(A) Gross receipts resulting from transactions with interstate characteristics are includable in the tax base on an apportioned basis, provided the activity that produced the receipts had a substantial nexus to a base of operations in the borough. “Transactions with interstate characteristics” within the meaning of this section include the performance of services by a taxpayer outside the state and the sale and delivery of goods to a non-Pennsylvania buyer in another state or country. The sale of interstate passenger tickets constitutes transactions with interstate characteristics.
(B) Apportionment of gross receipts will be made under the following formula:
(Total gross receipts x apportionment factor) = Gross receipts apportioned to the state |
(C) The apportionment factor shall be the product of averaging the total of the following percentages:
(1) (a) Wages, salaries, commissions and other compensation in the state, as a percentage of total wages, salaries, commissions and other compensation; and
(b) For the purpose of computing the payroll factor, other forms of compensation must be included when relevant. Other forms of compensation may include self-employment income of a proprietor or a single member of a limited liability company, an active partner’s share of partnership income, an active member’s share of the income of a limited liability company, or an active shareholder’s ordinary income from an “S” corporation.
(2) Value of the tangible personal property and real property owned or leased and situated within the state as a percentage of total tangible personal and real property owned or leased. The value of leased property is eight times the annual rental, for the purpose of this calculation; and
(3) Gross receipts from state sales and/or services, as a percentage of total gross receipts from sales and/or services.
(D) The Tax Collector may authorize unequal weighting of the three factors when unusual circumstances exist such that a straight average results in an apportionment that does not fairly reflect the activity connected to a base of operations in the borough. In such circumstances, the taxpayer must request authorization in writing to use an unequal weighting of the factors and the Tax Collector, in his or her discretion, may grant or deny such authorization in writing. In no event shall any of the three factors be weighted less than 20%.
(E) For taxpayers whose only base of operations is located in the borough, the tax base constitutes gross receipts apportioned to the state.
(F) For taxpayers with more than one base of operations in the state, gross receipts apportioned to the state may be further allocated. Refer to § 36.055 of these regulations for provisions governing attribution or allocation of receipts between or among multiple Pennsylvania locations.
(Ord. 2015-5, passed 4-28-2015)