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CITY OF PHILADELPHIA BUSINESS PRIVILEGE TAX REGULATIONS - page 18 / 59

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18 / 59

B.

In the event the taxpayer commences business with a fiscal period shorter than twelve months, and does not complete a full twelve-month fiscal year by the end of the tax year, the following rules shall apply:

      • (1)

        If the initial short fiscal period is more than 180 days, the net income reportable shall be the net income (or loss) for the short fiscal period divided by the number of days in that fiscal period and multiplied by 365 days.

      • (2)

        If the initial short fiscal year is 180 days or less, the net income reportable shall be the net income (or loss) for the first 365 days of business. Taxpayers who elect Net Income Method II shall compute and report net income (or loss) as would have been properly returned to and ascertained by the Federal Government for the first 365 days of business.

  • 3.

    Persons Who Commence Engaging in Business in Philadelphia During a Tax Year. The net income reportable for that tax year shall be the net income (or loss) for that portion of the tax year during which the taxpayer was engaged in business in Philadelphia. A taxpayer authorized to file tax returns with the Federal Government on a fiscal year basis, but whose first fiscal year does not end until the year following the tax year, shall make an election to report net income under Net Income Method I or Net Income Method II. Taxpayers who elect Net Income Method II shall compute and report net income (or loss) as would have been properly returned to and ascertained by the Federal Government for that portion of the current tax year during which the taxpayer was engaged in business. In the event that the taxpayer commences business in Philadelphia with a fiscal period shorter than twelve months, which ends within the current tax year, the following rules shall apply:

    • a.

      If the number of days in the initial short fiscal period is equal to 50% or more of the total number of days in business in Philadelphia during the current tax year, the net income reportable shall be the net income (or loss) for the short fiscal period, divided by the number of days in the short fiscal period, and multiplied by the total number of days in business in the current tax year.

    • b.

      If the number of days in the initial short fiscal period is less than 50% of the total number of days in business in Philadelphia during the current tax year, the net income reportable shall be the net income (or loss) for that portion of the tax year during which the taxpayer was engaged in business in Philadelphia. Taxpayers who elect Net Income Method II shall compute and report net income (or loss) as would have been properly returned to and ascertained by the Federal Government.

  • 4.

    Persons Engaged in a Seasonal, Temporary or Itinerant Business. The net income reportable for the tax year shall be the net income for that portion of the tax year in which the business was actually conducted.

Tax on Receipts

16

(Rev. 08/01)

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