In the taxation of income which is subject to the tax provided in this chapter, if the books and records of a taxpayer conducting a business or profession both within and outside of the boundaries of the City disclose with reasonable accuracy what portion of the net profit of such business or profession is attributable to that part of the business or profession conducted in the City, then only such portion shall be considered as having a taxable situs in the City for the purposes of the tax levied by this chapter. The portion of the entire net profits of a taxpayer to be allocated as having been derived from within the City, in absence of actual records thereof, shall be determined as follows:
Multiply the entire net profits by a business allocation percentage to be determined by a three-factor formula of property, payroll and sales, each of which shall be given equal weight as follows:
(a) The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the City during the taxable period to the average net book value of all the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. As used in this section, "real property" includes property rented or leased by the taxpayer, the value of such property to 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 the City to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed; and
(c) Gross receipts of the business or profession from sales made and services performed during the taxable period in the City to gross receipts of the business or profession during the same period from sales and services, wherever made or performed.
If the formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(d) (1) The net profits allocable to the City from business, professional or other activities conducted in the City by corporations or unincorporated entities (whether resident or nonresident) may be determined from the records of the taxpayer only if the taxpayer has bona fide records which disclose with reasonable accuracy what portion of his or her net profits is attributable to that part of his or her activities conducted within the City.
(2) If the books and records of the taxpayer are used as the basis for apportioning net profits, a statement must accompany the return, explaining the manner in which such apportionment is made in sufficient detail to enable the Tax Administrator to determine whether the net profits attributable to the City are apportioned with reasonable accuracy.
(3) In determining the income allocable to the City from the books and records of a taxpayer, an adjustment may be made for the contribution made to the production of such income by headquarters activities of the taxpayer, whether such headquarters is within or without the City.
(Ord. 1966-230. Passed 12-30-66; Ord. 2005-028. Passed 3-2-05.)