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EXHIBIT A:
ORDINANCE NO. XX-2026
AN ORDINANCE OF THE CITY OF FREMONT IMPOSING A
TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY
THE CALIFORNIA DEPARTMENT OF TAX AND FEE
ADMINISTRATION
WHEREAS, the City is authorized to levy a Transactions and Use Tax (“Sales Tax”) for general purposes pursuant to California Revenue and Taxation Code sections 7285.9 and 7251.1, subject to approval by a majority vote of the electorate pursuant to Article XIIIC, section 2 of the California Constitution; and
WHEREAS, California Constitution, Article XIIIC, section 2(b) requires that all general taxes which are imposed, extended or increased must be submitted to the electorate, consolidated with a regularly scheduled general election for members of the governing body of the local government, and approved by a majority vote of the qualified electors voting in the election; and
WHEREAS, pursuant to California Government Code section 53724 and Revenue and Taxation Code sections 7285.9, this ordinance was duly approved for placement on the ballot by a minimum two-thirds (2/3) supermajority of all members of the City Council on July __, 2026.
THE PEOPLE OF THE CITY OF FREMONT DO HEREBY ORDAIN AS FOLLOWS:
SECTION 1. RECITALS
The above Recitals are true and correct and are incorporated herein by reference.
SECTION 2. AMENDMENTS TO THE MUNICIPAL CODE
Article V (“Transaction and Use Tax”) is hereby added to Chapter 3.10 of Title 3 of the City of Fremont Municipal Code (“Revenue and Finance”) and shall read as follows:
3.10.500 Title.
This ordinance shall be known as the City of Fremont Transactions and Use Tax Ordinance. The City of Fremont hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.
3.10.510 Operative date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance . For purposes of Revenue and Taxation Code section 7265, Ordinance No. XX-2026 Page 2 of 9
this ordinance shall be considered adopted on the date of the election in which it is approved by the qualified voters of the City.
3.10.520 Purpose.
This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
(a) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with section 7251) of Division 2 of the Revenue and Taxation Code and section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.
(b) To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part
1.6 of Division 2 of the Revenue and Taxation Code.
(c) To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.
(d) To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collect ing the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.
3.10.530 Contract with State.
Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this Transactions and Use Tax Ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.
3.10.540 Transactions Tax Rate.
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of one-half percent (1/2%) of the gross Ordinance No. XX-2026 Page 3 of 9
receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.
3.10.550 Place of Sale.
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out- of-state destination or to a common carrier for del ivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.
3.10.560 Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of one-half percent (1/2%) of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.
3.10.570 Adoption of Provisions of State Law.
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.
3.10.580 Limitations on Adoption of State Law and Collection of Use Taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
(a) Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:
(1) The word "State" is used as a part of the title of the Sta te Controller, State Treasurer, State Treasury, or the Constitution of the State of California;
(2) The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration , in performing the functions incident to the administration or operation of this ordinance.
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(3) In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
(i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
(ii) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.
(4) In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.
(b) The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in section 6203 and in the definition of that phrase in section 6203.
(1) “A retailer engaged in business in the District” shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to section 267(b) of Title 26 of the United States Code and the regulations thereunder.
3.10.590 Permit not Required.
If a seller's permit has been issued to a retailer under section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.10.600 Exemptions and Exclusions.
(a) There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.
(b) There are exempted from the computation of the amount of transactions tax the gross receipts from:
(1) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in Ordinance No. XX-2026 Page 5 of 9
which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.
(2) Sales of property to be used outside the City, which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragr aph, delivery to a point outside the City shall be satisfied:
(i) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with section 9840) of the Vehicle Code by registration to an out -of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and;
(ii) With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.
(3) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
(4) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.
(5) For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
(c) There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property.
(1) The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.
(2) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a Ordinance No. XX-2026 Page 6 of 9
certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.
(3) If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.
(4) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amou nt fixed by a lease prior to the operative date of this ordinance.
(5) For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.
(6) Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.
(7) "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.
(d) Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with res pect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.
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3.10.610 Amendments.
All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part
1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.
3.10.620 Enjoining Collection Forbidden.
No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ord inance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.
3.10.630 Severability.
If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.
3.10.640 Effective Date.
This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately as provided by law.
3.10.650 Termination Date.
The authority to levy the tax imposed by this ordinance shall continue in effect until ended by the voters of the City of Fremont.
3.10.660 Publication and Codification.
The City Clerk shall comply with all applicable publication requirements. Upon adoption of this ordinance, the City Clerk shall codify this ordinance in the City of Fremont Municipal Code and forward a copy of the ordinance to the California Department of Tax and Fee Administration.
3.10.670 Financial Oversight.
Annually the City Council retains an independent auditor to conduct an audit of, and provide audited financial statements for, all of the City’s financial activities. The auditor shall include an accounting of the revenue received from the tax and expenditures thereof in the audited financial statements. The auditor’s report shall be presented to the Council and made available to the public.
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3.10.680 Amendments by the City Council.
Article V of Chapter 3.10 of the Municipal Code may be repealed or amended by the City Council without a vote of the People. However, as required by Article XIII C of the California Constitution, voter approval is required for any amendment of any provision that would increase the tax rate, revise the methodology for calculating the tax such that a tax increase would result, or impose the tax on transactions and uses not previously subject to the tax (unless such amendment occurs automatically by operation of California law). The People of the City of Fremont affirm that the following actions shall not constitute an increase of the rate of a tax:
A. The restoration of the rate of the tax to a rate that is no higher than that set by this ordinance if the City Council has acted to reduce the rate of the tax; and
B. The collection of the tax imposed by this ordinance, even if the City had for some period of time failed to collect the tax.
SECTION 3. ADJUSTMENT OF APPROPRIATIONS LIMIT
Pursuant to Article XIIIB of the Constitution of the State of California and applicable laws, the appropriations limit for the City is hereby increased by the aggregate sum authorized to be levied by this tax for fiscal year 2026-27 and each year thereafter.
SECTION 4. COMPLIANCE WITH CALIFORNIA ENVIRONMENTAL QUALITY ACT
Approval of this ordinance is exempt from the California Environmental Quality Act (Public Resources Code §§ 21000 et seq., [“CEQA”]; 14 Cal. Code Regs. §§ 15000 et seq. [“CEQA Guidelines”]). It is not a “project” as defined in CEQA Guidelines sections 15378(b)(2), 15378(b)(4) and 15378(b)(5), and it has no possibility of having a significant effect on the environment, as specified in CEQA Guidelines section 15061(b)(3), each as a separate and independent basis for CEQA compliance. The proposed sales tax to be submitted to the voters is a general tax that creates a government funding mechanism that can be used for any legitimate governmental purpose and which does not involve a commitment to any specific project.
* * *
The foregoing ordinance was introduced before the City Council of the City of Fremont at the regular meeting of the City Council, held on the __ day of _____, 2026, and adopted at a regular meeting of the City Council held on the day of _______by the following vote, subject to approval of the voters of the City of Fremont at the election held on November 3, 2026:
AYES:
NOES:
ABSENT:
ABSTAIN:
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Mayor
ATTEST: APPROVED AS TO FORM:
City Clerk City Attorney