HomeMy WebLinkAbout75D - PH - BUSINESS LICENSE TAX ORDINANCEREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JANUARY 22, 2013
TITLE:
BUSINESS LICENSE TAX PENALTY
ABATEMENT ORDINANCE
CITY MANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 15` Reading
? Ordinance on 2"d Reading
? Implementing Resolution
? Set Public Hearing For_
CONTINUED TO
FILE NUMBER
Adopt an ordinance amending Chapter 21 of the Santa Ana Municipal Code to establish a business
license tax penalty abatement procedure and to amend various sections of the code relating to
reporting, administrative procedures and authority, as well as enforcement and collection of
business license taxes and also adding various sections relating to the right to elect an alternative
tax deposit rule, as well as alternate tax reporting rules, and tax assessment methods.
DISCUSSION
In 2009, the Finance Department began exploring alternatives methods that would encourage
delinquent businesses to either file or update their business license without tremendous fear of
exorbitant penalties and fees. As a result, the Finance Department implemented a Business
License Tax Amnesty Program between 2010 and 2012. The Amnesty Program allowed
unlicensed businesses and independent contractors to have their delinquency penalties abated
based on current year tax rates. Licensed businesses that had misfiled their business license
taxes were also allowed to file corrected statements and have their past due penalties and interest
owing abated based on current year tax rates.
Over 12,500 letters were sent to prospective unlicensed businesses/independent contractors
based on data received from the state and county. The initial expectation was to capture business
licenses outstanding as well as the associated fees. The success of the program was established
immediately as revenues estimated originally at $250,000 were doubled in six months. Its success
allowed the program to be continued through September, 2012, and has generated $1.6 million in
additional revenue, and added over 4,000 new paid business license tax accounts.
The Finance Department now would like to include the abatement process as the standard for
collecting the business license tax. The proposed ordinance would institute the business license
tax penalty abatement procedure as a permanent part of SAMC Chapter 21, the Business License
Tax Code. As proven through the Amnesty Program, lowering the cost for complying with the
City's business license tax requirement encourages businesses and independent contractors who
are unlicensed or who have misfiled their taxes to come into compliance. By using an abatement
7501-1
Business License Tax Penalty Abatement Ordinance
Amending SAMC Chapter 21
January 22, 2013
procedure based on the current year's tax rates to allow calculating taxes owing for several years,
each year normally having a slightly different tax rate, simplifies the process and lowers costs for
participating businesses and promotes ease of administration for the city.
In addition, given that the last comprehensive revision to the code was conducted in 1987, the
proposed ordinance includes some definitional updates as well as reporting and administrative
items. Among these are the options for applicants who are small businesses to post a reduced
gross receipts tax deposit, and for home-based businesses to choose a simplified flat rate
assessment of ($165) in lieu of reporting gross receipts. For businesses engaged in administrative
or management related activities, a simplified alternate method for reporting gross receipts taxes
has been added. The limited liability of holding companies and pass-through entities, who owe the
minimum basic rate tax amount ($124) only, has also been clarified. The administrative authority
to settle claims remains, with the added ability to look at procedural requirements on both a case-
by-case and class-by-class basis. To better comply with Propositions 26 and 218, provisions have
been added to require adoption of administrative cost recovery fees by council resolution.
FISCAL IMPACT
There is an estimated $250,000 in anticipated increased business license tax revenue (fund
account number 01102002 50045) associated with this action beginning in FY 2013-14.
. 3?- T, I ')\?, A-?, I /In
Francisco Gutierrez 'Vi
Executive Director
Finance & Management Services Agency
Attachments: Ordinance
7501-2
ORDINANCE NO. NS-
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA ESTABLISHING A BUSINESS
LICENSE TAX PENALTY ABATEMENT
PROCEDURE AND AMENDING SECTIONS 21-3,
21-12, 21-16, 21-25, 21-41, 21-43, 21-44, 21-60, 21-
64, 21-83, 21-85, 21-100, 21-115, 21-122, 21-123,
21-124, 21-125 AND ADDING SECTIONS 21-80.1
AND 20-83.1 RELATING TO ADMINISTRATIVE
PROVISIONS OF CHAPTER 21, THE BUSINESS
LICENSE TAX CODE, AND ADDING SECTIONS 21-
93.1 RELATING TO ENFORCEMENT AND
COLLECTION AND SECTION 21-118.1 RELATING
TO DEPOSIT ADJUSTMENT AND SECTIONS 21-
119.1, RELATING TO LIMITED LIABILITY OF
HOLDING COMPANIES AND PASS-THROUGH
ENTITIES AND SECTIONS 21-119.2 AND 21-119.3
AND 21-120h ESTABLISHING AN ALTERNATIVE
ELECTIVE FLAT RATE BUSINESS LICENSE TAX
ASSESSMENT FOR HOME-BASED BUSINESSES.
THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY ORDAIN AS
FOLLOWS:
SECTION 1: The City Council hereby finds, determines and declares as follows:
A. Since the time of its incorporation, the City has imposed a general tax on the
privilege of conducting and carrying on all manner of business within the City, in order to
provide a portion of the general fund revenues required to provide police, fire, general
government and a host of other essential services to the community; and,
B. Due to continued financial instability at the Federal and State level, additional
reductions in revenues allocated to the City may occur; and,
C. Due to these reductions in immediate and future City revenues, and in order to
maximize the generation of general fund revenue from sources under the City's own
control, it is appropriate for the City to adopt a Business License Tax Penalty Abatement
Procedure allowing for the abatement of penalties and interest for (1) unlicensed
businesses obtaining their required City business licenses; and (2) licensed businesses
submitting amended returns in connection with underreported or misreported taxes
owing,
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75D-3
D. In order to assure the effective identification of unlicensed businesses and to
enhance the effective collection of the business license taxes, it is appropriate for the
City to amend Chapter 21, "The Business License Tax Code", to modify and to add
appropriate definitional and administrative provisions for the effective identification,
enforcement, collection and enhanced administration of the City's business license tax;
and,
E. In order to promote immediate and future ease of administration by the City, as
well as encourage participation and compliance by qualifying businesses, it is
appropriate for the City to amend Chapter 21 to add a voluntary elective alternative flat
rate tax assessment for home-based businesses doing business in Santa Ana
equivalent to the average gross receipts tax assessment paid by licensed home-based
businesses for the most recently tax assessment period. For qualifying unlicensed
home-based businesses that are in arrears for prior years' taxes it is appropriate that
this alternative tax assessment be adopted retro-active to January 1, 2010. For all other
qualifying business who are in arrears for prior years' taxes it is appropriate that
penalties and interest be abated to an amount equivalent to the amount of the prior years'
taxes owing, as computed or determined based upon the business license tax rates and
charges in effect for the most current tax year; and,
F. In the course of adopting a Business License Tax Penalty Abatement
Procedure and modifying the City's Business License Tax Code, it is not the intent of
the city council to either increase the scope of the City's business license tax, or impose
a higher business license tax rate, or shift any category of business to a higher tax
assessment classification. Any changes in definitional terms are intended to clarify the
administration of the City's business license tax with regard to changes in state and/or
federal law and modern business practices.
