(a) Rules of Construction. As used in this chapter, the words, terms and phrases set forth in subsection (b) hereof, and their derivations, have the meanings given therein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, and words in the singular number include the plural. "Shall" is always mandatory and not merely directory. "May" is always directory.
(b) Definitions. As used in this chapter:
(1) "Administrator" means the official designated by the City to administer this chapter, or the duly authorized agent or representative of that official, but does not mean the Department of Treasury.
(2) "Business" means an enterprise, activity, profession or undertaking of any nature conducted or ordinarily conducted for profit or gain by any person, including the operation of an unrelated business by a charitable, religious or educational organization.
(3) "Capital gains" and "capital losses" mean those terms as defined for Federal income tax purposes. In addition:
A. "Capital gains" shall also mean gains from the sale or exchange of non-capital property where such gains are taxed as capital gains under Sec. 1231 of the Federal Internal Revenue Code.
B. "Capital gains" and "capital losses" shall not include any portion of such gains or losses occurring prior to the effective date of the City income tax, January 1, 1994. In determining gain or loss on property acquired prior to January 1, 1994, the fair market value as of January 1, 1994, shall be used. The fair market value shall be determined by appraisal or other reliable evidence. In the case of traded securities, the fair market value shall be the closing price of such securities on the last business day prior to January 1, 1994. The bid price shall be used if quotations are shown in this way. If no fair market value can be determined by the above means, the following method shall be used:
1. Compute total gain or loss for Federal income tax purposes.
2. Compute the percentage of time held since the effective date of the City income tax, January 1, 1994, to the total time the property was held.
3. Apply the percentage determined in paragraph (b)(3) B.2 hereof to the amount in paragraph (b)(3) B.1. hereof to compute the capital gain or loss taxable by the City.
(4) "Compensation" means salary, pay or emolument given as compensation or wages for work done or services rendered, in cash or in kind, and includes but is not limited to the following: salaries, wages, bonuses, commissions, fees, tips, incentive payments, severance pay, vacation pay and sick pay.
(5) "Corporation" means a corporation or a joint stock association organized under the laws of the United States, this state, or any other state, territory, or foreign country or dependency.
(6) "Department" means the Department of Treasury for tax years after the 1996 tax year for which the City has entered into an agreement with the Department of Treasury pursuant to Section 9 of Chapter 1. "Department" includes a duly authorized agent or representative of the Department.
(7) "Doing business" shall be defined as follows:
A. "Doing business" means the conduct of any activity with the object of gain or benefit, except that it does not include:
1. The solicitation of orders by a person or his or her representative in the City for sales of tangible personal property, which orders are sent outside the City for approval or rejection and, if approved, are filled by shipment or delivery from a point outside the City.
2. The solicitation of orders by a person or his or her representative in the City in the name of or for the benefit of a prospective customer of a person, if orders by the customer to such person to enable the customer to fill orders resulting from the solicitation are orders described in paragraph (b)(7)A.1. hereof.
3. The mere storage of personal property in the City in a warehouse neither owned nor leased by the taxpayer.
B. A person shall not be considered to be doing business in the City, in the absence of maintaining an establishment in the City or engaging in other activity in the City, merely by engaging in one or more of the following acts:
1. Maintenance, by a corporation, of a resident agent in the City;
2. Installing, servicing or instructing in the use of equipment or other goods sold when performed by an employee-salesman of such person and where such activities are incidental to the employee-salesman's primary selling activities;
3. Occasional credit investigations or collections by an employee-salesman of such person where such activities are incidental to the employee-salesman's primary selling activities:
4. Exhibiting goods for a short time, in leased space, at a convention, exhibition or trade show;
C. Mere ownership of real or tangible personal property in the City which is not used in or related to business activity in the City and which does not produce gross income in the City.
(8) "Employee" means a person from whom an employer is required to withhold for either Federal income or Federal Social Security taxes.
(9) "Employer" means an individual, partnership, association, corporation, non-profit organization, governmental body or unit or agency, including the State, or any other entity, whether or not taxable under this chapter, that employs one or more persons on a salary, bonus, wage, commission or other basis, whether or not the employer is in a business.
(10) "Federal Internal Revenue Code" means the Internal Revenue Code of the United States in effect on the last day of the taxpayer's tax year.
