the 3B checkbox you will need to calculate the income for each 
(FTI) as if the taxpayer were a C Corporation.                                                       municipality separately and enter the total.  
                                                                                                     Per ORC  §718.02  (G)  when  computing  taxable  income  allocable  to  Brooklyn, 
                                                                                                     Jackson,  Lagrange,  Niles,  Oberlin,  Spencerville,  Walton  Hills  and  Wintersville, 
Name and Address                                                                                     add back to the income apportioned to each of these municipalities the amount 
Print your company name, address, and federal identification number.                                 of the stock option income that is exempt from each municipality’s withholding 
                                                                                                     (attach schedule).

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Schedule B – Distribution of Tax within Line C. Charitable Contribution Adjustment
Add charitable contributions in excess of what would be allowed for federal tax
RITA Municipalities purposes if the taxpayer were a C Corporation. Excess charitable contributions
If the amount of income (loss) and tax reported on Lines 4 and 5 of this form is to be should be carried forward to subsequent years. Subtract charitable contributions
allocated to any RITA municipality, you must fill in the names of all the RITA carried over from prior years to the same extent as would be allowed if a C
municipalities in which you conducted business along with the amount of taxable Corporation. Attach a schedule showing your carry forwards for municipal tax
income (loss) and tax due for each. If tax due is $10 or less for a municipality, enter purposes.
zero in the Tax Due field of Schedule B for that municipality. The total tax distribution in
Schedule B must equal the total tax due shown on Page 1, Line 5. Attach a schedule if
you need more space. Line D. Other
Each taxpayer, who is not an individual, must compute net profit as if the entity
were a C corporation. As such, in addition to the adjustments required for Lines
Schedule X – Reconciliation with Federal B and C on this worksheet, the taxpayer must also make the following applicable
Income Tax Return adjustments on Line D of this worksheet:
This schedule is used to make adjustments when total income (Line 1) includes income • Add back any distribution deduction claimed on IRS form 1041 (estates
not taxable and/or items not deductible for municipal purposes. Enter the amounts of and trusts only).
any such items in Schedule X and carry totals from Line G and Line Q respectively, to • Add back the additional deductions, if any (generally, depreciation
Lines (2A) and (2B). expense deductions) claimed on the IRS form 1065 on account of the
election described in IRC section 743 or section 754 (partnerships and
LLCs treated as partnerships only).
Line A. Section 1221 and 1231 Losses • Add the amount of recapture income described in IRC section 291.
Report all losses (ordinary and capital) directly related to the sale, exchange, or other • Add the amount of interest expense otherwise deducted to the extent that
disposition of an asset described in Section 1221 or 1231 of the Internal Revenue Code deduction is not allowed to a C corporation under IRC section 163 (j).
(IRC). Losses related to Section 1221 assets are usually reported on Federal Schedule • Add back all other items of income and deductions to the extent those
D while losses related to Section 1231 assets are usually reported on Federal Form items (i) are not listed above, (ii) are not already included in the
4797. computation of net profit, and (iii) would be taxable or nondeductible,
respectively, if the taxpayer were a C corporation.
Line B. Taxes Based on Income • Subtract any amount otherwise included in computation of net profit to the
Include foreign, state, local, and other taxes based on income. extent that amount would either be nontaxable or deductible if the
taxpayer were a C corporation.

Line C. 5% of Certain Intangible Income
Multiply Schedule X, Line O, (if used) by 5%. (Line C is not applicable to Wickliffe; Schedule Y – Business Apportionment
intangible income is taxable to the city of Wickliffe). Formula

A Business Apportionment Formula consisting of the average original cost of
Line D. Certain Owner Compensation real and tangible personal property, gross receipts, and wages paid must be
For use by taxpayers that are not C Corporations and are not individuals. Ohio law used by business entities not required to pay tax on entire net profits by reason
prohibits taxpayers that are not C Corporations and not individuals from claiming a of doing business both within and without of RITA municipalities. (ORC §
deduction for payments to a qualified self-employed retirement plan, payments for 718.02) However, if the Business Apportionment Formula does not produce an
health or life insurance for an owner or owner-employee, or federal self-employment equitable result, another basis (for example Books and Records) may be
tax. Report all such payments here. substituted following the process outlined in Section 3(F)(3)(b) of RITA’s Rules
and Regulations.
NOTE: Check the ORC 718.021 Election box on page 1 if the taxpayer has
Line E. REIT and RIC Adjustments elected to apportion income based on the guidelines in ORC 718.021 and will be
A real estate investment trust or regulated investment company must report all situsing any payroll, property or sales from a qualifying remote employee or
dividends, distributions, or amounts set aside for the benefit of investors included in owner at that individual’s qualifying remote work location to that individual’s
Page 1, Line 1. qualifying reporting location.

