Agenda Item No. 6
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: January 24, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: Deanne Purcell, Administrative Services Director SUBJECT: Authorization to Examine Sales and Use Tax Records from the California Department of Tax and Fee Administration (CDTFA) to MuniServices and Authorized City Staff
RECOMMENDATION
Adopt the Resolution authorizing the examination of Sales and Use Tax data with the California Department of Tax and Fee Administration (CDTFA).
BACKGROUND
The State of California Revenue and Taxation Code Section 7056 authorizes the examination of confidential sales and use tax data to officers or employees of local jurisdictions who are designated by resolution of the legislative body of the jurisdiction. The review of confidential information is governed by State Law and sets certain requirements and conditions for the disclosure of sales and use tax records. State Law also establishes criminal penalties for the unlawful disclosure of sales and use tax information.
After a Request for Proposals process, the City contracted with Avenu Insights & Analytics to perform a sales tax audit, analysis, and projections. Although Avenu is the official name of the company, it still operates under MuniServices, LLC for sales tax examination purposes. With the attached Amendment and Novation Agreement, the Assuming Party (MuniServices, LLC) becomes entitled to all rights, title, and interest of the Assigning Party (Avenu Insights & Analytics, LLC). These documents will be forwarded to the CDTFA to be placed on record.
This adopting resolution further formalizes the Administrative Services Director and the Finance Manager, ability to work with the CDTFA. The resolution also authorizes the City Manager to designate in writing to the State Board any other officer or employee of the City that may need to examine sales and use tax records.
FISCAL IMPACT
There is no fiscal impact from this item.
Staff report: Authorization to Examine Sales and Use Tax Data Page 2 January 24, 2022
ALTERNATIVES
The Council has the following alternatives to consider:
1. Adopt the resolution authorizing the examination of sales and use tax data with the California Department of Tax and Fee Administration (CDTFA).
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
ATTACHMENTS
1. Resolution No. 22-
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,
CALIFORNIA, AUTHORIZING THE EXAMINATION OF SALES OR
TRANSACTIONS AND USE TAX RECORDS
WHEREAS, The City of Grover Beach, CA entered into a contract with the California Department of Tax and Fee Administration, (“CDTFA”) (formerly State Board of Equalization) to perform all functions incident to the administration and collection of the Transactions and Use Tax Ordinances and the local sales and use taxes; and
WHEREAS, City deems it necessary for authorized representatives of City to examine confidential sales and transactions and use tax records of the CDTFA pertaining to sales and transactions and use taxes collected for City by the CDTFA; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of CDTFA records and establishes criminal penalties for the unlawful disclosure of information contained in, or derived from sales or transactions and use tax records of the CDTFA; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code requires that any person designated by City shall have an existing contract to examine City’s sales and transactions and use tax records.
NOW, THERFORE, THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA, DOES DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1. That the Administrative Services Director, or other officer or employee of City designated in writing by the Administrative Services Director to the CDTFA is hereby appointed to represent City with authority to examine all of the sales and transactions and use tax records of the CDTFA pertaining to sales and transactions and use taxes collected for City by the CDTFA pursuant to the contract between City and the CDTFA. The information obtained by examination of CDTFA records shall be used for purposes related to the collection of City’s sales and transactions and use taxes by the CDTFA pursuant to the contract.
Section 2. That the Administrative Services Director, or other officer or employee of City designated in writing by the City Manager to the CDTFA, is also hereby appointed to represent City with the authority to examine those sales and transactions and use tax records of the CDTFA for purposes related to the following governmental functions of City:
a) tracking and economic development
b) forecasting and budget related functions
c) detection of misallocations and deficiencies
The information obtained by examination of CDTFA records shall be used only for those governmental functions of City listed above.
Attachment 1
Resolution No. 22- Page 2
Section 3. That MuniServices, LLC (“Consultant”) is hereby designated and authorized to examine all of the sales and transactions and use tax records of the CDTFA pertaining to all sales and use taxes collected for City and any transaction and use taxes collected for City under the following Transactions and Use Tax Ordinances and any future Transactions and Use Tax Ordinances that may be enacted in the City:
City of Grover Beach, CA, Measure F-20 1% District Tax
The person or entity designated by this section meets all of the following conditions:
a) has an existing contract with City to examine sales and transactions and use tax records; b) is required by that contract to disclose information contained in, or derived from those sales and transactions and use tax records only to an officer or employee authorized under Section 1 (or Section 2) 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 and transactions and use tax records after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of CDTFA records shall be used only for purposes related to the collection of City’s sales and transactions and use taxes by the CDTFA pursuant to the contracts between City and the California Department of Tax and Fee Administration and for purposes relating to the governmental functions of City listed in Section 2 of this resolution.
Section 4. This resolution supersedes all prior sales and transactions and use tax resolutions of City adopted pursuant to subdivision (b) of Revenue and Taxation Code Section 7056 On motion by Council Member _____, seconded by Council Member ____, and on the following roll-call vote, to wit:
AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 24TH day of January 2022.
JEFF LEE, MAYOR
Attest:
WENDI B. SIMS, CITY CLERK
**DRAFT**