(11) "Financial institution" means a bank, industrial bank, trust company, building and loan or savings and loan association, credit union, safety and collateral deposit company, regulated investment company as defined in Section 851 and the following sections of the Federal Internal Revenue Code, under whatever authority organized, and any other association, joint stock company or corporation at least ninety percent of whose assets consist of intangible personal property and at least ninety percent of whose gross income consists of dividends or interest or other charges resulting from the use of money or credit.
(12) "Fiscal year" means an accounting period of twelve months ending on any day other than December 31. Only fiscal years accepted by the Internal Revenue Service for Federal Income tax purposes may be used for City tax purposes
(13) "Net profits" means the net gain from the operation of a business, profession or enterprise, after provision for all costs and expenses incurred in the conduct thereof, determined on either a cash or accrual method. on the same basis as provided for in the Federal Internal Revenue Code for Federal income tax purposes, excluding items exempted under this chapter, but without deduction of Federal and City taxes based on income and without deduction of net operating loss carry-over or capital loss carry-over sustained prior to the effective date of this tax. However, that net operating losses and capital losses sustained after the effective date of this tax may be carried over to the same extent and on the same basis as under the Federal Internal Revenue Code, but shall not be carried back to prior years.
A. "City taxes based on income," as used in this paragraph, shall mean the City of Ionia income tax imposed by this chapter.
B. Depreciation shall be computed in the same manner as under the Federal Internal Revenue Code and taken to the same extent as taken on the taxpayer's Federal return for the same taxable year. Depreciable assets acquired before the effective date of the City tax cannot be valued as of such effective date and depreciated on that basis. However, a taxpayer may take depreciation on war emergency facilities to the extent still being depreciated on its official books, on which it elected to take special amortization in lieu of depreciation under the authority of Acts of Congress for Federal income tax purposes.
(14) "Nonresident" means an individual domiciled outside the City.
(15) "Person" means a natural person, partnership, fiduciary, association, corporation or other entity. When used in any provision imposing a criminal penalty, "person" as applied to an association means the parties or members thereof, and as applied to a corporation, the officers thereof.
(16) "Predominant place of employment" means that city imposing a tax under a uniform city income tax ordinance other than the city of residence, in which the employee estimates he will earn the greatest percentage of his compensation from the employer, which percentage is twenty-five percent or more.
(17) "Resident" means an individual domiciled in the City. "Domicile" means a place where a person has his or her true, fixed and permanent home and principal establishment, to which, whenever absent therefrom, he or she intends to return, and domicile continues until another permanent establishment is established. If an individual, during the taxable year, being a resident becomes a non-resident or vice versa, taxable income shall be determined separately for income in each status.
(18) "Taxable year" means the calendar year, or the fiscal year, used as the basis on which net profits and other income subject to tax under this chapter are to be computed, and in case of a return for a fractional part of a year, the period for which the return is required to be made.
(19) "Taxpayer" means a person required under this chapter to file a return or to pay a tax.
A. Actual residence is not necessarily domicile, for domicile is the fixed place of abode which, in the intention of the individual, is permanent rather than transitory. It is the place in which an individual has voluntarily fixed his or her habitation, not for a mere special or limited purpose, but with the present intention of making a permanent home, until some unexpected event shall occur to cause him to adopt some other permanent home. Every individual has one and only one domicile. Once established it continues until a new one is established, coupled with the abandonment of the old. Prima facie, a married woman has the same domicile as her husband. Ordinarily, the domicile of a minor follows that of the father.
The Administrator may require of individuals claiming domicile outside the City of Ionia, a statement of information with respect to the particular case. Mailing address, place of voting, statements in licenses and other applications, establishment of business and social contacts, marital status and other overt acts are evidence of domicile, but no one such item is controlling
B. If an individual is a resident during part of a taxable year and a non-resident during the remainder, he or she shall not file two returns. If he or she is required to file under this chapter, he or she shall file a resident return only, Form I-1040, reporting thereon the period of time for each status. Income which is taxable to residents, but not to non-residents (e.g. interest and dividends), shall be reported, and be subject to tax, only for the portion of the year during which he or she was a resident.
C. Each person shall use the same taxable year for City income tax purposes as such person uses for Federal income tax purposes.
(Ord. 360. Passed 12-11-93.)