WHE
REAS, Neighboring cities, including Stockton, Modesto, Walnut Creek, San Jose and and San Francisco, have adopted a progressive business tax structure that imposes higher rates on businesses that earn more gross receipts; and
WHE
REAS, The City seeks to maintain quality of life while not taxing homeowners living in the City or burdening small businesses; and
WHE
REAS, The proposed amended Business Taxes measure is not a license to operate within the City, and each business must obtain a “Business Tax” Certificate; and WHE
REAS, The changes suggested to the Business Taxes Structure do not entitle the holder of the Business Tax Certificate to conduct business before complying with all requirements of the Tracy Municipal code and other applicable laws, nor to conduct business in a zone where such a business violates the law; and
WHE
REAS, In March 2020, the City Council formed an Ad-Hoc Committee of the City Council to develop policies and actions to ensure the City’s long-term fiscal sustainability; and WHE
REAS, On March 9, 2021, the City Council held a fiscal sustainability workshop where they adopted the City’s Guiding Budget Principles and several fiscal strategies; and WHE
REAS, The City Council directed the Ad-Hoc Committee to continue working through these strategies and to return to the City Council with further actions for consideration; and
WHEREAS, One of these strategies was to revise the City’s existing Business Taxes scheme, which has not been updated for the last four decades; and WHEREAS, During the March 22, 2022, City Council workshop, staff presented the General Fund’s ten-year forecast that discussed the impacts of the potential loss of Sales Tax revenues and what an increase from a revision to the Business Taxes revenue would look like for the City; and
WHE
REAS, On March 22, 2022, with the recommendation of the Ad-Hoc Committee, the City Council directed staff to proceed with the documents required to place a general tax measure on the ballot for the General Municipal Election on November 8, 2022, and WHEREAS, Over the past four months, the City has met with the Chamber of Commerce, the Tracy City Center Association (TCCA), and hosted four separate meetings for the City’s business community to discuss how to make the City’s Business Taxes Structure more equitable by switching to a gross receipts tax; and
WHE
REAS, The Ad-Hoc Committee initially explored options for the gross receipts tax to begin after the first $100,000 in gross revenue with a flat fee of $100; and WHE
REAS, The small business community’s feedback influenced the final recommend- ation, which reflects a base fee of $50 for the first $200,000 in gross receipts; and WHE
REAS, Based on the recommendations of the business community and the Ad-Hoc Committee, staff has prepared a proposed ballot measure asking the voters to repeal and replace, in its entirety, Chapter 6.04 (Business Taxes) of the Tracy Municipal Code in the form Resolution 2022-____
attached hereto as Exhibit A and incorporated herein by reference ( Ballot Measure) for the City Council’s consideration; and
W
HEREAS, if approved by the voters, the Ballot Measure would impose a general tax on businesses engaged in commercial activity in the City (General Tax); and WHEREAS, If the proposed Ballot Measure is approved by the voters, the amended Business Taxes Structure of the City would add resources to the general-purpose fund while also supporting small businesses by having a tax break on the first $200,000 in gross receipts; and
W
HEREAS, Revenues collected from the Ballot Measure would be for general revenue purposes and would go into the City's General Fund and be used for any government purpose; and
W
HEREAS, It is estimated that the proposed revisions to the Business Taxes Structure will generate approximately $5 million in annual tax revenue for the City’s General Fund; and W
HEREAS, Updating the City’s Business Taxes Structure would ensure that larger businesses relative to gross receipts pay their proportionate share of taxes while reducing the impact on small businesses; and
W
HEREAS, If approved, the Ballot Measure would generate additional revenue that also would allow the City to: maintain and even improve City streets, roads, parks, community facilities, and economic development; maintain and expand after-school programs, anti-gang activities, and recreation programs that keep young people off the streets, out of trouble and away from drugs and gangs; and help maintain rapid emergency and medical response times for police and fire by ensuring adequately staffed and trained police officers and firefighters; and W
HEREAS, Pursuant to Section 9222 of the California Elections Code, the City Council is authorized to place measures on the ballot to be considered at a general municipal election; and
W
HEREAS, Article XIII C, section 2(b) of the California Constitution requires that any General Tax for unrestricted general revenue purposes must be submitted to and approved by a majority vote of the voters voting on the issue of imposing any general tax; and W
HEREAS, At its June 24, 2022 meeting, the City Council adopted a R esolution (Resolution No 2022-083) calling for and giving notice of a General Municipal Election to be held on November 8, 2022, and requesting that the Board of Supervisors of the County of San Joaquin consolidate said election with the Statewide General Election to be held that day along with other requisite actions; and
W
HEREAS, The Calfiornia Elections Code requires ballot measures to pose a specific question for the voters’ consideration; and
W
HEREAS, Based upon analysis and voter polling, staff proposes that the ballot question be, “To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy/safe/clean; maintaining neighborhood police patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be Resolution 2022-____
adopted with typical rates between 0.1% and 0.3% of gross receipts, as described in the ordinance, providing an additional $4,000,000 annually, until ended by voters?”; and W
HEREAS, The Calfornia Elections Code allows legislative bodies to provide for the submission of arguments for and against ballot measures and to direct their respective counsel to prepare an impartial analysis of such measures; and
W
HEREAS, The City Council desires to submit the General Tax , pursuant to the Ballot Measure,to the qualified voters of the City at the next General Municipal Election to be held on Tuesday, November 8, 2022; and
W
HEREAS, In accordance with the California Environmental Quality Act (CEQA) Guidelines Sections 15378 (b)(3) and (b) (4), the City finds that this action does not constitute a project under CEQA; and now, therefore, be it
R
ESOLVED:
S
ection 1. Recitals. T he C ity Council hereby finds and determines that the foregoing recitals are true and correct and incorporates them fully herein.
S
ection 2. Ballot Meaure. The Ci ty Council hereby orders the City Clerk to submit to the City of Tracy Voters, at the November 8, 2022, General Municipal Election, the Ballot Measure repealing and replacing, in its entirety, Chapter 6.04 (Business Taxes ) of the Tracy Municipal Code.
Section 3. Argument. The City Council hereby authorizes the submission of an argument for the Ballot Measure, on behalf of the City Council with designated author(s), which argument, in accordance with California Elections Code sections 9282 and 9283:
(a) shall not exceed 300 words in length, and shall be printed upon the same sheet of paper
and mailed to each voter with the sample ballot for the election and may be signed by the authors designated by the City Council as part of the adoption of this Resolution; (b) i
nclude, preceding the argument itself, the headi ng “Argument For Measure ” and precede, which shall not be counted in the 300 word maximum (the blank spaces being filled only with the letter or number, if any, designating the measure); and (c) be filed with the City Clerk, accompanied by the printed name(s) and signature(s) of the author
(s) submitting it, due in the office of the City Clerk by the date established by the County Registrar of Voters
Section 4. Impar tial Analysis. The City Council hereby directs the City Attorney to prepare an impartial analysis of the Ballot Measure and to timely submit such analysis to the City Clerk Section 5. Rate and Method. The type, rate, and method of collection of the General Tax are set forth in the Ballot Measure.
Section 6. Ballot Label. The Ci ty Council hereby approve s the following ballot label for the proposed General Tax, to be submitted for a “Yes” or “No” vote:
Resolution 2022-____
To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy/safe/clean; maintaining neighborhood police patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be adopted with typical rates between
0.1% and 0.3% of gross receipts, as described in the ordinance, providing an additional $4,000,000 annually, until ended by voters? YES
NO
Section 7. Full Text. The full text of the Ballot Measure, which is attached as Exhibit A , shall be printed in the sample ballot/voter information pamphlet for the November 8, 2022 General Municipal Election.
Section 8. Approval. Pursuant to Section 2( b) of Article XIII C of the California Constitution, this measure requires approval by a majority vote (50% plus 1) of those casting ballots on the measure.
Section 9. Filing with County. The City C lerk shall file a certified copy of this Resolution, along with the argument and analysis authorized herein, with the Board of Supervisors and County Elections Department of the County of San Joaquin and to take such actions needed to comply with the California Elections Code.
Section 10. CEQA. In acc or dance with CEQA Guidelines Sections 15378 (b)(3) and (b)(4), the City finds that this action does not constitute a project under CEQA.
Section 11. Effectiv e Date. This Resolution shall be effective immediately upon adoption by a majority vote of the City Council.
The foregoing Res olution was adopted by the Tracy City Council on the 12th day of July, 2022, by the following vote:
AYES: CO
UNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
_______________________________
M
ayor
ATT
EST:
____________________________________
Ci
ty Clerk
Resolution 2022-____
EXHIBIT A
ORDINANCE NO. _____
Title 6 - BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
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Chapter 6.04 BUSINESS TAXES
Sections:
6.04.010 Definitions.
6.04.020 Revenue measure.
6.04.030 Effect on other laws.
6.04.040 Business tax payments required.
6.04.050 Evidence of doing business.
6.04.060 Constitutional apportionment.
6.04.070 Exemptions.
6.04.080 Posting and keeping tax certificates.
6.04.090 Confidentiality and examination.
6.04.100 Failure to file statements or corrected statements.
6.04.110 Amount of business tax debt to city.
6.04.120 Effect of convictions.
6.04.130 Duty of city to issue tax certificates.
6.04.140 Business taxes payable at City offices.
6.04.150 Separate taxes required— Warehouses excepted.
6.04.160 Tax certificate period.
6.04.170 Business taxes— Payment, delinquencies, and penalties.
6.04.180 Taxpayer information required.
6.04.190 Subsequent tax payments.
6.04.200 Extensions of filing dates— Interest charges.
6.04.210 Refunds.
6.04.220 Determinations of business classifications an administrative function.
6.04.230 Applications for changes of business classifications.
6.04.240 Appeals on decisions of business classifications.
6.04.250 Rules and regulations.
6.04.260 Referrals to other agencies— Prepayment of taxes.
6.04.270 Enforcement.
EXHIBIT A
Title 6 - BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
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6.04.280 Remedies cumulative.
6.04.290 Severability.
6.04.300 Violations— Penalties.
6.04.310 Determination of tax due based on gross receipts plus annual registration tax.
Article 1. General Provisions
6.04.010 Definitions.
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
“Base Gross Receipt” means the first $200,000 of Gross Receipt "Business" means and includes full-time or part-time professional services and retail, wholesale, manufacturing, or other occupations, trades, or callings of any kind, whether or not carried on for profit or livelihood.
"Business tax" means the Business activity tax.
"City" means the City of Tracy, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged, or reincorporated form.
“Code” means the Tracy Municipal Code, as amended from time to time. "Collector" means the Finance Director of the City or other designees charged by the Finance Director or City Manager of the City, as the case may be, with the administration of the provisions of this chapter.
“County” means the County of San Joaquin.
“Constitution” means the United States Constitution or the California Constitution, as the case may be.
"Employee" means all persons engaged in the operation or conduct of any Business, whether as a member of the owner's family, agent, manager, solicitor, and all other persons employed or working in said Business including, without limitations of the foregoing, all individuals who derive all or part of their income from commissioned sales. For purposes of computing tax based on employees, the average number of employees per year, as defined in this section, will be used.
"Fixed place of business" means premises in the City where a Business is conducted from day to day and regularly kept open for the purposes of such Business, also referred to as "regular place of business."
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“Gross Receipts” means the total amount of the sale price of all sales, and/or the total amount charged or received for the performance of any act or service or employment, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act, service or employment is done as a part of or in connection with the sale of materials, goods, wares or merchandise, and when such act, service or employment occurs as a result of any activity within the City. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, except as excluded in this subsection, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever as shown by either the Federal or State income tax return required to be filed by such person.
Where the Gross Receipts, as defined above, are less than the cost of operations of the Business, then the Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations. Such cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges and other expenses.
Excluded from “gross receipts” shall be:
(a) Cash discounts allowed and taken on sales;
(b) Credit allowed on property accepted as part of the purchase price and which property may later be sold;
(c) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;
(d) Such part of the sale price of property returned by purchasers upon rescission of the contract of sale as is refunded either in cash or by credit; (e) Amounts collected for others where the Business is acting as an agent or trustee to the extent that such amounts are paid to those whom collected; (f) The amount of each single sale to a single customer in excess of fifty thousand dollars ($50,000.00) where the gross profits derived therefrom does not exceed one percent (1%) of the sale price; and
The amount of gross receipts which has been the measure of a license tax paid to any other City. “Hearing officer” means an impartial person designated by the City Manager, as defined in Chapter 1.12 of the Tracy Municipal Code.
"Manufacturing" means making materials, raw or partly finished, into wares suitable for use by persons other than the manufacturer, including, but not limited to, fabrication, processing, packing, bottling, assembling, canning, compounding, and forging. "Not-for-profit entities" means any organization that qualifies under Section 501, subsection (c) (3) of the United States Internal Revenue Code or equivalent federal statute. "Peddler" means any person who goes from house to house or from place to place or in or along the streets of the City selling and making an immediate delivery, or offering for sale and immediate delivery, anything of value in his possession to persons other than dealers in such commodities.
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"Person" means any individual, firm, company, partnership, limited liability partnership, joint venture, association, proprietorship, social club, fraternal organization, joint stock company, domestic or foreign corporation, limited liability corporation, estate, trust, business trust, receiver, trustee, trustee in bankruptcy, administrator, executor, assignee, syndicate, or any other group or combination acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise, excepting: the United States of America, the State of California, and any political subdivision of either thereof upon which the City is without power to impose the tax herein provided.
"Solicitor" means a person engaged in soliciting, canvassing, or taking orders from house to house, or from place to place, or by telephone, or by any other means of communication for any goods, wares, or merchandise or any article to be delivered in the future, or for services to be performed in the future, or for making, manufacturing, or repairing any article whatsoever for future delivery, or for subscriptions to periodicals or tickets of admission to entertainments or memberships in any clubs.
“State” means the State of California.
"Sworn statement" means an affidavit sworn to before a person authorized to take oaths or a declaration or certification made under penalty of perjury. "Tax Certificate" means the Business tax certificate and any other identifying decal or marker as may be required by the Collector for purposes of this Chapter 6.04. "Tax Certificate Holder" means the Person to whom a Tax Certificate has been issued. "Transient business" means every Business not conducted at a "fixed place of business" or at a regular place of Business, whether the person conducting such transient business is or is not a resident of the City.
"Warehousing business" means every Business conducted solely for the purpose of maintaining or renting space for the storage of any kind of property. "Wholesale business" means every Business conducted solely for the purpose of selling goods, wares, or merchandise in wholesale lots for resale.
6.04.020 Revenue measure.
This chapter is enacted for the sole purpose of raising revenue for municipal purposes and is not intended for regulation. The issuance of any Tax certificate shall not be construed as authorizing any Business to operate without first complying with all other applicable laws and regulations.
6.04.030 Effect on other laws.
(a) Persons required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of any similar tax for the privilege of doing such Business required by any other law of the City, the County or the State and shall remain subject to the regulatory provisions of those other laws.
(b) Any Person required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of such Business Tax, notwithstanding that such Business is not in compliance with zoning, health, safety, or other regulatory provisions of the Code or other State or federal law. Compliance with the provisions of this chapter shall not constitute evidence that such Business is in compliance with any other such regulations or provisions of law.
6.04.040 Required business tax payment.
(a) It shall be unlawful for any person to transact and carry on any Business, trade, profession, calling, or occupation in the City without first having paid the Business Tax, as prescribed in this chapter or without complying with any and all applicable requirements of this chapter.
(b) This section shall not be construed to require any Person to pay a Business Tax or to comply with any other requirement of this chapter prior to doing Business within the City if such requirements conflict with applicable statutes of the United States or of the State.
