(a) Net profit from a business conducted both within and without the boundaries of the City shall be considered as having a taxable situs in the City for purposes of income taxation in the same proportion as the average ratio of:
(1) The average original cost of the real and tangible personal property owned or used by the taxpayer in the business in the City 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 during the same period, wherever located. As used in this paragraph, 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.
(2) Wages, salaries, and other compensation paid during the taxable period to employees in the business for services performed in the City to wages, salaries, and other compensation paid during the same period to all employees in the business, wherever their services are performed, but excluding compensation described in Section 183.02(f). As used in the preceding sentence, employees shall not include any subcontractor or independent contractor. Wages, salaries and other compensation shall be included to the extent that they represent qualifying wages.
(3) Gross receipts of the business from sales made and service performed during the taxable period in the City to gross receipts of the business during the same period from sales and services, wherever made or performed.
(4) If foregoing apportionment formula does not produce an equitable result, another basis may be substituted under uniform regulations so as to produce an equitable result. (Ord. 2004-84. Passed 12-17-04.)
(b) As used in subsection (a) hereof, sales made in the City means:
(1) All sales of tangible personal property delivered to a location within the City, regardless of where title passes, if shipped or delivered from a stock of goods located within the City;
(2) All sales of tangible personal property delivered to a location within the City, regardless of where title passes, even though transported from a point outside the City, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the City and the sales result from such solicitation or promotion;
(3) All sales of tangible personal property shipped from a location within the City to purchasers outside the City, 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 location where delivery is made.
(Ord. 2000-64. Passed 11-28-00.)
(c) (1) If an individual is engaged in two or more taxable business activities to be included in the same return, the net loss of one unincorporated business activity may be used to offset the profits of another (except any portion of a loss or profit separately reportable for municipal tax purposes to another taxing entity) for purposes of arriving at overall net profits or net operating loss. Net operating losses from the operation of a business or profession are not deductible from employee earnings but may be carried forward as set forth herein.
(2) The portion of a net operation loss sustained in any taxable year allocated to the City which has been detailed in a return submitted to the Tax Administrator may be applied against the portion of the profit of succeeding year(s) allocated to the City, until exhausted, but in no event for more than five taxable years immediately following the year in which the loss occurred. No portion of a net operating loss shall be carried back against net profits of any prior year. The portion of a net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
(d) (1) A consolidated return may be filed by a group of corporations who are affiliated through stock ownership if that affiliated group filed for the same tax period a consolidated return for Federal income tax purpose pursuant to Section 1501 of the Internal Revenue Code. A consolidated return must include all companies that are so affiliated. Once a consolidated return has been filed for any taxable year, consolidated returns shall continue to be filed in subsequent years unless the applicable requirements of the City for discontinuing the filing of consolidated returns have been met.
(2) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates, or some other method, or in case any person operates a division, branch, factory, office, laboratory or activity within the City, constituting a portion only of its total business, the Tax Administrator shall require such additional information as he may deem necessary to ascertain whether net profits are properly allocated to the City. If the Tax Administrator finds net profits are not properly allocated to the City by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory, or activity or by some other method, he shall make such allocation as he deems appropriate to produce a fair and proper allocation of net profits to the City.
(Ord. 2004-84. Passed 12-17-04.)