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CITY OF PHILADELPHIA BUSINESS PRIVILEGE TAX REGULATIONS - page 27 / 59

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27 / 59

Applicable Cost of Labor: 600,000/1,000,000 x 50,000

=

30,000

  • (2)

    The following expenses are includible in "cost of goods" of a wholesales or retailer:

    • (a)

      The cost of goods, wares, commodities and merchandise purchased by the retailer or wholesaler and resold by him.

    • (b)

      Freight charges paid for delivery to the taxpayer. Expenses for delivery to the customer are not includible in cost of goods sold.

    • (c)

      Direct costs incurred to independent contractors or suppliers who process, repair, recondition, dye, assemble, fabricate, work on or prepare goods, wares, commodities and merchandise owned by and sold by the taxpayer.

    • (d)

      Container or packaging costs, but only when the container or packaging is an integral part of the thing sold, not only for purposes of transportation to the consumer, but also for purposes of use by the consumer. Incidental wrapping and shipping materials and supplies such as cartons or boxes in which the individual packages are transported, or which are primarily for the purpose of transportation, are not considered a part of the "cost of goods".

  • (3)

    Expenses includable in the "Cost of labor" of a wholesaler or retailer.

    • (a)

      The following expenses are includible in cost of labor if paid to or on behalf of a taxpayer's own employees who are used in receiving, storing, shipping, delivering and making the actual sales of the goods, wares, commodities or merchandise purchased for resale, including the proportionate part of the expenses paid to or on behalf of officers and administrative employees to the extent that they are engaged directly in receiving, storing, shipping, selling and delivering the goods, wares, commodities or merchandise purchased for resale:

      • (i)

        Salaries, wages, commissions or other compensation.

      • (ii)

        Contributions by an employer under the Pennsylvania Unemployment Compensation Act.

      • (iii)

        Taxes paid by an employer under the Federal Unemployment Tax Act.

      • (iv)

        Premiums paid by an employer under the Worker's Compensation Act.

      • (v)

        Taxes paid by an employer under the Federal Insurance Contributions Act.

      • (vi)

        Contributions by an employer into a pension plan, profit sharing plan, savings plan, deferred compensation plan, annuity plan, 401K, I.R.A., etc.

      • (vii)

        Medical, dental and hospital expenses and insurance premiums.

      • (viii)

        Life insurance premiums.

      • (ix)

        Disability income insurance premiums.

      • (x)

        Payments based upon a percentage of payroll or hourly rate made by an employer to a union or an employee association under a collective bargaining agreement.

25

(Rev. 08/01)

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