6.04.050 Evidence of doing business.
When any Person, by the use of signs, circulars, cards, telephone books, or newspapers, shall advertise, hold out, or represent that the Person is in Business in the City, or when any Person holds an active license or permit issued by a governmental agency indicating that the Person is in Business in the City, or when any Person makes a sale, takes an order, renders a commercial service, or performs any other similar act within the City, and such Person fails to deny by a sworn statement given to the Collector that the Person is not conducting a Business in the City after being requested to do so by the Collector, then such facts shall be considered prima facie evidence that the Person is conducting a Business in the City.
6.04.060 Constitutional apportionment.
(a) None of the Business Taxes provided for by this chapter shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the Equal Protection and Due Process Clauses of the Constitution (b) In any case where a Business Tax is believed by a Person transacting or carrying on any Business in the City to place an undue burden upon interstate commerce or be violative of such constitutional clauses, such Person may apply to the Collector for an adjustment of the tax. Such application may be made before or at the time the tax is required to be paid or within six (6) months after the payment of the prescribed Business Tax. The applicant, by sworn statement and supporting testimony, shall show the applicant's method of Business, the gross volume or estimated gross volume of such Business, and such other information as the Collector may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Collector shall then conduct an investigation and, after having first obtained the written approval of the City Attorney, shall fix as the Business Tax for the applicant an amount that is reasonable and nondiscriminatory or, if the Business Tax has already been paid,
shall order a refund of the amount over and above the Business Tax so fixed. Such investigation, fixing of the Business Tax, and order of refund shall be accomplished within a reasonable time upon receiving the requisite information by the City. In fixing the Business Tax, the Collector shall have the power to fix the Business Tax on any basis which will assure that the Business Tax assessed shall be uniform with that assessed on Businesses of like nature, so long as the amount assessed does not exceed the Business Tax prescribed by this chapter. If it is determined that no Business Tax is due, the applicant exempt from the Business Tax shall obtain, and the Collector shall issue, a Tax Certificate indicating such exemption from the tax.
6.04.070 Exemptions
(a) Nothing contained in this chapter shall be deemed or construed as applying to any person transacting, engaging in, and carrying on any Business exempt by virtue of the Constitution or applicable statutes of the United States or of the State from payment of taxes prescribed herein.
(b) Exemptions Requiring tax-exempt Tax Certificates. The following Persons shall be exempted from the provisions of this chapter, except that any such Person shall be required to obtain a tax-exempt Tax Certificate:
(1) Not-for-profit entities, as defined in this Code; (2) Banks, including national banking associations as provided by subsection 1(a) of Section 16 of Article XIII of the State Constitution; and (2) Insurance companies and associations as provided by Section 14 of Article XIII of the State Constitution provided however that insurance brokers shall not be excluded under this section.
(c) Exemptions Not Requiring tax-exempt Tax Certificates. The following Persons shall be exempted from the provisions of this chapter, and shall not be required to obtain a tax- exempt Tax Certificate:
(1) Any delivery by a firm lacking a fixed place of Business in the City, which delivery is occasional and incidental to a Business carried on outside the City provided, however, that four (4) or more deliveries within any twelve (12) month period shall be considered proof that any further delivery is not occasional and incidental to such Business;
(2) Any public utility or other organization which is wholly owned and operated by a political subdivision of the State and any public district organized under the laws of the State; and
(3) Any vehicle which is subject to the Motor Carriers of Property Permit Fee Act (California Revenue and Taxation Code section 7231 et. al); provided, however, this exemption shall only apply to the transportation Business. (d) Claims for exemption. Any Person desiring to claim an exemption from the payment of a Business Tax and to have a free tax-exempt Tax Certificate issued shall make an P
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application therefor upon a form prescribed by the City and shall furnish such information and make such affidavits as may be required, on an annual basis. Upon the determination being made that the applicant is entitled to an exemption from the payment of the Business Tax for any reason set forth in this chapter, the City, upon the applicant complying with the provisions of this chapter or any other law of the City which may require a permit for the doing of the particular act proposed to be done, shall issue a free tax-exempt Tax Certificate to such Person, which certificate shall show upon its face that the Business is exempt from the Business Tax.
(e) Revocation of exemptions. The City may revoke any tax-exempt Tax Certificate granted pursuant to the provisions of this chapter upon information that the Business is not entitled to the exemption as provided therein. In such revocation, the procedure to be followed and the right of appeal shall be as provided in this chapter for the determination of a disputed tax.
(f) Sworn statements. The City may require the filing of a sworn statement from any person claiming to be excluded by the provisions of the section, which statement shall set forth all the facts upon which the exclusion is claimed.
6.04.080 Posting and keeping Tax Certificates – Record keeping. (a) Any Person carrying on Business at a fixed place of Business in the City shall keep the Tax Certificate posted in a conspicuous place on the premises where such Business is carried on.
(b) Every Tax Certificate holder not having a fixed place of Business in the City shall keep the Tax Certificate upon his or her person, or if required by the Collector affixed in plain view upon any cart, vehicle, van, or other movable structure or device, at all times while transacting or carrying on the Business for which it is issued. (c) All Persons subject to the provisions of this chapter shall keep complete records of Business transactions, including sales, receipts, purchases, and other expenditures, and shall retain all such records for examination by the Collector. Such records shall be maintained for a period of at least three years. No Person required to keep records under this section shall refuse to allow authorized representatives of the Collector to examine said records at reasonable times and places.
6.04.090 Information confidentiality.
No statement shall be conclusive as to the matters set forth in any application filed under the provisions of this chapter and neither the filing thereof, the assessment or payment of any tax, nor the issuance of any Tax Certificate shall preclude the City from collecting by appropriate action such sum as is actually due and payable. Such statement, and each of the several items therein contained, shall be subject to audit and verification by the Finance Director, who is hereby authorized to examine, audit, and inspect such books and records of any Tax Certificate Holder or applicant for a Tax Certificate as may be necessary for the judgment of the Collector to verify or ascertain the amount of Business Tax due.
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(a) It is unlawful for the Collector or any person having an administrative duty under the provisions of this chapter to make known in any manner whatever the Business affairs, operations, or information obtained by an investigation of records and equipment of any Person required to have a Tax Certificate, or pay a Business Tax, or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or copy of either, or any book containing any abstract particulars thereof to be seen or examined by any person. Provided that nothing in this section shall be construed to prevent:
(1) The disclosure to, or the examination of records and equipment by, another City official, employee, or agent for collection of taxes for the sole purpose of administering or enforcing any provisions of this chapter, or collecting taxes imposed hereunder;
(2) The disclosure of information to, or the examination of records by Federal or State officials, or the tax officials of another city or county, or city and county, if a reciprocal arrangement exists, or to a grand jury or court of law, upon subpoena; (3) The disclosure of information and results of the examination of records of particular taxpayers, or relating to particular payers, to a court of law in a proceeding brought to determine the existence or amount of any Business Tax liability of the particular taxpayers to the City;
(4) The disclosure after the filing of a written request to that effect, to the taxpayer himself, or to his successors, receivers, trustees, executors, administrators, assignees, and guarantors, if directly interested, of information as to the items included to the measure of any paid tax, any unpaid tax or amounts of tax required to be collected, interest and penalties; further provided, however, that the City Attorney approves each such disclosure and that the Collector may refuse to make any disclosure referred to in this paragraph when in his opinion the public interest would suffer thereby;
(5) The disclosure of the names and addresses of persons to whom Business Tax receipts have been issued, and the general type or nature of their Business; (6) The disclosure by way of public meeting or otherwise of such information as may be necessary to the City Council in order to permit it to be fully advised as the facts when a taxpayer files a claim for refund of Business Taxes or submits an offer of compromise with regard to a claim asserted against him by the City for Business Taxes, or when acting upon any other matter;
(7) The disclosure of general statistics regarding taxes collected or Business done in the City.
6.04.100 Failure to file statements or corrected statements. (a) If any Person fails to file any required statement within the time prescribed, or if, after demand therefor made by the Collector, such Person fails to file a corrected statement, or
if any Person subject to the tax imposed by this chapter fails to submit the information required by the Collector necessary to determine the Business Tax due and payable, or if the Collector is not satisfied with the information supplied and the statement filed, the Collector may determine the amount of the Business Tax due from such Person by means of such information as he may be able to obtain.
(b) If such a determination is made, the Collector shall give notice of the amount so assessed by serving such notice electronically, personally, or by depositing it in the United States Post Office, postage prepaid, addressed to the Person so assessed at his last known address.
(c) Assessments so established shall be paid within fifteen (15) days after the mailing of such notice, subject to the provisions of section 6.04.180 of this chapter.
6.04.110 Amount of business tax debt to the city.
The amount of any Business Tax imposed by this chapter shall be deemed a debt to the City, and any Person carrying on any trade, calling, profession or occupation mentioned in this chapter without having a Tax Certificate from the City shall be liable to an action in the name of the City in any court of competent jurisdiction for the amount of the Business Tax by this chapter imposed on such trade, calling, profession, or occupation.
6.04.120 Effect of convictions.
The conviction and punishment of any Person for transacting any trade, calling, profession, or occupation without a tax shall not excuse or exempt such person from the payment of any Business Tax due or unpaid at the time of such conviction, and nothing in this chapter shall prevent a criminal prosecution for any violation of the provisions of this chapter.
6.04.130 Duty of City to issue business tax certificates. (a) It shall be the duty of the City to prepare and issue a Tax Certificate pursuant to the provisions of this chapter for every person liable to pay a Business Tax and to state in each Tax Certificate the period of time covered thereby; the name of the person or Business to whom issued; the Business classification to which the Tax Certificate is issued; the trade, calling, profession, or occupation to which the license certificate is issued and the location or place of Business where such trade, calling, profession, or occupation is to be carried (b) No Tax Certificate granted or issued under any provision of this chapter shall be in any manner transferred or assigned, nor shall such Tax Certificate authorize any Person, other than is therein mentioned or named, to not pay a Business Tax. (c) The City may make a charge of Ten ($10.00) Dollars for each duplicate Tax Certificate issued to replace any Tax Certificate issued under the provisions of this chapter that has been lost or destroyed. In no case shall any mistake made by the City in stating the amount of a Business Tax prevent or prejudice the collection by the City of what shall be due from any Person carrying on a trade, calling, profession, or occupation subject to Business Tax under this chapter.
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6.04.140 Business taxes payable at City offices.
All Business Taxes shall be paid in advance in lawful money of the United States to the City of Tracy, in a manner prescribed by the Collector.
6.04.150 Separate business tax certificate required - Warehouses excepted.
A separate Tax Certificate shall be obtained for each branch establishment or location.
Warehouses and distributing establishments used in connection with and incidental to a Business Taxed under the provisions of this chapter shall not be deemed to be separate places of Business or branch establishments.
6.04.160 Business tax certificate period.
No Tax Certificate shall be issued for a period of more than twelve (12) months of the City’s fiscal year beginning July 1 and ending June 30. Any application for a Tax Certificate received by the City mid-fiscal year will use a prospective estimate of how much the applicant would pay had they applied at the beginning of the Tax Certificate period.
6.04.170 Business taxes— Payment, delinquencies, and penalties. (a) All Business Taxes shall be due on the first day of July and delinquent at 5:00 p.m. on the last day of July.
(b) For failure to pay a Business Tax when due, the Collector shall add a penalty of ten (10%) percent of such Business Tax on the first day of delinquency and shall add a further penalty of ten (10%) percent of such Business Tax on the first day of every subsequent calendar month following such first day of delinquency provided the amount of such penalties to be added shall in no event exceed fifty (50%) percent of the Business Tax due. The penalties provided in this subsection shall be assessed from the date when such deficiency was required to be paid pursuant to the provisions of this chapter.
6.04.180 Application - Initial.
(a) Upon a Person making an application for the first Business Tax Certificate for a newly established or acquired Business, such Person shall furnish to the Collector a statement, upon a form provided by the Collector; setting forth the following information:
(1) The exact nature or kind of Business;
(2) The place where such Business is to be carried on, and if the same is not to be carried on at any permanent place of Business, the places of residence of the owners of same; (3) In all cases where the amount of tax to be paid is measured by gross receipts, the application shall set forth such information as may be therein required and as may be necessary to determine the amount of the tax to be paid by the applicant; (4) Any further information which the Collector may require. (b) If the amount of the tax to be paid by the applicant is measured by gross receipts, he or she shall estimate the gross receipts for the period covered. Such estimate, if accepted by the Collector as reasonable, shall be used in determining the amount of tax to be paid by P
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the applicant; provided, however, the amount of the tax so determined shall be tentative only, and such person shall, within 60 days after the expiration of the period covered, furnish the Collector with a statement, upon a form prescribed by the Collector, showing the applicant’s actual gross receipts during the period covered, and the tax for such period shall be finally ascertained and paid in the manner provided by this chapter for the ascertaining and paying of such taxes, after deducting from the payment found to be due the amounts initially paid.
(c) In all cases, the applicant shall, upon filing his or her application, pay no less than the prescribed minimum tax in advance, without being prorated, to cover the remaining portion of the current reporting period.
(d) The Collector shall not issue to any such person another Business Tax Certificate for the same or any other Business until such Person shall have furnished to him or her a statement and paid the tax as herein required.
6.04.190 Application - Renewal.
In all cases, the applicant for the renewal of a Business Tax Certificate shall submit to the Collector for his or her guidance in ascertaining the amount of the tax to be paid by the applicant, a statement, upon a form prescribed by the Collector, setting forth such information concerning the applicant’s Business during the preceding year as may be required by the Collector to enable him or her to ascertain the amount of the tax to be paid by said applicant pursuant to the provisions of this chapter. 6.04.200 Extensions of filing dates— Interest charges.
The Collector shall have the power, for good cause, to extend the time for filing any required sworn statement for a period not exceeding sixty (60) days and in such case to waive any penalty that would have otherwise accrued, except that twelve (12%) percent simple interest shall be added to any tax determined to be payable.
6.04.210 Refunds.
No refund of an overpayment of a Business Tax imposed by this chapter shall be allowed in whole or in part unless a claim for a refund is filed with the Collector within a period of one (1) years after the last day of the calendar month following the period for which the overpayment was made, and all such claims for refunds shall be filed with the Collector on forms the Collector furnishes in the manner prescribed by the Collector. Upon the filing of such a claim and when the Collector determines, in a reasonable time, that an overpayment has been made, the Collector may refund the amount overpaid.
6.04.220 Determinations of business classifications an administrative function.
The final determination of which Business or class of Business a Tax Certificate Holder or applicant for a Tax Certificate is engaged in, or about to engage in, shall be an administrative function of the City.
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6.04.230 Applications for changes of business classifications. (a) In any case, where a Tax Certificate Holder or an applicant for a Tax Certificate believes that his or her Business is not assigned to the proper classification under this chapter because of circumstances peculiar to it, as distinguished from other Businesses of the same kind, he or she may apply to the Collector for reclassification. Such application shall contain such information as the Collector may deem necessary and require in order to determine whether the applicant’s individual Business is properly classified. The Collector shall then conduct an investigation following which he or she shall assign the applicant’s individual Business to the classification shown to be proper on the basis of such investigation. The proper classification is that classification which, in the opinion of the Collector, most nearly fits the applicant’s Business. The reclassification shall not be retroactive but shall apply at the time of the next regularly ensuing calculation of the applicant’s tax. No Business shall be classified more than once a year.