SECTION 2: ESTABLISHMENT OF BUSINESS LICENSE TAX PENALTY
ABATEMENT PROCEDURE. An ordinance is hereby adopted establishing a Business
License Tax Penalty Abatement Procedure.
(a) SHORT TITLE. Section 2 of this ordinance shall be known as the "Business
License Tax Penalty Abatement Ordinance."
(b) DEFINITIONS. Except where the context otherwise requires, the terms used in
this ordinance shall have the meaning given to them in Chapter 21 of the Santa
Ana Municipal Code.
(c) ABATEMENT PROGRAM. A business license tax penalty abatement program
is hereby established for persons required to obtain a business license and pay
a business license tax under Chapter 21 of the Santa Ana Municipal Code .
Page 2
7501-4
SECTION 3: That section 21-3 [Definitions-Specific. definition of "Gross Receipts",
definition of "Person", and definition of "Transact and Carry-on'] of Chapter 21 of the
Santa Ana Municipal Code are hereby amended and shall read as follows [new
language in bold, deleted language in etrikeou ]:
Gross receipts shall include the total amount of the sale price of all sales and the
total amount charged or received for the performance of any act or service of whatever
nature it may be, for which a charge is made or credit allowed, whether or not such act
or service is done as a part of or in connection with the sale of materials, goods, wares
or merchandise. The following shall be included in "gross receipts": all receipts, rents,
cash, credits and property of any kind or nature, without any deduction therefrom on
account of the cost of property sold, the cost of materials used, labor or service cost,
interest paid or payable, or losses or other expenses whatsoever.
The following shall be excluded from "gross receipts":
(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 for whom
collected, provided the agent or trustee has furnished the collector with the
names and addresses of the others and the amounts paid to them, other
than amounts received as commissions or fees earned, or charges of any
character made or compensation of any character received for the
performance of any service as agent or trustee; provided that any agent or
trustee dealing in stocks or other similar written instruments evidencing a
right to participate in the assets of any business, or dealing in bonds or
other evidences of indebtedness, who also deals in such property as a
principal, shall include in the gross receipts by which the tax is measured
the amount of his or her trading profits resulting therefrom. No deduction
from receipts attributable to trading as a principal shall be made unless
such deduction is provided for in this section;
(f) The difference between the balance owed and paid on a defaulted
purchase or finance contract upon repossession by seller and the amount
Page 3
75D-5
received from resale of the repossessed article by the repossessing seller;
(g) Receipts of refundable deposits, except that refundable deposits forfeited
and taken into income of the business shall not be excluded;
(h) As to alcoholic beverages, that portion of the receipts of a manufacturer,
transporter, retailer or wholesale distributor generated or otherwise
collected from the manufacture, transport, retail or wholesale of
intoxicating liquors within the state pursuant to Article XX, Section 22 of
the State Constitution;
(i) As to a retail gasoline dealer, a portion of his or her receipts from the sale
of motor vehicle fuels equal to the motor vehicle fuel license tax imposed
by and previously paid under the provisions of Part 2 of Division 2 of the
State Revenue and Taxation Code, as the same now exists or as
hereafter amended;
Q) As to a retail gasoline dealer, the special motor fuel tax imposed by
Section 4041 of Title 26 of the United States Code, as the same now
exists or as hereafter amended, if paid by the dealer or collected by him or
her from the purchaser;
(k) Cash value of sales, trades, transfers or other transactions as made
between separate departments, divisions or units of any single business
entity;
(1) Sales for convenience where sales of new goods, wares or merchandise
are made by a person engaged in selling such articles to another person
engaged in selling like or similar articles:
(1) Where the primary purpose of the particular transaction of sale is to
accommodate the purchaser rather than to make a sale in the
ordinary course of business and the price paid is essentially the
book value of the article;
(2) Where, in the particular kind of business involved, a similar manner
of dealing is frequent or customary in the circumstances under
which the particular sale is made; and
(3) Where goods, wares or merchandise of like or similar kind and of
substantially equivalent value to that which was sold is received in
consideration.
As to general contractors and other similar businesses, "gross receipts" shall not
include that portion of the receipts of a general contractor which represents payments to
subcontractors, provided that such subcontractors are licensed under this chapter and
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7501-6
provided the general contractor furnishes the collector upon request with the names and
addresses of the subcontractors and the amounts paid to them.
As to bail bond brokerages, commission agent brokerages, mortgage
brokerages, real estate brokerages, securities brokerages, travel agencies, and other
similar businesses employing agents, brokers and/or commissioned employees, "gross
receipts" shall include the total gross commissions or other receipts attributable to the
local office, agents, brokers and/or employees.
As to accountants, architects, attorneys, chiropractors, doctors, dentists,
optometrists, podiatrists, psychologists, veterinarians and other professionals, either
practicing solely or in partnership or as a professional corporation, "gross receipts" shall
include the total gross fees or other receipts attributable to services performed or
otherwise rendered within the city.
As to other persons having a fixed place of business within the city and providing
a service or plying an occupation or trade or involved in similar businesses, "gross
receipts" shall include the total fees, commissions or other receipts attributable to that
local location and/or employees.
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Page 5
75D-7
(iv) Payments made to other building and !E)aR °c°oniati"n° Whinh renreeent
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As to a business established outside the city but maintaining as local office or
establishment or facility, within the city through an agent, broker or employee, "gross
receipts" shall include the total sales or receipts attributable to the local office or
establishment or facility, agent, broker or employee.
As to a business established outside the city but transacting and carrying
on business within the city, or otherwise performing or rendering services
negotiated or contracted for within the city, whether or not by a principal or
through an agent or employee, "gross receipts" shall include the total fees,
commissions or other receipts attributable to the business activity conducted.
As to any business, whether established within or established outside the
city, fin the event separate sales or receipt records are not maintained for said a local
office or establishment or facility, agent, broker or employee, or in the event any
retailing, wholesaling, manufacturing or processing activity conducted thereat does not
generate gross receipts as hereinabove defined, or in the event said local office or
establishment or facility, agent, broker or employee is engaged in providing
administrative or management related services, to include, but not limited to, record
keeping, data processing, research and development, advertising, public relations,
personnel administration or legal services, in connection with sales or services
performed or rendered elsewhere, the business tax shall be based upon an amount
which bears the same proportion to the total gross receipts of the business which cost
of maintaining said local office, facility, local agent, broker or employee bears to the total
cost of maintaining said business. Alternatively, at the election of an applicant or
licensee, the business tax may be based on an amount equivalent to the cost of
maintaining said business without reference to the total gross receipts of the
business. As used herein the phrase "cost of maintaining said business" shall
have the same meaning as "cost of doing business".
