§ 956.2.

APPORTIONMENT OF RECEIPTS BASED ON PAYROLL

a.

For all persons required to determine an amount of gross receipts pursuant to this Section, that amount shall be all non-exempt combined gross receipts of the person multiplied by a fraction, the numerator of which is payroll in the City and the denominator of which is combined payroll.

b.

Combined gross receipts are the total worldwide gross receipts of the person and all related entities to the person, unless the election provided for in California Revenue and Taxation Code Section 25110 is in effect for the person, in which case combined gross receipts shall be computed consistently with the water’s edge election, as set forth therein.

c.

Combined payroll is the total worldwide compensation paid by the person and all related entities to the person, unless the election provided for in California Revenue and Taxation Code Section 25110 is in effect for the person, in which case combined payroll shall be computed consistently with the water’s edge election, as set forth therein. A person who has no combined payroll in a tax year shall have no gross receipts under this Section for that tax year.

d.

Payroll in the City is the total amount paid for compensation in the City by the person and by all related entities to the person.

e.

Compensation paid in the City shall be determined as set forth in Section 904 of Article 12-A.

f.

“Compensation” means wages, salaries, commissions and any other form of remuneration paid to employees for services. In the case of any person who has no employees, compensation shall also include all taxable income for federal income tax purposes of the owners or proprietors of such person who are individuals. Those owners or proprietors shall be treated as individuals to whom compensation is paid for purposes of subsection (e).

g.

The apportionment provided by this Section shall not include in either the numerator or the denominator any payroll of persons exempt from tax under subsections (a), (b), or (f) of Section 954.

History

(Added by Proposition E, App. 11/6/2012, Oper. 1/1/2014)

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