To provide funds for the purpose of general Municipal operations, maintenance of equipment, new equipment, extension, enlargement and improvement of Municipal services and facilities and capital improvements of the City, there is hereby levied a tax upon income at the rate of one percent (1%) upon the following:
(a) On all income, salaries, wages, commission and other compensation earned and/or received on and after January 1, 1983, by resident individuals of the City. For clarification purposes “income” includes Lottery, gambling and sports winnings, and games of chance. In no circumstance shall deductions be allowed against these winnings. However, deductions shall be allowed against gambling and sports winnings if the taxpayer is considered a professional gambler for federal income tax purposes.
(b) On all income, salaries, wages, commission and other compensation earned and/or received on and after January 1, 1983, by nonresident individuals of the City, for work done or services performed or rendered in the City. Separation pay, termination pay, reduction-in-force pay, and other compensation paid as a result of an employee leaving the service of an employer shall be allocable only to the City of Salem. Effective for taxable years beginning on and after January 1, 2001, the City shall not tax the compensation of a non-resident individual if all of the following apply:
(1) The individual does not reside in the City.
(2) The compensation is paid for personal services performed by the individual in the City on twelve or fewer days during the calendar year. A day is a full day or any fractional part of a day.
(3) In the case of an individual who is an employee, the principal place of business of the individual’s employer is located outside the City and the individual pays tax on income to the City, if any, in which the employer’s principal place of business is located, and no portion of that tax is refunded to the individual.
(4) The individual is not a professional entertainer or professional athlete; the promoter of a professional entertainment or sports event, or an employee of such a promoter, all as may be reasonably defined by the City.
(c) On the net profits attributable to the City, earned on and after January 1, 1983, of all resident unincorporated businesses, professions and other activities derived from work done or services rendered or performed and business or other activities conducted in the City.
(d) On the portion of the distributive share of the net profit earned on or after January 1, 1983, of a resident individual, partner or owner of a resident unincorporated business entity attributable to the City and not levied against such unincorporated business entity.
(e) On the net profits attributable to the City, earned on and after January 1, 1983, of all nonresident unincorporated businesses, professions or other activities, derived from work done or services performed or rendered and business or other activities conducted in the City.
(f) On the portion of the distributive share of the net profits earned and/or received on and after January 1, 1983, of a resident individual, partner or owner of a nonresident unincorporated business entity not attributable to the City and not levied against such unincorporated business entity.
(g) On the net profits earned on and after January 1, 1983, of all corporations derived from work done or services performed or rendered and business or other activities conducted in the City.
(h) (1) 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 City for purposes of income taxation in the same proportion as the average ratio of:
A. The average original cost 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 original cost of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. 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.
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 profession, wherever their services are performed. For taxable years beginning on and after January 1, 2004, wages, salaries, and other compensation shall be included to the extent that they represent qualifying wages.
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.
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.
(2) As used in subsection (h) (1) hereof, “sales made in the City” means:
A. 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;
B. 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;
C. All sales of tangible personal property which is shipped from a place within the City to purchasers outside 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.
(i) On the net income of rental of any and all real properties, owned by residents of the City, wherever located, where the gross monthly rental of any and all, regardless of number and value, aggregates one hundred dollars ($100.00) or more per month.
(j) On the net income of rental of any and all real property located with the City, owned by nonresidents of the City, where the gross monthly rental of any and all, regardless of number and value, aggregates one hundred dollars ($100.00) or more per month.
(k) On the net income of rental of commercial property when the rental is based on fixed or fluctuating percentage of gross or net sales, receipts or profits of the lessee, whether or not such rental aggregates one hundred dollars ($100.00) or more per month.
(l) On the net income of rental of farm property whether or not the gross income is one hundred dollars ($100.00) per month or more.
(m) On the net income from the rental of two or more rooms in a private residence whether or not the gross income is one hundred dollars ($100.00) per month or more.
(Ord. 051206-85. Passed 12-20-05.)
(Ord. 051206-85. Passed 12-20-05.)