(b) The Collector shall notify the applicant of the action taken on the application for reclassification. Such notice shall be given by serving it personally or by depositing it in the United States Post Office postage prepaid, addressed to the applicant at his or her last known address. Such applicant may, within 10 working days after the mailing or serving of such notices, make a written request to the Collector for a appeal hearing on the application’s reclassification. If such a request is made within the time prescribed, the Collector shall cause the matter to be set for hearing before the City Council within 15 days.
The Collector shall give the applicant at least 10 days’ notice of the time and place of the hearing in the manner prescribed under section 1.12.020 for serving notice of the action taken on the application for reclassification. The City Council shall consider all evidence adduced and shall adopt a resolution reflecting its decision. The decision of the City Council shall be final.
6.04.240 Appeals on decisions of business classifications.
Any applicant or Tax Certificate Holder aggrieved by the Business classification decision of the City shall have the right of appeal to an impartial Hearing Officer as outlined by section
1.12.030 of the Code. Such appeal shall be taken by filing with the City Clerk, within fifteen (15) days after the notice of the decision of the City, a written statement setting forth the grounds for the appeal. The City Clerk shall set a time and place for a hearing on such appeal within thirty (30) days after the receipt of the appeal. Notwithstanding chapter 1.12 of the Code, the decisions and orders of the Hearing Officer shall be final and conclusive.
6.04.250 Rules and regulations.
The City Manager may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, as may be necessary or desirable to aid in the enforcement of the provisions of this chapter.
6.04.260 Referrals to other agencies— Prepayment of taxes. (a) Referrals to other agencies. The Collector may refer to any governmental agency any statement and all other information submitted by persons subject to the provisions of this P
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chapter in connection with the conduct of a Business regulated or supervised or otherwise the concern of any such agency, including agencies concerned with health regulations, zoning conformance, fire safety, police considerations, or any other safeguard of the public interest. (b) Prepayment of taxes. The Collector may advise any person filing a statement in connection with the payment of a Business Tax for a new or other Business not actually in operation that such person may desire to defer the payment of the Business Tax until the person has obtained whatever approval may be required in order to transact and carry on the Business until such Business is actually in operation. If any person does, however, pay the Business Tax in advance of the commencement of the operation of the Business, but does not operate the Business because City or other governmental agency did not grant an approval which is required by regulation or law in order for such Business to be transacted and carried on, then the Business Tax shall be refunded in full, after the person has informed Collector in a timely manner, to the person having paid such tax minus the application fee as set by resolution of the City Council and revised from time to time.
6.04.270 Enforcement.
(a) It shall be the duty of the Collector to enforce each and all of the provisions of this chapter, and the various City departments shall render such assistance in the enforcement as may from time to time be required by the Collector, City Manager, or City Council. (b) The Collector, in the exercise of the duties imposed upon the Collector shall examine, or cause to be examined, all places of Business in the City to ascertain whether the provisions of this chapter have been complied with.
(c) The Collector, and each designee, and any police officer or duly authorized inspector, shall have the power and authority to enter free of charge at any reasonable time any place of Business or to question any person, which Business or person is, or there is reasonable cause to believe such Business or person may be, subject to the provision of this chapter, and demand an exhibition of proof of Business Tax payment. (d) The Collector's designees who have satisfactorily completed a certified course in "Powers of Arrest" may thereafter exercise the powers of arrest as specified in Section 836.5 of the California Penal Code on any person who has committed a misdemeanor or infraction in their presence which is a violation of the provisions of this chapter.
6.04.280 Remedies cumulative.
All remedies prescribed in this chapter shall be cumulative, and the use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.
6.04.290 Severability.
If any section, subsection, sentence, clause, phrase, or portion of this chapter is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter.
The City Council hereby declares that it would have adopted this chapter, and each section, subsection, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, clauses, phrases, or portions be declared invalid or unconstitutional.
6.04.300 Violations— Penalties.
Any person violating any of the provisions of this chapter or knowingly or intentionally misrepresenting to any officer or employee of the City any material fact in procuring, or attempting to procure, the Business Tax certificate provided for in this chapter shall be deemed guilty of an infraction.
Article 2. Taxes
6.04.310 Determination of tax due based on gross receipts plus annual registration tax.
(a) Every person who engages in Business within the City shall pay a Business Tax based upon Gross Receipts at the specified category rates listed in this section. (b) A flat rate of $50 will be applied to the Base Gross Receipts, as defined by section
6.04.010, regardless of which category the Business falls under. If the Business makes less than the Base Gross Receipts but more than $1, the Business will only pay $50 in Business Tax. Any dollar amount in excess of the Base Gross Receipt, will be calculated by the rates below.
For example, if a Business has a Gross Receipt of $300,000 and is a Category 1 Business, the total amount of tax the Business would pay would be a $50 (for the first $200,000 [Base Gross Receipt]) + $100 ([$300,000-$200,000] x .001) for a total of $150 in Business Tax.
(c) If a Business has no Gross Receipts, as defined in section 6.04.010, then the Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations for such Business. The cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges, and other expenses.
(d) Categories of Businesses:
(1) CATEGORY 1: General retail, restaurants, hotels, and tour operators and any Business not otherwise classified (0.001 X Gross Receipts in excess of the Base Gross Receipts)
Example: If a Business has a Gross Receipt of $400,000 and is a Category 1 Business, the total amount of tax the Business would pay would be $50 (for the first $200,000 [Base Gross Receipts]) + $200 ([$400,000-$200,000] x .001) for a total of $250 in Business Tax
(A) Any establishment or Business that conducts retail (the sale of goods to ultimate consumers, usually in small quantities), or wholesale (the sale of goods in quantity, as to retailers or jobbers, for resale), or restaurant (an P
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establishment where meals, prepared food, and/or beverages are served to customers).
(B) “Tour operator” means a Business that provides tours in the City for Compensation.
(2) CATEGORY 2: Wholesale and Manufacturing (0.0015 X Gross Receipt in excess of the Base Gross Receipts):
Example: If a Business has a Gross Receipt of $400,000 and is a Category 2 Business, the total amount of tax the Business would pay would be $50 (for the first $200,000 [Base Gross Receipts]) + $300 ([$400,000-$200,000] x .0015) for a total of $350 in Business Tax
(A) “Manufacturing” includes every person conducting or carrying on a Business consisting of manufacturing, packing, or processing any goods, wares, merchandise, or commodities at a fixed place of Business within the City or conducting or carrying on a Business of cold storage or refrigeration.
(3) CATEGORY 3: Contractors and Services (0.002 X Gross Receipt in excess of the Base Gross Receipt):
Example: If a Business has a Gross Receipt of $400,000 and is a Category 3 Business, the total amount of tax the Business would pay would be $50 (for the first $200,000 [Base Gross Receipts]) + $400 ([$400,000-$200,000] x .002) for a total of $450 in Business Tax
(A) Contractors: every person, firm, or corporation conducting, managing, or carrying on the Business of contractor, subcontractor, or builder; or engaging in the construction or repair of any buildings; or engaged in any engineering, construction, operating, or advertising as such, or representing himself as such, and regularly employing help for building construction, sewer construction, plumbing construction or general construction. (B) “Services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically covered under any other part, chapter, or section of this chapter, and shall include those professions that may require governmental certification or licensure, but not be limited to the services rendered by a person engaged in the practice or profession such as hairstylist, beautician or cosmetologist, aesthetician, or art instructor.
(4) CATEGORY 4: Professionals and Rental Units (Commercial and Residential) (0.003 X Gross Receipts in excess of the Base Gross Receipt):
Example: If a Business has a Gross Receipt of $400,000 and is a Category 4 Business, the total amount of tax the Business would pay would be $50 (for the first $200,000 [Base Gross Receipts]) + $600 ([$400,000-$200,000] x .003) for a total of $650 in Business Tax
(A) “Professional services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically covered under any other part, chapter or section of this chapter, and shall include those professions generally requiring governmental certification or a professional degree, but not be limited to the services rendered by a person engaged in the practice or profession of law, medicine, surgery, dentistry, ophthalmologist, optometry, chiropractic, osteopathy, chiropody, dental technician, laboratory technician, physical therapist, mortician, undertaker, psychologist, psychotherapy, radiologist, speech therapist, veterinary, licensed financial planner, licensed investment counselor, real estate agent, real estate broker, stock/bond or security agent or broker, civil, mechanical, electrical, industrial, or other class of engineer, surveyor, geologist, appraiser, architect, accountant, real estate management, property management, income tax preparers, bookkeepers, income tax consultants, developer, or marriage counselors.
(B) Any Business, individual, or entity that leases, rents, or otherwise provides property to another individual or entity for compensation.
RESOLUTION 2
APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE
T
RACY CITY COUNCIL
R
ESOLUTION NO. _______________
O
RDERING THE CITY CLERK TO SUBMIT TO THE CITY OF TRACY VOTERS AT THE NOVEMBER 8, 2022, GENERAL MUNICIPAL ELECTION, A BALLOT MEASURE REPEALING AND REPLACING, IN ITS ENTIRETY, CHAPTER 6.04 (BUSINESS TAXES) OF THE TRACY MUNICIPAL CODE, AND 2) AUTHORIZING THE SUBMISSION OF AN ARGUMENT ON
BEHALF OF THE CITY COUNCIL WITH DESIGNATED AUTHOR(S), AND DIRECTING THE
CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS, OF THE BALLOT MEASURE ON THE NOVEMBER 8, 2022 GENERAL ELECTION BALLOT
W
HEREAS, Chapter 6.04 of the Tracy Municipal Code contains the City of Tracy’s (City) Business Taxes structure (Business Taxes Structure), which applies to all persons engaged in business activities in the City of Tracy (City); and
W
HEREAS, The City’s Business Taxes Structure has not been critically re-examined in decades; and
W
HEREAS, The City’s current Business Taxes Structure imposes a disproportionate burden on small businesses, as it is based on the total employee count instead of gross receipts generated by the businesses; and
W
HEREAS, Due to this flat tax structure and reliance on the total employee count, large employers in the City, such as warehouse businesses and big corporations, are currently not paying their proportionate share of tax relative to their gross receipts; and W
HEREAS, Small, locally owned businesses in the City are currently paying a higher effective rate compared to larger businesses who are currently paying far less than their respective “fair share” relative to the gross receipts generated by such businesses; and W
HEREAS, An alternative to the flat tax is a progressive gross receipts tax, in which larger businesses with higher gross receipts pay more than smaller businesses with less gross receipts; and
W
HEREAS, A progressive tax structure would create a better business environment for small businesses and provide additional funding for City services; and W
HEREAS, In a progressive system, every business pays their fair and proportional share into the City’s General Fund and is aligned with the nation’s progressive income tax structure; and
Resolution 2022-____
WHEREAS, Neighboring cities, including Stockton, Modesto, Walnut Creek, San Jose and and San Francisco, have adopted a progressive business tax structure that imposes higher rates on businesses that earn more gross receipts; and
WHEREAS, The City seeks to maintain quality of life while not taxing homeowners living in the City or burdening small businesses; and
WHEREAS, The proposed amended Business Taxes measure is not a license to operate within the City, and each business must obtain a “Business Tax” Certificate; and
WHEREAS, The changes suggested to the Business Taxes Structure do not entitle the holder of the Business Tax Certificate to conduct business before complying with all requirements of the Tracy Municipal code and other applicable laws, nor to conduct business in a zone where such a business violates the law; and
WHEREAS,
In March 2020, the City Council formed an Ad-Hoc Committee of the City Council to develop policies and actions to ensure the City’s long-term fiscal sustainability; and
WHEREAS, On March 9, 2021, the City Council held a fiscal sustainability workshop where they adopted the City’s Guiding Budget Principles and several fiscal strategies; and
WHEREAS, The City Council directed the Ad-Hoc Committee to continue working through these strategies and to return to the City Council with further actions for consideration; and
WHEREAS, One of these strategies was to revise the City’s existing Business Taxes scheme, which has not been updated for the last four decades; and
WHEREAS, During the March 22, 2022, City Council workshop, staff presented the General Fund’s ten-year forecast that discussed the impacts of the potential loss of Sales Tax revenues and what an increase from a revision to the Business Taxes revenue would look like for the City; and
WHEREAS, On March 22, 2022, with the recommendation of the Ad-Hoc Committee, the City Council directed staff to proceed with the documents required to place a general tax measure on the ballot for the General Municipal Election on November 8, 2022, and
WHEREAS, Over the past four months, the City has met with the Chamber of Commerce, the Tracy City Center Association (TCCA), and hosted four separate meetings for the City’s business community to discuss how to make the City’s Business Taxes Structure more equitable by switching to a gross receipts tax; and
WHEREAS, The Ad-Hoc Committee initially explored options for the gross receipts tax to begin after the first $100,000 in gross revenue with a flat fee of $100; and
WHEREAS, The small business community’s feedback influenced the final recommend- ation, which reflects a base fee of $50 for the first $350,000 in gross receipts; and
WHEREAS, Based on the recommendations of the business community and the Ad-Hoc Committee, staff has prepared a proposed ballot measure asking the voters to repeal and replace, in its entirety, Chapter 6.04 (Business Taxes) of the Tracy Municipal Code in the form, Resolution 2022-____
attached hereto as Exhibit A and incorporated herein by reference (Ballot Measure) for the City Council’s consideration; and
W
HEREAS, if approved by the voters, the Ballot Measure would impose a general tax on businesses engaged in commercial activity in the City (General Tax); and WHEREAS, If the proposed Ballot Measure is approved by the voters, the amended Business Taxes Structure of the City would add resources to the general-purpose fund while also supporting small businesses by having a tax break on the first $350,000 in gross receipts; and
W
HEREAS, Revenues collected from the Ballot Measure would be for general revenue purposes and would go into the City's General Fund and be used for any government purpose; and
W
HEREAS, It is estimated that the proposed revisions to the Business Taxes Structure will generate approximately $4.5 million in annual tax revenue for the City’s General Fund; and W
HEREAS, Updating the City’s Business Taxes Structure would ensure that larger businesses relative to gross receipts pay their proportionate share of taxes while reducing the impact on small businesses; and
W
HEREAS, If approved, the Ballot Measure would generate additional revenue that also would allow the City to: maintain and even improve City streets, roads, parks, community facilities, and economic development; maintain and expand after-school programs, anti-gang activities, and recreation programs that keep young people off the streets, out of trouble and away from drugs and gangs; and help maintain rapid emergency and medical response times for police and fire by ensuring adequately staffed and trained police officers and firefighters; and W
HEREAS, Pursuant to Section 9222 of the California Elections Code, the City Council is authorized to place measures on the ballot to be considered at a general municipal election; and
W
HEREAS, Article XIII C, section 2(b) of the California Constitution requires that any General Tax for unrestricted general revenue purposes must be submitted to and approved by a majority vote of the voters voting on the issue of imposing any general tax; and W
HEREAS, At its June 24, 2022 meeting, the City Council adopted a R esolution (Resolution No 2022-083) calling for and giving notice of a General Municipal Election to be held on November 8, 2022, and requesting that the Board of Supervisors of the County of San Joaquin consolidate said election with the Statewide General Election to be held that day along with other requisite actions; and
W
HEREAS, the Calfiornia Elections Code requires ballot measures to pose a specific question for the voters’ consideration; and
W
HEREAS, Based upon analysis and voter polling, staff proposes that the ballot question be, “To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy/safe/clean; maintaining neighborhood police patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be Resolution 2022-____
adopted with typical rates between 0.1% and 0.3% of gross receipts, as described in the ordinance, providing an additional $3,500,000 annually, until ended by voters?”; and W
HEREAS, The Calfornia Elections Code allows legislative bodies to provide for the submission of arguments for and against ballot measures and to direct their respective counsel to prepare an impartial analysis of such measures; and
W
HEREAS, The City Council desires to submit the General Tax , pursuant to the Ballot Measure,to the qualified voters of the City at the next General Municipal Election to be held on Tuesday, November 8, 2022; and
W
HEREAS, In accordance with the California Environmental Quality Act (CEQA) Guidelines Sections 15378 (b)(3) and (b) (4), the City finds that this action does not constitute a project under CEQA; and now, therefore, be it
R
ESOLVED:
S
ection 1. Recitals. The City Council hereby finds and determines that the foregoing recitals are true and correct and incorporates them fully herein.
