(A) Except as provided in division (D) below, net profit shall be apportioned as follows:
(1) For business entities with both payroll and sales revenue in more than one tax district, by multiplying the net profit by a fraction, the numerator of which is the payroll factor, described in division (B) below, plus the sales factor, described in division (C) below, and the denominator of which is two; and
(2) For business entities with sales revenue in more than one tax district, by multiplying the net profit by the sales factor as set forth in division (C) below.
(B) The payroll factor is a fraction, the numerator of which is the total amount paid or payable in the city during the tax period by the business entity for compensation, and the denominator of which is the total compensation paid or payable by the business entity everywhere during the tax period. Compensation is paid or payable in the city based on the time the individual’s service is performed within the city.
(C) The sales factor is a fraction, the numerator of which is the total sales revenue of the business entity in the city during the tax period and the denominator of which is the total sales revenue of the business entity everywhere during the tax period:
(1) The sale, lease or rental of tangible personal property is in the city if:
(a) The property is delivered or shipped to a purchaser, other than the United States government or to the designee of the purchaser within the city regardless of the f.o.b. point or other conditions of the sale; or
(b) The property is shipped from an office, store, warehouse, factory or other place of storage in the city and the purchaser is the United States Government.
(2) Sales revenues, other than revenues from the sale, lease or rental of tangible personal property or the lease or rental of real property, are apportioned to the city based upon a fraction, the numerator of which is the time spent in performing such income-producing activity within the city and the denominator of which is the total time spent performing that income-producing activity; and
(3) Sales revenue from the sale, lease or rental of real property is allocated to the tax district where the property is located.
(D) If the apportionment provisions of this section do not fairly represent the extent of the business entity’s activity in the city, the business entity may petition the city or the city may require, in respect to all or any part of the business entity’s business activity, if reasonable:
(1) Separate accounting;
(2) The exclusion of any one or more of the factors;
(3) The inclusion of one or more additional factors which will fairly represent the business entity’s business activity in the city; or
(4) The employment of any other method to effectuate an equitable allocation and apportionment of net profit (“alternate apportionment method”). The city must approve any alternate apportionment method prior to its implementation by the business entity. Once an alternate apportionment method is approved by the city, the business entity must apply such apportionment scheme in all future tax years, unless otherwise directed by the city.
(E) All partnerships, S corporations, limited liability companies and all other entities where income is “passed through” to the owners are subject to this chapter. The occupational license tax imposed in this subchapter is assessed against income before it is “passed through” these entities to the owners.
(F) If a business entity makes, or is required to make, a federal income tax return, the occupational license tax shall be computed for the purposes of this chapter on the basis of the same calendar or fiscal year required by the federal government, and the entity shall employ the same methods of accounting required for federal income tax purposes.
(1984 Code, § 110.05) (Ord. O-77-82, passed 11-30-1982; Ord. O-78-82, passed 11-30-1982; Ord. O-15-92, passed 4-28-1992; Ord. O-47-01, passed 11-13-2001; Ord. O-65-04, passed 12-7-2004; Ord. O-18-19, passed 6-24-2019) Penalty, see § 110.99