Staff Report re ESC JPA Agreement Page 1 of 2
STAFF REPORT
TO: Mayor and Members of the City Council
FROM: Daniel Barros, City Manager
MEETING DATE: February 26, 2025
SUBJECT: Examination of Sales and Transaction and Use Tax Records
RECOMMENDATION
Staff recommends that the City Council adopt the following:
RESOLUTION APPROVING AND AUTHORIZING EXAMINATION OF SALES OR
TRANSACTIONS AND USE RECORDS
COUNCIL ADOPTED VALUES
RESPONSIBLE
BACKGROUND
The Town of Colma is authorized to levy a Transaction and Use Tax. The City Council submitted to the voters at the November 5, 2024, General Municipal Election Measure AA to establish a one half (1/2 cent) tax increase on all the sale and/or use of all tangible personal property sold at retail in the Town of Colma. This vote required a majority (50 % plus one) of voter approval.
The Town of Colma Measure AA (local transactions and use tax) passed with voter approval over 80%.
ANALYSIS
California Revenue and Taxation Code Section 7056 forbids divulging information contained in, or derived from, sales tax or transactions and use tax records. However, local government officials can use sales or transactions and use tax information if it is related to the tax collection or other governmental functions and the legislative body of the local government has requested by resolution to permit duly authorized officers, employees, or consultants to examine all of the sales or transactions and use tax records. As part of this action, staff is recommending that the Council adopt the resolution for the purpose of authorizing certain staff and consultants the ability to examine Bradley-Burns sales tax or Measure AA transactions and use tax records.
The designated positions of the Town have also been amended to include the City Manager and Administrative Services Director, all of whom have responsibilities requiring the examination of sales or transactions and use tax records. The Town has an existing agreement with the AGENDA ITEM #3
Staff Report re ESC JPA Agreement Page 2 of 2
consulting firm HdL for sales or transaction and use tax analysis and on tonight’s agenda an amendment is proposed to the Town’s agreement with HdL to extend HdL’s responsibilities to include data for both the old sales tax and new transactions and use tax approved by Measure AA. Today’s resolution will allow both the named staff and consultants from HdL to access and review the Town’s confidential data.
With approval of the recommended actions, staff will finalize the required agreements with CDTFA and provide all necessary information to Department staff. Effective April 1, 2025, CDTFA will begin collection of the local transactions and use tax approved by the voters.
FISCAL IMPACT
There is no direct budget impact of the recommended action. However, with the recommendation, effective April 1, 2025, CDTFA will begin collection of the local transactions and use tax approved by the voters on November 5, 2024, with Measure AA. An estimated annual revenue increase of approximately $2.3 million is anticipated.
ALTERNATIVES
There are no alternatives recommended to the Town since Measure AA was passed by the Colma Voters.
CONCLUSION
Staff recommends the City Council adopt the resolution.
ATTACHMENTS
A. Resolution
RESOLUTION NO. 2025-_____
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION AUTHORIZING EXAMINATION OF SALES OR TRANSACTIONS AND USE TAX
RECORDS
WHEREAS, pursuant to Ordinance Number 825, the Town of Colma (City) entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes; and WHEREAS, pursuant to Transactions and Use Tax Ordinance Number 825, Revenue and Taxation Code section 7270, the City entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of transactions and use taxes; and
WHEREAS, the City Council of the Town of Colma deems it desirable and necessary for authorized officers, employees and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales and use taxes collected by the Department for the City pursuant to that contract; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department;
NOW, THEREFORE, THE CITY COUNCIL OF TOWN OF COLMA HEREBY RESOLVES AS FOLLOWS:
Section 1. That the City Manager, or other officer or employee of the City designated in writing by the City Manager to the California Department of Tax and Fee Administration is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales and use taxes collected for the City by the Department pursuant to the contract between the City and the Department.
Section 2. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales and use taxes by the Department pursuant to that contract, and for purposes related to the following governmental functions of the City:
(a)Budgeting and Planning
(b)Economic Development
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
Section 3. That Hinderliter, De Llamas, and Associates (HDL) is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the Hinderliter, De Llamas, and Associates (HDL):
ATTACHMENT A
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of Department records shall be used only for purposes related to the collection of City sales and use taxes by the Department pursuant to the contract between the City and the Department and for Budgeting and planning and economic development.
Section 4. That Hinderliter, De Llamas, and Associates (HDL) is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to any petition or appeal for the reallocation/redistribtuion of sales or transactions and use taxes that was filed by Hinderliter, De Llamas, and Associates (HDL) on behalf of the City pursuant to the contract between the HDL and City. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the HDL:
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
Section 5. That this resolution supercedes all prior resolutions of the City Council of the Town of Colma adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056.
Introduced, approved and adopted this 26 day of February 2025.
ATTEST: (s) ___________________________ (s) ____________________________ City Clerk Mayor
Certification of Adoption
I certify that the foregoing Resolution No. 2025-__ was duly adopted at a regular meeting of said City Council held on February 26, 2025 by the following vote:
Name Voting Present, Not Voting Absent
Aye No Abstain Not Participating
Ken Gonzalez, Mayor
Carrie Slaughter
Helen Fisicaro
Joanne F. del Rosario
Thomas Walsh
Voting Tally
Dated _______________________________________________________________ Ken Gonzalez, Mayor
Attest: ____________________________
Michelle Estabillo, City Clerk