S
ection 2. Ballot Meaure. The City Council hereby orders the City Clerk to submit to the City of Tracy Voters, at the November 8, 2022, General Municipal Election, the Ballot Measure repealing and replacing, in its entirety, Chapter 6.04 (Business Taxes ) of the Tracy Municipal Code.
Section 3. Argument. The City Council hereby authorizes the submission of an argument for the Ballot Measure, on behalf of the City Council with designated author(s), which argument, in accordance with California Elections Code sections 9282 and 9283:
(a) s
hall not exceed 300 words in length, and shall be printed upon the same sheet of paper and mailed to each voter with the sample ballot for the election and may be signed by the authors designated by the City Council as part of the adoption of this Resolution; (b)
i
nclude, preceding the argument itself, the heading “Argument For Measure ” and precede, which shall not be counted in the 300 word maximum (the blank spaces being filled only with the letter or number, if any, designating the measure); and (c) be fi
led with the City Clerk, accompanied by the printed name(s) and signature(s) of the author
(s) submitting it, due in the office of the City Clerk by the date established by the County Registrar of Voters
Section 4. Impartial Analysis. The City Council hereby directs the City Attorney to prepare an impartial analysis of the Ballot Measure and to timely submit such analysis to the City Clerk Section 5. Rate and Method. The type, rate, and method of collection of the General Tax are set forth in the Ballot Measure.
Section 6. Ballot Label. The City Council hereby approve s the following ballot label for the proposed General Tax, to be submitted for a “Yes” or “No” vote:
Resolution 2022-____
To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy/safe/clean; maintaining neighborhood police patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be adopted with typical rates between
0.1% and 0.3% of gross receipts, as described in the ordinance, providing an additional $3,500,000 annually, until ended by voters? YES
NO
Section 7. Full Text. The full text of the Ballot Measure, which is attached as Exhibit A , shall be printed in the sample ballot/voter information pamphlet for the November 8, 2022 General Municipal Election.
Section 8. Approval. Pursuant to Section 2( b) of Article XIII C of the California Constitution, this measure requires approval by a majority vote (50% plus 1) of those casting ballots on the measure.
Section 9. Filing with County. The City Clerk shall file a certified copy of this Resolution, along with the argument and analysis authorized herein, with the Board of Supervisors and County Elections Department of the County of San Joaquin and to take such actions needed to comply with the California Elections Code.
Section 10. CEQA. In accordance with CEQA Guidelines Sections 15378 (b)(3) and (b)(4), the City finds that this action does not constitute a project under CEQA.
Section 11. Effective Date. This Resolution shall be effective immediately upon adoption by a majority vote of the City Council.
The foregoing Resolution was adopted by the Tracy City Council on the 12th day of July, 2022, by the following vote:
AYES: CO
UNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
_______________________________
Mayor
AT
TEST:
____________________________________
City Clerk
Resolution 2022-____
EXHIBIT A
ORDINANCE NO. _____
Title 6 ‐ BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
Chapter 6.04 BUSINESS TAXES
Sections:
6.04.010 Definitions.
6.04.020 Revenue measure.
6.04.030 Effect on other laws.
6.04.040 Business tax payments required.
6.04.050 Evidence of doing business.
6.04.060 Constitutional apportionment.
6.04.070 Exemptions.
6.04.080 Posting and keeping tax certificates.
6.04.090 Confidentiality and examination.
6.04.100 Failure to file statements or corrected statements.
6.04.110 Amount of business tax debt to city.
6.04.120 Effect of convictions.
6.04.130 Duty of City to issue tax certificates.
6.04.140 Business taxes payable at City offices.
6.04.150 Separate taxesrequired—Warehouses excepted.
6.04.160 Tax certificate period.
6.04.170 Business taxes—Payment, delinquencies, and penalties.
6.04.180 Taxpayer information required.
6.04.190 Subsequent tax payments.
6.04.200 Extensions of filing dates—Interest charges.
6.04.210 Refunds.
6.04.220 Determinations of business classifications an administrative function.
6.04.230 Applications for changes of business classifications.
6.04.240 Appeals on decisions of business classifications.
6.04.250 Rules and regulations.
6.04.260 Referrals to other agencies—Prepayment of taxes.
6.04.270 Enforcement.
EXHIBIT A
Title 6 ‐ BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
6.04.280 Remedies cumulative.
6.04.290 Severability.
6.04.300 Violations—Penalties.
6.04.310 Determination of tax due based on gross receipt plus annual registration.
Article 1. General Provisions
6.04.010 Definitions.
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
“Base Gross Receipt” means the first $350,000 of Gross Receipt "Business" means and includes full‐time or part‐time professional services and retail, wholesale, manufacturing, or other occupations, trades, or callings of any kind, whether or not carried on for profit or livelihood.
"Business tax" means the Business activity tax.
"City" means the City of Tracy, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged, or reincorporated form.
“Code” means the Tracy Municipal Code, as amended from time to time. "Collector" means the Finance Director of the City or other designees charged by the Finance Director or City Manager of the City, as the case may be, with the administration of the provisions of this chapter.
“County” means the County of San Joaquin.
“Constitution” means the United States Constitution or the California Constitution, as the case may be.
"Employee" means all persons engaged in the operation or conduct of any Business, whether as a member of the owner's family, agent, manager, solicitor, and all other persons employed or working in said Business including, without limitations of the foregoing, all individuals who derive all or part of their income from commissioned sales. For purposes of computing tax based on employees, the average number of employees per year, as defined in this section, will be used.
"Fixed place of business" means premises in the City where a Business is conducted from day to day and regularly kept open for the purposes of such Business, also referred to as "regular place of business."
“Gross Receipts” means the total amount of the sale price of all sales, and/or the total amount charged or received for the performance of any act or service or employment, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act, service or employment is done as a part of or in connection with the sale of materials, goods, wares or merchandise, and when such act, service or employment occurs as a result of any activity within the City. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, except as excluded in this subsection, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever as shown by either the Federal or State income tax return required to be filed by such person.
Where the Gross Receipts, as defined above, are less than the cost of operations of the Business, then the Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations. Such cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges and other expenses.
Excluded from “gross receipts” shall be:
(a) Cash discounts allowed and taken on sales;
(b) Credit allowed on property accepted as part of the purchase price and which property may later be sold;
(c) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;
(d) Such part of the sale price of property returned by purchasers upon rescission of the contract of sale as is refunded either in cash or by credit; (e) Amounts collected for others where the Business is acting as an agent or trustee to the extent that such amounts are paid to those whom collected; (f) The amount of each single sale to a single customer in excess of fifty thousand dollars ($50,000.00) where the gross profits derived therefrom does not exceed one percent (1%) of the sale price; and
The amount of gross receipts which has been the measure of a license tax paid to any other City. “Hearing officer” means an impartial person designated by the City Manager, as defined in Chapter 1.12 of the Tracy Municipal Code.
"Manufacturing" means making materials, raw or partly finished, into wares suitable for use by persons other than the manufacturer, including, but not limited to, fabrication, processing, packing, bottling, assembling, canning, compounding, and forging. "Not‐for‐profit entities" means any organization that qualifies under Section 501, subsection (c) (3) of the United States Internal Revenue Code or equivalent federal statute. "Peddler" means any person who goes from house to house or from place to place or in or along the streets of the City selling and making an immediate delivery, or offering for sale and immediate delivery, anything of value in his possession to persons other than dealers in such commodities.
"Person" means any individual, firm, company, partnership, limited liability partnership, joint venture, association, proprietorship, social club, fraternal organization, joint stock company, domestic or foreign corporation, limited liability corporation, estate, trust, business trust, receiver, trustee, trustee in bankruptcy, administrator, executor, assignee, syndicate, or any other group or combination acting as a unit, whether mu tual, cooperative, fraternal, nonprofit or otherwise, excepting: the United States of America, the State of California, and any political subdivision of either thereof upon which the City is without power to impose the tax herein provided.
"Solicitor" means a person engaged in soliciting, canvassing, or taking orders from house to house, or from place to place, or by teleph one, or by any other means of communication for any goods, wares, or merchandise or any article to be delivered in the future, or for services to be performed in the future, or for making, manufacturing, or repairing any article whatsoever for future d elivery, or for subscriptions to periodicals or tickets of admission to entertainments or memberships in any clubs.
“State” means the State of California.
"Sworn statement" means an affidavit sworn to before a person authorized to take oaths or a declaration or certification made under penalty of perjury. "Tax Certificate" means the Business tax certif icate and any other identifying decal or marker as may be required by the Collector for purposes of this Chapter 6.04. "Tax Certificate Holder" means the Person to whom a Tax Certificate has been issued. "Transient business" means every Business not conducted at a "fixed place of business" or at a regular place of Business, whether the pers
on conducting such transient business is or is
not a resident of the City.
"Warehousing business" means every Business conducted solely for the purpose of maintaining or renting space for the storage of any kind of property. "Wholesale business" means every Business conducted solely for the pur pose of selling goods, wares, or merchandise in wholesale lots for resale.
6.04.020 Revenue measure.
This chapter is enacted for the sole purpose of raising revenue for municipal purposes and is not intended for regulation. The issuance of any Tax certificate shall not be construed as authorizing any Busines
s to operate without first complying with all other applicable laws and regulations.
6.04.030 Effect on other laws.
(a) Persons required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of any similar tax for the privileg e of doing such Business required by any other law of the City, the County or the State and shall remain subject to the regulatory provisions of those other laws.
(b) Any Person required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of such Business Tax, notwithstanding that such Business is not in compliance with zoning, health, safety, or other regulatory provisions of the Code or other State or federal law. Compliance with the provisions of this chapter shall not constitute evidence that such Business is in compliance with any other such regulations or provisions of law.
6.04.040 Required business tax payment.
(a) It shall be unlawful for any person to transact and carry on any Business, trade, profession, calling, or occupation in the City without first having paid the Business Tax, as prescribed in this chapter or without complying with any and all applicable requirements of this chapter.
(b) This section shall not be construed to require any Person to pay a Business Tax or to comply with any other requirement of this chapter prior to doing Business within the City if such requirements conflict with applicable statutes of the United States or of the State.
6.04.050 Evidence of doing business.
When any Person, by the use of signs, circulars, cards, telephone books, or newspapers, shall advertise, hold out, or represent that the Person is in Business in the City, or when any Person holds an active license or permit issued by a governmental agency indicating that the Person is in Business in the City, or when any Person makes a sale, takes an order, renders a commercial service, or performs any other similar act within the City, and such Person fails to deny by a sworn statement given to the Collector that the Person is not conducting a Business in the City after being requested to do so by the Collector, then such facts shall be considered prima facie evidence that the Person is conducting a Business in the City.
6.04.060 Constitutional apportionment.
(a) None of the Business Taxes provided for by this chapter shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the Equal Protection and Due Process Clauses of the Constitution
(b) In any case where a Business Tax is believed by a Person transacting or carrying on any Business in the City to place an undue burden upon interstate commerce or be violative of such constitutional clauses, such Person may apply to the Collector for an adjustment of the tax. Such application may be made before or at the time the tax is required to be paid or within six (6) months after the payment of the prescribed Business Tax. The applicant, by sworn statement and supporting testimony, shall show the applicant's method of Business, the gross volume or estimated gross volume of such Business, and such other information as the Collector may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Collector shall then conduct an investigation and, after having first obtained the written approval of the City Attorney, shall fix as the Business Tax for the applicant an amount that is reasonable and nondiscriminatory or, if the Business Tax has already been paid, shall order a refund of the amount over and above the Business Tax so fixed. Such investigation, fixing of the Business Tax, and order
of refund shall be accomplished within a reasonable time upon receiving the requisite information by the City. In fixing the Business Tax, the Collector shall have the power to fix the Business Tax on any basis which will assure that the Business Tax assessed shall be uniform with that assessed on Businesses of like nature, so long as the amount assessed does not exceed the Business Tax prescribed by this chapter. If it is determined that no Business Tax is due, the applicant exempt from the Business Tax shall obtain, and the Collector shall issue, a Tax Certificate indicating such exemption from the tax.
6.04.070 Exemptions
(a) Nothing contained in this chapter shall be deemed or construed as applying to any person transacting, engaging in, and carrying on any Business exempt by virtue of the Constitution or applicable statutes of the United States or of the State from payment of taxes prescribed herein.
(b) Exemptions Requiring tax‐exempt Tax Certificates. The following Persons shall be exempted from the provisions of this chapter, except that any such Person shall be required to obtain a tax‐exempt Tax Certificate:
(1) Not‐for‐profit entities, as defined in this Code; (2) Banks, including national banking associations as provided by subsection 1(a) of Section 16 of Article XIII of the State Constitution; and (2) Insurance companies and associations as provided by Section 14 of Article XIII of the State Constitution provided however that insurance brokers shall not be excluded under this section.
(c) Exemptions Not Requiring tax‐exempt Tax Certificates. The following Persons shall be exempted from the provisions of this chapter, and shall not be required to obtain a tax‐ exempt Tax Certificate:
(1) Any delivery by a firm lacking a fixed place of Business in the City, which delivery is occasional and incidental to a Business carried on outside the City provided, however, that four (4) or more deliveries within any twelve (12) month period shall be considered proof that any further delivery is not occasional and incidental to such Business;
(2) Any public utility or other organization which is wholly owned and operated by a political subdivision of the State and any public district organized under the laws of the State; and
(3) Any vehicle which is subject to the Motor Carriers of Property Permit Fee Act (California Revenue and Taxation Code section 7231 et. al); provided, however, this exemption shall only apply to the transportation Business. (d) Claims for exemption. Any Person desiring to claim an exemption from the payment of a Business Tax and to have a free tax‐exempt Tax Certificate issued shall make an application therefor upon a form prescribed by the City and shall furnish such information and make such affidavits as may be required, on an annual basis. Upon the determination
being made that the applicant is entitled to an exemption from the payment of the Business Tax for any reason set forth in this chapter, the City, upon the applicant complying with the provisions of this chapter or any other law of the City which may require a permit for the doing of the particular ac t proposed to be done, shall issue a free tax‐exempt Tax Certificate to such Person, which certificate shall show upon its face that the Business is exempt from the Business Tax.
(e) Revocation of exemptions. The City may revoke any tax‐exempt Tax Certificate granted pursuant to the provisions of this chapter upon info rmation that the Business is not entitled to the exemption as provided therein. In such revocation, the procedure to be followed and the right of appeal shall be as provided in this chapter for the determination of a disputed tax.
(f) Sworn statements. Th e City may require the filing of a sworn statement from any person claiming to be excluded by the provisions of the section, which statement shall set forth all the facts upon which the exclusion is claimed.
6.04.080 Posting and keeping Tax Certificates – Record keeping. (a) Any Person carrying on Business at a fixed place of Business in the City sh all keep the Tax Certificate posted in a conspicuous place on the premises where such Business is carried on.
