§ 107 — Allocation to the city

§ 107. Allocation to the city. (a) General.--If an unincorporated\nbusiness is carried on both within and without the city, as determined\nunder regulations of the director of finance, there shall be allocated\nto the city a fair and equitable portion of the excess of its\nunincorporated business gross income over its unincorporated business\ndeductions. If the unincorporated business has no regular place of\nbusiness outside the city, all of such excess shall be allocated to the\ncity.\n (b) Allocation by taxpayer's books.--The portion allocable to the city\nmay be determined from the books of the business if the methods used in\nkeeping such books are approved by the director of finance as fairly and\nequitably reflecting the income from the city.\n (c) Allocation by formula.--If subdivision (b) does not apply to the\ntaxpayer, the portion allocable to the city shall be determined by\nmultiplying (A) the excess of its unincorporated business gross income\nover its unincorporated business deduction, by (B) the average of the\nfollowing three percentages:\n (1) Property percentage.--The percentage computed by dividing (A) the\naverage of the value, at the beginning and end of the taxable year, of\nreal and tangible personal property connected with the unincorporated\nbusiness and located within the city, by (B) the average of the value,\nat the beginning and end of the taxable year, of all real and tangible\npersonal property connected with the unincorporated business and located\nboth within and without the city. For this purpose, real property shall\ninclude real property rented to the unincorporated business.\n (2) Payroll percentage.--The percentage computed by dividing (A) the\ntotal wages, salaries and other personal service compensation paid or\nincurred during the taxable year to employees in connection with the\nunincorporated business carried on within the city, by (B) the total of\nall wages, salaries and other personal service compensation paid or\nincurred during the taxable year to employees in connection with the\nunincorporated business carried on both within and without the city.\n (3) Gross income percentage.--The percentage computed by dividing (A)\nthe gross sales or charges for services performed by or through an\nagency located within the city, by (B) the total of all gross sales or\ncharges for services performed within and without the city. The sales or\ncharges to be allocated to the city shall include all sales negotiated\nor consummated, and charges for services performed, by an employee,\nagent, agency or independent contractor chiefly situated at, connected\nby contract or otherwise with, or sent out from, offices of the\nunincorporated business, or other agencies, situated within the city.\n (d) Other allocation methods.--The portion allocable to the city shall\nbe determined in accordance with rules and regulations of the director\nof finance if it shall appear to the director of finance that the income\nfrom the city is not fairly and equitably reflected under the provisions\nof either subdivision (b) or subdivision (c).\n (e) Special rules for real estate.--Income and deductions from the\nrental of real property, and gain and loss from the sale, exchange or\nother disposition of real property, shall not be subject to allocation\nunder subdivisions (b), (c), or (d), but shall be considered as entirely\nderived from or connected with the state, other than this state, in\nwhich such property is located or, if such property is located in this\nstate, the political subdivision thereof.\n