A. General. Receipts from any transactions shall be attributable to the City of Reading if the person's sole place of business is located in the City of Reading. If a person has more than one place of business in Pennsylvania, but no interstate commerce, the receipts attributable to the City of Reading shall be equal to total receipts times a fraction, the numerator of which shall be receipts from transactions within the City of Reading and the denominator of which shall be receipts from transactions within the City of Reading and other place(s) of business in Pennsylvania. If a person has more than one place of business in Pennsylvania, and interstate commerce, the receipts attributable to the City of Reading shall be equal to total receipts, less receipts attributable outside of Pennsylvania, times a fraction, the numerator of which shall be receipts from transactions within the City of Reading and the denominator of which shall be receipts from transactions within the City of Reading and other place(s) of business in Pennsylvania. [Amended 1-22-2007 by Ord. No. 9-2007]
B. Persons rendering professional, commercial, industrial or personal services. [Amended 1-22-2007 by Ord. No. 9-2007]
(1) General. Receipts from any service shall be attributable to the City of Reading if the transaction or any activity in connection therewith occurs within the City of Reading; or is generated, directed, managed, or controlled by a place of business in the City of Reading and contributes to the taxpayer's ultimate business purpose; or where there is no other place of business.
(2) Out-of-City branch office. Where a taxpayer maintains a bona fide branch office or place of business outside the City of Reading, he will nevertheless be subject to business privilege tax liability on those receipts which are the result of services rendered or business activities generated within or attributable to the City of Reading. Said taxpayer will be permitted to exclude his branch office receipts from his taxable gross receipts only where he sustains the burden of proving that the City of Reading does not have the requisite minimal contact or nexus with those receipts to sustain the imposition of the business privilege tax.
C. Lessors of tangible personal property. Persons doing business within the City of Reading who own and hold title to tangible personal property which is leased to others are required to report gross receipts from the rental of or license to use such property according to the following rules:
(1) Where the original situs of the property is within the City of Reading, the receipts from tangible personal property leased to others are deemed to be:
(a) Wholly taxable receipts, if the property is delivered to lessees inside Pennsylvania.
(b) Nontaxable receipts, if the property is delivered to lessees outside Pennsylvania.
(2) Where the original situs of the property is outside Pennsylvania, the receipts from tangible personal property leased to others are deemed to be:
(a) Allocable receipts, if the property is delivered to lessees within the City of Reading.
(b) Nonallocable and nontaxable receipts, if the property is delivered to lessees outside the City of Reading, whether within or without the United States.
(c) The term "original situs," as used herein, means the place at which the property is warehoused when not leased to others and to which place the property is returned upon termination of the lease. Where there is no such established place, the term "original situs" shall mean the principal office of the taxpayer.
(3) This subsection does not apply to conditional sales of tangible personal property.
D. Lessors of real property. Persons doing business within the City of Reading who own and hold title to real property which is leased to others are required to report the gross receipts from the rental of all such property which is situated in the City of Reading. This subsection does not apply to conditional sales of real property. Where a lessor has no more than two rental units in his principal place of residence such rentals are excluded from taxable receipts provided he has no other rental units of realty located within the City of Reading.
E. Place of origin and delivery outside of the City of Reading. Where the sale of origin of goods, wares and merchandise in a sales transaction is a location owned or leased by the seller outside of the City of Reading and the place of delivery is a location outside of the City of Reading regularly maintained by the other party to the transaction, the receipts are nonallocable and nontaxable.
F. Location of vendee. Receipts from the sale of goods, wares and merchandise delivered to a vendee located outside of the City of Reading by an employee of the taxpayer who works in or from, or is attached to the City of Reading place of business of the taxpayer, is fully taxable if the vendee is located within Pennsylvania and nontaxable if the vendee and place of delivery is located outside of Pennsylvania.
G. There will be no allocation for receipts generated in intrastate commerce unless the receipts sought to be excluded from business privilege tax returns are clearly allocable to a bona fide branch office or other place of business located outside of the City of Reading. The burden of proving that any receipt is allocable to an office or other place of business located outside of the City of Reading is on the taxpayer and he must be able to support any such exclusion of receipts from the City of Reading on the basis of clear and objective evidence shown on his books, records and accounts. If a taxpayer does not keep his books, records and accounts in a manner which will clearly and objectively show the allocation of receipts to his various branch offices or places of business, the business privilege tax will be based on the entire amount of gross receipts from all intrastate sources. The receipts will not be allocated on the basis of subjective and unrecorded data. [Amended 1-22-2007 by Ord. No. 9-2007]
H. The following is a list of factors which are relevant, but not conclusive, for determining whether a person maintains a bona fide non-City branch office within the meaning of this section: [Amended 1-22-2007 by Ord. No. 9-2007]
(1) Name of taxpayer in telephone directory, or building directory (if applicable), or on door leading to entrance of office or otherwise displayed on the office exterior.
(2) Stationery and calling cards showing address.
(3) Storage of inventories or display samples at location in question.
(4) A written lease for the space involved and the payment of rent.
(5) A written agreement for the maintenance of an office by an agent or agency on behalf of the taxpayer.
(6) Employees based in or operating out of a location outside of the City of Reading.
(7) The expenses attributable to an office located outside of the City of Reading are allowed as deductions on the taxpayer's federal income tax return.
(8) The office serves as a base of operations from which the person manages, directs and controls business activities.
(9) No single factor will raise a presumption that a bona fide office located outside of the City of Reading exists. Use by the taxpayer or his agents or employees of facilities provided by the taxpayer's client, employer, customer, or any other person, even for a protracted period of time and even where such use constitutes part of the contractual or business arrangement entered into by the taxpayer with the said client, employer, customer, or any other person does not establish a branch office located outside of the City of Reading for purposes of allocation of gross receipts.
I. A field trailer used by contractors can be considered a bona fide branch office located outside of the City of Reading office only if all the following activities are conducted therein: [Amended 1-22-2007 by Ord. No. 9-2007]
(1) It bears the name of the taxpayer.
(2) It is staffed by taxpayer's employees who report directly to the field site, and who control the operation from that site.
(3) At least one telephone is present and listed in the taxpayer's name.
(4) It is maintained at the same site for no less than 60 days.
(5) It is owned and maintained by the taxpayer or has all the indicia of ownership by the taxpayer.
(6) Business is solicited.
(7) Meetings are held.
(8) Mail is received.
(9) Supplies are stored.
(10) Accounting and other administrative duties are performed.
J. An office maintained in the taxpayer's home which is located outside of the City of Reading is a bona fide office or place of business only if it meets the test set forth in Subsection H above and if it is exclusively used on a regular basis as such for federal income tax purposes under the United States Internal Revenue Code of 1976, as amended. [Amended 1-22-2007 by Ord. No. 9-2007]
K. A motel or hotel residence, used on a long-term basis, is not a bona fide branch located outside the City of Reading unless it fulfills the criteria set forth above. [Amended 1-22-2007 by Ord. No. 9-2007]