(b) Every Tax Certificate holder not having a fixed place of Business in the City shall keep the Tax Certificate upon his or her person, or if requi red by the Collector affixed in plain view upon any cart, vehicle, van, or other movable structure or device, at all times while transacting or carrying on the Business for which it is issued. (c) All Persons subject to the provisions of this chapter shall keep complet e records of Business transactions, including sales, receipts, purchases, and other expenditures, and shall retain all such records for examination by the Collector. Such records shall be maintained for a period of at least three years. No Person required to keep records under this section shall refuse to allow aut horized representatives of the Collector to examine said records at reasonable times and places.
6.04.090 Information confidentiality.
No statement shall be conclusive as to the matters set forth in any application filed under the provisions of this chapter and neither the filing thereof, the assessment or payment of any tax, nor the issuance of any Ta x Certificate shall preclude the City from collecting by appropriate action such sum as is actually due and payable. Such statement, and each of the several items therein contained, shall be subject to audit and verification by the Finance Director, who is hereby authorized to examine, audit, and inspect such books and records of any Ta
x Certificate Holder or applicant for a Tax Certificate as may be necessary for the judgment of the Collector to verify or ascertain the amount of Business Tax due. (a) It is unlawful for the Collector or any person having an administrative duty under the provisions of this chapter to make kn
own in any manner whatever the Business affairs,
operations, or information obtained by an investigation of records and equipment of any Person required to have a Tax Certificate, or pay a Business Tax, or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or copy of either, or any book containing any abstract particulars thereof to be seen or examined by any person. Provided that nothing in this section shall be construed to prevent:
(1) The disclosure to, or the examination of records and equipment by, another City official, employee, or agent for collection of taxes for the sole purpose of administering or enforcing any provisions of this chapter, or collecting taxes imposed hereunder;
(2) The disclosure of information to, or the examination of records by Federal or State officials, or the tax officials of another city or county, or city and county, if a reciprocal arrangement exists, or to a grand jury or court of law, upon subpoena; (3) The disclosure of information and results of the examination of records of particular taxpayers, or relating to particular payers, to a court of law in a proceeding brought to determine the existence or amount of any Business Tax liability of the particular taxpayers to the City;
(4) The disclosure after the filing of a written request to that effect, to the taxpayer himself, or to his successors, receivers, trustees, executors, administrators, assignees, and guarantors, if directly interested, of information as to the items included to the measure of any paid tax, any unpaid tax or amounts of tax required to be collected, interest and penalties; further provided, however, that the City Attorney approves each such disclosure and that the Collector may refuse to make any disclosure referred to in this paragraph when in his opinion the public interest would suffer thereby;
(5) The disclosure of the names and addresses of persons to whom Business Tax receipts have been issued, and the general type or nature of their Business; (6) The disclosure by way of public meeting or otherwise of such information as may be necessary to the City Council in order to permit it to be fully advised as the facts when a taxpayer files a claim for refund of Business Taxes or submits an offer of compromise with regard to a claim asserted against him by the City for Business Taxes, or when acting upon any other matter;
(7) The disclosure of general statistics regarding taxes collected or Business done in the City.
6.04.100 Failure to file statements or corrected statements. (a) If any Person fails to file any required statement within the time prescribed, or if, after demand therefor made by the Collector, such Person fails to file a corrected statement, or if any Person subject to the tax imposed by this chapter fails to submit the information required by the Collector necessary to determine the Business Tax due and payable, or if
the Collector is not satisfied with the information supplied and the statement filed, the Collector may determine the amount of the Business Tax due from such Person by means of such information as he may be able to obtain.
(b) If such a determination is made, the Collector shall give notice of the amount so assessed by serving such notice electronically, personally, or by depos iting it in the United States
Post Office, postage prepaid, addressed to the Person so assessed at his last known address.
(c) Assessments so established shall be paid within fifteen (15) days after the mailing of such notice, subject to the provisions of section 6.04.180 of this ch apter.
6.04.110 Amount of business tax debt to the city.
The amount of any Business Tax imposed by this chapter shall be deemed a debt to the City, and any Person carrying on any trade, calling, profession or occupation mentioned in this chapter wit
hout having a Tax Certificate from the City shall be liable to an action in the name of the City in any court of competent jurisdiction for the amount of the Business Tax by this chapter imposed on such trade, calling, profession, or occupation.
6.04.120 Effect of convictions.
The co nviction and punishment of any Person for transacting any trade, calling, profession, or occupation without a tax shall not excuse or exempt such person from the payment of any Business Tax due or unpaid at the time of such conviction, and nothing in this chapter shall prevent a criminal prosecution for any violation of the provis ions of this chapter.
6.04.130 Duty of City to issue business tax certificates. (a) It shall be the duty of the City to prepare and issue a Tax Certificate pursuant to the provisions of this chapter for every person liable to pay a Business Tax and to state in each Tax Ce
rtificate the period of time covered thereby; the name of the person or Business to whom issued; the Business classification to which the Tax Certificate is issued; the trade, calling, profession, or occupation to which the license certificate is issued and the location or place of Business where such trad e, calling, profession, or occupation is to be carried(b) No Tax Certificate granted or issued under any provision of this chapter shall be in any manner transferred or assigned, nor shall such Tax Certificate authorize any Person, other than is therein mentioned or named, to not pay a Business Tax . (c) The City may make a charge of Ten ($10.00) Dollars for each duplicate Tax Certificate issued to replace any Tax Certificate issued under the provisions of this chapter that has been lost or destroyed. In no case shall any mistake made by the City in stating the amount of a Business Tax prevent or prejudice the coll
ection by the City of what shall be
due from any Person carrying on a trade, calling, profession, or occupation subject to Business Tax under this chapter.
6.04.140 Business taxes payable at City offices.
All Business Taxes shall be paid in advance in lawful money of the United States to the City of Tracy, in a manner prescribed by the Collector.
6.04.150 Separate business tax certificate required—Warehouses excepted.
A separate Tax Certificate shall be obtained for each branch establishment or location.
Wareh
ouses and distributing establishments used in connection with and incidental to a Business Taxed under the provisions of this chapter shall not be deemed to be separate places of Business or branch establishments.
6.04.160 Business tax certificate period.
No Tax Certificate shall be issued for a period of more than twelve (12) months of the City’s fiscal year beginning July 1 and ending June 30. Any application for a Tax Ce rtificate
received by the City mid‐fiscal year will use a prospective estimate of how much the applicant would pay had they applied at the beginning of the Tax Ce rtificate period.
6.04.170 Business taxes—Payment, delinquencies, and penalties. (a) All Business Taxes shall be due on the first day of July and delinquent at 5:00 p.m. on the last day of July.
(b) For failure to pay a Business Tax when due, the Collector shall add a penalty of ten (10%) percent of such Business Tax on the first day of delinquency and shall add a further penalty of ten (10%) percent of such Business Tax on the first day of every subsequent calend ar
month following such first day of delinquency provided the amount of such penalties to be added shall in no event exceed fifty (50%) percent of the Business Tax due. Th e penalties provided in this subsection shall be assessed from the date when such deficiency was required to be paid pursuant to the provisions of this chapter.
6.04.180 Application ‐ Initial.
(a) Upon a Person making an application for the firs t Business Tax Certificate for a newly established or acquired Business, such Person shall furnish to the Collector a statement, upon a form provided by the Collector; setting forth the following information:
(1) The exact nature or kind of Business;
(2) The place where such Business is to be carri ed on, and if the same is not to be carried on at any permanent place of Business, the places of residence of the owners of same; (3) In all cases where the amount of tax to be paid is measured by gross receipts, the application shall set forth such information as may be ther ein required and as may be necessary to determine the amount of the tax to be paid by the applicant; (4) Any further information which the Collector may require. (b) If the amount of the tax to be paid by the applicant is measured by gross receipts, he or she shall estimate the gross receipts for the period covered . Such estimate, if accepted by
the Collector as reasonable, shall be used in determining the amount of tax to be paid by the applicant; provided, however, the amount of the tax so determined shall be tentative only, and such person shall, within 60 days after the expiration of the period covered, furnish the Collector with a statement, upon a form prescribed by the Collector, showing the applicant’s actual gross receipts during the period covered, and the tax for such period shall be finally ascertained and paid in the manner provided by this chapter for the ascertaining and paying of such taxes, after deducting from the payment found to be due the amounts initially paid.
(c) In all cases, the applicant shall, upon filing his or her application, pay no less than the prescribed minimum tax in advance, without being prorated, to cover the remaining portion of the current reporting period.
(d) The Collector shall not issue to any such person another Business Tax Certificate for the same or any other Business until such Person shall have furnished to him or her a statement and paid the tax as herein required.
6.04.190 Application ‐ Renewal.
In all cases, the applicant for the renewal of a Business Tax Certificate shall submit to the Collector for his or her guidance in ascertaining the amount of the tax to be paid by the applicant, a statement, upon a form prescribed by the Collector, setting forth such information concerning the applicant’s Business during the preceding year as may be required by the Collector to enable him or her to ascertain the amount of the tax to be paid by said applicant pursuant to the provisions of this chapter.
6.04.200 Extensions of filing dates—Interest charges.
The Collector shall have the power, for good cause, to extend the time for filing any required sworn statement for a period not exceeding sixty (60) days and in such case to waive any penalty that would have otherwise accrued, except that twelve (12%) percent simple interest shall be added to any tax determined to be payable.
6.04.210 Refunds.
No refund of an overpayment of a Business Tax imposed by this chapter shall be allowed in whole or in part unless a claim for a refund is filed with the Collector within a period of one (1) years after the last day of the calendar month following the period for which the overpayment was made, and all such claims for refunds shall be filed with the Collector on forms the Collector furnishes in the manner prescribed by the Collector. Upon the filing of such a claim and when the Collector determines, in a reasonable time, that an overpayment has been made, the Collector may refund the amount overpaid.
6.04.220 Determinations of business classifications an administrative function.
The final determination of which Business or class of Business a Tax Certificate Holder or applicant for a Tax Certificate is engaged in, or about to engage in, shall be an administrative function of the City.
6.04.230 Applications for changes of business classifications. (a) In any case, where a Tax Certifi
cate Holder or an applicant for a Tax Certificate believes that his or her Business is not assigned to the proper classification under this chapter because of circumstances peculiar to it, as distinguished from other Businesses of the same kind, he or she may ap ply to the Collector for reclassification. Such application shall contain such information as the Collector may deem necessary and require in order to determine whether the applicant’s individual Business is properly classified. The Collector shall then conduct an investigation following which he or she shall assign the applicant’s individual Business to the classification shown to be proper on the basis of such investigation . The proper classification is that classification which, in the opinion of the Collector, most nearly fits the applicant’s Business. The reclassification shall not be retroactive but shall apply at the time of the next regularly ensuing calculation of the applicant’s tax. No Business shall be classified mo
re than once a year.
(b) The Collector shall notify the applicant of the action taken on the application for reclassification. Such notice shall be given by serving it personally or by depositing it in the United States Post Office postage prepaid, addres sed to the applicant at his or her last known address. Such applicant may, within 10 working days after the mailing or serving of such notices, make a written request to the Collector for a appeal hearing on the application’s reclassification. If such a request is made within the time prescribed, the Coll
ector shall cause the matter to be set for hearing before the City Council within 15 days.
The Collector shall give the applicant at least 10 days’ notice of the time and place of the hearing in the manner prescribed under section 1.12.020 for serving notice of the action taken on th
e application for reclassification. The City Council shall consider all evidence adduced and shall adopt a resolution reflecting its decision. The decision of the City Council shall be final.
6.04.240 Appeals on decisions of business classifications.
Any applicant or Tax Certificate Holder aggrieved by the Business classification decision of the City shall have the ri
ght of appeal to an impartial Hearing Officer as outlined by section
1.12.030 of the Code. Such appeal shall be taken by filing with the City Clerk, within fifteen (15) days after the notice of the decision of the City, a written statement setting forth the grounds for the appeal. Th
e City Clerk shall set a time and place for a hearing on such appeal within thirty (30) days after the receipt of the appeal. Notwithstanding chapter 1.12 of the Code, the decisions and orders of the Hearing Officer shall be final and conclusive.
6.04.250 Rules and regulations.
The City Manager may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, as may be necessary or desirable to aid in the enforcement of the provisions of this chapter.
6.04.260 Referrals to other agencies—Prepayment of taxes. (a) Referrals to other agencies. The Collector may refer to any governmental agency any statement and all other information submitted by persons subject to the provisions of this chapter in connection with the conduct of a Business regulated or supervised or otherwise the concern of any such agency, including agencies concerned with health regulations, zoning conformance, fire safety, police considerations, or any other safeguard of the public interest. (b) Prepayment of taxes. The Collector may advise any person filing a statement in connection with the payment of a Business Tax for a new or other Business not actually in operation that such person may desire to defer the payment of the Business Tax until the person has obtained whatever approval may be required in order to transact and carry on the Business until such Business is actually in operation. If any person does, however, pay the Business Tax in advance of the commencement of the operation of the Business, but does not operate the Business because City or other governmental agency did not grant an approval which is required by regulation or law in order for such Business to be transacted and carried on, then the Business Tax shall be refunded in full, after the person has informed Collector in a timely manner, to the person having paid such tax minus the application fee as set by resolution of the City Council and revised from time to time.
6.04.270 Enforcement.
(a) It shall be the duty of the Collector to enforce each and all of the provisions of this chapter, and the various City departments shall render such assistance in the enforcement as may from time to time be required by the Collector, City Manager, or City Council. (b) The Collector, in the exercise of the duties imposed upon the Collector shall examine, or cause to be examined, all places of Business in the City to ascertain whether the provisions of this chapter have been complied with.
(c) The Collector, and each designee, and any police officer or duly authorized inspector, shall have the power and authority to enter free of charge at any reasonable time any place of Business or to question any person, which Business or person is, or there is reasonable cause to believe such Business or person may be, subject to the provision of this chapter, and demand an exhibition of proof of Business Tax payment. (d) The Collector's designees who have satisfactorily completed a certified course in "Powers of Arrest" may thereafter exercise the powers of arrest as specified in Section 836.5 of the California Penal Code on any person who has committed a misdemeanor or infraction in their presence which is a violation of the provisions of this chapter. (Ord. 1044 § 1 (part), 2002)
6.04.280 Remedies cumulative.
All remedies prescribed in this chapter shall be cumulative, and the use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.
6.04.290 Severability.
If any section, subsection, sentence, clause, phrase, or portion of this ch apter is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter.
The City Council hereby declares that it would have adopted this chapter, and each section, subsection, clause, phrase, or portion thereof
, irrespective of the fact that any one or more
sections, subsections, clauses, phrases, or portions be declared invalid or unconstitutional.
6.04.300 Violations—Penalties.
Any person violating any of the provisions of this chapter or knowingly or intentionally misrepresenting to any officer or employee of th e City any material fact in procuring, or attempting to procure, the Business Tax certificate provided for in this chapter shall be deemed guilty of an infraction.
Article 2. Taxes
6.04.310 Determination of tax due based on gross receipts plus annual registration tax. (a) Every person who engages in Busin ess within the City shall pay a Business Tax based upon Gross Receipts at the specified category rates listed in this section. (b) A flat rate of $50 will be applied to the Base Gross Receipts, as defined by section
6.04.010, regardless of which category the Business falls under. If the Business makes less tha
n the Base Gross Receipts but more than $1, the Business will only pay $50 in Business Tax. Any dollar amount in excess of the Base Gross Receipt, will be calculated by the rates below.
For example, if a Business has a Gross Receipt of $500,000 and is a Category 1 Business, the total amount of tax the Business would pay would be a $50 (for the first $350,000 [Base Gr
oss Receipt]) + $150 ([$500,000‐$350,000] x .001) for a total of $200 in Business Tax.
(c) If a Business has no Gross Receipts, as defined in section 6.04.010, then th e Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations for such Business. The cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges, and other expenses.
