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The tax levied by this chapter shall be levied, collected and paid with respect to all salaries, wages, commissions and other compensation, and with respect to all net profits of businesses, professions or other activities, earned on and after December 31, 1971.
(Ord. 1971-33. Passed 12-13-71.)
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 the absence of actual records thereof, shall be determined by multiplying 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:
(1) 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.
(2) 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
(3) 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.
(Ord. 1966-64. Passed 12-29-66.)
As used in Section 793.05(c), "sales made in the City" means:
All sales of tangible personal property which is delivered in the City, regardless of where title passes, if shipped or delivered from a stock of goods in the City;
All sales of tangible personal property which is delivered in the City, regardless of where title passes, even though transported from a point outside the City, if the taxpayer is regularly engaged through his or her own employees in the solicitation or promotion of sales in the City and the sales result from such solicitation or promotion; and
All sales of tangible personal property which is shipped from a place in the City to purchasers outside of the City, regardless of where title passes, if the taxpayer is not, through his or her own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(Ord. 1966-64. Passed 12-29-66.)
The business allocation percentage referred to in Section 793.05 shall be determined by adding together the percentages determined in accordance with subsections (a) through (c) of Section 793.05 or such of these percentages as are applicable to the particular taxpayer and dividing the total so obtained by the number of percentages used in deriving such total. A factor is applicable even though it may be allocable entirely in or outside of the City.
(Ord. 1966-64. Passed 12-29-66.)
(a) Rental income received by a taxpayer shall be included in the computation of net profits from business activities as set forth in subsections (c) through (h) of Section 793.03 only if, and to the extent that, the rental ownership, management or operation of the real estate from which such rentals are derived (whether so rented, managed or operated by a taxpayer individually or through agents or other representatives) constitutes a business activity of the taxpayer in whole or in part.
Where the gross monthly rental of any and all real properties, regardless of number and value, aggregates in excess of two hundred fifty dollars ($250.00) per month, it shall be prima-facie evidence that the rental, ownership, management or operation of such properties is a business activity of such taxpayer, and the net income of such rental property shall be subject to tax, provided that:
(1) In the case of commercial property, the owner shall be considered engaged in a business activity when the rental is based on a fixed or fluctuating percentage of gross net sales, receipts or profits of the lessee, whether or not such rental exceeds two hundred fifty dollars ($250.00) per month;
(2) In the case of farm property, the owner shall be considered engaged in a business activity when he or she shares in crops or when the rental is based on a percentage of the gross or net receipts derived from the farm, whether or not the gross income exceeds two hundred fifty dollars ($250.00) per month; and
(b) The person who operates a licensed rooming house shall be considered to be in business whether or not the gross income exceeds two hundred fifty dollars ($250.00) per month.
(Ord. 1971-33. Passed 12-13-71.)
(a) The portion of a net operating loss, sustained in any taxable year subsequent to January 1, 1967, allocable to the City may be applied against the portion of the profit of succeeding tax years allocable 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.
(b) The portion of net operating loss sustained shall be allocated to the City in the same manner as provided in this chapter for allocating net profits to the City.
(c) The Administrator shall provide, by rules and regulations, the manner in which such net operating loss carry-forward shall be determined.
(Ord. 1966-64. Passed 12-29-66.)
The tax levied by this chapter shall not be levied on the following:
(a) Pay or allowance of active members of the Armed Forces of the United States, or the income of religious, fraternal, charitable, scientific, literary or educational institutions to the extent that such income is derived from tax-exempt real estate, tax-exempt tangible or intangible property or tax-exempt activities;
(b) Poor relief, unemployment insurance benefits, old age pensions or similar payments, including disability benefits received from local, State or Federal governments or charitable, religious or educational organizations;
(c) Proceeds of insurance paid by reason of the death of the insured, pensions, disability benefits, annuities or gratuities not in the nature of compensation for services rendered, from whatever source derived;
(d) Receipts from seasonal or casual entertainment, amusements, sport events and health and welfare activities when conducted by bona fide charitable, religious or educational organizations and associations;
(e) Alimony received;
(f) Personal earnings of a natural person under eighteen years of age;
(g) Compensation for personal injuries or for damage to property by way of insurance or otherwise;
(h) Interest, dividends and other revenue from intangible property;
(i) Gains from involuntary conversion, cancellation of indebtedness, interest on Federal obligations, items of income already taxed by the State which the City is specifically prohibited from taxing, and income of a decedent's estate during the period of administration (except such income from the operation of a business);
(j) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the United States Constitution or any act of Congress limiting the power of the states or their political subdivisions to impose net income taxes on income derived from interstate commerce; and
(k) Salaries, wages, commissions and other compensation and net profits, the taxation of which is prohibited by the Constitution of the State or any act of the General Assembly limiting the power of the City to impose net income taxes.
(Ord. 1966-64. Passed 12-29-66.)
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