ORDINANCE NO. 3905
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TORRANCE, CALIFORNIA, IMPOSING A TRANSACTIONS
AND USE TÆ( TO FUND GENERAL MUNICIPAL
SERVICES TO BE ADMINISTERED BY THE CALIFORNIA
DEPARTMENT OF TÆ( AND FEE ADMINISTRATION, IF
APPROVED BY A MAJORITY OF THE VOTERS VOTING
IN THE GENERAL MUNICIPAL ELECTION CONSOLIDATED
STATEWIDE PRIMARY ELECTION ON TUESDAY,
JUNE 7,2022
WHEREAS, the health and safety of all residents in the City of Torrance ("the City") is the City's top priority; and
WHEREAS, the City is committed to safe neighborhoods and quality services to support residents; and
WHEREAS, the City has been forced in recent years to reduce resources and staffing in nearly all service areas including public safety, public works, administration, libraries and community services in order to balance the budget and will need to continue to do so in the absence of additional revenue; and
WHEREAS, the inadequacy of the City's existing revenues creates a potential threat to the public health, safety and general welfare of the community; and WHEREAS, Los Angeles County and the Metropolitan Transit Authority have increased sales taxes in recent years for regional purposes and those funds are not allocated directly to the City.
Only a fraction of those taxes Torrance residents and visitors pay in Torrance actually flow back to Torrance. Currently, the City can count on receiving just 1% of the sales taxes Torrance residents and visitors pay; and
WHEREAS, any new sales tax applicable in the City imposed by an entity otherthan the City would likely result in those tax revenues being spent outside the City and the City would be prohibited from using the remaining amount of the available tax rate; and WHEREAS, Torrance residents have identified priorities such as maintaining 911, fire and paramedic services, addressing homelessness, and maintaining safe schools; and WHEREAS, an increased revenue source would help fund critical public safety and community services programs and pay for essential public infrastructure improvements to roads, parks and public facilities; and
WHEREAS, the City must ensure that Torrance has the needed public safety officers, firefighters, paramedics, lifesaving equipment and communications technology to respond quickly to emergencies and save lives; and
WHEREAS, local, voter-approved funding will provide a guaranteed source of money for essential City services that cannot be taken by Sacramento or Washington D.C. as all funds will be legally required to be spent in Torrance; and
I
WHEREAS, pursuant to California Constitution Article Xl, Section 5(a) and Torrance City Charter section 400, the City of Torrance ("City") is authorized to levy a Transactions and Use Tax for general purposes, subject to voter approval; and
WHEREAS, pursuant to California Revenue & Taxation Code Sections 7251 et seq. and 7285.9, the City is authorized to levy a Transactions and Use Tax for general purposes, subject to voter approval; and
WHEREAS, the City proposes to levy a Transactions and Use Tax (sales tax) for general purposes to fund unbudgeted priorities, maintain public safety, and maintain other essential City services; and
WHEREAS, the proposed measure will include strict accountability requirements such as public disclosure of all spending, annual independent financial audits, and a Citizens' Oversight Committee that ensure funds are used effectively and as promised, and only to benefit the Torrance community.
NOW, THEREFORE, THE PEOPLE OF THE CITY OF TORRANCE, CALIFORNIA, DO ORDAIN AS FOLLOWS:
SECTION l. AMENDMENT OF CODE. Chapter 32 is hereby added to Division 2 of the Torrance Municipal Code to read as follows:
"Ghapter 32 - Transactions and Use Tax
Section 232.1.010. Title. This Chapter shall be known as the "City of Torrance Transactions and Use Tax." The City of Torrance hereinafter shall be called "City." This Chapter shall be applicable in the incorporated territory of the City.
Section 232.1.020. Operative Date. The provisions of this Chapter shall be operative on the first day of the first calendar quarter commencing more than 110 days after the adoption of this Chapter, the date of such adoption being as set forth below.
Section 232.1.030. Purpose. This Chapter is adopted to achieve the following, among other purposes, and directs that its 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 af Division 2 which authorizes the City to adopt this Chapter which becomes operative if a majority of the electors voting on the ballot measure approving the Chapter 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 incorporate 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. 2 (c) To adopt a retail transactions and use tax ordinance that impose a tax and provide 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 collecting 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 Chapter.
Section 232.1.040. Contract with State. Before the operative date, the City must contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this Chapter; provided that if the City has not contracted with the California Department of Tax and Fee Administration before the operative date, it must nevertheless so contract and in such a case the operative date is the first day of the first calendar quarter following the execution of such a contract.
Section 232.1.050. 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 0.50% of the gross 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.
Section 232.1.060. Place of Sale. For the purposes of this Chapter, 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 delivery 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. ln 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.
Section 232.1.070. 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 0.50% 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.
Section 232.1.080. Adoption of Provisions of State Law. Except as provided in this Chapter and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, allof the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are adopted and made part of this Chapter as though fully set forth.