Line N. Certain Section 1221 and 1231 Gains Step 1. Property
Report all income and gains directly related to the sale, exchange, or other disposition The average original cost of real property and tangible personal property within
of an asset described in Section 1221 or 1231 of the IRC. (Note: Do not include RITA municipalities. Annual rental on rented or leased real and tangible personal
income or gain(s) described in Section 1245 or 1250 of the IRC. ORC §718.01 (E) property situated within the RITA municipality multiplied by 8.
requires all S-Corporations and partnerships to increase their Section 1250 gains by the
adjustment all C Corporations must make under IRC Section 291.) Property at a qualifying remote employee or owner’s qualifying remote work
location may be sitused to a qualifying reporting location under ORC 718.021. If
Line P. Other Items Not Taxable making this election note that it applies to all municipalities and the ORC
Use this line to report pass-through income/(loss) from another entity. Indicate the 718.021 Election box on Page 1 must be selected.
Federal Identification Number of the business that originated the pass-through income
and include a copy of the K-1 issued. Do not include or take credit for tax paid by the Step 2. Wages and Salaries
business that generated the pass-through income. Wages, salaries and other compensation paid during the taxable period to W-2
employees for services performed within RITA municipalities, excluding
Also use this line to report any other income RITA municipalities are specifically compensation from which taxes are not required to be withheld under ORC §
prohibited from taxing that is not required to be reported on another line of Schedule X 718.011. If your business is considered a “Small Employer” as defined on page
or on the AFTI Worksheet. Note: Cancellation of indebtedness and wage adjustments 1 of these instructions or your business is impacted by the 20 day rule, allocate
associated with federal work and job credits are included as income under federal code. wages and salaries in the same manner in which they were withheld.
AFTI (ORC §718.01(E)) does not permit deductions for cancellation of indebtedness or
for wage adjustments associated with federal work and job credits Wages, salaries and other compensation earned at a qualifying remote
employee or owner’s qualifying remote work location may be sitused to a
AFTI Worksheet qualifying reporting location under ORC 718.021. If making this election note
Ohio law creates a uniform definition of taxable income for net profit tax returns, that it applies to all municipalities and the ORC 718.021 Election box on Page 1
Adjusted Federal Taxable Income (AFTI). The definition of AFTI is found at ORC must be selected.
§718.01(E). A taxpayer that is not a C Corporation and is not an individual must make
the adjustments in Lines B, C and/or Line D below. Step 3. Gross Receipts
Total gross receipts of the business or profession from sales and rentals made
Line B. Section 179 Adjustment and services performed during the taxable period in the municipal corporation to
Add federal Section 179 depreciation in excess of what would be allowed for federal tax total gross receipts of the business or profession during the same period from
purposes if the taxpayer were a C Corporation. Excess Section 179 expenses should sales, rentals and services, wherever made or performed.
be carried forward to subsequent years. Subtract Section 179 depreciation carried over
from prior years to the same extent as would be allowed if a C Corporation. Estates Sales or services at a qualifying remote employee or owner’s qualifying remote
and trusts can claim the IRC section 179 deduction to the extent the deduction would work location may be sitused to a qualifying reporting location under ORC
be allowed if the estate or trust were a C corporation. Attach a schedule showing your 718.021. If making this election note that it applies to all municipalities and the
carryforwards for municipal tax purposes. ORC 718.021 Election box on Page 1 must be selected.

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Step 3. Gross Receipts (continued) Line 6B. Amount of Previous Year Credits
Sales and gross receipts in RITA municipalities means: Enter credit from prior year(s). (This should be the overpayment you indicated on
(1) Gross receipts from the sale of tangible personal property shall be sitused to the the prior year return to be credited against this year’s tax).
municipal corporation only if, regardless of where title passes, the property meets
either of the following criteria: Line 7A. Balance Due
a) The property is shipped to or delivered within the municipal corporation If Line 5 is greater than Line 6C, enter the difference here. Remittance in this
from a stock of goods located within the municipal corporation. amount must accompany the return when filed. A business may round off cents.
b) The property is delivered within the municipal corporation from a location
outside the municipal corporation, provided the taxpayer is regularly engaged
through its own employees in the solicitation or promotion of sales within such Line 7B. Overpayment Claimed
If Line 6C is greater than Line 5, enter the difference here. This amount will be
municipal corporation and the sales result from such solicitation or promotion. transferred as a credit unless you request a refund. Amounts $10 or less will not
(2) Gross receipts from the sale of services shall be sitused to the municipal be refunded. If requesting a refund, please check the refund box on return
corporation to the extent that such services are performed in the municipal envelope to expedite processing of the refund.
corporation.
(3) To the extent included in income, gross receipts from the sale of real property
located in the municipal corporation shall be sitused to the municipal corporation. Line 8. Computation of Estimated Tax
Estimated tax payments are due on the fifteenth (15th) day of the fourth
(4) To the extent included in income, gross receipts from rents and royalties from real (4th) sixth (6th), ninth (9th) and twelfth (12th) months of each fiscal year.
property located in the municipal corporation shall be sitused to the municipal
corporation. A. Enter the estimated taxable income and tax for each municipality in the space
(5) Gross receipts from rents and royalties from tangible personal property shall be provided next to the name of that municipality. Then place the total estimated
sitused to the municipal corporation based upon the extent to which the tangible taxes on Line 8A.
personal property is used in the municipal corporation.
B. Credit from prior year: If upon completion of your annual net profit
Form 27 you have accrued a credit and did not request a refund, you may
Schedule Y-1. Reconciliation of S c h ed u l e take that credit on Line 8B. Otherwise, place a zero on this line.

