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Gratuities charged by or collected by persons subject to the tax imposed by section 19-455 may be excluded from gross income if:
(1) Such charge is separately stated upon the bill, invoice, etc., provided the customer, and such amounts are maintained separately in the books and records of the taxpayer; and
(2) Such gratuities are distributed in total to employees of the taxpayer in addition to customary and regular wages.
(Ord. No. 6674, § 3, 3-23-87)
(a) Distinction Between Transfer of Tangible Personal Property and Sales at Retail. Charges for transfer of tangible personal property included in the gross income of the business activity of persons engaged in the following business activities shall be deemed only as gross income from such business activity and not sales at retail taxed by section 19-460:
(2) Reserved.
(3) Job printing, per section 19-425.
(4) Mining, timbering and other extraction, but not sales of sand, gravel or rock extracted from the ground, per section 19-430.
(5) Publication of newspapers, magazines and other periodicals, per section 19-435.
(7) Restaurants and bars, per section 19-455.
(8) Food for home consumption, per section 19-462.
(9) Telecommunications services, per section 19-470.
(10) Utility services, per section 19-480.
(11) Wastewater removal services, per section 19-485.
(b) Distinction Between Construction Contracting, Retail and Certain Direct Customer Service Activities.
(1) When an item is attached or installed on real property, it is a construction contracting activity, and any subsequent repair, removal or replacement of that item is construction contracting.
(2) Items attached or installed on tangible personal property are retail sales.
(3) Transactions where no tangible personal property is attached or installed are considered direct customer service activities (for example: carpet cleaning, lawn mowing, landscape maintenance).
(4) Demolition, earth moving, and wrecking activities are considered construction contracting.
(c) The sale of sand, rock and gravel extracted from the ground shall be deemed a sale of tangible personal property and not mining or metallurgical activity.
(d) Sale of consumable goods incorporated into or applied to real property is considered a retail sale and not construction contracting. Examples of consumable goods are lubricants, faucet washers, and air conditioning coolant, but not paint.
(e) Installation or removal of tangible personal property which has independent functional utility is considered a retail activity.
(1) "Tangible personal property which has independent functional utility" must be able to substantially perform its function(s) without attachment to real property. "Attachment to real property" must include more than connection to water, power, gas, communication or other service.
(2) Examples of tangible personal property which has independent functional utility include artwork, furnishings, "plug-in" kitchen equipment, or similar items installed by bolts or similar fastenings.
(3) Examples of tangible personal property which does not have independent functional utility include wall-to-wall carpeting, flooring, wallpaper, kitchen cabinets, or "built- in" dishwashers or ranges.
(4) The installation of window coverings (drapes, mini-blinds, etc.) is always a retail activity.
(f) Sale and installation of interior window coverings. Notwithstanding any other provision of this code and regulations pertaining thereto, the sale of interior window coverings is always a retail activity, except when sold and installed by the vendor, in which case it shall be construction contracting.
(Ord. No. 6674, § 3, 3-23-87; Ord. No. 8766, §§ 3, 4, 10-21-96; Ord. No. 10949, § 5, 12-13-11; Ord. No. 11183, § 10, 6-17-14, eff. 1-1-13)
A trading stamp transaction is defined as follows: the trading stamp company issues stamps to a vendor; the vendor then provides them to its customers; and the customer then exchanges the stamps for merchandise from the trading stamp company.
The exchange transaction for the merchandise shall be deemed a retail sale and the trading stamp company a retailer. All taxes imposed by this article applicable to retail transactions are therefore applicable to such exchange transactions.
The rate of tax shall be the retail rate based upon the retail dollar value of the redeemed merchandise as expressed in the redemption dollar value per book of stamps or portion thereof. The tax imposition described herein is in lieu of any privilege or use tax upon the business of issuing stamps, redeeming the same, or using or storing property redeemed.
(Ord. No. 6674, § 3, 3-23-87)
(a) "Professional services" refer to services rendered by such persons as doctors, lawyers, accountants, architects, etc., for their customers or clients where the services meet particular needs of a specific client and only apply in the factual context of the client and the final product has no retail value in itself. For example, opinion letters, workpapers, reports, etc., are not in a form which would be subject to retail sales to customers. However, transfer of items in a form which would be subject to retail sales (e.g., artwork, forms, manuals, etc.) would not be considered professional services. The issue is one of fact which must be resolved in each situation.
(b) Creative ("idea") labor and design labor that do not result in tangible personal property that will be or can be sold are deemed professional services and, if charged separately and maintained separately in the taxpayer's books and records, are not includable in gross income.
(c) "Professional services" shall be deemed to include those items of tangible personal property which are incidental to the services rendered, provided such tangible personal property is "inconsequential."
(1) Incidental transfers of tangible personal property shall be regarded as "inconsequential" if:
a. The purchase price of the tangible personal property to the person rendering the professional services represents less than fifteen (15) percent of the charge, billing or statement rendered to the purchaser in connection with the transaction; and
b. The tangible personal property transferred is not itself in a form which is subject to retail sale.
(2) In cases where the tangible personal property transferred is deemed inconsequential, the provider of the tangible personal property so transferred is deemed the ultimate consumer of such tangible personal property, and subject to all applicable taxes imposed by this article upon such transfer.
(d) Examples:
(1) The transfer of paper embodying the result or work product of the services rendered by an attorney or certified public accountant is regarded as inconsequential to the charges for professional services.
(2) An appraisal report issued by an appraiser, reflecting such appraiser's efforts to appraise real estate, is regarded as inconsequential.
(3) Use of a hair care product on a client's hair by a barber or beautician in connection with performing professional services is usually inconsequential. On the other hand, if the barber or beautician supplies the customer with a bottle of the product for the client's use thereafter and without the professional's assistance, the transfer of the bottle of hair care product is deemed not inconsequential.
(4) If a mortician properly segregates his professional services from other taxable activities on his bill (invoice, contract), his gross income would include only the income derived from the sale of tangible personal property (caskets, cards, flowers, etc.) and rental, leasing or licensing of real and tangible personal property. His charges for professional services (embalming, cosmetic work, etc.) would not be includable in gross income.
(Ord. No. 6674, § 3, 3-23-87)
(a) "Monetized bullion" means coins or other forms of money manufactured or minted from precious metals or other metals and issued as legal tender or a medium of exchange by or for any government authorized to do so.
(b) Any coin shall be considered to have been transferred or acquired primarily for its "numismatic value" if the sale or acquisition price:
(1) Is equal to or greater than twice (2 times) the value of the metallic content of the coin as of the date of transfer or acquisition; and
(2) Is equal to or greater than twice (2 times) its face value, in the case of a coin which, at the time of transfer or acquisition, was legal tender or a medium of exchange of the government issuing or authorizing its issuance.
(Ord. No. 6674, § 3, 3-23-87)
Sales of merchandise acquired on consignment are taxable as retail sales. In cases where the merchant is acting as an agent on behalf of another dealer, sales of the consigned merchandise are taxable to the principal, provided the merchant makes full disclosure to customers that he is acting only as an agent for the named principal. However, when the principal is not deemed to be a dealer, such sales are considered to be those of the merchant and are taxable to him.
(Ord. No. 6674, § 3, 3-23-87)
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