3 Section 232.1.090. Limitations on Adoption of State Law and Collection of Use Taxes. ln adopting the provisions of Part 1 of Division2 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 part of the title of the State 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 Chapter.
(3) ln 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) lmpose 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) ln Sections 6701,6702 (except in the last sentence thereof) .6711, 6715,6737,6797 or 6828 ofthe 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 orfor delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($SOO,OOO¡. 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.
Section 232.1.100. Permit Not Required. lf 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 Chapter. 4 Section 232.1.1 I 0. 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 which the sales 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 paragraph, delivery to a point outside the City shall be satisfied:
(¡) 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 Chapter.
(4) A lease of tangible personal propertywhich 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 Chapter.
(5) For purposes of subparagraphs (3) and (a) 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. 5 (c) There are exempted from the use tax imposed by this Chapter, 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 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) lf 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 Chapter.
(4) lf 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 amount fixed by a lease prior to the operative date of this Chapter.
(5) For the purposes of subparagraphs (3) and (a) 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 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.
6 (d) Any person subject to use tax under this Chapter may credit againstthat 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 respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.
Section 232.1.120. Oversight Committee. The City Council shall appoint a Citizens' Oversight Committee. The City Council shall, by resolution, adopt guidelines for the composition and duties of the Citizens' Oversight Committee which shall include, but not be limited to, receiving semi-annual reports from City staff each fiscal year on revenues and expenditures from the tax imposed by this Ordinance, review of proposed spending plans and reporting findings to the public.
Section 232.1.130. Amendments. All amendments subsequent to the effective date of this Chapter 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 Chapter, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this Chapter.
Section 232.1.140. Enjoining Gollection 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 Chapter, 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.
Section 232.',.150. Severability. lf any provision of this Chapter 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.
Section 232.1.160. Effective Date. This Chapter relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately." SECTION 2. ENVIRONMENTAL ANALYSIS: This Ordinance is exempt from review under the California Environmental Quality Act (California Public Resources Code Sections 2100 et seq., "CEQA") and CEQA regulations (14 California Code of Regulations Sections 1500 et seq.) because it establishes rules and procedures to implement government funding mechanisms; does not involve any commitment to a specific project which could result in a potentially significant physical impact on the environment; and constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, this Ordinance does not constitute a "project" that requires environmental review (14 CCR Section 15378(bX4-5)).
SECTION 3. INCONSISTENT PROVISIONS. Any provisions of the Torrance Municipal Code, or appendices thereto, or any other ordinances of the City inconsistent herewith, to the extent of such inconsistencies and no further, are hereby repealed. 7 SECTION 4. VOTER APPROVAL. This Ordinance will enact and impose a general tax.
Accordingly, it will be submitted to a General Municipal Election consolidated with the statewide primary election on Tuesday, June 7,2022 for voter approval. lf a majority of voters vote in favor of the Proposition, it will become valid and binding on the date that the City Council certifies the election results. Should the provisions of Government Code Sections 53720 et seq. or California Constitution Article XllC be repealed or amended, or interpreted by the courts so that voter approval is not required for enacting this Ordinance, then this Ordinance will take effect as provided for all other City ordinances and may be amended in the same manner as all other City ordinances.
SECTION 5. CERTIFICATION. The Mayor will sign this Ordinance and the City Clerk will attest and certify to the passage and adoption of this Ordinance if a majority of voters voting in the General Municipal Election consolidated with the statewide primary election on Tuesday, June 7 ,2022 approve the Proposition approving this Ordinance.
PASSED, APPROVED, and ADOPTED by the People of the City of Torrance at a General Election held on June 7, 2022.
PASSED, APPROVED, and ADOPTED by the City Council of the City of Torrance this 12th day of July, 2022.
APPROVED AS TO FORM:
PATRICK Q. SULLIVAN, City Attorney
ATTEST
By:
/^
Tatia Y. Strader, Ãssistant City Attorney Poirier, M Clerk I
TORRANCE CITY COUNCIL ORDINANCE NO. 3905
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF TORRANCE
)
)
)
SS
l, Rebecca Poirier, City Clerk of the City of Torrance, California, do hereby certify that the foregoing Ordinance was duly passed, approved, and adopted by the People of the City of Torrance at a General Election on June 7,2022 and was duly passed, approved, and adopted at a regular meeting of the City Council held on the 12th day of July, 2022 by the following roll call vote:
AYES COUNCILMEMBERS Ashcraft, Chen, Griffiths, Kalani, Mattucci, Walser, and Mayor Furey.
None.
None.
None.
NOES:
ABSTAIN
ABSENT:
COUNCILMEMBERS:
COUNCILMEMBERS:
COUNCILMEMBERS:
This ordinance was duly published in accordance with State law (GC 40806) Date:ì fùr
Foirier, MMC
City Clerk of the City of Torrance
I