(a) Method of Determination. In the taxation of income which is subject to the City income tax, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of the City shall 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 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:
(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 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 the preceding paragraph, real property shall include property rented or leased by the taxpayer and the value of such property shall 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.
(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.
In the event that the foregoing allocation formula does produce an equitable result, another basis may, under uniform regulations, be submitted so as to produce such result.
(b) Sales Made in the City. As used in subsection (a) 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 of 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.
(c) Total Allocation. Add together the percentage determined in accordance with subsection (a) hereof or such of the aforesaid percentages as are applicable to the particular taxpayer and divide the total so obtained by the number of percentages used in deriving such total in order to obtain the business allocation percentage referred to in subsection (a) hereof.
A factor is applicable even though it may be allocable entirely in or outside the City.
(d) Rentals. Rental income received by a taxpayer shall be included in the computation of net profits from business activities under Section 191.03(a)(3), (4) and (5) 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.
Where a 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 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 or net sales, receipts or profits of the lessee, whether or not such rental exceeds two hundred fifty dollars ($250.00) per month; provided further, that in the case of farm property, the owner shall be considered engaged in a business activity when he shares in crops or when the rental is based on a percentage of the gross or net profits derived from the farm, whether or not the gross income exceeds such two hundred fifty dollars ($250.00) per month; provided further, that the person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds two hundred fifty dollars ($250.00) per month.
(e) Operating Loss-Carry Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to August 1, 1972, allocable to the City may be applied against the portion of the profit of succeeding tax taxable years allocable to the City until exhausted but in no event for more than five 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.
(2) The portion of net operating loss sustained shall be allocated to the City in the same manner as provided herein for allocating net profits to the City.
(3) The Administrator shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined. (1978 Code Sec. 281.04)