(d) Categories of Businesses:
(1) CATEGORY 1: General retail, restaurants, hotels
, and tour operators and any
Business not otherwise classified (0.001 X Gross Receipts in excess of the Base Gross Receipts)
For example, if a Business has a Gross Receipt of $500,000 and is a Category 1 Business, the total amount of tax the Business would pay would be a $50 (for the first $350,000 [Base Gross Receipt]) + $150 ([$500,000‐$350,000] x .001) for a total of $200 in Business Tax.
(A) Any establishment or Business that conducts retail (the sale of goods to ultimate consumers, usually in small quantities), or wholesale (the sale of goods in quantity, as to retailers or jobbers, for resale), or restaurant (an establishment where meals, prepared food, and/or beverages are served to customers).
(B) “Tour operator” means a Business that provides tours in the City for Compensation.
(2) CATEGORY 2: Wholesale and Manufacturing (0.0015 X Gross Receipt in excess of the Base Gross Receipts):
For example, if a Business has a Gross Receipt of $500,000 and is a Category 2 Business, the total amount of tax the Business would pay would be a $50 (for the first $350,000 [Base Gross Receipt]) + $225 ([$500,000‐$350,000] x .0015) for a total of $275 in Business Tax.
(A) “Manufacturing” includes every person conducting or carrying on a Business consisting of manufacturing, packing, or processing any goods, wares, merchandise, or commodities at a fixed place of Business within the City or conducting or carrying on a Business of cold storage or refrigeration.
(3) CATEGORY 3: Contractors and Services (0.002 X Gross Receipt in excess of the Base Gross Receipt):
For example, if a Business has a Gross Receipt of $500,000 and is a Category 3 Business, the total amount of tax the Business would pay would be a $50 (for the first $350,000 [Base Gross Receipt]) + $300 ([$500,000‐$350,000] x .002) for a total of $350 in Business Tax.
(A) Contractors: every person, firm, or corporation conducting, managing, or carrying on the Business of contractor, subcontractor, or builder; or engaging in the construction or repair of any buildings; or engaged in any engineering, construction, operating, or advertising as such, or representing himself as such, and regularly employing help for building construction, sewer construction, plumbing construction or general construction. (B) “Services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically covered under any other part,
chapter, or section of this chapter, and shall include those professions that may require governmental certification or licensure, but not be limited to the services rendered by a person engaged in the practice or profession such as hairstylist, beautician or cosmetologist, aesthetician, or art instructor.
(4) CATEGORY 4: Professionals and Rental Un its (Commercial and Residential) (0.003 X Gross Receipts in excess of the Base Gross Receipt):
For example, if a Business has a Gross Receipt of $500,000 and is a Category 4 Business, the total amount of tax the Business would pay would be a $50 (for the first $350,000 [Base Gross Receipt]) + $450 ([$500,000‐$350,000] x .003) for a total of $500 in Business Tax
.
(A) “Professional services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically co vered under any other part, chapter or section of this chapter, and shall include those professions generally requiring governmental certification or a professional degree, but not be limited to the services rendered by a person engaged in the practice or profession of law, medicine, surgery, dentistry, ophthalmologist, optometry, chir opractic, osteopathy, chiropody, dental technician, laboratory technician, physical therapist, mortician, undertaker, psychologist, psychotherapy, radiologist, speech therapist, veterinary, licensed financial planner, licensed investment counselor, real estate agent, real estate broker, stock/bond or security agent or broker, civil, mechanical, electrical, industrial, or other class of engineer, surveyor, geologist, appraiser, architect, accountant, real estate ma nagement, property management, income tax preparers, bookkeepers, income tax consultants, developer, or marriage counselors.
(B) Any Business, individual, or entity that leases, rents, or otherwise provides property to another individual or entity for compensation.
RESOLUTION 3
APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE
T
RACY CITY COUNCIL
R
ESOLUTION NO. _______________
O
RDERING THE CITY CLERK TO SUBMIT TO THE CITY OF TRACY VOTERS AT THE NOVEMBER 8, 2022, GENERAL MUNICIPAL ELECTION, A BALLOT MEASURE REPEALING AND REPLACING, IN ITS ENTIRETY, CHAPTER 6.04 (BUSINESS TAXES) OF THE TRACY MUNICIPAL CODE, AND 2) AUTHORIZING THE SUBMISSION OF AN ARGUMENT ON
BEHALF OF THE CITY COUNCIL WITH DESIGNATED AUTHOR(S), AND DIRECTING THE
CITY ATTORNEY TO PREPARE AN IMPARTIAL ANALYSIS, OF THE BALLOT MEASURE ON THE NOVEMBER 8, 2022 GENERAL ELECTION BALLOT
W
HEREAS, Chapter 6.04 of the Tracy Municipal Code contains the City of Tracy’s (City) Business Taxes structure (Business Taxes Structure), which applies to all persons engaged in business activities in the City of Tracy (City); and
W
HEREAS, The City’s Business Taxes Structure has not been critically re-examined in decades; and
W
HEREAS, The City’s current Business Taxes Structure imposes a disproportionate burden on small businesses, as it is based on the total employee count instead of gross receipts generated by the businesses; and
W
HEREAS, Due to this flat tax structure and reliance on the total employee count, large employers in the City, such as warehouse businesses and big corporations, are currently not paying their proportionate share of tax relative to their gross receipts; and W
HEREAS, Small, locally owned businesses in the City are currently paying a higher effective rate compared to larger businesses who are currently paying far less than their respective “fair share” relative to the gross receipts generated by such businesses; and W
HEREAS, An alternative to the flat tax is a progressive gross receipts tax, in which larger businesses with higher gross receipts pay more than smaller businesses with less gross receipts; and
W
HEREAS, A progressive tax structure would create a better business environment for small businesses and provide additional funding for City services; and W
HEREAS, In a progressive system, every business pays their fair and proportional share into the City’s General Fund and is aligned with the nation’s progressive income tax structure; and
Resolution 2022-____
W
HEREAS, Neighboring cities, including Stockton, Modesto, Walnut Creek, San Jose and and San Francisco, have adopted a progressive business tax structure that imposes higher rates on businesses that earn more gross receipts; and
W
HEREAS, The City seeks to maintain quality of life while not taxing homeowners living in the City or burdening small businesses; and
W
HEREAS, The proposed amended Business Taxes measure is not a license to operate within the City, and each business must obtain a “Business Tax” Certificate; and W
HEREAS, The changes suggested to the Business Taxes Structure do not entitle the holder of the Business Tax Certificate to conduct business before complying with all requirements of the Tracy Municipal code and other applicable laws, nor to conduct business in a zone where such a business violates the law; and
W
HEREAS, In March 2020, the City Council formed an Ad-Hoc Committee of the City Council to develop policies and actions to ensure the City’s long-term fiscal sustainability; and W
HEREAS, On March 9, 2021, the City Council held a fiscal sustainability workshop where they adopted the City’s Guiding Budget Principles and several fiscal strategies; and W
HEREAS, The City Council directed the Ad-Hoc Committee to continue working through these strategies and to return to the City Council with further actions for consideration; and
WHEREAS, One of these strategies was to revise the City’s existing Business Taxes scheme, which has not been updated for the last four decades; and WHEREAS, During the March 22, 2022, City Council workshop, staff presented the General Fund’s ten-year forecast that discussed the impacts of the potential loss of Sales Tax revenues and what an increase from a revision to the Business Taxes revenue would look like for the City; and
W
HEREAS, On March 22, 2022, with the recommendation of the Ad-Hoc Committee, the City Council directed staff to proceed with the documents required to place a general tax measure on the ballot for the General Municipal Election on November 8, 2022, and WHEREAS, Over the past four months, the City has met with the Chamber of Commerce, the Tracy City Center Association (TCCA), and hosted four separate meetings for the City’s business community to discuss how to make the City’s Business Taxes Structure more equitable by switching to a gross receipts tax; and
W
HEREAS, The Ad-Hoc Committee initially explored options for the gross receipts tax to begin after the first $100,000 in gross revenue with a flat fee of $100; and W
HEREAS, The small business community’s feedback influenced the final recommend- ation, which reflects a base fee of $50 for the first $500,000 in gross receipts; and W
HEREAS, Based on the recommendations of the business community and the Ad-Hoc Committee, staff has prepared a proposed ballot measure) asking the voters to repeal and replace, in its entirety, Chapter 6.04 (Business Taxes) of the Tracy Municipal Code in the form Resolution 2022-____
attached hereto as Exhibit A and incorporated herein by reference (Ballot Measure) for the City Council’s consideration; and
W
HEREAS, if approved by the voters, the Ballot Measure would impose a general tax on businesses engaged in commercial activity in the City (General Tax); and WHEREAS, If the proposed Ballot Measure is approved by the voters, the amended Business Taxes Structure of the City would add resources to the general-purpose fund while also supporting small businesses by having a tax break on the first $500,000 in gross receipts; and
W
HEREAS, Revenues collected from the Ballot Measure would be for general revenue purposes and would go into the City's General Fund and be used for any government purpose; and
W
HEREAS, It is estimated that the proposed revisions to the Business Taxes Structure will generate approximately $4.2 million in annual tax revenue for the City’s General Fund; and W
HEREAS, Updating the City’s Business Taxes Structure would ensure that larger businesses relative to gross receipts pay their proportionate share of taxes while reducing the impact on small businesses; and
W
HEREAS, If approved, the Ballot Measure would generate additional revenue that also would allow the City to: maintain and even improve City streets, roads, parks, community facilities, and economic development; maintain and expand after-school programs, anti-gang activities, and recreation programs that keep young people off the streets, out of trouble and away from drugs and gangs; and help maintain rapid emergency and medical response times for police and fire by ensuring adequately staffed and trained police officers and firefighters; and W
HEREAS, Pursuant to Section 9222 of the California Elections Code, the City Council is authorized to place measures on the ballot to be considered at a general municipal el ection; and
W
HEREAS, Article XIII C, section 2(b) of the California Constitution requires that any General Tax for unrestricted general revenue purposes must be submitted to and approved by a majority vote of the voters voting on the issue of imposing any general tax; and W
HEREAS, At its June 24, 2022 meeting, the City Council adopted a R esolution (Resolution No 2022-083) calling for and giving notice of a General Municipal Election to be held on November 8, 2022, and requesting that the Board of Supervisors of the County of San Joaquin consolidate said election with the Statewide General Election to be held that day along with other requisite actions; and
W
HEREAS, the Calfiornia Elections Code requires ballot measures to pose a specific question for the voters’ consideration; and
W
HEREAS, Based upon analysis and voter polling, staff proposes that the ballot question be, “To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy/safe/clean; mai ntaining neighborhood police patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be Resolution 2022-____
adopted with typical rates between 0.1% and 0.3% of gross receipts, as described in the ordinance, providing an additional $3,200,000 annually, until ended by voters?”; and W
HEREAS, The Calfornia Elections Code allows legislative bodies to provide for the submission of arguments for and against ballot measures and to direct their respective counsel to prepare an impartial analysis of such measures; and
W
HEREAS, The City Council desires to submit the General Tax , pursuant to the Ballot Measure ,to the qualified voters of the City at the next General Municipal Election to be held on Tuesday, November 8, 2022; and
W
HEREAS, In accordance with the California Environmental Quality Act (CEQA) Guidelines Sections 15378 (b)(3) and (b) (4), the City finds that this action does not constitute a project under CEQA; and now, therefore, be it
R
ESOLVED:
S
ection 1. Recitals. The City Council hereby finds and determines that the foregoing recitals are true and correct and incorporates them fully herein.
S
ection 2. Ballot Meaure. The City Council hereby orders the City Clerk to submit to the City of Tracy Voters, at the November 8, 2022, General Municipal Election, the Ballot Measure repealing and replacing, in its entirety, Chapter 6.04 (Business Taxes ) of the Tracy Municipal Code.
Section 3. Argument. The City Council hereby authorizes the submission of an argument for the Ballot Measure, on behalf of the City Council with designated author(s), which argument, in accordance with California Elections Code sections 9282 and 9283:
(a) s
hall not exceed 300 words in length, and shall be printed upon the same sheet of paper and mailed to each voter with the sample ballot for the election and may be signed by the authors designated by the City Council as part of the adoption of this Resolution; (b)
i
nclude, preceding the argument itself, the heading “Argument For Measure ” and precede, which shall not be counted in the 300 word maximum (the blank spaces being filled only with the letter or number, if any, designating the measure); and (c) be fi
led with the City Clerk, accompanied by the printed name(s) and signature(s) of the author
(s) submitting it, due in the office of the City Clerk by the date established by the County Registrar of Voters
Section 4. Impartial Analysis. The City Council hereby directs the City Attorney to prepare an impartial analysis of the Ballot Measure and to timely submit such analysis to the City Clerk Section 5. Rate and Method. The type, rate, and method of collection of the General Tax are set forth in the Ballot Measure.
Section 6. Ballot Label. The City Council hereby approve s the following ballot label for the proposed General Tax, to be submitted for a “Yes” or “No” vote:
Resolution 2022-____
To ensure large businesses pay a proportionate share and provide funding for City services such as: repairing potholes/streets; keeping public areas healthy
/safe/clean; maintaining neighborhood police
patrols/9-1-1 emergency response/fire protection; supporting our economy/ general government use, shall the ordinance to update the City of Tracy business taxes be adopted with typical rates between
0.1% and 0.
3% of gross receipts, as described in the ordinance,
providing an additional $3,200,000 annually, until ended by voters? YES
NO
Section 7. Full Text. The full text of the Ballot Measure, which is attached as Exhibit A , shall be printed in the sample ballot/voter information pamphlet for the November 8, 2022 General Municipal Election.
Section 8. Approval. Pursuant to Section 2( b) of Article XIII C of the California Constitution, this measure requires approval by a majority vote (50% plus 1) of those casting ballots on the measure.
Section 9. Filing with County. The City Clerk shall file a certified copy of this Resolution, along with the argument and analysis authorized herein, with the Board of Supervisors and County Elections Department of the County of San Joaquin and to take such actions needed to comply with the California Elections Code.
Section 10. CEQA. In accordance with CEQA Guidelines Sections 15378 (b)(3) and (b)(4), the City finds that this action does not constitute a project under CEQA.
Section 11. Effective Date. This Resolution shall be effective immediately upon adoption by a majority vote of the City Council.
The foregoing Resolution was adopted by the Tracy City Council on the 12th day of July, 2022, by the following vote:
AYES: CO
UNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
_______________________________
Mayor
AT
TEST:
____________________________________
City Clerk
Resolution 2022-____
EXHIBIT A
ORDINANCE NO. _____
Title 6 ‐ BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
Chapter 6.04 BUSINESS TAXES
Sections:
6.04.010 Definitions.
6.04.020 Revenue measure.
6.04.030 Effect on other laws.
6.04.040 Business tax payments required.
6.04.050 Evidence of doing business.
6.04.060 Constitutional apportionment.
6.04.070 Exemptions.
6.04.080 Posting and keeping tax certificates.
6.04.090 Confidentiality and examination.
6.04.100 Failure to file statements or corrected statements.
6.04.110 Amount of business tax debt to city.
6.04.120 Effect of convictions.
6.04.130 Duty of City to issue tax certificates.
6.04.140 Business taxes payable at City offices.
6.04.150 Separate taxesrequired—Warehouses excepted.
6.04.160 Tax certificate period.
6.04.170 Business taxes—Payment, delinquencies, and penalties.
6.04.180 Taxpayer information required.
6.04.190 Subsequent tax payments.
6.04.200 Extensions of filing dates—Interest charges.
6.04.210 Refunds.
6.04.220 Determinations of business classifications an administrative function.
6.04.230 Applications for changes of business classifications.
6.04.240 Appeals on decisions of business classifications.
6.04.250 Rules and regulations.
6.04.260 Referrals to other agencies—Prepayment of taxes.
6.04.270 Enforcement.
EXHIBIT A
Title 6 ‐ BUSINESSES, PROFESSIONS AND TRADES
Chapter 6.04 BUSINESS TAXES
Tracy, California, Code of Ordinances
6.04.280 Remedies cumulative.
6.04.290 Severability.
6.04.300 Violations—Penalties.
6.04.310 Determination of tax due based on gross receipt plus annual registration.
Article 1. Ge neral Provisions
6.04.010 Definitions.
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
“Base Gross Receipt” means the first $500,000 of Gross Receipt "Business" means and includes full‐time or part‐time professional services and retail, wholesal
e, manufacturing, or other occupations, trades, or callings of any kind, whether or not carried on for profit or livelihood.
