Application of Fraction. The amount of apportioned net income (or loss) to be included in the measure of the tax is determined by multiplying the weighted average of factors computed pursuant to subsection 408 (5) by the net income (or loss) after adjustments and allocation of nonbusiness income.
Other Methods of Apportionment. If the regularly applicable apportionment method does not fairly represent the taxpayer's business activity in Philadelphia, the taxpayer may petition for, or the Department may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
Sales $5,000,000 x2 = 8,000,000 Total Percentages Average of Percentages (3.25÷4) = .8125 = =
The exclusion of one or more additional factors;
The inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this City; or
The employment of any other method to effectuate an equitable apportionment of the taxpayer's income.
A departure from the applicable method of apportionment may be permitted only where the method does not accurately and fairly reflect business activity in Philadelphia. An alternative method may not be invoked, either by the Department or the taxpayer, merely because it reaches a different apportionment percentage than the regularly applicable formula. However, if the applicable formula will lead to a grossly distorted result in a particular case, a fair and accurate alternative method is appropriate. The taxpayer seeking to utilize an alternative apportionment method must show by clear and cogent evidence that the regularly applicable formula would result in taxation of net income which is not properly attributable to the doing of business in Philadelphia. This can be shown only, if the regularly applicable formula is demonstrated to operate unreasonably and arbitrarily in attributing to Philadelphia a percentage of income which is out of all proportion to the taxpayer's business activity in Philadelphia. The taxpayer seeking to use an alternative formula must prove that the alternative formula fairly and accurately apportions income to Philadelphia based upon business activity in this City. A departure from the regularly applicable apportionment method will be authorized only in limited and specific cases where unusual fact situations (which ordinarily will be unique and nonrecurring) produce incongruous results under the regularly applicable apportionment provisions.