Taxable income.

(b) The tax is levied at the flat rate of 2.3% on eight classes of income defined as follows:

(1) Compensation. All salaries, wages, commissions, bonuses and incentive payments whether based on profits or otherwise, fees, tips, and similar remuneration received for services rendered whether directly or through an agent and whether in cash or in property.

(2) Net profits. The net income from the operation of a business, profession, or other activity after provision for all costs and expenses incurred in the conduct thereof, determined either on a cash or accrual basis in accordance with accepted accounting principles and practices but without deduction of taxes based on income.

(3) Net gains or income from disposition of property. Net gains or net income, less net losses, derived from the sale, exchange or other disposition of property, including real or personal, whether tangible or intangible. The term net gains or income shall not include gains or income derived from obligations which are statutorily free from State or local taxation under any other act of the General Assembly of this Commonwealth or under the laws of the United States.

(4) Other. Net gains or income derived from or in the form of rents, royalties, patents and copyrights.

(5) Dividends. Any distribution in cash or property made by a corporation, association, or business trust paid out of the following:

(i) Accumulated earnings and profits.