FIN 2018-08-21 Item 2A - Discussion - Business and Occupation (B&O) Tax Revenue

Browse Search

3. If the allocation and apportionment provisions of this subsection do not fairly represent the extent of the taxpayer's business activity in the city or cities in which the taxpayer does business, the taxpayer may petition for or the tax administrators may jointly require, in respect to all or any part of the taxpayer's business activity, that one of the following methods be used jointly by the cities to allocate or apportion gross income, if reasonable: (a) Separate accounting; (b) The use of a single factor; (c) The inclusion of one or more additional factors that will fairly represent the taxpayer's business activity in the city; or (iv) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income. G. The definitions in this subsection apply throughout this section. 1. "Apportionable income" means the gross income of the business taxable under the service classifications of a city's gross receipts tax, including income received from activities outside the city if the income would be taxable under the service classification if received from activities within the city, less any exemptions or deductions available. 2. "Compensation" means wages, salaries, commissions, and any other form of remuneration paid to individuals for personal services that are or would be included in the individual's gross income under the federal internal revenue code. 3. "Individual" means any individual who, under the usual common law rules applicable in determining the employer -employee relationship, has the status of an employee of that taxpayer. 4. "Customer location" means the city or unincorporated area of a county where the majority of the contacts between the taxpayer and the customer take place. 5. "Primarily assigned" means the business location of the taxpayer where the individual performs his or her duties. 6. "Service -taxable income" or "service income" means gross income of the business subject to tax under either the service or royalty classification. 7. "Tax period" means the calendar year during which tax liability is accrued. If taxes are reported by a taxpayer on a basis more frequent than once per year, taxpayers shall calculate the factors for the previous calendar year for reporting in the current calendar year and correct the reporting for the previous year when the factors are calculated for that year, but not later than the end of the first quarter of the following year. Draft B&O Ordinance Page 19 of 23 27