(A) Whenever a person is engaged in or operating a business subject to a tax measured by his or her gross receipts, only those gross receipts which are directly attributable to the business operated and engaged in within the city shall be included within the measure of the tax. When, by reason of the provisions of the Constitution of the United States or the State Constitution, the measure of tax based on the gross receipts cannot be enforced without there being an apportionment thereof according to the amount of business conducted by the person within the city or in the state, as the case may be, the Collector may make such rules and regulations for the apportionment of the gross receipts and fixing the tax thereon as are necessary or desirable to overcome the constitutional objections. The rules and regulations shall avoid taxation of significant extraterritorial values and provide a measure of taxation fairly apportioned to the quantum of business actually done it the city.
(B) In establishing the rules and regulations, the Collector shall consider the following principles enunciated by the California Supreme Court:
(1) Unapportioned gross receipts may not be taxed if the receipts are derived from wholesale sale of goods delivered from a point within the city to retail sellers outside the city;
(2) Any business which involves the manufacturing and selling, handling and selling, assembly and selling, storage, handling and selling or processing and selling may be taxed upon the unapportioned total gross receipts from the sale of such manufactured, assembled, handled, stored and handled and processed goods, wherever the sales are made as to those goods wholly manufactured, handled, stored and handled, assembled or processed in the city;
(3) Unapportioned gross receipts may not be taxed if the receipts are derived from wholesale sale of products manufactured outside of the city and shipped into the city to persons for delivery pursuant to orders for such goods as placed in the city;
(4) Unapportioned gross receipts may not be rated if the receipts are derived from the retail or wholesale outlet outside the city to customers within the city after orders for said goods had been solicited in the city, but the consummation of the sales transactions had been made outside the city;
(5) Unapportioned gross receipts may not be taxed if the receipts are derived from the wholesale sale of goods manufactured outside of the city and delivered to dealers or retail sellers outside of the city pursuant to orders for such a place in the city.
(`78 Code, § 5.02.240.)