As to a business established outside the Gity but tFansaGting and
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75D-8
Person shall include, without limitation, all domestic and foreign corporations
' , of any kind, all firms and companies
(holding, joint stock, private, public, parent, pass-through, professional, operating,
operating property, non-profit, subordinate and subsidiary), partnerships of every
kind including but not limited to (general partnerships, limited partnerships, master
limited partnerships, limited liability partnerships, limited liability limited
partnerships, professional partnerships, and publically traded partnerships), slue
OF GOMMOR law tFU6t6, private trusts, Massachusetts business or common law trusts,
real estate investment trusts, royalty trusts, estates, associations, syndicates, clubs,
joint ventures, unincorporated business organizations, limited liability companies
of every kind including but not limited to (sole member limited liability companies,
multi member limited liability companies, non-profit limited liability companies, and
series limited liability companies), cooperatives, all other types of business entities
defined or authorized under federal and state laws, receivers, trustees, guardians or
other representatives appointed by order of any court, S^^?Tand any natural
individuals transacting and carrying on any business in the city other than as an employee.
Transact and carry on means to repeat, or intend to repeat, or to continue and
includes:
(a) The maintaining, operating, managing or being in control of, or right to
make use of directly or remotely, any office, store, warehouse, factory,
establishment, premises, location or place:
(1) Having one or more telephones listed for any business activity in
any classified telephone directory or in the classified section of any
consolidated telephone directory, or in any combined online
directory or internet/web based listing service,
(2) Having computers or other computing devices used to
maintain one or more internet websites or webpages or
maintaining internettweb based advertising,
94(3) Having in use in connection with any business one or more
counters, desks, chairs, tables, filing cabinets, typewriters, adding
or calculating machines, computers, servers, printers, scanners,
fax machines or other articles of office equipment,
(3)(4) At, from, or in which any processing, manufacturing, supervising,
administration, management, research, sales or sales promotion,
peddling, solicitation, warehousing, distributing, routing, delivery,
mail or package receipt, recycling, dispatching, billing, collection,
accounting, computing, product development, software
development, testing, storage, record-keeping or other activity is
Page 7
75D-9
conducted in connection with any business,
(4)(5) In or at which one or more persons may, for any valuable
consideration intended to result, or that results, in any livelihood,
financial profit or commercial gain to any person, receive any
instruction, advice, treatment or examination, or any service upon
their person, or any repair, refinishing, renewing, cleaning, or other
improvement to, or of, any personal property,
(5)(6) In which any letter, announcement, advertisement, circular,
handbill, newspaper, agreement, contract, instruction, legal
instrument, government required registration, permit or license,
tax filing statement, financial statement, statement of account,
financial record, or any other instrument or record is written,
printed, reproduced, published, prepared or kept in connection with
any business,
(6)(7) From which any circular, handbill, newspaper, announcement,
statement of account, card or letter is sent or distributed, in writing,
or any contract is made, in person or by telephone, in connection
with any business,
(4(8) Upon any exterior side, wall, window, door, roof or other portion, or
in the proximity of which, there is maintained any sign, lettering,
announcement or advertisement indicating that such office or place
is one in, at or from which any article exists, or any act is performed
in connection with any business;
(b) The repeated or continuous offering, or contracting, orally or in writing, in
connection with any business:
(1) To sell or rent one or more articles, or one or more rooms,
apartments, portions or parcels of any real or personal property, or
(2) To transport any person or personal property, or
(3) To perform any service;
(c) In connection with any business, the repeated or continuous:
(1) Sale or renting of one or more articles or parcels of real or personal
property, or
(2) The transporting of any person or property, or
(3) The performance of any service;
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75D-10
(d) The repeated parking, servicing, replenishing or maintaining of any
delivery vehicle, catering truck, junk collection vehicle, pushcart or wagon
within the city, whether or not on the premises of another, when done in
connection with the permanent painting or inscribing or affixing of said
address on the surface of said pushcart, vehicle or wagon;
(e) The performance, in connection with any business, of any single act, with
intent to repeat or continue the performance of such act.
SECTION 4: That section 21-3 [Definitions-Specific. definition of "Service fee'] be
added to Chapter 21 of the Santa Ana Municipal Code to hereby read as follows [new
language in bold]:
Service fee shall mean a fixed fee, specified by resolution of the city
council, which is intended solely to cover the reasonable administrative costs
incurred in redeeming dishonored or stopped payments, in performing audits,
collections, inspections, investigations, and the administrative enforcement of
this chapter and adjudication thereof.
SECTION 5: That sections 21-12, 21-16, 21-25, 21-41, 21-43, 21-44, 21-49, 21-
60, 21-64, 21-83, 21-85, 21-100, 21-115, 21-122, 21-123, 21-124, 21-125 of Chapter 21
of the Santa Ana Municipal Code are hereby amended and shall read as follows [new
language in bold, deleted language in stFikeeu ]:
Sec. 21-12. Association with local business or governmental agency; disclosure of
associated businesses and independent contractors.
Any person who shall associate ternperafila} with any local business, dealer, tFader
?nen.1.ed in this nhapter or governmental agency, whether or not on a temporary
basis, shall not be relieved from the provisions of this chapter and shall be required
to pay the appropriate business license tax as specified in this chapter. Nothing in
this chapter shall be deemed or construed to relieve any such person from the
provisions of this chapter by virtue of any exemption provided to any local
business pursuant to this chapter or any exemption or exclusion applicable to any
agency, instrumentality, or political subdivision of the state or of the United States,
or any exemption or exclusion otherwise arising out of the constitution or
applicable statutes of the United States or the state.
Page 9
75D-11
(a) Definitions. As used in this section, the following phrases shall have the
meaning hereinafter set forth:
(1) The phrase "local business" as used in this section shall be defined
as including all persons transacting and carrying on business from
any fixed place of business within the city other than as an
employee. In addition, the phrase "local business" shall include all
leaseholder-lessors and owner-lessors of commercial or residential
real estate within the city.
(2) The phrase "governmental agency" as used in this section shall be
defined as including every agency, instrumentality, or political
subdivision of the state or of the United States.
(3) The phrase "associate with" as used in this section shall be
defined to mean the transacting and carrying on, by any other
person, of business on the premises owned, controlled, or
managed by said local business or governmental agency, whether
as a tenant of, in connection with, or as an affiliate of, or as an
adjunct to, or in the name of said local business or governmental
agency, or whether as a building management agent, or property
management agent, or independent general operating agent or
manager for said local business or governmental agency, or
whether as an outside business or an independent contractor
performing services for said local business or governmental
agency.
