(a) This section does not apply to taxpayers that are subject to and required to file reports under Chapter 5745 of the Ohio Revised Code. Net profit from a business or profession conducted both within and without the City of Bucyrus shall be considered as having taxable situs in Bucyrus for purposes of the Bucyrus Income Tax in the same proportion as the average ratio of the following:
(1) The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in Bucyrus during the taxable period to the average original cost of all of the real and tangible personal property owned and used by the taxpayer in the business or profession during the same period, wherever situated.
As used in the preceding paragraph, real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rent thereon by eight;
(2) Wages, salaries and other compensation paid during the taxable period to persons employed in the business or profession for services performed in Bucyrus to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed, excluding compensation described in Section 187.31(a)(11).
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in Bucyrus to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
(b) As used in the preceding paragraph “sales made in Bucyrus” mean:
(1) All sales of tangible personal property delivered within Bucyrus regardless of where title passes if shipped or delivered from a stock of goods within Bucyrus;
(2) All sales of tangible personal property delivered within Bucyrus regardless of where title passes even though transported from a point outside Bucyrus if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within Bucyrus and the sales result from such solicitation or promotion;
(3) All sales of tangible personal property shipped from a place in Bucyrus to purchasers outside such municipal corporation regardless of where title passes if the taxpayer is not, through its own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(c) If one of the factors (property, sales, or payrolls) is missing, the other two (2) percentages are added and the sum is divided by two (2), and if two (2) of the factors are missing, the remaining percentage is the business apportionment percentage.
A factor is applicable even though it may be apportioned entirely in or outside the City of Bucyrus.
EXAMPLE 1:
Corporation having places of business in Bucyrus, Detroit and Cleveland.
Bucyrus real and tangible personal property $10,000. All real and personal property (Bucyrus, Detroit and Cleveland) $100,000. Percentage: 10%.
Bucyrus sales $15,000. All sales $75,000. Percentage: 20%.
Bucyrus payroll $6,000. All payroll $20,000. Percentage: 30%.
Business Apportionment Percentage:
10% plus 20% plus 30% divided by 3 = 20%.
EXAMPLE 2:
Same corporation owning no real or tangible personal
property anywhere. Bucyrus sales $15,000. All sales $75,000.
Percentage: 20%.
Bucyrus payroll $6,000. All payroll $20,000. Percentage 30%
Business Apportionment Percentage:
20% plus 30% divided by 2 = 25%.
EXAMPLE 3.
Same corporation owning real and tangible personal property in Bucyrus valued at $10,000 and owning no real or tangible personal property outside Bucyrus. Other factors same as in Examples 1 and 2.
Business Apportionment Percentage:
100% plus 20% plus 30% divided by 3 = 50%.
After determining such business apportionment percentage, the tax shall be determined by applying that percentage to the entire net profits of the taxpayer, wherever derived (thus arriving at the taxable net profit), and computing one (1) percent plus any additional tax of limited duration imposed by Ordinance or Resolution of the resultant taxable net profit.
Generally, the Business Apportionment Percentage Formula will result in a fair apportionment of the taxpayer's net profits within and without the City of Bucyrus. However, due to the peculiar circumstances of certain businesses, the formula may result in an overstatement of earnings and tax in some cases or result in a tax evasion in others, thus does not do justice to the taxpayer or the City of Bucyrus. Accordingly, in such cases, the City Income Tax Administrator may substitute factors calculated to bring about a fair and proper apportionment in any case where the taxpayer has used the Business Apportionment Percentage Formula.
(Res. 240-2003. Passed 12-30-03.)