(a) Taxable Situs. In the taxation of income which is subject to Village income taxes, if the books and records of a taxpayer conducting a business or profession both within and without the boundaries of the Village shall disclose with reasonable accuracy what portion of its net profit is attributable to the part of the business or profession conducted within the boundaries of the Village, then only such portion shall be considered as having a taxable situs of the Village for purposes of Village income taxation. In the absence of such records, net profit from a business or profession conducted both within and without the boundaries of the Village shall be considered as having a taxable situs in the Village for purposes of Village income taxation in the same proportion as the average ratio of:
(1) The average net book value of the real and tangible personal property owned or used by the taxpayer in the business or profession in the Village during the taxable period to the average net book value 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.
As used in the preceding paragraph, 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.
(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 to wages, salaries and other compensation paid during the same period to persons employed in the business or profession, wherever their services are performed.
(3) Gross receipts of the business or profession from sales made and services performed during the taxable period in the Village 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 allocation formula does not produce an equitable result, another basis may, under uniform regulations, be substituted so as to produce such result.
(b) Sales Made in the Village Defined. As used in subsection (a) hereof, "sales made in the Village" means:
(1) All sales of tangible personal property which is delivered within the Village, regardless of where title passes, if shipped or delivered from a stock of goods within the Village.
(2) All sales of tangible personal property which is delivered within the Village, regardless of where title passes, even though transported from a point outside the Village, if the taxpayer is regularly engaged through its own employees in the solicitation or promotion of sales within the Village 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 to purchases outside the Village, 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.
(c) Operating Loss Carry-Forward.
(1) The portion of a net operating loss sustained in any taxable year subsequent to the effective date of the "first" ordinance permitting loss carry-forwards and allocable to the Village of Westfield Center, may be applied against the portion of the profit of succeeding year(s) which is allocable to the Village of Westfield Center, until exhausted, but in no event for more than five taxable years. No portion of a net operating loss shall be carried back against net profits of any prior year.
(2) The portion of a net operating loss sustained shall be allocated to the Village of Westfield Center in the same manner as provided herein for allocating net profits to the Village of Westfield Center.
(3) The Administrator shall provide by rules and regulations the manner in which such net operating loss carry-forward shall be determined.
(d) Consolidated Returns.
(1) The filing of consolidated returns may be permitted or required in accordance with the rules and regulations prescribed by the Administrator.
(2) In the case of a corporation that carried on transactions with its stockholders or with other corporations related by stock ownership, interlocking directorates or some other method, or in case any person operates a division, branch, factory, office, laboratory or other activity within the Village of Westfield Center constituting a portion only of its total business, the Administrator shall require such additional information as he or she may deem necessary to ascertain whether net profits are properly allocated to the Village of Westfield Center. If the Administrator finds that net profits are not properly allocated to the Village of Westfield Center by reason of transactions with stockholders or with other corporations related by stock ownership, interlocking directorates, or transactions with such division, branch, factory, office, laboratory or activity, or by some other method, he or she shall make such allocation as he or she deems appropriate to produce a fair and proper allocation of net profits to the Village of Westfield Center.
(e) Exceptions. The provisions of this chapter shall not be construed as levying a tax upon the following:
(1) Funds received from local governments or from the State or Federal Government because of service in the Armed Forces of the United States by the person rendering such service, or as a result of another person rendering such service;
(2) Poor relief, pensions, Social Security, unemployment compensation, disability benefits received from private industry, local governments, the State or Federal Government, or charitable, religious or educational organizations, and deferred compensation paid to retired individuals pursuant to a nonqualified deferred compensation plan as defined in 26 USC 3121 (v)(2)(C);
(3) Dues, contributions and similar payments received by charitable, religious, educational or literary organizations or labor unions, lodges and similar organizations;
(4) Receipts from casual entertainment, amusements, sports events and health and welfare activities conducted by bona fide charitable, religious and/or educational organizations and associations;
(5) Any association, organization, corporation, club or trust, which is exempt from Federal taxes on income by reason of its charitable, religious, educational, literary, scientific, etc., purposes;
(6) Gains from involuntary conversions, cancellation of indebtedness, interest of Federal obligations, and income of a decedent's estate during the period of administration (except such income from the operation of a business); and
(7) Earnings and income of all persons under eighteen years of age, whether residents or nonresidents.
(Ord. 1999-10. Passed 12-7-99; Ord. 2009-05. Passed 6-2-09.)