(b) Application. In the case of a local business which is a partnership or
joint venture, the phrase "associate with" shall not include the business
transacted and carried on by a general partner in connection with the
general partnership or by a joint venturer in connection with the joint
venture. In the case of a local business which is a corporation, the
phrase "associate with" shall include any business transacted and
carried on by a subordinate or subsidiary corporation or holding
company, pass-through entity or trust. For all local businesses, the
phrase "associate with" shall include the maintaining on the premises of
the local business of any principle executive or other business office as
required in connection with the registration of any business entity
address with the California Secretary of State for any actively
registered corporation, limited liability company, limited partnership, or
limited liability partnership under the California Corporations Code as
the same now exists or as may be hereafter amended from time-to-time.
In the case of a local business which is a leaseholder-lessor or owner-
lessor of commercial or residential real estate within the city, the phrase
"associate with" shall include any business transacted and carried on by
an independent resident property manager, independent building
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75D-12
manager, independent property agent or independent building agent,
whether or not such independent manager or agent is also a tenant of
said property. Such independent manager or agent shall be required to
obtain a separate business license. In the case of a local business which
is a tenant of a commercial premises and a party to a lease-back
agreement or other similar agreement involving said commercial real
estate in which the ownership identities of both parties to the agreement
are identical, but the legal entities are distinct, the phrase "associate
with" shall include any such business transacted by the owner-lessor or
leaseholder-lessor of said commercial real estate. Such owner-lessor or
leaseholder-lessor shall be required to obtain a separate business
license and shall be subject to all the requirements of this chapter.
(c) Disclosure.
(1) Every local business, and any person acting as their agent, shall
upon request by the collector, provide the names and addresses of
all persons who lease, rent or maintain space, mailboxes, coin-
operated machines or devices, or in any other manner transact and
carry-on business, or occupy or maintain a business presence on
the premises owned, controlled, or managed by said local
business. In addition, every local business, and any person acting
as their agent, shall upon request by the collector, provide the
names and addresses of all persons, whether or not located within
the city, who are contracted to perform, or who regularly do
perform services on the premises owned, controlled, or managed
by said local business.
(2) Every person engaged in the rental of residential real estate within
the city, every condominium or homeowner association within the
city, and all property management services acting as their agents,
shall upon request by the collector, provide the names and
addresses of all persons who have been granted permission to
engage in business activity on the premises owned, controlled, or
managed by them. In addition thereto, all condominium or
homeowner associations within the city and all property
management services acting as their agents, shall upon request by
the collector, provide the names, property addresses, and mailing
addresses of all owners engaged in the rental of any residential real
estate, under their control or management.
(3) Every person engaged in the rental of commercial real estate within
the city, and all property management services acting as their
agents, shall, at the time the license required by this chapter is
applied for and thereafter annually at the time of the renewal of
their license for the rental of commercial real estate, or at such
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75D-13
other time as the collector in his or discretion may set, provide to
the collector a list of (i) the names and addresses of all tenants
(including subtenants) occupying the commercial real estate
property licensed; and (ii) the names and addresses of all persons,
whether or not located within the city, who are contracted to
perform, or who regularly do perform services on the licensed
premises owned, controlled, or managed by said commercial real
estate rental licensee or commercial real estate management agent.
(d) Disclosure requirements - authority to vary. To effectively implement the
intent of the disclosure provisions of this section, the collector may vary
the strict requirements of subsection (c) above to accommodate the
regular record keeping and business practices of persons subject to the
disclosure requirement and also to facilitate ease of administration by the
collector.
(e) Confidentiality. All information received by the collector pursuant to this
section shall remain confidential and shall be used solely for the
purposes of administering the city's business license tax and shall not be
maintained by the city as part of the public record.
Sec. 21-16. Evidence of doing business.
(a) When any person shall by use of signs, circulars, cards, business letterhead,
telephone books, newspapers, billboards, trade publications, electronic telephone or
business directories, internet advertisement, or websites, advertise, holdout, or
represent that he OF she such person is in business in the city; or when any person has
registered and published a Fictitious Name Statement registered to an address in
the city, or holds or has been issued an active State Board of Equalization Permit, or
holds any other active licenses, of permits, certificates or registrations issued by a
governmental agency (including but not limited to: Federal or State Employer
Identification Numbers, or registration with the California Secretary of State as a
corporation, limited partnership, limited liability partnership, or limited liability
company) indicating that he erne such person is in business within the city, or
maintains a post office box under a business name registered to any address within
the city, or when any person files federal income tax or state franchise tax statements
reporting business income within the city or claiming business office deductions or
business expense deductions for a commercially located or home-based business
in the city, or gives other evidence of transacting and carrying on business as may be
defined elsewhere under the terms of this chapter and such person fails to deny in a sworn
statement given to the collector that he she such person is "engaged in business"
within the city, or fails to assert and document that such person is "exempted" or
otherwise "excluded" from the requirement to pay a business license tax, after
being requested to do so by the collector, then these facts shall be considered prima
facie evidence that he °r, o she such person is conducting a business in the city.
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75D-14
(b) When any municipal utility records indicate that the occupant of any
commercial real estate within the city is a person other than the person indicated by
county assessor or county recorder records to be the owner of such property, or
when any utility records indicate that the occupant of any residential real estate
within the city is a person other than the person indicated by county assessor or
county recorder records to be the owner of such property, or when the county
assessor or county recorder records indicate that any person owning residential
real estate within the city does not claim a homeowner's exemption for said
property and receives their property tax notification for said property at another
residence location, and such person fails to deny in a sworn statement given to the
collector that such person is engaged in the "rental of residential real estate" within
the city, or fails to assert and document that such person is "exempted" or
otherwise "excluded" from the requirement to pay a business license tax, after
being requested to do so by the collector, then these facts shall be considered
prima facie evidence that such person is conducting a business in the city.
Sec. 21-25. Original delinquency penalty; conducting a business without first having
procured a license; effect - Voluntary compliance; effect - Abatement
of penalty; application - Violation; misdemeanor.
(a) Any person who shall commence, engage, transact and carry on any trade,
calling, profession, occupation or business within the city without first having procured
the required business license from the city to do so, shall be assessed a penalty of fifty
(50) per cent of the amount of the license tax owing, which amount shall be separately
calculated for each successive license period beginning with the calendar month in
which the commencement of business activity within the city began, and ending with the
expiration of the current annual licensing period. Provided, however, that the start of
such period shall not exceed three (3) years prior to the date of notification of violation.
Such penalty to be collected, and the amount thereof to be enforced, in the same
manner as all other business license taxes are collected and the payment thereof
enforced.
(b) Where any person is in arrears for business license taxes under
subsection (a) above, owed for the rental of residential or commercial real estate
within the city, or owed for a business which is conducted solely from a home
residence within the city, the penalties imposed under subsection (a) shall be
abated in accordance with subsection (f) below if the tax is paid by the last day of
the calendar month following the month in which such person was given notice
of the requirement to obtain a city business license; otherwise penalties shall
accrue as in the case of any other business.
