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DIVISION 2.
DETERMINATION OF GROSS INCOME
DETERMINATION OF GROSS INCOME
(a) Gross income includes:
(1) The value proceeding or accruing from the sale of property, the providing of service, or both.
(2) The total amount of the sale, lease, license for use or rental price at the time of such sale, rental, lease or license.
(3) All receipts, cash, credits, barter, exchange, reduction of or forgiveness of indebtedness, and property of every kind or nature derived from a sale, lease, license for use, rental or other taxable activity.
(4) All other receipts whether payment is advanced prior to, contemporaneous with, or deferred in whole or in part subsequent to the activity or transaction. (Reg. 200.1)
(b) Barter, exchange, trade-outs or similar transactions are includable in gross income at the fair market value of the service rendered or property transferred, whichever is higher, as they represent consideration given for consideration received.
(c) No deduction or exclusion is allowed from gross income on account of the cost of the property sold, the time value of money, expense of any kind or nature, losses, materials used, labor or service performed, interest paid, or credits granted.
(d) For the purposes of this chapter the total amount of gross income, gross receipts or gross proceeds of sales for nuclear fuel shall be deemed to be the value of the purchase price of uranium oxide used in producing the fuel. The tax imposed by this chapter may be imposed only once for any one quantity or batch of nuclear fuel regardless of the number of transactions or financing arrangements which may occur with respect to that nuclear fuel.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 11183, § 6, 6-17-14, eff. 1-1-13)
In transactions between affiliated companies or persons, or in other circumstances where the relationship between the parties is such that the gross income from the transaction is not indicative of the market value of the subject matter of the transaction, the tax collector shall determine the "market value" upon which the city privilege and use taxes shall be levied. "Market value" shall correspond as nearly as possible to the gross income from similar transactions of like quality or character by other taxpayers where no common interest exists between the parties, but otherwise under similar circumstances and conditions.
(Ord. No. 6674, § 3, 3-23-87)
The tax collector may examine any transaction, reported or unreported, if, in his opinion, there has been or may be an evasion of the taxes imposed by this article and to estimate the amount subject to tax in cases where such evasion has occurred. The tax collector shall disregard any transaction which has been undertaken in an artificial manner in order to evade the taxes imposed by this article.
(Ord. No. 6674, § 3, 3-23-87)
The method of reporting chosen by a taxpayer, as provided in section 19-520, necessitates the following adjustments to gross income for all purposes under this article:
(1) Cash basis. When a person elects to report and pay taxes on a cash basis, gross income for the reporting period shall include:
a. The total amounts received on "paid in full" transactions, against which are allowed all applicable deductions and exclusions; and
b. All amounts received on accounts receivable, conditional sales contract, or other similar transactions, against which no deductions and no exclusions from gross income are allowed. Interest on finance contracts may be deducted if separately itemized on all books and records.
(2) Accrual basis. When a person elects to report and pay taxes on an accrual basis, gross income shall include all gross income for the applicable period regardless of whether receipts are for cash, credit, conditional, or partially deferred transactions, and regardless of whether or not any security document or instrument is sold, assigned, or otherwise transferred to another. Persons reporting on the accrual basis may deduct bad debts, provided that:
a. The amount deducted for the bad debt must be deducted from gross income of the month in which the actual charge-off was made, and only to the extent that such amount was actually charged off, and also only to the extent that such amount is or was included as taxable gross income; and
b. If any amount is subsequently collected on such charged-off account, it shall be included in gross income for the month in which it was collected, without deduction for expense of collection.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8784, § 2, 12-2-96)
(a) The following items are not included in gross income:
(1) Cash discounts allowed by the vendor for timely payment, but only discounts allowed against taxable gross income.
(2) The value of property returned by customers to the extent of the amount actually refunded either in cash or by credit and the amount refunded was included in taxable gross income.
(3) The trade-in allowance for tangible personal property accepted as payment, not to exceed the full sales price for any tangible personal property sold, when the full sales price is included in taxable gross income. Trade-in allowances are not allowed for manufactured buildings taxable under section 19-427.
(4) When coupons issued by a vendor are later accepted by the vendor as a discount against the transaction, the discount may be excluded from gross income as a cash discount. Amounts credited or refunded by a vendor for redemption of coupons issued by any person other than the vendor may not be excluded from gross income.
(5) Rebates issued by the vendor to a customer as a discount against the transaction may be excluded from gross income as a cash discount. Rebates issued by a person other than the vendor may not be excluded from gross income, even when the vendee assigns his right to the rebate to the vendor.
(6) In computing the tax base, gross proceeds of sales or gross income does not include a manufacturer's cash rebate on the sales price of a motor vehicle if the buyer assigns the buyer's right in the rebate to the retailer.
(b) If the amount specified in subsection (a) above is credited by a vendor subsequent to the reporting period in which the original transaction occurs, such amount may be excluded from the taxable gross income of that subsequent reporting period, but only to the extent that the excludable amount was reported as taxable gross income in that prior reporting period.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8440, § 4, 1-23-95; Ord. No. 8784, § 3, 12-2-96)
(a) When Tax Is Separately Charged and/or Collected. The total amount of gross income shall be exclusive of combined taxes only when the person upon whom the tax is imposed shall establish to the satisfaction of the tax collector that such tax has been added to the total price of the transaction. The taxpayer must provide to his customer and also keep a reliable record of the actual tax charged or collected, shown by cash register tapes, sales tickets or other accurate record, separating net transaction price and combined tax. If at any time the tax collector cannot ascertain from the records kept by the taxpayer the total or amounts billed or collected on account of combined taxes, the claimed taxes collected may not be excluded from gross income unless such records are completed and/or clarified to the satisfaction of the tax collector.
(1) Remittance of all tax charged and/or collected. When an added charge is made to cover city (or combined) privilege and use taxes, the person upon whom the tax is imposed shall pay the full amount of the city taxes due, whether collected by him or not; and in the event he collects more than the amount due, he shall remit the excess to the tax collector. In the event the tax collector cannot ascertain from the records kept by the taxpayer the total or amounts of taxes collected by him, and the tax collector is satisfied that the taxpayer has collected taxes in an amount in excess of the tax assessed under this article, the tax collector may determine the amount collected and collect the tax so determined in the manner provided in this article. (Reg. 250.1)
(2) Itemization. A taxpayer, in order to be entitled to exclude from his gross income any amounts paid to him by customers for combined taxes passed on to the customer, must prove that he has provided his customer with a written record of the transaction showing at a minimum the price before the tax, the combined taxes, and the total cost. This shall be in addition to the record required to be kept under subsection (a) above.
(b) When Tax Has Been Neither Separately Charged nor Separately Collected. When the person upon whom the tax is imposed shall establish, by means of invoices, sales tickets or other reliable evidence, that no added charge was made to cover combined taxes, the taxpayer may exclude tax collected from such income by dividing such taxable gross income by 1.00 plus a decimal figure representing the effective combined tax rate expressed as a fraction of 1.00.
(Ord. No. 6674, § 3, 3-23-87)
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