"Business tax" means the Business activity tax.
"City" means the City of Tracy, a municipal corporation of the State of California, in its present incorporated form or in any later re organized, consolidated, enlarged, or reincorporated form.
“Code” means the Tracy Municipal Code, as amended from time to time. "Collector" means the Finance Director of the City or other designees charged by the Finance Director or City Manager of the City, as the case may be, with the administration of the provisions of this chapter.
“County” me
ans the County of San Joaquin.
“Constitution” means the United States Constitution or the California Constitution, as the case may be.
"Employee" means all persons engaged in the operation or conduct of any Business, whether as a member of the owner's family, agent, manager, solicitor, and all other persons employed or working in said Business including, without limitations of th e foregoing, all
individuals who derive all or part of their income from commissioned sales. For purposes of computing tax based on employees, the average number of employees per year, as defined in this section, will be used.
"Fixed place of business" means premises in the City where a Business is conducted from day to day and regularly kept open fo
r the purposes of such Business, also referred to as
"regular place of business."
“Gross Receipts” means the total amount of the sale price of all sales, and/or the total amount charged or received for the performance of any act or service or employment, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act, service or employment is done as a part of or in conn ection with the sale of materials, goods, wares or merchandise, and when such act, service or employment occurs as a result of any activity within the City. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, except as exclud ed in this subsection, without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever as shown by either the Federal or State income ta x return required to be filed by such person.
Where the Gross Receipts, as defined above, are less than the cost of operations of the Business, then the Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations. Such cost of oper ations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges and other expenses.
Excluded from “gross receipts” shall be:
(a) Cash discounts allowed and taken on sales;
(b) Credit allowed on property accepted as part of the purchase price and which property may lat
er be sold;
(c) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;
(d) Such part of the sale price of property returned by purchasers upon rescission of the contract of sale as is refunded either in cash or by credit ; (e) Amounts collected for others where the Business is acting as an agent or trustee to the extent that such amounts are paid to those whom collected; (f) The amount of each single sale to a single customer in excess of fifty thousand dollars ($50,000.00) where th e gross profits derived therefrom does not exceed one percent (1%) of the sale price; and
The amount of gross receipts which has been the measure of a license tax paid to any other City. “Hearing officer” means an impartial person designated by the City Manager, as defined in Chapter 1.12 of the Trac y Municipal Code.
"Manufacturing" means making materials, raw or partly finished, into wares suitable for use by persons other than the manufacturer, including, but not limited to, fabrication, processing, packing, bottling, assembling, canning, compounding, and forging. "Not‐for‐profit entities" means any organization that qualifies under Section 501, subsection (c
) (3) of the United States Internal Revenue Code or equivalent federal statute. "Peddler" means any person who goes from house to house or from place to place or in or along the streets of the City selling and making an immediate delivery, or offering for sale and immediate delivery, anything of value in his possession to persons oth er than dealers in such commodities.
"Person" means any individual, firm, company, partnership, limited liability partnership, joint venture, association, proprietorship, social club, fraternal organization, joint stock company, domestic or foreign corporation, limited liability corporation, estate, trust, business trust, receiver, trustee, trustee in bankruptcy, administrator, executor, assignee, syndicate, or any other group or combination acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise, excepting: the United States of America, the State of California, and any political subdivision of either thereof upon which the City is without power to impose the tax herein provided.
"Solicitor" means a person engaged in soliciting, canvassing, or taking orders from house to house, or from place to place, or by telephone, or by any other means of communication for any goods, wares, or merchandise or any article to be delivered in the future, or for services to be performed in the future, or for making, manufacturing, or repairing any article whatsoever for future delivery, or for subscriptions to periodicals or tickets of admission to entertainments or memberships in any clubs.
“State” means the State of California.
"Sworn statement" means an affidavit sworn to before a person authorized to take oaths or a declaration or certification made under penalty of perjury. "Tax Certificate" means the Business tax certificate and any other identifying decal or marker as may be required by the Collector for purposes of this Chapter 6.04. "Tax Certificate Holder" means the Person to whom a Tax Certificate has been issued. "Transient business" means every Business not conducted at a "fixed place of business" or at a regular place of Business, whether the person conducting such transient business is or is not a resident of the City.
"Warehousing business" means every Business conducted solely for the purpose of maintaining or renting space for the storage of any kind of property. "Wholesale business" means every Business conducted solely for the purpose of selling goods, wares, or merchandise in wholesale lots for resale.
6.04.020 Revenue measure.
This chapter is enacted for the sole purpose of raising revenue for municipal purposes and is not intended for regulation. The issuance of any Tax certificate shall not be construed as authorizing any Business to operate without first complying with all other applicable laws and regulations.
6.04.030 Effect on other laws.
(a) Persons required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of any similar tax for the privilege of doing such Business required by any other law of the City, the County or the State and shall remain subject to the regulatory provisions of those other laws.
(b) Any Person required to pay a Business Tax for transacting and carrying on any Business under this chapter shall not be relieved from the payment of such Business Tax, notwithstanding that such Business is not in compliance with zoning, health, safety, or other regulatory provisions of the Code or other State or fed eral law. Compliance with the provisions of this chapter shall not constitute evidence that such Business is in compliance with any other such regulations or provisions of law.
6.04.040 Required business tax payment.
(a) It shall be unlawful for any person to transact and carry on any Business, trade, profession, calling, or oc
cupation in the City without first having paid the Business Tax, as prescribed in this chapter or without complying with any and all applicable requirements of this chapter.
(b) This section shall not be construed to require any Person to pay a Business Tax or to comply with any other requirement of this chapter prior to do ing Business within the City if such requirements conflict with applicable statutes of the United States or of the State.
6.04.050 Evidence of doing business.
When any Person, by the use of signs, circulars, cards, telephone books, or newspapers, shall advertise, hold out, or repr esent that the Person is in Business in the City, or when any Person holds an active license or permit issued by a governmental agency indicating that the Person is in Business in the City, or when any Person makes a sale, takes an order, renders a commercial service, or pe rforms any other similar act within the City, and such Person fails to deny by a sworn statement given to the Collector that the Person is not conducting a Business in the City after being requested to do so by the Collector, then such facts shall be considered prima facie evidenc e that the Person is conducting a Business in the City.
6.04.060 Constitutional apportionment.
(a) None of the Business Taxes provided for by this chapter shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the Equal Protection and Due Process Clauses of the Constitution
(b) In any case where a Bus
iness Tax is believed by a Person transacting or carrying on any Business in the City to place an undue burden upon interstate commerce or be violative of such constitutional clauses, such Person may apply to the Collector for an adjustment of the tax. Su
ch application may be made before or at the time the tax is required to be paid or within six (6) months after the payment of the prescribed Business Tax. The applicant, by sworn statement and supporting testimony, shall show the applicant's method of Business, the gross volume or estimated gross volume of such Business, and such other information as the Collector ma
y deem necessary in order to determine the extent, if any, of such undue burden or violation. The Collector shall then conduct an investigation and, after having first obtained the written approval of the City Attorney, shall fix as the Business Ta
x for the applicant an amount that is reasonable and nondiscriminatory or, if the Business Tax has already been paid, shall order a refund of the amount over and above the Business Tax so fixed. Such investigation, fixing of the Business Tax, and order
of refund shall be accomplished within a reasonable time upon receiving the requisite information by the City. In fixing the Business Tax, the Collector shall have the power to fix the Business Tax on any basis which will assure that the Business Tax assessed shall be uniform with that assessed on Businesses of lik e nature, so long as the amount assessed does not exceed the Business Tax prescribed by this chapter. If it is determined that no Business Tax is due, the applicant exempt from the Business Tax shall obtain, and the Collector shall issue, a Tax Certificate indicating such exemption from th e tax.
6.04.070 Exemptions
(a) Nothing contained in this chapter shall be deemed or construed as applying to any person transacting, engaging in, and carrying on any Business exempt by virtue of the Constitution or applicable statutes of the United States or of the State from payment of taxes prescribed herein.
(b) Exemptions Requiring tax‐ex
empt Tax Certificates. The following Persons shall be
exempted from the provisions of this chapter, except that any such Person shall be required to obtain a tax‐exempt Tax Certificate:
(1) Not‐for‐profit entities, as defined in this Code;
(2) Banks, inclu ding national banking associations as provided by subsection 1(a) of Section 16 of Article XIII of the State Constitution; and (2) Insurance companies and associations as provided by Section 14 of Article XIII of the State Constitution provided however that insurance brokers shall not be excluded under this section.
(c) Exemptions Not Requiring tax‐exem
pt Tax Certificates. The following Persons shall be
exempted from the provisions of this chapter, and shall not be required to obtain a tax‐ exempt Tax Certificate:
(1) Any delivery by a firm lacking a fixed place of Business in the City, which delivery is occasional and incidental to a Business carried on outside the City provided, however, that four (4) or more deliveries within any twelve (12) mont h period shall be
considered proof that any further delivery is not occasional and incidental to such Business;
(2) Any public utility or other organization which is wholly owned and oper ated by a political subdivision of the State and any public district organized under the laws of the State; and
(3) Any vehicle which is subject to the Motor Carriers of Property Permit Fee Act (California Revenue and Taxation Code section 7231 et. al); provided, however, this exemption shall only ap ply to the transportation Business. (d) Claims for exemption. Any Person desiring to claim an exemption from the payment of a Business Tax and to have a free tax‐exempt Tax Certificate issued shall make an application therefor upon a form prescribed by the City and shall furnish such information and make such affidavits as may be required
, on an annual basis. Upon the determination
being made that the applicant is entitled to an exemption from the payment of the Business Tax for any reason set forth in this chapter, the City, upon the applicant complying with the provisions of this chapter or any other law of the City which may require a permit for the doing of the particular ac t proposed to be done, shall issue a free tax‐exempt Tax Certificate to such Person, which certificate shall show upon its face that the Business is exempt from the Business Tax.
(e) Revocation of exemptions. The City may revoke any tax‐exempt Tax Certificate granted pursuant to the provisions of this chapter upon info rmation that the Business is not entitled to the exemption as provided therein. In such revocation, the procedure to be followed and the right of appeal shall be as provided in this chapter for the determination of a disputed tax.
(f) Sworn statements. Th e City may require the filing of a sworn statement from any person claiming to be excluded by the provisions of the section, which statement shall set forth all the facts upon which the exclusion is claimed.
6.04.080 Posting and keeping Tax Certificates – Record keeping. (a) Any Person carrying on Business at a fixed place of Business in the City sh all keep the Tax Certificate posted in a conspicuous place on the premises where such Business is carried on.
(b) Every Tax Certificate holder not having a fixed place of Business in the City shall keep the Tax Certificate upon his or her person, or if requi red by the Collector affixed in plain view upon any cart, vehicle, van, or other movable structure or device, at all times while transacting or carrying on the Business for which it is issued. (c) All Persons subject to the provisions of this chapter shall keep complet e records of Business transactions, including sales, receipts, purchases, and other expenditures, and shall retain all such records for examination by the Collector. Such records shall be maintained for a period of at least three years. No Person required to keep records under this section shall refuse to allow aut horized representatives of the Collector to examine said records at reasonable times and places.
6.04.090 Information confidentiality.
No statement shall be conclusive as to the matters set forth in any application filed under the provisions of this chapter and neither the filing thereof, the assessment or payment of any tax, nor the issuance of any Ta x Certificate shall preclude the City from collecting by appropriate action such sum as is actually due and payable. Such statement, and each of the several items therein contained, shall be subject to audit and verification by the Finance Director, who is hereby authorized to examine, audit, and inspect such books and records of any Ta
x Certificate Holder or applicant for a Tax Certificate as may be necessary for the judgment of the Collector to verify or ascertain the amount of Business Tax due. (a) It is unlawful for the Collector or any person having an administrative duty under the provisions of this chapter to make kn
own in any manner whatever the Business affairs,
operations, or information obtained by an investigation of records and equipment of any Person required to have a Tax Certificate, or pay a Business Tax, or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, se t forth in any statement or application, or copy of either, or any book containing any abstract particulars thereof to be seen or examined by any person. Provided that nothing in this section shall be construed to prevent:
(1) The disclosure to, or the examination of records and equipment by, anoth er City official, employee, or agent for collection of taxes for the sole purpose of administering or enforcing any provisions of this chapter, or collecting taxes imposed hereunder;
(2) The disclosure of information to, or the examination of records by Federal or State officials, or the tax officials of another cit y or county, or city and county, if a reciprocal arrangement exists, or to a grand jury or court of law, upon subpoena; (3) The disclosure of information and results of the examination of records of particular taxpayers, or relating to particular payers, to a court of law in a proceeding brought to determine the existen
ce or amount of any Business Tax liability of the particular taxpayers to the City;
(4) The disclosure after the filing of a written request to that effect, to the taxpayer himself, or to his successors, receivers, trustees, executors, administrators, assignees, and guarantors, if directly interested, of information as to the items includ ed to the measure of any paid tax, any unpaid tax or amounts of tax required to be collected, interest and penalties; further provided, however, that the City Attorney approves each such disclosure and that the Collector may refuse to make any disclosure referred to in this paragraph when in his opinion the public interest would suffer thereb
y;
(5) The disclosure of the names and addresses of persons to whom Business Tax receipts have been issued, and the general type or nature of their Business; (6) The disclosure by way of public meeting or otherwise of such information as may be necessary to the City Council in orde
r to permit it to be fully advised as the facts when
a taxpayer files a claim for refund of Business Taxes or submits an offer of compromise with regard to a claim asserted against him by the City for Business Tax
es, or when acting upon any other matter;
(7) The disclosure of general statistics regarding taxes collected or Business done in the City.
6.04.100 Failure to file statements or corrected statements. (a) If any Person fails to file any required statement within the time prescribed, or if, after demand therefor made by the Col
lector, such Person fails to file a corrected statement, or if any Person subject to the tax imposed by this chapter fails to submit the information required by the Collector necessary to determine the Business Tax due and payable, or if
the Collector is not satisfied with the information supplied and the statement filed, the Collector may determine the amount of the Business Tax due from such Person by means of such information as he may be able to obtain.
(b) If such a determination is made, the Collector shall give notice of the amount so assessed by serving such notice electronically, personally, or by depositing it in the United States Post Office, postage prepaid, addressed to the Person so assessed at his last known address.
(c) Assessments so established shall be paid within fifteen (15) days after the mailing of such notice, subject to the provisions of section 6.04.180 of this chapter.