(c) Where any person occupying a commercial premises as a tenant or
subtenant is in arrears for business license taxes under subsection (a) above,
and has been reported to the collector pursuant to section 21-12, the penalties
imposed under subsection (a) shall be abated in accordance with subsection (f)
below if the tax is paid by the last day of the calendar month following the month
Page 13
7501-15
in which such person was given notice of the requirement to obtain a city
business license; otherwise penalties shall accrue as in the case of any other
business.
(d) Where any person, whether or not located within the city, is contracted
to perform, or regularly does perform services on the premises owned,
controlled, or managed by a local business as defined in section 21-12 and is in
arrears for business license taxes under subsection (a) above, and has been
reported to the collector pursuant to section 21-12, the penalties imposed under
subsection (a) shall be abated in accordance with subsection (f) below if the tax
is paid by the last day of the calendar month following the month in which such
person was given notice of the requirement to obtain a city business license;
otherwise penalties shall accrue as in the case of any other business.
(e) Where any person is otherwise in arrears for business license taxes
under subsection (a) above, the penalties imposed under subsection (a) shall be
abated in accordance with subsection (f) below if such person voluntarily applies
for the required business license and pays the business license tax owing in
arrears; otherwise penalties shall accrue as in the case of any other business.
(f) In all cases where the provisions of this section provide for the
abatement of penalties imposed under subsection (a), the amount owing in
arrears and the amount of the accrued penalties shall be abated until the
combined amount of tax and penalty due is equalized to an amount equivalent to
the amount of current and prior years' taxes owing as computed or determined
based upon the business license tax rates in effect for the most current tax year.
(g) In determining the amount of penalty due for any person for whom an
initial license period gross receipts in lieu deposit is required in accordance with
sections 21-117, 21-118 or 21-118.1 the collector shall compute and apply the
penalty due at the time that such person's initial period gross receipts report is
filed and computed in accordance with section 21-117(c).
(h) However, no abatement of penalties or interest shall be permitted under
this section in any case where such person concurrently holds or has previously
held a city business license or previously been given notice of said requirement
with regard to any business activity engaged in or conducted within the city.
(i) When any person is determined to be liable for delinquent business
license taxes and such person fails to properly procure the correct business
license after being given notice to do so, the collector shall determine the amount
of delinquent business license taxes owed in accordance with section 21-41.
Penalties thereon shall be accrued as applicable in accordance with this section.
In determining the amount of tax due for any business for whom the gross
receipts of such business is made the basis for fixing the amount of such
Page 14
75D-16
business license the collector may base such determination upon an average of
the reported gross receipts of like businesses, similarly classified.
Q) Any person required to obtain a city business license under the terms of
this chapter having been given notice of the requirement to obtain a city business
license under the terms of this section, whether by personal service, or by a
notice conspicuously posted upon the premises of such person's business, or by
notice given through the United States mail, who has not paid said business
license tax or otherwise obtained a valid business license, or applied for
exemption therefrom and who has not applied for, or who is not undergoing the
process of a hearing or appeal pursuant to section 21-41 or Chapter 3 of this
Code shall be deemed guilty of a misdemeanor violation. For the misdemeanor
violation provision of this section to apply, notice, when given by United States
mail shall be mailed to the responsible person by certified mail, postage prepaid
with a requested return receipt. Simultaneously, the notice may be sent by first
class mail. If the notice is sent by certified mail and the return receipt is returned
unsigned or refused, then service of notice shall be deemed effective pursuant to
first class mail, provided the notice sent by first class mail is not returned.
Sec. 21-41. Collector; assessment of tax, penalties, interest, charges (including
services fees), determination of classification; notification of violation; right to
hearing; hearing service fee deposit.
(a) The collector shall determine the amount of license tax due, together with any
penalties, interest, charges (including services fees) that may be due and payable as
of the date the oFiginal liGense tax was due and payable and/or the proper classification for
a business by means of such information as he or she may be able to obtain in the event:
(1) Any person fails to properly procure the correct business license prior
to doing business in the city; or
(2) Any person engaged in transacting and carrying on business within
the city fails to renew any business license; or
(3) Any person fails to file any required statement within the time
prescribed; or
(4) If, after demand therefor has been made by the collector, any person
or she fails to file a corrected statement within fifteen (15) days
after notification to do so; or
(5) It appears to the satisfaction of the collector that a statement filed does
not set forth the facts of the business for which a license is required; or
Page 15
75D-17
(6) If a licensee or an applicant for a license believes that his or ;er
dal the business is not assigned to the proper classification
because of circumstances peculiar to it.
(b) In the case where such determination is made, the collector shall give notice of
the amount so assessed, or classification found to be appropriate in the following manner:
(1) By serving it personally, or causing it to be served personally by a duly
authorized agent, or
(2) By depositing it in the United States Mail, postage prepaid addressed
to the person so assessed at their address of record.
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(c) Any person receiving a determination made by the collector pursuant to
this section regarding the amount of tax owed, or classification found to be
appropriate, may, within fifteen (15) days after the serving or mailing of such notice,
make application in writing to the collector for an administrative hearing, hereinafter
("hearing") by completing and filing a "request for hearing" form with the collector.
Request for hearing forms shall be made available in the office of the Director of
Finance and Clerk of the City Council. A failure to file a timely "request for hearing"
form shall be deemed a waiver of the right of appeal. Provided, further that any
person seeking a hearing under this section shall first deposit with the collector a
Page 16
75D-18
hearing service fee to be specified by resolution of the city council to cover the
city's cost in providing an administrative hearing officer, hereinafter ("hearing
officer").
(d) All hearings conducted pursuant to this section shall be heard by the
same hearing officer who has been appointed by the Santa Ana City Manager
pursuant to section 1-28.8 of this code.
(e) Hearing procedures for hearings conducted pursuant to this section shall
be as follows:
(1) No hearing to contest a determination of the collector before a
hearing officer shall be held unless and until a timely "request for
hearing" form has been completed and filed with the collector,
and
(2) After receipt of the "request for hearing" form and deposit of the
hearing service fee, a hearing before the hearing officer shall be
set for a date that is not less than fifteen (15) and not more than
sixty (60) days from the date that the "request for hearing" is filed
in accordance with the provisions of this section. The person
requesting the hearing shall be notified at least (10) days prior to
the date of the hearing. The failure of any person to appear at the
hearing shall constitute a forfeiture of the administrative hearing
service fee deposit and shall be a bar to judicial review of the
hearing officer decision based upon failure to exhaust
administrative remedies.
(3) At such hearing the person may appear and offer evidence why
the collector's specified tax amount should not be fixed as the
license tax amount or why such classification prescribed by the
collector as the applicable tax classification should not be fixed.
Formal rules of evidence shall not apply.
(4) Upon request, the person requesting the hearing shall be
provided with reports and other documents relied upon by the
collector in making his or her determination. In addition, if the
collector, duly authorized revenue officer, or other individual
appearing at the hearing as the agent of the collector submits
any additional written reports to the hearing officer for
consideration at the hearing, then a copy of said documentation
shall also be served by mail on the person requesting the
hearing.
