For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
BUSINESS. Any enterprise, activity, trade, occupation, profession or undertaking of any nature conducted for gain or profit. BUSINESS shall not include the usual activities of board of trade, chambers of commerce, trade associations or unions, or other associations performing services usually performed by trade associations or unions. BUSINESS shall not include funds, foundations, corporations or associations organized and operated for the exclusive and sole purpose of religious, charitable, scientific, literary, educational, civic or fraternal purposes, where no part of the earnings, incomes or receipts of such unit, group or association, inures to the benefit of any private shareholder or other person.
BUSINESS ENTITY. Each separate corporation, limited liability company, business development corporation, partnership, limited partnership, registered limited liability partnership, sole proprietorship, association, joint stock company, receivership, trust, professional service organization or other legal entity through which business is conducted.
CITY. The City of Dawson Springs, Kentucky.
COMPENSATION. Wages, salaries, commissions or any other form of remuneration paid or payable by an employer for services performed by an employee, which are required to be reported for federal income tax purposes and adjusted as follows:
(1) Include any amounts contributed by an employee to any retirement, profit sharing or deferred compensation plan, which are deferred for federal income tax purposes under a salary reduction agreement or similar arrangement, including, but not limited to, salary reduction arrangements under §§ 401(a), 401(k), 402(e), 403(a), 403(b), 408, 414(h) or 457 of the Internal Revenue Code; and
(2) Include any amounts contributed by an employee to any welfare benefit, fringe benefit or other benefit plan made by salary reduction or other payment method which permits employees to elect to reduce federal taxable compensation under the Internal Revenue Code, including, but not limited to, §§ 125 and 132 of the Internal Revenue Code.
CONCLUSION OF THE FEDERAL AUDIT. The date that the adjustments made by the Internal Revenue Service to net income as reported on the business entity’s federal income tax return become final and unappealable.
EMPLOYEE. Any person who renders services to another person or any business entity for compensation, including an officer of a corporation and any officer, employee or elected official of the United States, a state or any political subdivision of a state, or any agency of instrumentality of any one or more of the above. A person classified as an independent contractor under the Internal Revenue Code shall not be considered an EMPLOYEE.
EMPLOYER. The person for whom an individual performs or performed any service, of whatever nature, as the employee of such person; except that:
(1) If the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term EMPLOYER means the person having control of the payment of such wages; and
(2) In the case of a person paying wages on behalf of a non-resident alien individual, foreign partnership or foreign corporation, not engaged in trade or business within the United States, the term EMPLOYER means such person.
FINAL DETERMINATION OF THE FEDERAL AUDIT. The revenue agent’s report or other documents reflecting the final and unappealable adjustments made by the Internal Revenue Service.
FISCAL YEAR. An accounting period of 12 months ending on the last day of any month other than December.
INTERNAL REVENUE CODE. The Internal Revenue Code in effect on December 31 of the year preceding the year in which the return to the city is due (for example, if the return is due on 4-15-2008, then the applicable Internal Revenue Code would be the one in effect on 12-31-2007).
NET PROFIT. Gross income as defined in § 61 of the Internal Revenue Code minus all the deductions from gross income allowed by Ch. 1 of the Internal Revenue Code, and adjusted as follows:
(1) Include any amount claimed as a deduction for state tax or local tax which is computed, in whole or in part, by reference to gross or net income and which is paid or accrued to any state of the United States, local taxing authority in a state, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States or any foreign country or political subdivision thereof;
(2) Include any amount claimed as a deduction that directly or indirectly is allocable to income which is either exempt from taxation or otherwise not taxed;
(3) Include any amount claimed as a net operating loss carry back or carry forward allowed under § 172 of the Internal Revenue Code;
(4) Include any amount of income and expenses passed through separately as required by the Internal Revenue Code to an owner of a business entity that is a pass-through entity for federal tax purposes; and
(5) Exclude any amount of income that is exempt from state taxation by the State Constitution, or the Constitution and statutory laws of the United States.
PERSON. Every natural person, whether a resident or non-resident of the city. Whenever the word PERSON is used in a clause prescribing and imposing a penalty in the nature of a fine or imprisonment, the word, as applied to a partnership or other form of unincorporated enterprise, shall mean the partners or members thereof, and as applied to corporations, shall mean the officers and directors thereof.
RETURN or REPORT. Any properly completed and, if required, signed form, statement, certification, declaration or any other document permitted or required to be submitted or filed with the city.
SALES REVENUE. Receipts from the sale, lease or rental of goods, services or property.
TAX DISTRICT. Any city of the first to fifth class with the authority to levy net profits, or occupational license taxes.
TAXABLE NET PROFIT.
(1) In case of a business entity having payroll or sales revenue only within the city means net profit, as defined in this section.
(2) In case of a business entity having payroll or sales revenue both within and without the city means net profit, as defined in this section, and as apportioned under § 111.04 of this chapter.
TAXABLE YEAR. The calendar year or fiscal year ending during the calendar year, upon the basis of which net profit is computed.
(Prior Code, § 111.01) (Ord. 07-08, passed 9-16-2008)