§ 18-10-5. Same—Income and profits to which tax applicable.

(a)

Income of residents. The tax under this article shall apply on the following types of income of a resident individual to the same extent and on the same basis that the income is subject to taxation under the Internal Revenue Code:

(1)

On a salary, bonus, wage, commission, and other compensation;

(2)

On a distributive share of the net profits of a resident owner of an unincorporated business, profession, enterprise, undertaking or other activity, as a result of work done, services rendered and other business activities wherever conducted;

(3)

On dividends, interest, capital gains less capital losses, income from estates and trusts and net profits from rentals of real and tangible personal property; and

(4)

On other income of a resident individual.

(b)

Income of nonresidents. The tax under this article shall apply on the following types of income of a nonresident individual to the same extent and on the same basis that the income is subject to taxation under the Internal Revenue Code:

(1)

On a salary, bonus, wage commission, and other compensation for services rendered as an employee for work done or services performed in the city, except that income which the nonresident taxpayer receives as the result of a disability and after exhausting all vacation pay, holiday pay, and sick pay is not compensation for services rendered as an employee for work done or services performed in the city. Vacation pay, holiday pay, sick pay and a bonus paid by the employer are considered to have the same tax situs as the work assignment or work location and are taxable on the same ratio as the normal earnings of the employee for work actually done or services actually performed;

(2)

On a distributive share of the net profits of a nonresident owner of an unincorporated business, profession, enterprise, undertaking or other activity as a result of work done, services rendered and other business activities conducted in the city; and

(3)

On capital gains less capital losses from sales of and on the net profits from rentals of real and tangible personal property where the capital gains arise from property located in the city.

(c)

Corporate profits. The tax under this article shall apply on the taxable net profits of a corporation doing business in the city, being levied on such part of the taxable net profits as is earned by the corporation as a result of work done, services rendered and other business activities conducted in the city, as determined in accordance with this article. No deduction shall be allowed for:

(1)

Net operating losses and net capital losses sustained prior to the effective date of the tax; and

(2)

The city income tax imposed by this article. A corporation may deduct income, war profits, and excess profits taxes imposed by a foreign country or a possession of the United States, allocable to income included in taxable net income, any part of which would be allowable as a deduction in determining federal taxable income under the applicable provisions of the Internal Revenue Code.

(Code 1964, § 21-8-21; Ord. No. 43-98, § 1, 12-1-98)

State law reference

Similar provisions, MCL 141.612—141.614, MSA 5.3194(22)—5.3194(24).