Page 17
75D-19
(5) The hearing officer may continue the hearing and request
additional information from the collector prior to issuing a written
decision.
(6) After such hearing, the hearing officer shall determine the proper
tax to be charged or classification prescribed and shall forthwith
give written notice to the person requesting the hearing in the
manner prescribed herein of such determination and the amount
of such tax.
(d) Hearing officer's decision. After considering all of the testimony and
evidence submitted at the hearing, the hearing officer may immediately issue a
verbal decision or may issue a written decision within fifteen (15) days of the
hearing. The decision shall include the reasons for the decision and such decision
shall be final.
(e) If the hearing officer fixes the amount of the tax, penalty, interest, charges,
services fees or the tax classification in accordance with the original written
determination of the collector, then the amount as finally determined shall be
immediately due and payable and/or the classification shall be immediately
applicable, and the hearing service fee shall be forfeit. If the hearing officer
determines the amount of the tax, penalty, interest, charges, services fees or the tax
classification to be applicable in accordance with the original statement of the
person requesting the hearing then the amount due and payable and/or the
classification applicable shall be as set forth in such person's original statement
and the collector shall refund the hearing service fee deposit. If the hearing officer
fixes the amount of the tax, penalty, interest, charges, services fees and/or the tax
classification to be applied in some other manner the hearing officer shall also
make a written determination as to fixing the amount of tax, penalty, interest,
charges, service fees and/or the tax classification applicable and shall indicate the
disposition of the hearing service fee deposit.
(f) Any person who is aggrieved by the decision of the hearing officer may
obtain judicial review of such decision in the manner provided under section 1-21.9
of this code.
(g) In the event no application for a hearing is filed within the time prescribed
the decision of the collector shall become final and conclusive on expiration of the
time herein fixed for hearing and shall render any subsequent appeal null and void
and shall further act as a waiver against future action.
(h) Notwithstanding any other provision contained in this chapter or any
other provision contained in this code to the contrary, any person voluntarily
tendering payment of any license tax, interest, or penalties to the city pursuant to
any provision of this chapter shall for all purposes thereafter be precluded and
barred from appealing, contesting or otherwise challenging the validity or amount
Page 18
75D-20
of any such tax, interest or penalties pursuant to any otherwise available procedure
set forth in this chapter, or otherwise available by law, unless said payment is made
under written protest to the city. Said written protest shall be deemed made for the
purposes of this chapter only by one of the following methods: (1) a written notation
set forth on the check, draft, money order, or other negotiable instrument by which
payment is tendered, indicating that such payment is made under protest; or (2) a
written notice addressed and delivered to the collector at the time of payment
indicating that such payment is made under protest. Provided, however, that this
subsection shall not bar a request for refunds authorized pursuant to section 21-87
of this chapter.
Con 21 43. (;gll°n4gr• extension of time for filing Ggrnpremise Of Glaim
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Sec. 21-43. Collector; extension of time for filing - compromise of claims; waiver
of claims.
(a) The collector shall have the power to extend the time for filing any
required application, affidavit, statement or report and remitting of any taxes or
other monies owing for a period of up to six (6) months. In connection with that
authority the collector shall also have the power to extend the time for giving
notification of tax renewal and to extend the time that any previously issued
license shall remain valid. The collector may in his or her discretion exercise this
authority on a case-by-case basis in connection with any individual applicant or
licensee, or other individual person subject to the requirements of this chapter.
The collector may also exercise this authority on a class-by-class basis in
connection with any category, class or subclass of assessment or any category,
class or subclass of applicants, licensees, or other persons subject to the
requirements of this chapter, or any persons subject to any applicable business
license tax surcharge or surtax or other business license related assessment or
fee required or authorized under the general laws of the state.
(b) The collector shall have the further power, for good cause shown, to
compromise any claim, or class of claims, as to the amount demanded or owing.
(c) The collector, shall have the further authority to settle, discontinue, or
waive the collection of any claim, or class of claims, for good cause shown, or if it
appears that further proceedings would be without merit, or if the administrative
or legal cost therefor would be excessive, or if the amount of the claim in
question is de minimus. A claim, or class of claims, shall be deemed to be de
minimus whenever the total amount of the claim is determined by the collector to
Page 19
75D-21
be equal to or less than the total anticipated administrative costs associated with
collecting said amount. The collector may in his or her discretion determine this
amount on a case-by-case basis or on a class-by-class basis. In accordance with
section 21-42 the collector may adopt administrative rules, regulations, and
guidelines, relating to the settlement, discontinuance, or waiver of claims arising
pursuant to this chapter.
(d). In connection with the exercise of the power and authority hereinabove
provided to the collector, he or she in their discretion, shall have the right to
allow the payment of any taxes or other monies owed to the city by installment
without penalty, interest or other administrative charge on a case-by-case basis
or class-by-class basis. In accordance with section 21-42 the collector may adopt
administrative rules, regulations, and guidelines, relating to the acceptance of
installment payments.
(e). Moreover, to effectively implement the intent of the general provisions of
this chapter the collector in his or her discretion may vary the strict procedural,
enforcement, deposit, or other administrative requirements of this chapter on a
case-by-case or class-by-class basis in any manner.
Sec. 21-44. Collector; additional power.
In addition to all other powers conferred upon him or her, the collector shall have
the power, for good cause shown, to waive or reduce any penalty or late interest
imposed, or deposit, or charge, or service fee demanded.
Sec. 21-49. Business licensing - Specified exclusions.
Except as may be otherwise specifically provided in this chapter, the terms
hereof shall not be deemed to apply or construed to require the payment of a license tax
by any of the following persons:
(1) Any public utility making franchise payments to the city, except to the
extent said public utility engages in retail sales or services within the city
not covered or otherwise authorized by such franchise,
(2) Banks, including national banking associations, federal credit unions, and
financial corporations, to the extent that a city may not levy a license tax
upon them under the provisions of Article XIII, Section 27 of the State
Constitution.
(3) Insurance companies or associations engaged in the sale and servicing of
insurance and their direct agents, including bailbond agents and life
agents, but not including brokers or bailbond brokers or life and disability
insurance analysts or insurance solicitors to the extent that a city may not
levy a license tax upon them under the provisions of Article XIII, Section
Page 20
75D-22
28 of the State Constitution.
(4) Any governmental agency or subdivision and the employees thereof, to
the extent they are engaged in the business of such governmental
agencies or subdivisions.
(5) Meter Y inle GarTers, eeF he-u6ehold-ge arripF?? 'f tis, nn ? `?ndor the
jurisdiGtiGR of the PubliG Utilities COFAM0660OR of the any publia transpeFtatlon system on the vity wh"°e definite permanen
points of origin andlar terminat1en lie outside of the legal limits of the vity
to the extent that a vit y may not levy a license tax upon them pUF6 ant to
Sentoon 4301 et sea of the State PubliG Utilities Go
k6.)(5) Any state alcoholic beverage licensee engaged in the manufacture, sale,
purchase, possession, or transportation of alcoholic beverages within the
state to the extent that a city may not levy a license tax upon them under
provisions of Article XX, Section 22 of the State Constitution.
