CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
Item No. Item No.
Item No.
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: A Resolution Approving an Agreement with the Franchise Tax Board for Participation in a Data Exchange Program Meeting Date: October 24, 2023
RECOMMENDATION:
Approve and adopt the Resolution approving an Agreement with the Franchise Tax Board for participation in a data exchange program.
BACKGROUND/ANALYSIS:
In September 2008, SB 1146 passed which mandated cities that administer a business tax program, to provide specific data to the Franchise tax Board (FTB) annually. This law also created an opportunity for cities to enter into a reciprocal agreement to participate in a Data Exchange Program with the FTB.
Under the Data Exchange Program, the City will provide the FTB with business license data as mandated by SB 1146. The FTB will then provide the City with limited tax information on taxpayers that report business expenses on a Schedule C (“Profit or Loss from Business Activity”) and/or legal entities that report business income.
On March 6, 2012, City Council approved a reciprocal agreement with the FTB for participation in the FTB’s Data Exchange Program. The term of the agreement expired in December 31, 2014.
On April 21, 2015, City Council approved a reciprocal agreement with the FTB for the City’s participation in the Data Exchange Program. The term of the agreement expired December 31, 2017. The FTB requires a new agreement for continued participation. The City has participated in the Data Exchange Program since 2009.
On March 8, 2018, City Council approved a reciprocal agreement with the FTB for the City’s participation in the Data Exchange Program. The term of the agreement expired December 31, 2020. The FTB requires a new agreement for continued participation. The City has participated in the Data Exchange Program since 2009.
On April 6, 2021, City Council approved the reciprocal agreement so as to participate in the program. As stated above, the FTB requires a new agreement for continued participation.
The Business License Division would like to continue participation in the program for business license compliance purposes. The new agreement term will be January 1, 2024 through December 31, 2026. There is no cost to the City to participate. The deadline to submit the executed agreement to the FTB is October 27, 2023.
The FTB imposes very strict confidentiality conditions on the data they provide. The data cannot be shared with any other person or entity. They also explicitly specify that the data is to be used solely for administering the City’s business license program. The FTB data must be destroyed if not used within 1 year.
The Finance Department will serve as the assigned project coordinator and will be authorized to handle the information as specified in the agreement.
ALTERNATIVES:
Provide staff with further direction
FISCAL IMPACT:
Potential increased revenue for the City using existing equipment to send and receive data electronically via FTB’s Secure Web Internet File Transfer.
RELATIONSHIP TO STRATEGIC GOALS:
This report is not applicable to any specific goal; however, it is related to the following goal: Implement city business processes and identification of cost of services and cost of recovery policies.
Prepared & Recommended by: Vilko Domic, Assistant City Manager Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Edgar P. Cisneros, City Manager ATTACHMENTS:
Resolution
Agreement