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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 9. TAXATION AND ASSESSMENTS |
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Chapter 9-1. INCOME AND FRANCHISE TAXES |
Section 9-127. PAYROLL FACTOR
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127.1The payroll factor is a fraction, the numerator of which is the total compensation paid or accrued by the taxpayer in the District during the taxable year, and the denominator or which is the total compensation paid or accrued by the taxpayer everywhere during the taxable year, except that neither the numerator nor the denominator of the payroll factor shall include compensation paid or accrued to employees for personal services rendered in the production of non-business income.
127.2Compensation paid or accrued other than in cash shall be valued at its fair market value as of the date of payment or accrual.
127.3In the case of transportation companies, the numerator of the payroll factor, in addition to other compensation described in § 127.1, shall include the portion of the total compensation paid or accrued to employees who are employed on vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment used by the taxpayer during the taxable period to transport persons and property within and outside the District; determined by applying to the total compensation the percentage computed under § 126.2 relating to the portion of the average value of vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment of transportation companies to be included in the numerator of the property factor.
127.4If compensation is paid or accrued for services the income from which is allocable or apportionable partly under this paragraph and partly under another section or paragraph of this chapter, the taxpayer may employ (subject to the approval of the Deputy Chief Financial Officer), or the Deputy Chief Financial Officer may require the employment of any method which will reflect properly the portion to be used in arriving at the payroll factor under this section.
127.5Compensation shall be paid or accrued in the District if the individual's service is performed entirely within the District.
127.6Compensation shall be paid or accrued in the District if the individual's service is performed both within and outside the District but the service performed outside the District is incidental to the individual's service within the District.
127.7Compensation shall be paid or accrued in the District if some of the individual's service is performed in the District and either of the following is applicable.
(a) The base of operations or, if there is no base of operations, the place from which the service is directed or controlled is within the District; or
(b) The base of operations or the place from which the service is directed or controlled is not in the District or in any State in which some part of the service is performed, but the individual's residence is in the District.