(7) Any day pare favility where not more than sox (6) people "r" i aFe d f"r OR "
feller part time basis to the extent that a pity may not levy a liGenne to
e
upon them puFsuant to SeGtOOR 1523 of the State Health and Safety Code.
(g) ARJ , r? entiaall pare favility ?iheFe not more than cox (6) peoopl a
for, on a full or naFt tome hasis to the extent that a Gity may ""t levy a
license tax upon them pUFS pant to Seatlon 1 566 2 of the State Health and
Safety Cede.
Sec. 21-60. Application; autoregistration - service fee.
Before any license is issued, the applicant shall make a written application to the
collector, which shall contain the following information:
(1) The exact nature or kind of business, profession, show, exhibition, game,
occupation or enterprise for which the license is requested;
(2) The place where such business, profession, show, exhibition, or
enterprise is to be carried on; and if the same is not to be carried on at any
permanent place of business, the residence address, identified as such, of
the owners of the same,
(3) The address where the applicant shall consent to receive mail concerning
the license applied for;
(4) Where any person contracts, sells or delivers any goods, wares or
merchandise in the city for which sales or use tax is payable, the
application shall set for the appropriate California State Board of
Page 21
75D-23
Equalization permit number;
(5) Where any person employs others in the course of such business the
application shall set forth the appropriate federal and/or state employer
identification number,
(6) Where any person conducting any business is self-employed,-the
' number, or is
appliGatiGn shall set feFth the conducting business as a spouse or joint-owner or in any other
capacity not requiring a federal and/or state employer identification
number the application shall set forth the social security number of
the applicant(s). Where any such applicant is not in possession of a
social security number the collector in his or her discretion may
accept another form of personal identification sufficient to properly
identify such applicant;
(7) In the event that the application is made for the issuance of a license to a
person doing business under a fictitious name, the application shall set
forth the names and places of residence of those owning said business or
enterprise;
(8) In the event that the application is made for the issuance of a license to a
person doing business as a state licensed contractor, the application shall
set forth the applicant's state contractor's license number and specialty
classification;
(9) In all cases where the amount of tax to be paid is based upon the number
of persons employed, or upon the number of vehicles used, or upon the
number of rental units in any building or structure, or upon the seating
capacity of any auditorium, stadium or enclosure, or upon the number of
coin-operated machines or devices, or upon any amount or number which
furnishes the basis for determination of the license tax for the particular
business referred to in the application, such items must be stated on the
application; provided that a newly established business shall make a true
estimate or statement of such information and the business tax shall be
based upon said estimation and shall be paid at the time such license is
issued;
(10) Any further information which the collector may require to enable him or
her to issue the type of license applied for;
(11) Any further information which the state may require, or any further
information which the collector may deem necessary to properly identify
the applicant.
Page 22
75D-24
(12) A signed statement made under penalty of perjury that the statements
therein are true and correct, which statement shall be required to be filed
with the collector upon submission of any original license application,
annual renewal statement, miscellaneous supplementary statement, or
other return or filing. Each such declaration of truth of application or
statement shall have included therein, or attached thereto, a certification
or declaration, which shall be substantially in the following form:
I declare, under penalty of perjury; that this application, return or
statement (including any accompanying schedules, statements, and
supporting data) has been examined by me, and, to the best of my
knowledge, information, and belief, is a full true and correct application,
return, or statement and I accordingly so represent.
(Signature of Owner, or Partner, or (Date)
Officer of Corporation, or Other
Authorized Agent or Representative of
an of the above said same
(13) In the case of applications submitted via email, the collector in his or her
discretion may accept a facsimile copy of the applicant's signature;
(14) In the case of applications submitted via other electronic means, the
collector in his or her discretion may accept a digital signature or other unique
personal identification number (PIN) verification.
All information specified to be set forth on any application form prescribed by the
collector shall be submitted completely and accurately and the license shall be deemed
based upon the information submitted and represented. The collector shall not be
required to receive or consider, any application, return or statement unless the above
quoted declaration, in substantially the form hereinabove set forth, is contained therein
or attached thereto and properly executed by the applicant or the authorized agent or
representative of the applicant, and it is unlawful and shall be deemed a misdemeanor
in any such application, return or statement for such applicant or authorized agent or
representative of the applicant to make any statement which is false or which is contrary
to the declaration or representation made in the above quoted form.
Any license shall be deemed based upon the application on file, and if the
information is incomplete or inaccurate, the license shall be deemed invalid. If
information submitted in an application subsequently becomes incomplete or inaccurate
by reason of a change in circumstances, the license shall thereafter be deemed invalid.
Upon the collector's learning of any inaccuracy or incompleteness, notice shall be given
forthwith to the licensee, at the address shown on the license where the licensee
consented to receive information concerning his or her license, that the license is invalid
and requesting the licensee to reapply for a re-validated license within thirty (30) days.
Page 23
7501-25
Upon the licensee's successful application for a re-validated license within the
period hereinabove set the collector shall apply pro rata to the re-validated license the
remainder of the sum originally paid by the licensee.
Upon the licensee's failure to make successful application for a re-validated
license within the period hereinabove set the collector shall give notice forthwith
pursuant to section 21-86 that the licensee's license is hereby suspended. Thereafter,
upon denial of licensee's appeal it shall be revoked whereupon the licensee's original
payment shall be forfeit.
Any person refusing or failing to make application or to provide information
required shall be assessed an amount pursuant to section 21-41, and shall be in
violation of this chapter. The collector, upon making an assessment pursuant to
section 21-41, may in his or her discretion autoregister a license account in the
name of any such person for purposes of assessing business license taxes,
penalties, interest, charges, and service fees as applicable. Whenever the
collector shall cause a license account to be registered an autoregistration
service fee shall be applicable in the amount as specified by resolution of the city
council.
Sec. 21-64. How and when payable; effect of dishonored instrument; return payment
service fee.
All business license taxes or deposits in lieu thereof due hereunder shall be paid
in advance, in lawful money of the United States, or by check, draft or other instrument
in the discretion of the collector, at the office of the collector in the finance department of
the city. No business license shall be issued or renewed until the amount due and
payable has been paid in full. Any license, the fee for which has been paid by an
instrument such as a check, or draft which is dishonored upon presentation for
payment, shall be void and of no effect from its inception. The collector, may, in his or
her discretion, withhold the effect of this provision if the fee is paid within fifteen (15)
days. Payment of license fees following a dishonor of such instrument upon
presentation for payment shall thereafter be made only by cashier's check, money order
or cash, which fee shall include any applicable penalty, as well as a
($10.00) return payment service fee in the amount as specified by resolution of the
city council for such dishonored instrument. The collector shall be authorized to reject
payment other than by cash, cashier's check or money order from such licensee for a
period of two (2) years following any such dishonor.
