(a) A corporate taxpayer or a nonresident business entity must use the formula set forth in Section 181.03 to compute the percentage of their entire net profits (derived from activities both within and outside the Municipality) which is taxable under the Chapter and to determine the tax payable to the Municipality thereunder. If the taxpayer had a place of business outside the Municipality and was doing business in the Municipality during such period, the business allocation percentage shall be computed on the following basis: (Ohio R.C. 718.02)
(1) Multiply the entire net profits of the business by a business apportionment percentage to be determined by the ratio of:
A. The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in such municipal corporation during the taxable period to the average original cost of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. 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.
B. Wages, salaries, and other compensation paid during the taxable period to persons employed in the business or profession for services performed in such municipal corporation 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 that is not taxable by the municipal corporation under section 718.011 of the Ohio Revised Code.
C. Gross receipts of the business or profession from sales made and services performed during the taxable period in such municipal corporation to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
D. Adding together the percentages determined in accordance with subsections (a)(l)A.,B. and C .hereof, or such of the aforesaid percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in deriving such total.
1. A factor is applicable even though it may be apportioned entirely in or outside the Municipality.
2. Provided however, that in the event a just and equitable result cannot be obtained under the formula provided for herein, the Tax Administrator, upon application of the taxpayer, shall have the authority to substitute other factors or methods calculated to effect a fair and proper apportionment.
(2) As used in subsection (a)(1)C. hereof, "sales made in the Municipality" means:
A. All sales of tangible personal property delivered within the Municipality regardless of where title passes if shipped or delivered from a stock of goods within such Municipal corporation.
B. All sales of tangible personal property delivered within the Municipality regardless of where title passes, even though transported from a point outside the Municipality, if the taxpayer is regularly engaged through its own employees, in the solicitation or promotion of sales within the Municipality and the sales result from such solicitation or promotion.
C. All sales of tangible personal property shipped from a place within the Municipality to purchasers outside the Municipality 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.
(3) As used in subsection (a)(1)C. thereof, "Business Receipts" means:
A. Work done and performed or services rendered in the Municipality.
B. Rental from property situated in the Municipality, where the rental of such property is a usual or normal part of the taxpayer's business activity.
C. All other business receipts earned in the Municipality. For the purpose of determining business allocation percentage, no account shall be given to receipts, within or without the Municipality, of income derived from intangibles (including stocks, bonds, royalties and the like), the income of which is taxable under the statutes of the State. All receipts of the period covered by the report (computed on the cash or accrual basis, in accordance with the method of accounting used in the computation of the taxpayer's Federal Income Tax) shall be taken into account.
(4) Compensation for work done and performed or service rendered means:
A. Compensation and other receipts for work done or services performed within the Municipality are allocable to the Municipality and taxable under this chapter. All amounts so received, credited or charged by the taxpayer in payment for such work or services are so allocable, irrespective of whether done or performed by employees or agents of the taxpayer, by subcontractors, or by any other persons. It is immaterial where such amounts were payable or where they were received.
B. Commissions or fees received by the taxpayer are allocated to the Municipality if the services for which the commissions paid were performed in the Municipality. If the taxpayer's services, for which commissions or fees were paid, were performed for the taxpayer by salespersons or other agents or employees attached to, or working out of a place of business within the Municipality, the taxpayer's services shall be deemed to have been performed in the Municipality. Where a lump sum is received by the taxpayer in payment of services within and without the Municipality, the amount attributable to services within the Municipality, is to be determined on the basis of such services within and without.
(5) Payroll Factor includes:
A. Employees within the Municipality, includes all employees regularly connected with, or working out of, a place of business maintained by the taxpayer in the Municipality, irrespective of where the services of such employee were performed. However, if the taxpayer establishes to the satisfaction of the Administrator that because of the fact that a substantial part of its payroll was paid to employees who performed a substantial part of their services outside the Municipality, the computation of the payroll factor according to the general rule, would not produce an equitable result, then the Administrator may, in his discretion, permit the payroll factor to be computed on the basis of the amount of compensation paid for services rendered within and without the Municipality.
B. Wherever it appears that because a substantial part of the taxpayer's payroll being paid to employees attached to places of business outside the Municipality, performed a substantial part of their services within the Municipality, the computation of the payroll factor according to the general rule would not properly reflect the amount of the taxpayer's business performed inside the Municipality, the Administrator may require the payroll factor to be computed on the basis of the amount of compensation paid for services performed within and without the Municipality.
C. Whenever the services inside the Municipality are performed by leased employees, the payroll factor according to the general rule will not produce an equitable result. In this case, the payroll percentage will be eliminated from the apportionment allocation in its entirety.
(Ord. 2003-79. Passed 12-2-03.)