Y Wages to Withholding Returns D. Enter the amount of estimated tax to be paid with this return. For your
Use this schedule to reconcile workplace wages, salaries, etc. allocated to RITA convenience, you may pay the full amount of total estimated tax due, (Line 8C)
municipalities on Schedule Y with the amounts reported on your withholding returns with this declaration. Otherwise, at least 1/4 of the estimated tax due, less any
filed for the tax year covered by this return. credit carryforward, must be remitted with this declaration and the
remaining amount will be billed. If the return is filed on extension, more than ¼ of
Line 1. Withholding Return Wages the estimated tax may be due.
A calendar year taxpayer must use the workplace wages reported on their annual
Reconciliation of Income Tax Withheld (Form 17). A fiscal year taxpayer must use the For each RITA municipality owed, if your estimated payments are not 90%
sum of the wages reported on the Form 11 withholding statements that correspond to of the tax due or are not equal to or greater than your prior year’s total tax
the fiscal year. liability, you will be subject to penalty and interest charges. Quarterly
payments of estimated tax must be made to each RITA municipality if the
anticipated amount owed is greater than or equal to $200.
Line 2. Explanation of Discrepancy
Attach an explanation if the overall discrepancy is: (1) greater than 10% of the total
workplace wages reported; and (2) greater than $5,000. If you are reporting workplace Line 9. Total Due
wages for multiple RITA municipalities apply the 10% / $5,000 thresholds to each Print your federal employer identification number on your check or money order
municipality. and make it payable to RITA. Sign and date Form 27 in the space provided.
Enclose your check or money order with the Form 27 along with a copy of the
federal return and supporting schedules as indicated below.
Line 3. Other Company Information
Provide the Company Name and Federal Identification Number under which the
withholding tax was remitted if different than the FEIN reported on page 1 of the Form WHAT TO ATTACH TO YOUR RETURN:
27. Attach a complete copy of the Federal Form 1041, 1065, 1120, 1120-A, 1120-
REIT, or 1120S as appropriate. Also attach copies of Schedule D, Schedule E,
Form 1125-A, Form 4562, Form 4797, Form 8825, and any supporting
Schedule Z. Pass-Through Distributive Shares statements for “other income”, “taxes and licenses”, “other expenses”, and Form
1125-A “other costs”. If applicable, attach copies of any K-1 schedules issued or
of Net Income received. If filing a consolidated return, attach copies of your federal
All pass-through entities must attach a schedule showing each partner/shareholder consolidation schedules. If you issued any 1099-NEC forms, please attach
name, social security number, distributive share, guaranteed payments (if applicable) copies of those issued to Ohio residents. Note: The federal return MUST be
and ownership percentage. The amounts reported on this schedule must correspond attached to be considered a complete tax return. Please also attach all
with the amounts reported on your federal return. applicable schedules and 1099-NEC to avoid delays in processing.

Schedule ZZ: Consolidated Returns Joint Economic Districts (JEDDs) or Joint
Taxpayers filing consolidated returns must attach Federal Form 851 or a schedule
listing the name, address and employer identification number of each affiliate included Economic Development Districts (JEDZs)
in the consolidated return when filing their Form 27. Once an election is made to file a Most RITA revenue sharing districts (JEDDs and JEDZs) require taxpayers to file
consolidated return, permission is needed to file separately in future years. For tax annual Net Profit returns separately from the related municipal tax authority,
years beginning on or after January 1, 2016, consolidated filers have a five year opt- meaning net profits must be allocated to revenue sharing districts as if the
in/out window for changing from consolidated to single filing, or vice versa, and can districts are separate, stand-alone municipalities. However, the following JEDDs
elect each year to include or exclude income from 80% PTE ownership from the or JEDZ require that you file the annual Net Profit return with the related tax
consolidated group. Please see ORC §718.06 for more information on municipal authority
income tax consolidated return requirements. JEDD or JEDZ ______ Tax Authority
Beachwood East JEDD Beachwood
Line 5. Municipal Tax Due Beachwood West JEDD Beachwood
You must complete Schedule B on Page 2 for any amount shown on Line 5. See Orange Chagrin Highland JEDD Orange
ritaohio.com to obtain current tax rates.

Line 6A. Payments on Declarations of
Estimated Municipal Tax
Enter estimated payments made to RITA municipalities for this taxable year.

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