Finance and Management Services
www.santa-ana.org/finance
Item # 27
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 19, 2024
TOPIC: Non-Financial Agreement with the California Franchise Tax Board for Exchange of Business License Tax Data
AGENDA TITLE
Resolution Authorizing a Reciprocal Agreement with the California Franchise Tax Board for the Exchange of Business License Tax Data
RECOMMENDED ACTION
1. Adopt a resolution authorizing a reciprocal agreement with the California Franchise Tax Board for the exchange of business license tax data.
RESOLUTION NO. 2024-XXX entitled A RESOLUTION OF THE CITY OF SANTA
ANA AUTHORIZING A RECIPROCAL AGREEMENT WITH THE CALIFONIA
FRANCHISE TAX BOARD FOR THE EXCHANGE OF BUSINESS LICENSE TAX DATA
2. Approve a non-financial reciprocal agreement with the California Franchise Tax Board for the exchange of business license tax data (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The City of Santa Ana Municipal Code (“SAMC”) Chapter 21, known as the Business License Tax Code, is intended to provide revenue for the general operation of the City by the levy of a business license tax on all business transactions or activities carried on or occurring within Santa Ana. It is not intended as a regulatory measure.
The data exchange program with the California Franchise Tax Board (“FTB”), which began because of the enactment of Senate Bill 1146 on September 26, 2008, enables both Santa Ana and the FTB to share information and identify non-compliant businesses. The City has been participating in the data exchange program since 2022, and has conducted audits of business license data to ensure the City receives the revenue it is legally entitled to collect.
Non-Financial Agreement with the California Franchise Tax Board for Exchange of Business License Tax Data
November 19, 2024
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The Agreement with the FTB is good for three years at a time. The current agreement is set to expire December 31, 2024, and it is now time for renewal. Under the terms of the Agreement, Santa Ana will be required to send data to the FTB annually between April and July for each tax year that the Agreement is in place. The data includes ownership name, address information, Employer ID number, and business start date. Each December, the FTB will send the City similar information from their database, as well as information on taxpayers who file business related income tax returns. Under the terms of this Agreement, the data exchange will continue through December 2027. Neither the FTB nor the City of Santa Ana would be reimbursed for the cost of providing data and neither party will be charged for receiving data from the other agency. Should the City wish to discontinue participating in the data exchange program, the Agreement may be terminated with thirty days (30) written notice to the FTB.
As of November 1, 2024, due to the Exchange program, approximately 750 new business licenses have been registered for a total of $630,000 in Business License Tax revenues. Staff recommends the adoption of a Resolution authorizing a reciprocal agreement with the California Franchise Tax Board for the continued exchange of business data.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Resolution
2. FTB Agreement
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Alvaro Nuñez, City Manager