(A) Musicians and entertainers.
(1) In the field of professional musicians, there has arisen a practice peculiar to the engagement of musicians exclusively through a so-called “contractor.” The practice which arose by prescription by the American Federation of Musicians and of local union regulations, enables the purchaser of music to deal with only one of the number of musicians required for a particular occasion.
(a) Contractor. The term CONTRACTOR means that individual musician through whom the purchaser and the musician negotiated the contract of service and performance thereof. The contractor may or may not perform actual musical service under a contract which he or she has negotiated.
(b) Purchaser of music. The person, partnership, organization or association for whom or which the musical services are to be performed or furnished and who exercise an employee’s control over the conduct of the musicians. For example, hotels, cafés, taprooms, restaurants, theaters, clubs, radio stations and radio sponsors.
(c) Name bands or orchestras. A name band or orchestra is one which is identified or known by a name and which holds itself out to the public as a permanent organization, and in addition thereto has either: a fixed personnel; or the individual member musician has contracted for his or her services with the leader or the owner of the band at a fixed salary by term or by individual engagement, and over whom the purchaser has no direct control.
(2) When a contract for the purchase of music has been executed between a purchaser and a contractor, the musician shall be deemed to be the employee of the purchaser, except in the case of name bands, in which event the musicians shall be deemed employees of the leader or owner of the name band.
(3) The purchaser, and in the case of a name band, the leader or owner thereof, shall be the person responsible for withholding the license fee from the wages paid to the musicians and the remittal thereof to the City Clerk/Treasurer/Tax Collector.
(4) An entertainer other than a musician is usually engaged by a purchaser through a booking agent. The booking agent, once the contract of employment has been executed, does not exercise an employer’s control over the entertainer. The owner of a club, café, taproom, theater or any place which furnishes entertainment to the public or to its patrons, shall be deemed the person liable as an employer of entertainers. Such employer must deduct the license fee from the compensation paid to the entertainer and remit the same to the City Clerk/Treasurer/Tax Collector.
(B) Insurance agents.
(1) Employees or contractors. Individuals engaged in the sale of insurance may be either employees or independent contractors.
(a) Where the individual is subject to the direct control of another as to the manner of his or her conduct and is paid a fixed fee, he or she is considered a employee, and not subject to the privilege license tax, and the amount of the license shall be withheld at the source.
(b) Where the individual is not under the direct control of another and may conduct the sale as he or she sees fit, receiving his or her payment in the form of commission from the sale, he or she is considered an independent contractor and shall file his or her own return and make payment as an independent contractor.
(2) Commissions subject to license fee.
(a) In determining whether the commissions payable by reasons of the selling of any policy by an agent resulted from work done or services performed or rendered in the city, the test shall be the residence of the insured at the time of issuance of the policy, rather than the actual place of solicitation, except where the solicitation is in the city and the agent’s established place of business is within the city, the commission is subject to the license fee regardless of the residence of the insured.
(b) If an agent has an office outside the city as well as an office of his or her own within the city, the commission on policies sold to nonresidents handled through the outside office are not subject to a license fee, since under such circumstances, they are not gross sales or gross income of an independent city business.
(3) Group insurance commissions. Commissions paid on the sale of contracts of group insurance are subject if the group is located within the city as a unit without regard to the residence of the writing agent.
(4) Bonuses and incentive payments subject to license fee. The proportionate part of all bonuses and incentive payments received by an agent, which bears the same ratio to the total amount of bonuses and incentive payments received by him or her as the amount of commissions received by him or her on policies sold to residents, bears to the total amount of commissions received by him or her on all policies sold, to both residents and nonresidents, is subject to the license fee.
(5) Advances and drawing accounts. There are two main types of advances and drawing account payments: those which impose upon the agent a written obligation to repay, if they are not in fact earned; those which (though offset by commissions as earned) cannot be recovered at law even though the agent fails to produce enough business to justify them. The first of these two types of advance and drawing account payments is in the nature of a loan and accordingly is never subject to a license fee. All commissions or bonuses applied toward the repayment of these types of advances and drawing accounts are subject in accordance with the rules set forth above. The second type of advance and drawing account payment is subject compensation when received to the extent that it exceeds compensation earned after July 15, 1994.
(6) Collection of license fee at source. It is the duty of all companies doing business in the city (or general agents in the case of agents whose contracts are with a general agent alone and to whom payment is made by general agent out of funds of general agent) to deduct or withhold monthly or more often the amount of license fee due on all compensation paid to agents who are considered employees.
(C) Federal, state or municipal employees.
(1) Compensation received from the federal government for services performed within any federal reservation situated within the geographical limits of the city, title to which is in the federal government, is subject income, even though exclusive jurisdiction thereof was granted to the federal government by the state and the city.
(2) Compensation received from state, county and municipal government agencies is subject to the provisions of this chapter.
(3) Refund of tax withheld and paid covering activities outside the city will be made upon application to the City Clerk/Treasurer/Tax Collector.
(D) Real estate salespersons and brokers.
(1) Real estate salespersons or brokers who are engaged in the business as employees rather than an independent contractor, are not required to file a return for the commissions earned by them. The employer is required to deduct the fee from the commissions earned and remit the same to the City Clerk/Treasurer/Tax Collector.
(2) Real estate salespersons or brokers acting as independent contractors are subject to a license fee on their gross receipts in accordance with the rules and regulations herein pertinent.
(E) Tailors. Tailors who receive work to perform in their own shops for a specified amount to be paid for each garment are independent contractors.
(F) Nurses.
(1) A registered nurse (except as provided below) is in the same status as any other professional person and is required to file a return upon her gross receipts.
(2) A registered nurse regularly employed by a hospital, institution, business entity or individual is not subject to the business privilege license tax.
(G) Executives and directors. An officer or director of a corporation performing services out of the city, except for occasional visits to the city office to examine correspondence, and the like, is not subject to the license fee. Where an organization meets in the city, and part of the work required as officer or director of such organization is done by him or her in the city, his or her compensation is subject in the ratio that those duties bear to his or her total duties.
(H) Domestic servants. Domestic servants employed in private homes are not subject to the provisions of this chapter.
(I) Miscellaneous.
(1) Where compensation is received (paid) in property, its fair market value, at the time of receipt, shall be subject to a license fee or to withholding (deduction of fee at source). Board and lodging and similar items shall be included in earnings at their fair market value, where such board and lodging is considered part of the compensation paid. However, the value accepted for the purpose of the state and federal payroll taxes may be accepted by the Director of Finance.
(2) In the case of employees who incur and pay expenses directly connected with the performance of their duties or services and for which no reimbursement is made by the employer the reasonable actual expenses incurred and paid in earning the compensation may be deducted in computing the amount subject to the license fee. To be allowed, however, such expenses must be recognized as deductions by federal and state authorities for income tax purposes.
(3) Such items as personal, family or living expenses, expenses of commuting to and from work, old age benefits taxes, deductions for group insurance, hospitalization, pension plans and the like, are not deductible as expenses directly connected with the performance of service.
(2002 Code, § 110.19) (Ord. 1994-C-2, passed 6-6-1994)