(a) If the books and records of a Taxpayer conducting a Business both within and without the City disclose with reasonable accuracy what portion of its Net Profits is attributable to the conduct of Business within the City, then only such portion will be considered as having a taxable situs within the City. In the absence of such records, Net Profits from a Business conducted both within and without the City will be considered as having a taxable situs within the City in the same proportion as the average of the following ratios of the Taxpayer:
(1) The average net book value.
A. The average net book value of the real and tangible personal property owned or used by the Taxpayer in the Business in the City during the Applicable Tax Year to the average net book value of all of the real and tangible personal property owned or used by the Taxpayer in the Business during the same Applicable Tax Year, wherever situated.
B. 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 rental thereon by eight (8).
(2) Salaries, Wages, Commissions and Other Compensation.
A. Salaries, Wages, Commissions and Other Compensation paid by the Taxpayer during the Applicable Taxable Year to Persons employed in the Business for services performed in the City to Salaries, Wages, Commissions and Other Compensation paid during the same Applicable Tax Year to Persons employed in the Business wherever their services are performed, excluding compensation that is not taxable by the City under Sections 718.01(F)(8) and 718.011 of the Revised Code.
B. As used in the preceding paragraph, Persons employed does not include any subcontractor or independent contractor.
(3) Gross receipts of the Taxpayer’s Business from sales made and services performed during the Applicable Tax Year in the City to gross receipts of the Taxpayer’s Business during the same Applicable Tax Year from sales and services wherever made or performed.
(b) If the foregoing allocation formula does not produce an equitable result, another basis may be substituted by the Administrator under uniform regulations so as to produce an equitable result.
(c) As used in this chapter, “sales made in the City” means:
(1) All sales of tangible personal property delivered within the City regardless of where title passes if shipped or delivered from a stock of goods within the City;
(2) All sales of tangible personal property delivered within the City regardless of where title passes even though transported from a point outside the City if the Taxpayer is regularly engaged through its own Employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion;
(3) All sales of tangible personal property shipped from a place within the City to purchasers outside the City 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.
(d) An affiliated group of Corporations that files a consolidated City income tax return pursuant to Section 191.04(g) shall determine the City income tax liability of each member of the group properly included in the combined filing in accordance with the following steps:
Step 1: Determine the Net Profits of the affiliated group attributable to each member by applying the allocation factors set forth in Section 191.05
to the consolidated income of the affiliated group. For this purpose, the numerator of each of the factors shall consist of information pertaining solely to the individual member as if the numerator of each of the factors did not contain the phrase “in the City” and the denominator of each of the factors shall consist of the information pertaining to all members of the group properly included in the combined return filed with the City. The result is the Net Profits of each member of the affiliated group included in the consolidated City income tax return.
Step 2: Determine the Net Profits of each member of the affiliated group attributable to the City by applying the allocation factors set forth in Section 191.05 to the Net Profits of each member as determined in Step1.
Step 3: Apply the City income tax rate to the Net Profits of each member of the affiliated group attributable to the City as determined in Step2.
(Ord. 154-00. Passed 1-8-01.)