We accept the evidence and inferences favorable to the prevailing party and disregard all contrary evidence. While we defer to the trial court for findings of fact, we independently evaluate the court's conclusions of law. We will reverse the trial court's judgment if it is based on an erroneous application of the law. Section 5.23 levies the companion payroll expense tax. Id. Income subject to the earning tax is limited by both the enabling statute and the ordinance to income received as compensation for services, including salaries, wages, commissions and other compensation earned.
Appellants concede that stock options are compensation for services rendered by the employees.
Appellants further argue that even if this court holds that the stock options are earned income, then, they are earned at the time of grant and not at the time of exercise. The Court concluded that the city might tax compensation when an employee controls it because compensation is earned when the employee gains control of it, though it may not be in hand. In the case at bar, we conclude that the stock options granted to employees as part of their compensation for services rendered are earned compensation. The employees do not purchase the options. The stock options are only granted to employees of Ralston.