### OrdinanceNo. 3046

acting only as an agentforthe named principal. However, when the principal is not deemed to be a dealer, such sales are considered to be those ofthe merchantand are taxable to him. Reg. 62-465.1 Retail sales: repairservices. (a) Fair market value of parts and labor charges. The Tax Collector may examine the reporting ofall transactions covered bythis Section to determine if an "armslength" price is charged for the parts and materials. The applicable tax may not be avoided by pricing a part, which ordinarily sells to the customer at $10, at $5 and including the difference as "service" or"labor". In the absence ofsatisfactory evidence supplied by the taxpayer as to industry or business practice, the Tax Collectormay use the cost ofthe part or materials to the taxpayer marked up by a reasonable profit, to estimate the gross income subjectto tax. (b) (Reserved) Reg. 62-465.2 Retail sales: warranty, maintenance, and similarservice contracts. (a) Gross income from sales of warranty, maintenance, and service contracts is exemptfrom the tax imposed bySection 460. (b) Transfers of tangible personal property in connection with a service, warranty, guaranty, or maintenance agreement between a vendor and a vendee shall be subjectto tax underSection 460 onlyto the extentofgross income received from separately itemized charges madeforthe items'ofpropertytransferred. (c) The gross income derived from a maintenance insurance agreement, which agreement is entered into between the purchaserand any person otherthan the seller is not subject to imposed by Section 460. If the provider of the maintenance insurance agreement pays fortangible personal property on behalf of the insured in the performance ofthe agreement, such sales are subjectto all applicable taxes imposed bythis Chapter. (d) Charges for tangible personal property provided under the terms of a warranty, maintenance, or service contract exempted under Section 465 are subject to tax as retail sales. (e) However, gross income received byadealerfrom a manufacturerforwork performed undera manufacturer'swarranty is nottaxable underSection 460. Reg.62-465.3 Retail sales: sale ofcontainers, paperproducts, and labels. (a) The sale of a container or similar packaging material which contains personal property and which is transferred to the customerwith the sale of the product is not taxable as a sale for resale. Examples of such nontaxable containers include butare not limited to:

Ch 62tax code 112 10/21199 11789(93101I.doc) Pg.112 of 116(1 ) (2) (3)

(4) (5) 

### OrdinanceNo. 3046

Packaging materials sold to a manufacturer of video equipment for containmentofthe productduring shipment. Cellophane-type wrap sold to a meat department or butcher for containmentofthe individuallywrapped orcontained meat. 8ags used to contain loose fungible goods such as fruits, vegetables, and other products sold in bulk, where such bags or containers are used to contain and measure the amount purchased bythe customer. Shopping bags and similar merchandising bags sold to grocery stores, departmentstores orotherretailers. Giftwrappings and giftboxes sold to departmentstores orother retailers. (b) Sales ofnon-returnable ordisposable paper (and similarproducts such as plastic or styrofoam) cups, lids, plates, bags, napkins, straws, knives, forks and other similar food accessories to a restaurant or others taxable under Section 455 for transfer by the restaurantto 

### its customer to contain or facilitate the consumption ofthe food, drinkorcondimentare salesfor resales and nottaxable. (c) Where a retailer imposes a charge for giftwrapping and the charge includes the container, paper, and other appropriate materials, the wrapping charge shall be considered a sale. (d) Charges for returnable containers, where the charges are imposed on the customer, are subjectto taxatthe time ofthe transaction. A credit may be taken forthe amountofrefund aftersuch refund is made. (e) The sale of labels to a purchaser who affIXes them to a primary container is a sale for resale and nottaxable. Directional or instructional material included with products sold are considered to be part of the product and a sale for resale. However, the sale of items such as price tags, shipping tags, and advertising matter delivered to the customer in connection with the retail sale is taxable to the retaileras a retail saleto 

### it, and is not exemptas a salefor resale. Reg. 62-465.4 Retail sales: Aircraft acquired foruse outside the State.



### Aircraft acquired for use outside the State means aircraft, navigational and communication instruments, and otheraccessories and related equipment sold to: (a) Any foreign governmentforuse by such governmentoutside ofthis State. (b) Persons who are not residents ofthis state and who will not use such property in this State otherthan in removing such property from this state. This subsection also applies to corporations that are not incorporated in this State, regardless of maintaining a place of business in this state, if the principal corporate office is located outside this State and the property will not 

### be used in this State other than in removing the propertyfrom this State. (Note: the above regulation is effective July 1,1995.)

Ch 62 tax code 10/21199 11789(9310ll.doc) Pg. 113 of 116 113

### OrdinanceNo. 3046

Reg. 62-470.1 Telecommunication services. (a) Gross incomefrom the business activity of providing telecommunication services to consumerswithin this Cityshall not include: (1) Charges for installation, maintenance, and repair of telecommunication equipment which are subject to the provisions of Sections 415, 416, or 417 (construction contracting); 445 (real property rental); 450 (tangible personal property rental); or460 (retail sales); depending upon the nature ofthework performed. (2) Separately billed advertising charges which are subject to the provisions ofSection 405 or435. (b) Mobile equipment In cases where the customer is being provided telecommunication services to receivingltransmission equipment designed to be mobile in nature (for example, mobile telephones, portable hand-held two-way radios, paging devices, etc.), the provider shall, for the purposes of the tax imposed by this Section, determine whether such provider's customers are ''within this City" asfollows: (1) By the billing address of the customer, provided that such address is a permanent residence or business location of the consumer within the State.

