(a) Net profit from a business or profession conducted both within and without the boundaries of the City shall be considered as having a taxable situs in the Village of Richfield for purposes of income taxation in the same proportion as the average ratio of:
(1) The average original cost of the real and tangible personal property owned or used by the taxpayer in the business or profession in the Village of Richfield, during the taxable period, to the average original cost 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 includes 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 Village of Richfield to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed. Wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages.
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the Village of Richfield 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 apportionment formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(1) All sales of tangible personal property which is delivered within the Village of Richfield, regardless of where title passes, if shipped or delivered from a stock of goods within the Village of Richfield.
(2) All sales of tangible personal property which is delivered within the Village of Richfield regardless of where title passes even though transported from a point outside the Village if the taxpayer is regularly engaged through his own employees in the solicitation or promotion of sales within the Village of Richfield and the sales result from such solicitation or promotion.
(3) All sales of tangible personal property which is shipped from a place within the Village of Richfield to purchasers outside the Village regardless of where title passes if the taxpayer is not, through his own employees, regularly engaged in the solicitation or promotion of sales at the place where delivery is made.
(4) Add together the percentages determined in accordance with Section 191.04 (a)(1), (2) and (3), 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 this total in order to obtain the business allocation percentage referred to in Section 191.04(a). A factor is applicable even though it may be allocable entirely in or outside the Village of Richfield.
(c) 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. Landlords must furnish a list of tenants’ names, addresses and phone numbers when requested by the Administrator, but not more often than once a year.
(1) Where gross monthly rental of any and all 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.
(2) In the case of farm property the owner shall be considered engaged in a business activity when he share 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 the two hundred fifty dollars ($250.00) per month.
(3) A person who operates a licensed rooming house shall be considered in business whether or not the gross income exceeds two hundred fifty ($250.00) per month.
(d) Operating loss carryforward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to July 1, 1969, allocable to the Village of Richfield, may be applied against the portion of the profit of succeeding tax years allocable to the Village until exhausted, but in no event for more than five taxable 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 Village of Richfield in the same manner as provided herein for allocating net profits to the Village.
(3) Business losses cannot be used to offset Federal W-2 salaries, wages and other compensation.
(4) The Administrator shall provide by rules and regulations, the manner in which such net operating loss carry-forward shall be determined.
(Ord. 17-2006. Passed 3-17-06.)