(a) Method of Determination.
(1) In the taxation of income which is subject to City income taxes, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of the City disclose with reasonable accuracy what portion of its net profit is attributable to that part of the business or profession conducted within the boundaries of the City, then only such portion shall be considered as having a taxable situs in the City for the purposes of Municipal income taxation. 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 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 subsection (a)(1)A, "real property" means property rented or leased by the taxpayer. The value of such property shall be determined by multiplying the annual rental thereof 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.
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.
(2) In the event that the foregoing allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(b) Sales Made in the City. As used in subsection (a)(1)C hereof, "sales made in the City" means:
(1) All sales of tangible personal property which is delivered within the City regardless of where title passes if shipped or delivered from a stock of goods within the City;
(2) All sales of tangible personal property which is delivered 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 which is shipped from a place within the City to purchasers outside of 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 place where delivery is made.
(4) The net profit from all sales of real property within the City by persons not residing within the property sold and sold in the ordinary course of a business or occupation.
(c) Total Allocation. Add together the percentages determined in accordance with subsection (b) hereof, or such of the aforesaid as are applicable to the particular taxpayer and divide the total so obtained by the number of percentages used in deriving the total in order to obtain the business allocation percentage referred to in Section 191.03
(a).
A factor is applicable only if it may be allocable inside the City.
(d) Rentals. Rental income received by a taxpayer shall be included in the computation of net profits from business activities under subsection (a) hereof, only if and to the extent that the rental, ownership, management, or operations 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.
(Ord. 97-60. Passed 11-20-97.)