. (2) In all other cases, the business location of the telecommunications provider. Reg. 62-475.1 Distinction between transporting for hire and certain related activities.

The hiring of mobile equipment (cranes, airplanes, limousines, etc.) is deemed rental, leasing, or licensing for use of tangible personal property whenever the charge is for a fixed sum or hOUrly rate. By comparison, the activity ofa common carrier conveying goods orpersons for a fee based upon distance, and nottime, shall 

### be considered transporting for hire. Reg. 62-520.1 Reports madeto the City. (a) Each taxpayer shall provide, as a minimum, all of the following when reporting taxes due as provided in this Chapter: (1) Legal business name ofthe taxpayerorhis agent. (2) Mailing address ofthe taxpayer. (3) City Privilege License numberofthe taxpayer. (4) Period oftimeforwhich the report is intended. (5) For each category of income to which the taxpayer is subject, for the reporting period, as provided on the official Citytax return: (A) All amounts subject to, excluded from, exemptfrom, or deductible from the 

### tax imposed upon that category of business activity, summarized in total as "gross receipts" of that category of business activity.

Ch 62 tax code 114 10/21199 11789(93101 Ldoc} Pg. 114 of 116(6) 

### (7) (8) (9) (10) 

### OrdinanceNo. 3046 (8) The total amount claimed as excludable, exempted, or deducted from such "gross receipts", itemized as provided on the official City tax return, and summarized in total as "total deductions" for that category. (C) The difference between such "gross receipts" and "total deductions" as "nettaxable" forthatcategory. (D) Thetaxdue and payableforthatcategory. That total amount subject to Use Tax, summarized as "net taxable", and the UseTaxdue and payableforthat reporting period. Any excess

### tax collected which is due and payable. Any claimed tax credits againsttaxes due and payable. Total amount remitted with the return. A statement verifying that the infonnation provided on the return is accurate to the best of the preparer's knowledge. Such statement must be accompanied by a dated signature ofthe preparer, and also show the preparer'stitle orrelationship to the taxpayer. Reg. 62-520.2 Change ofmethod ofreporting. (a) Any taxpayerelecting to change his reporting method shall be pennitted to do so only upon filing a written request to the Tax Collector and after receiving written approval of the Tax. Collector. The approval shall state the effective date of the change. (b) The Tax Collector may postpone such approval to allow for examination of the records ofthe taxpayerand mayfurther require that all 

### tax liability be satisfied up to the effective date ofthe change. (c) Failure of the taxpayer to notify the Tax Collector and await approval before changing the method of reporting will subject the taxpayer to interest and penalties if his original method of reporting would produce highertaxes due the City. When a person makes such change without the consent of the Tax Collector, the Tax Collector may audit his books and records to verify the tax liability as ofthe date ofthe change. (d) Any taxpayer who has failed to indicate a choice of reporting method upon the application for a Privilege License shall be deemed to have chosen the accrual method of reporting. Reg. 62-555.1 Administrative Requestforthe attendance ofwitnesses orthe production of documents; service thereof; remedies and penalties forfailure to respond. (a) If a taxpayer refuses or fails to comply in whole or in part with a request to provide records authorized by Section 555, the Tax Collector may issue his written Administrative Requestwhich shall: (1) Designate the individual to provide infonnation. (2) Describe specifically or generally the infonnation to be provided, and any documents soughtto be examined.

Ch 62 tax code 115 10121/99 11789(93101I.doc) Pg. 115 of 116(3)

(4) 

### OrdinanceNo. 3046

State the date, time, and place in which the individual shall appear before the Tax Collector to provide the information and to produce the documents sought. Be directed to:

. (A) Any director, officer, employee, agent, or representative of the person soughtto be examined; or (B) Any independent accountant, accounting firm, bookkeeping or financial service retained or employed by such person for any purpose connected with business activitysubjectto taxation; or (C) Any other person who, in the opinion of the Tax Collector, has knowledge of facts bearing upon any tax liability of the person or taxpayerfrom whom information is sought (b) The failure of a taxpayer to comply with reasonable requests for records without good reason or cause may, in the exercise ofjudicial discretion by a court, be held to constitute afailure to exhaustadministrative remedies. Reg. 62-571.1 Collection oftax in jeopardy.

Evidence that collection of

### tax due is injeopardyshall include documentation that (a) Thetaxpayer is going outofbusiness. (b) The taxpayer has no City Privilege License or has no permanent business location in the State.

. (c) The taxpayer has failed to timely pay any tax (or penalties and interest thereon) due to the City on three (3) or more occasions within the previous thirty-six (36) calendarmonths. (d) Thetaxpayerhas remitted payment by check, which has been dishonored. (e) The taxpayer has failed to comply with a formal written request of the Tax Collectormade pursuantto Regulation 555.1.

Ch 62tax code 116 10/21199 11789(93101I.doc) Pg. 116 of 116

# EXHIBIT 6