Words used in the business privilege tax ordinance, the mercantile license tax ordinance, and/or these regulations, but not defined in the tax provisions, these regulations, by state statute, or by the state judiciary, will be interpreted using the common and ordinary meaning afforded to such words in a local tax context. Any taxpayer may request in writing a written determination of taxability from the Tax Collector with respect to the application of the provisions of the tax provisions or these regulations. For the purpose of §§ 36.050 through 36.057, 36.070 through 36.081, 36.095 through 36.099 and 36.110 through 36.121, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
AGENT. A person with the legal authority to act on behalf of another, called a principal.
ALLOCATION OF GROSS RECEIPTS. The calculation of a share of total gross receipts for a particular base of operations when more than one base of operations exists. The allocation formula is based on a single payroll factor.
APPORTIONMENT OF GROSS RECEIPTS. The calculation of a share of gross receipts to be included in the tax base, resulting from the performance of services in Philadelphia and/or outside the state, by or in conjunction with a base of operations with substantial nexus with the borough. See § 36.057 regarding interstate commerce for apportionment formula and applicability.
ASSESSMENT. The determination of the amount of tax principal, penalty and/or interest due by a taxpayer.
ATTRIBUTION. The process of specifically identifying gross receipts directly or indirectly connected to a particular base of operations of the taxpayer.
BASE OF OPERATIONS.
(1) A physical location used by a taxpayer to conduct significant business activities.
(2) Indicia of significant business activities include, but are not limited to:
(a) Providing workers with a place to work;
(b) Providing a base from which operations are managed, directed or controlled;
(c) Storage of inventory or other business assets;
(d) Administrative, executive or marketing activities, including meetings;
(e) Maintaining business records;
(f) Business communications via telephone, fax, mail or electronic means;
(g) Utilization of business equipment;
(h) The holding out to others, through the use of signage, advertising, legal registry or stationery to indicate a business location; and
(i) Rental or sublet of real estate by a landlord or tenant.
(3) Whether a location constitutes a
BASE OF OPERATIONS is a factual determination based upon the totality of the circumstances, and no one factor is necessarily controlling. A taxpayer with a single location is deemed to have a BASE OF OPERATIONS at that location. A taxpayer claiming that a location is not a BASE OF OPERATIONS, must demonstrate that another location functions as a BASE OF OPERATIONS. A taxpayer claiming multiple business locations has the burden of proof to demonstrate that any given location constitutes a BASE OF OPERATIONS as defined herein.
(4) HOME OFFICE. An area of a personal residence is recognized as a BASE OF OPERATIONS if it is used for business, and no other BASE OF OPERATIONS is reasonably available to conduct business activities. A HOME OFFICE used for the convenience of an employee, owner or other worker, does not qualify as a BASE OF OPERATIONS. Use of a HOME OFFICE is deemed to be simply for the convenience of an employee or owner, if there is another business office where the same activities are performed.
(5) Use of a customer’s or client’s facility by a taxpayer does not qualify as a
BASE OF OPERATIONS of the taxpayer if the business activity at the facility by the taxpayer is incidental with respect to the taxpayer’s overall business activity. Business activity of sufficient size, duration and complexity will constitute a BASE OF OPERATIONS of the taxpayer.
(a) Example 1.
1. A consultant with no office in the borough spends three weeks working at a client’s location in the borough. The client provides the consultant with a place to work and access to other facilities during the three weeks. The consultant also works at other client locations and at his or her own office.
2. The consultant does not have a base of operations at his or her client’s location because the activity in the borough lacks sufficient size, duration and complexity.
(b) Example 2.
1. A property management firm headquartered outside the borough manages a building located in the borough under a three-year service contract. Several full-time employees of the management firm provide maintenance and administrative services, on a daily basis, and exclusively at the building in the borough. The building owner provides office space and a maintenance facility for the use of the property management firm’s employees.
2. The property management firm has a
BASE OF OPERATIONS in the borough because the business activity is of sufficient size, duration and complexity.
(6) Real estate located in North York Borough constitutes a
BASE OF OPERATIONS of the owner, of the lessee and of the operator.
BOROUGH. The Borough of North York, a municipality located in York County and a political subdivision of the Commonwealth of Pennsylvania.
BROKER. In general, is one who holds himself or herself out for employment by others, and acts as an intermediate negotiator between parties to a transaction, and in a sense is the agent of both parties. The determination of who is a BROKER is fact specific. In industries that require a specific license to act as a BROKER, BROKER is defined by the requirements for the specific license.
BUSINESS ACTIVITY. Any significant participation, by a person, to offer a service or sale to another, or to engage in commercial transactions.
COMMONWEALTH. The Commonwealth of Pennsylvania.
EXEMPT FROM TAX or EXEMPT. Refers to the status of persons not subject to the borough’s business privilege tax and/or mercantile license tax under the laws of the Commonwealth, for example, institutions of purely public charity, government entities or manufacturers. See § 36.056.
EXEMPTION. Also refers to certain receipts excluded from gross receipts and not subject to tax as provided by state law, borough ordinance or these regulations. Similarly, nontaxable receipts are also referred to as “exclusions”’in the ordinances and regulations. Any person claiming exemption from tax or an exclusion of gross receipts has the burden to demonstrate his or her legal right to such EXEMPTION or exclusion.
MANUFACTURING. Consists of the application of labor and skill to material whereby the original article is changed into a new, different and useful article. Whether or not an article is a manufactured product depends upon whether or not it has gone through a substantial transformation in form, qualities and adaptability in use from the original material, so that a new article or creation has emerged. See § 36.056(B)(6).
PERSON. Any individual, partnership, limited partnership, association, corporation, limited liability company, estate, trust, trustee, fiduciary or any other legally recognized entity, except such as are wholly exempt from taxation under the Act of December 31, 1965, P.L. 1257, as amended (Act 511), being 53 P.S. §§ 6924.101 et seq. and the Institutions of Purely Public Charity Act (Act 55).
SALE. The passing or assignment of ownership from the seller to the buyer for a price.
TAX. The business privilege tax and/or mercantile license tax levied by the borough.
TAX EXEMPT NONPROFIT CORPORATION OR ORGANIZATION. An institution that qualifies as a Pennsylvania Purely Public Charity. See § 36.056(B)(5).
TAXPAYER. A person subject to the tax or, in a case where the borough is seeking to determine whether a person is subject to tax. TAXPAYER also includes such a person.
(Ord. 2015-5, passed 4-28-2015)