6.04.110 Amount of business tax debt to the city.
The amount of any Business Tax imposed by this chapter shall be deemed a debt to the City, and any Person carrying on any trade, calling, profession or occupation mentioned in this chapter without having a Tax Certificate from the City shall be liable to an action in the name of the City in any court of competent jurisdiction for the amount of the Business Tax by this chapter imposed on such trade, calling, profession, or occupation.
6.04.120 Effect of convictions.
The conviction and punishment of any Person for transacting any trade, calling, profession, or occupation without a tax shall not excuse or exempt such person from the payment of any Business Tax due or unpaid at the time of such conviction, and nothing in this chapter shall prevent a criminal prosecution for any violation of the provisions of this chapter.
6.04.130 Duty of City to issue business tax certificates. (a) It shall be the duty of the City to prepare and issue a Tax Certificate pursuant to the provisions of this chapter for every person liable to pay a Business Tax and to state in each Tax Certificate the period of time covered thereby; the name of the person or Business to whom issued; the Business classification to which the Tax Certificate is issued; the trade, calling, profession, or occupation to which the license certificate is issued and the location or place of Business where such trade, calling, profession, or occupation is to be carried(b) No Tax Certificate granted or issued under any provision of this chapter shall be in any manner transferred or assigned, nor shall such Tax Certificate authorize any Person, other than is therein mentioned or named, to not pay a Business Tax. (c) The City may make a charge of Ten ($10.00) Dollars for each duplicate Tax Certificate issued to replace any Tax Certificate issued under the provisions of this chapter that has been lost or destroyed. In no case shall any mistake made by the City in stating the amount of a Business Tax prevent or prejudice the collection by the City of what shall be due from any Person carrying on a trade, calling, profession, or occupation subject to Business Tax under this chapter.
6.04.140 Business taxes payable at City offices.
All Business Taxes shall be paid in advance in lawful money of the United States to the City of Tracy, in a manner prescribed by the Collector.
6.04.150 Separate business tax certificate required—Warehouses excepted.
A separate Tax Certificate shall be obtained for each branch establishment or location.
Wareh
ouses and distributing establishments used in connection with and incidental to a Business Taxed under the provisions of this chapter shall not be deemed to be separate places of Business or branch establishments.
6.04.160 Business tax certificate period.
No Tax Certificate shall be issued for a period of more than twelve (12) months of the City’s fiscal year beginning July 1 and ending June 30. Any application for a Tax Ce rtificate
received by the City mid‐fiscal year will use a prospective estimate of how much the applicant would pay had they applied at the beginning of the Tax Ce rtificate period.
6.04.170 Business taxes—Payment, delinquencies, and penalties. (a) All Business Taxes shall be due on the first day of July and delinquent at 5:00 p.m. on the last day of July.
(b) For failure to pay a Business Tax when due, the Collector shall add a penalty of ten (10%) percent of such Business Tax on the first day of delinquency and shall add a further penalty of ten (10%) percent of such Business Tax on the first day of every subsequent calend ar
month following such first day of delinquency provided the amount of such penalties to be added shall in no event exceed fifty (50%) percent of the Business Tax due. Th e penalties provided in this subsection shall be assessed from the date when such deficiency was required to be paid pursuant to the provisions of this chapter.
6.04.180 Application ‐ Initial.
(a) Upon a Person making an application for the firs t Business Tax Certificate for a newly established or acquired Business, such Person shall furnish to the Collector a statement, upon a form provided by the Collector; setting forth the following information:
(1) The exact nature or kind of Business;
(2) The place where such Business is to be carri ed on, and if the same is not to be carried on at any permanent place of Business, the places of residence of the owners of same; (3) In all cases where the amount of tax to be paid is measured by gross receipts, the application shall set forth such information as may be ther ein required and as may be necessary to determine the amount of the tax to be paid by the applicant; (4) Any further information which the Collector may require. (b) If the amount of the tax to be paid by the applicant is measured by gross receipts, he or she shall estimate the gross receipts for the period covered . Such estimate, if accepted by
the Collector as reasonable, shall be used in determining the amount of tax to be paid by the applicant; provided, however, the amount of the tax so determined shall be tentative only, and such person shall, within 60 days after the expiration of the period covered, furnish the Collector with a statement, upon a form prescribed by the Collector, showing the applicant’s actual gross receipts during the period covered, and the tax for such period shall be finally ascertained and paid in the manner provided by this chapter for the ascertaining and paying of such taxes, after deducting from the payment found to be due the amounts initially paid.
(c) In all cases, the applicant shall, upon filing his or her application, pay no less than the prescribed minimum tax in advance, without being prorated, to cover the remaining portion of the current reporting period.
(d) The Collector shall not issue to any such person another Business Tax Certificate for the same or any other Business until such Person shall have furnished to him or her a statement and paid the tax as herein required.
6.04.190 Application ‐ Renewal.
In all cases, the applicant for the renewal of a Business Tax Certificate shall submit to the Collector for his or her guidance in ascertaining the amount of the tax to be paid by the applicant, a statement, upon a form prescribed by the Collector, setting forth such information concerning the applicant’s Business during the preceding year as may be required by the Collector to enable him or her to ascertain the amount of the tax to be paid by said applicant pursuant to the provisions of this chapter.
6.04.200 Extensions of filing dates—Interest charges.
The Collector shall have the power, for good cause, to extend the time for filing any required sworn statement for a period not exceeding sixty (60) days and in such case to waive any penalty that would have otherwise accrued, except that twelve (12%) percent simple interest shall be added to any tax determined to be payable.
6.04.210 Refunds.
No refund of an overpayment of a Business Tax imposed by this chapter shall be allowed in whole or in part unless a claim for a refund is filed with the Collector within a period of one (1) years after the last day of the calendar month following the period for which the overpayment was made, and all such claims for refunds shall be filed with the Collector on forms the Collector furnishes in the manner prescribed by the Collector. Upon the filing of such a claim and when the Collector determines, in a reasonable time, that an overpayment has been made, the Collector may refund the amount overpaid.
6.04.220 Determinations of business classifications an administrative function.
The final determination of which Business or class of Business a Tax Certificate Holder or applicant for a Tax Certificate is engaged in, or about to engage in, shall be an administrative function of the City.
6.04.230 Applications for changes of business classifications. (a) In any case, where a Tax Certificate Holder or an applicant for a Tax Certificate believes that his or her Business is not assigned to the proper classification under this chapter because of circumstances peculiar to it, as distinguished from other Businesses of the same kind, he or she may apply to the Collector for reclassification. Such application shall contain such information as the Collector may deem necessary and require in order to determine whether the applicant’s individual Business is properly classified. The Collector shall then conduct an investigation following which he or she shall assign the applicant’s individual Business to the classification shown to be proper on the basis of such investigation. The proper classification is that classification which, in the opinion of the Collector, most nearly fits the applicant’s Business. The reclassification shall not be retroactive but shall apply at the time of the next regularly ensuing calculation of the applicant’s tax. No Business shall be classified more than once a year.
(b) The Collector shall notify the applicant of the action taken on the application for reclassification. Such notice shall be given by serving it personally or by depositing it in the United States Post Office postage prepaid, addressed to the applicant at his or her last known address. Such applicant may, within 10 working days after the mailing or serving of such notices, make a written request to the Collector for a appeal hearing on the application’s reclassification. If such a request is made within the time prescribed, the Collector shall cause the matter to be set for hearing before the City Council within 15 days.
The Collector shall give the applicant at least 10 days’ notice of the time and place of the hearing in the manner prescribed under section 1.12.020 for serving notice of the action taken on the application for reclassification. The City Council shall consider all evidence adduced and shall adopt a resolution reflecting its decision. The decision of the City Council shall be final.
6.04.240 Appeals on decisions of business classifications.
Any applicant or Tax Certificate Holder aggrieved by the Business classification decision of the City shall have the right of appeal to an impartial Hearing Officer as outlined by section
1.12.030 of the Code. Such appeal shall be taken by filing with the City Clerk, within fifteen (15) days after the notice of the decision of the City, a written statement setting forth the grounds for the appeal. The City Clerk shall set a time and place for a hearing on such appeal within thirty (30) days after the receipt of the appeal. Notwithstanding chapter 1.12 of the Code, the decisions and orders of the Hearing Officer shall be final and conclusive.
6.04.250 Rules and regulations.
The City Manager may promulgate such rules and regulations, not inconsistent with the provisions of this chapter, as may be necessary or desirable to aid in the enforcement of the provisions of this chapter.
6.04.260 Referrals to other agencies—Prepayment of taxes. (a) Referrals to other agencies. The Collector may re fer to any governmental agency any statement and all other information submitted by persons subject to the provisions of this chapter in connection with the conduct of a Business regulated or supervised or otherwise the concern of any such agency, including agencies concerned with health regulations, zoning conformance, fire safety, po lice considerations, or any other safeguard of the public interest. (b) Prepayment of taxes. The Collector may advise any person filing a statement in connection with the payment of a Business Tax for a new or other Business not actually in operation that such person may desire to defer the payment of the Business Tax until the person has obtained wh
atever approval may be required in order to transact
and carry on the Business until such Business is actually in operation. If any person does, however, pay the Business Tax in advance of the commencement of the operation of the Business, but does not operate th
e Business because City or other governmental agency
did not grant an approval which is required by regulation or law in order for such Business to be transacted and carried on, then the Business Tax shall be refunded in full, after the person has informed Col lector in a timely manner, to the person having paid such tax minus the application fee as set by resolution of the City Council and revised from time to time.
6.04.270 Enforcement.
(a) It shall be the duty of the Collector to enforce each and all of the provisions of this chapter, and the various City departments shall render such assistance in the enf orcement as may
from time to time be required by the Collector, City Manager, or City Council. (b) The Collector, in the exercise of the duties imposed upon the Collector shall examine, or cause to be examined, all places of Business in the City to ascertain whet her the provisions of this chapter have been complied with.
(c) The Collector, and each designee, and any police officer or duly authorized inspector, shall have the power and authority to enter free of charge at any reasonable time any place of Business or to question any person, which Business or person is, or there is reasona ble cause to believe such Business or person may be, subject to the provision of this chapter, and demand an exhibition of proof of Business Tax payment. (d) The Collector's designees who have satisfactorily completed a certified co urse in "Powers of Arrest" may thereafter exercise the powers of arrest as specified in Section 836.5 of the California Penal Code on any person who has committed a misdemeanor or infraction in their presence which is a violation of the provisions of this chapter.
6.04.280 Remedies cumulative.
All remedies prescribed in this chapter shall be cumulative, and the use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of this chapter.
6.04.290 Severability.
If any section, subsection, sentence, clause, phrase, or portion of this chapter is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this chapter.
The City Council hereby declares that it would have adopted this chapter, and each section, subsection, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, clauses, phrases, or portions be declared invalid or unconstitutional.
6.04.300 Violations—Penalties.
Any person violating any of the provisions of this chapter or knowingly or intentionally misrepresenting to any officer or employee of the City any material fact in procuring, or attempting to procure, the Business Tax certificate provided for in this chapter shall be deemed guilty of an infraction.
Article 2. Taxes
6.04.310 Determination of tax due based on gross receipts plus annual registration tax.
(a) Every person who engages in Business within the City shall pay a Business Tax based upon Gross Receipts at the specified category rates listed in this section. (b) A flat rate of $50 will be applied to the Base Gross Receipts, as defined by section
6.04.010, regardless of which category the Business falls under. If the Business makes less than the Base Gross Receipts but more than $1, the Business will only pay $50 in Business Tax. Any dollar amount in excess of the Base Gross Receipt, will be calculated by the rates below.
For example, if a Business has a Gross Receipt of $700,000 and is a Category 1 Business, the total amount of tax the Business would pay would be a $50 (for the first $500,000 [Base Gross Receipt]) + $200 ([$700,000‐$500,000] x .001) for a total of $250 in Business Tax.
(c) If a Business has no Gross Receipts, as defined in section 6.04.010, then the Business shall be deemed to produce Gross Receipts in an amount at least equal to the cost of maintaining such operations for such Business. The cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges, and other expenses.
(d) Categories of Businesses:
(1) CATEGORY 1: General retail, restaurants, hotels, and tour operators and any
Business not otherwise classified (0.001 X Gross Receipts in excess of the Base Gross Receipts)
For example, if a Business has a Gross Receipt of $700,000 and is a Category 1 Business, the total amount of tax the Business would pay would be a $50 (for the first $500,000 [Base Gross Receipt]) + $200 ([$700,000‐$500,000] x .001) for a total of $250 in Business Tax.
(A) Any establishment or Business that conducts retail (the sale of goods to ultimate consumers, usually in small quantities), or wholesale (the sale of goods in quantity, as to retailers or jobbers, for resale), or restaurant (an establishment where meals, prepared food, and/or beverages are served to customers).
(B) “Tour operator” means a Business that provides tours in the City for Compensation.
(2) CATEGORY 2: Wholesale and Manufacturing (0.0015 X Gross Receipt in excess of the Base Gross Receipts):
For example, if a Business has a Gross Receipt of $700,000 and is a Category 2 Business, the total amount of tax the Business would pay would be a $50 (for the first $500,000 [Base Gross Receipt]) + $300 ([$700,000‐$500,000] x .0015) for a total of $350 in Business Tax.
(A) “Manufacturing” includes every person conducting or carrying on a Business consisting of manufacturing, packing, or processing any goods, wares, merchandise, or commodities at a fixed place of Business within the City or conducting or carrying on a Business of cold storage or refrigeration.
(3) CATEGORY 3: Contractors and Services (0.002 X Gross Receipt in excess of the Base Gross Receipt):
For example, if a Business has a Gross Receipt of $700,000 and is a Category 3 Business, the total amount of tax the Business would pay would be a $50 (for the first $500,000 [Base Gross Receipt]) + $400 ([$700,000‐$500,000] x .002) for a total of $450 in Business Tax.
(A) Contractors: every person, firm, or corporation conducting, managing, or carrying on the Business of contractor, subcontractor, or builder; or engaging in the construction or repair of any buildings; or engaged in any engineering, construction, operating, or advertising as such, or representing himself as such, and regularly employing help for building construction, sewer construction, plumbing construction or general construction. (B) “Services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically covered under any other part,
chapter, or section of this chapter, and shall include those professions that may require governmental certification or licensure, but not be limited to the services rendered by a person engaged in the practice or profession such as hairstylist, beautician or cosmetologist, aesthetician, or art instructor.
(4) CATEGORY 4: Professionals and Rental Un its (Commercial and Residential) (0.003 X Gross Receipts in excess of the Base Gross Receipt):
For example, if a Business has a Gross Receipt of $700,000 and is a Category 4 Business, the total amount of tax the Business would pay would be a $50 (for the first $500,000 [Base Gross Receipt]) + $600 ([$700,000‐$500,000] x .003) for a total of $650 in Business Tax
.
(A) “Professional services” means any professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the Business of offering to the public professional or semiprofessional services for compensation, and not specifically co vered under any other part, chapter or section of this chapter, and shall include those professions generally requiring governmental certification or a professional degree, but not be limited to the services rendered by a person engaged in the practice or profession of law, medicine, surgery, dentistry, ophthalmologist, optometry, chir opractic, osteopathy, chiropody, dental technician, laboratory technician, physical therapist, mortician, undertaker, psychologist, psychotherapy, radiologist, speech therapist, veterinary, licensed financial planner, licensed investment counselor, real estate agent, real estate broker, stock/bond or security agent or broker, civil, mechanical, electrical, industrial, or other class of engineer, surveyor, geologist, appraiser, architect, accountant, real estate ma nagement, property management, income tax preparers, bookkeepers, income tax consultants, developer, or marriage counselors.
(B) Any Business, individual, or entity that leases, rents, or otherwise provides property to another individual or entity for compensation.