(a) Upon every person engaging or continuing within the City in the business of banking or financial business, from and after July 1, 1971, the tax shall be equal to one percent of the gross income received from interest, premiums, discounts, dividends, service fees or charges, commissions, fines, rents from real or tangible personal property, however denominated, royalties, charges for bookkeeping or data processing, receipts from check sales, charges or fees, and receipts from the sale of tangible personal property; provided, that gross income shall not include:
(1) Interest received on the obligations of the United States, its agencies and instrumentalities;
(2) Interest received on the obligations of this or any other state, territory or possession of the United States, or any political subdivision of any of the foregoing or of the District of Columbia; or
(3) Interest received on investments or loans primarily secured by first mortgages or deeds of trust on residential property occupied by non transients; provided further, that all interest derived on activities exempt under (3) above, shall be reported, as to amounts, on the return of a person taxable under the provision of this section.
(b) Gross income of a banking or financial business, from whatever source derived, shall be taxable under this section only.
(c) The City Council hereby finds and declares that it is the intent of the Council to subject national banking associations and other financial organizations to the tax imposed by this article, in accordance with the authorization contained in Section 5219 of the Revised Statutes of the United States as amended by Public Law 91-156, enacted December 24, 1969.
(1) Standards for reporting banking business income. Each person engaging in banking business in the City that also maintains a banking location outside the City shall make a good faith allocation of its gross income in accordance with this article, subject to the approval of the City Collector. Each person subject to this regulation shall report gross income for the City municipal business and occupation tax purposes to reflect all gross income generated from loans originated and services provided to customers at or through each banking location within the municipal limits of the City and each such person's report shall fully reflect gross income earned from investments (other than loans) funded by deposits and repurchase agreements regularly maintained at or through each banking location within the municipal limits of the City. Other gross income shall be allocated in a reasonable manner that attributes all income to banking locations. No allocation methodology used to make such a report shall allocate or apportion gross income to locations other than a banking location.
(2) Without limiting the generality of the foregoing:
A. The phrase "banking location" (and all derivations thereof) means a physical facility maintained by a person engaged in banking business at which customers normally personally visit to conduct typical banking transactions, such as opening accounts, originating loans, making deposits, etc.
B. Gross income from loans is reportable (without adjustment, apportionment or allocation) to the banking location at which the loan originates. The transfer of loan files to a location outside of a municipality for processing or collection does not alter the taxability of the interest from such loans with respect to the banking location at which such loans originate.
C. Gross income from investments (other than loans) acquired or funded from deposits or repurchase agreements is reportable to banking location(s) in which deposits giving rise to the income are maintained, regardless of whether the investments function is managed or directed at a separate location. Deposits and repurchase agreements are considered maintained only at banking locations in accordance with reasonable procedures that reflect typical customer deposit activities and repurchase agreement relationships maintained at banking locations of the taxpayer subject to the approval of the City Collector. Gross income from investments (other than loans) acquired or funded from sources other than deposits or repurchase agreements shall be reported to banking location(s) in a reasonable manner that fairly allocates all such gross income to banking locations.
D. Gross income from fees is reportable to the banking location at which the activity giving rise to the fee is primarily undertaken, using a reasonable method that fully reports fee income to one or more banking locations.
(3) The City Collector of the City shall have authority to review and approve reasonable allocation methods in accordance with this article.
(4) Each person subject to this regulation shall establish and maintain sufficient records for review by the City Collector and his or her designee as long as the contents of such records may be material in the administration of the municipal business and occupation tax of the City along with such additional information as may otherwise be required. Each person subject to this regulation shall file reports on such forms designed from time to time by the City Collector and shall follow all instructions in connection therewith.
(Ord. 2005-06-03. Passed 3-20-06.)