If a person, or a combined group as described in Section 956.3, engages in business activities described in more than one of Sections 953.1 through 953.7, inclusive, or engages in business activities listed in more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), the rate or rates of gross receipts tax to be applied to that person or combined group, and the method for determining gross receipts in the City, shall be determined as follows:
(a) If more than 80% of its gross receipts, determined in accordance with Section 956, are derived from business activities described in only one of Sections 953.1 through 953.7, inclusive, then the rules of that applicable Section apply to all of its gross receipts derived from all business activities. If the Section from which the person or combined group derived more than 80% of its gross receipts includes different rates for different business activities described in that Section, then the rates applicable to the gross receipts that are deemed to be from business activities described in that Section shall be the rates that apply to the business activities within that Section from which the person or combined group derived the most taxable gross receipts, or if there is not a single business activity within that Section from which the person or combined group derived the most taxable gross receipts because the person or combined group derived the same amount of taxable gross receipts from one or more business activities within the Section, then the rates applicable to the gross receipts that are deemed to be from business activities described in that Section shall be the highest rates within that Section that apply to business activities from which the person or combined group derived the same amount of taxable gross receipts.
(b) If its business activities in the City are described in more than one of Sections 953.1 through 953.7, inclusive, or are listed in more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), and, after applying subsection (a) of this Section 953.9, the person or combined group remains subject to the rates in more than one of Sections 953.1 through 953.7, inclusive, or more than one of subsections 953.1(a)(2), 953.1(a)(3), 953.2(a)(2), 953.2(a)(3), 953.2(a)(4), 953.2(a)(5), 953.3(a)(2), 953.3(a)(3), 953.4(a)(2), 953.4(a)(3), 953.6(a)(2), and 953.6(a)(3), then such person or combined group shall separately compute the gross receipts tax for each set of business activities as provided in the Section or subsection applicable to that particular set of business activities, modified as follows:
(1) if the set of business activities described in any of Sections 953.1 through 953.7, inclusive, generates less than 20% of the total gross receipts of the person or combined group, then the receipts and payroll of any such set of activities may be combined for all purposes related to computing the gross receipts tax with whichever set of that person’s or combined group’s activities are taxed at the highest rate;
(4) the applicable rate for each set of business activities shall be determined in numbered order of the Sections and subsections describing each set of business activities; e.g., the gross receipts and tax for business activities described in subsection 953.1(a)(2) should be determined first, subsection 953.1(a)(3) second, subsection 953.3(a)(2) third, and so on;
(5) the rate(s) applicable to any set of activities after the first shall be determined by adding together the gross receipts determined for all previous sets of activities and applying the rate scale commencing with the total gross receipts so determined; and
(6) the gross receipts tax liability for the person or combined group shall be the sum of the liabilities for each set of business activities.
(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014; amended by Proposition F, 11/3/2020, Eff. 12/29/2020, Oper. 1/1/2021)