Page 24
75D-26
Sec. 21-83. Penalties for past due delinquency; application - Minor errors in payments;
acceptance.
(a) For failure to fully pay a liense tax any business license renewal flax
amount when due, the collector shall add the following penalties:
(1) Ten dollars ($10.00) or ten (10) percent of said tax, of the unpaid
balance of said amount, whichever is greater, on the past due date
thereof,
(2) Fifteen dollars ($15.00) or fifteen (15) per cent of said tax, of the
unpaid balance of said amount, whichever is greater, on the first day of
the second month after the past-due date thereof;
(3) Twenty-five dollars ($25.00) or twenty-five (25) per cent of said tax,
of the unpaid balance of said amount, whichever is greater, on the first
day of the third month after the due date thereof; and
(4) Fifty dollars ($50.00) or fifty (50) per cent of said tax-of the unpaid
balance of said amount, whichever is greater, on the first day of the
fourth month the ear after the due date thereof;
provided that the maximum amount shall not exceed an amount equal to one hundred
(100) per cent of the amount of the business license tax due. Notification of
delinquent business license taxes will be given by first class United States mail no
later than the fifteenth day of each month, until the maximum penalty is imposed;
provided that failure to receive such notification shall not exempt the licensee from
all requirements under this chapter.
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eFsen shall aGkR
owled
e the
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owed the Git
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i
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e eve
O
i R
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s
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im
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e
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) da
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Page 25
75D-27
(b) In the event a minor discrepancy exists between the amount paid and the
amount due under this chapter, arising from a miscalculation on the part of an
applicant or licensee, and resulting in an underpayment of the business license tax
in an amount not to exceed such amount as is specified by resolution of the city
council, the collector may accept and record the underpayment as payment in full
without notification to the taxpayer.
Sec. 21-85. Same - Interest.
In addition to the past due delinquency penalties imposed in section 21-83,
any business that fails to remit the tax due shall pay interest at the rate of one (1) per
cent per month, or portion thereof, exclusive of penalties, on the amount of the
unpaid tax, from the date on which remittance first became delinquent until paid-in-full
or otherwise satisfied. Provided however, that pursuant to section 21-84 penalties upon
attaining a combined amount equal to one hundred (100) per cent of the amount of the
business license tax due are merged with the tax payable hereunder and any additional
interest charged from such date on shall be charged the combined amount delinquent
until paid.
Sec. 21-100. Additional required information.
At the time the license required under this agile section 21-98 is applied for,
, and
thereafter annually at the time of the renewal of such license, or at such other time
as the collector may set, the applicant or licensee shall provide to the collector a list
giving the kind or character of machine or device, local business name and street
address, and number of machines or devices at each proposed or existing location.
Sec. 21-115. Same - Keeping of records; applicability of audit.
Section 21-80 shall apply to all statements provided to be filed under this section
21-114; provided however, that the inspection of books and records shall be limited
specifically to books and records reflecting the employees and other persons engaged in
the business activity.
Ste ;22. Nonpayment of tax; asssess eet-by l+eR.
The arnOURt of any business 1iGen6e tax, penalty or by this
Page 26
75D-28
6eGt*GR 21 3
if the busines6 liGense taxes aFe RGt aid when due
GUG h tax
eRalt
aRd
. p
, , p
y
interest, aFe paid OF Until it is d1Qnhapg ed of reGGrd
Sec. 21-122. Nonpayment of tax; assessment by lien; recording and enforcement
of liens; recording service fee.
(a) Recording of a certificate of lien. If any amount, including penalties,
interest, and administrative charges required to be paid under this chapter is not
paid when due, the collector or any duly authorized revenue officer acting as his
or her designated agent, may record or cause to be recorded, in the office of the
county recorder(s) of such counties as the collector may determine, a certificate
which specifies the amount due, the name and address of the person liable for
the same, a statement that the collector has complied with all provisions of this
chapter in the determination of the amount required to be paid, and a legal
description of the real property owned by such person. From the time of the
recording of the certificate, the amount required to be paid together with
penalties, interest, and administrative charges owing constitutes a lien upon all
real property in the county owned by such person or thereafter acquired before
the lien expires. The lien shall have the force, effect and priority of a tax lien and
shall continue for ten (10) years from the filing of a certificate unless sooner
released or otherwise discharged.
(b) Recording service fee. Whenever the collector in his or her discretion
determines that the recording of a certificate of lien is desirable to secure and
effectuate the collection of any amount required to be paid under the terms of this
Page 27
75D-29
chapter, then a recording service fee shall be applicable in the amount as
specified by resolution of the city council.
The GOI!eGtC)F 6hall file with the Git
mana
er a wFitten n9ti Ge of these
eFSE)RS
y
g p
mana
er shall
re6ent 6arne to the Git
GOUnGul
and the Git
GGun G;I shall forthwith
b
g
p
y
,
y ,
(1) By sewing it ppeFSE)nall7y, ° orr 6 it t to he °e mar rpr eced p p by a d rly
°?acr°"??rc r?vrrurT??}6 ?Fg -r- m.-?
a rthorized agent; or
r
(2) By depestti g 4 in the United Stator` mail pGstage prepaid, addFessed to
r
the owner of the hr rsineeelhr r°inecc property at the addFe°° listed in the
°cc?r-.
seWwGe. When made by mail, eFVOGe 6rhalli be deemed `Mplete at the tom?mce o Q°cPve1-°si
in the I Rated Statp° mail
Sec. 21-123. Reserved.
VVuth the nonfirmation of the report by the Gity nor rnnil the delinor rent business
innlr rSio.? ? n in the next propert Nr vNvr •y y tax a66eeement
...?.. OR r the r rvoa ?uic *RteFest at the Fate E)
r r
twelve (12)
eFGeRt
eF aRRUR; ftern the date Of FeGG
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Page 28
75D-30
al taxes
MURiGi
The s eGial assessment liens shall be 6ubordinate to lieR6 exGe
t fGF
p
.
p
those of state
GOURt
an p
d MUniGi
al taxes with whiGh it shall be U
on
aFit
The lieR
y
,
shall GE)RtiRue unto! the as p
p
p
y.
sessment aRd all iRteFest aRd GhaFges due aRd payable aFe
aid
All laws a
liGable GGIleGtian And PRfGFGemeRt Of MURiGi
to the lev
al taxes shall
p
.
pp
be a
licable to said me y,
p
nial assessments
pp
Sec. 21-124. Reserved.
FeGGFded with the reGE)rdeF of the County Of QFange.
Sec. 21-125. Reserved.
SECTION 6: That sections numbered 21-80.1, 21-83.1, 21-93.1, 21-118.1, 21-
119.1, 21-119.2, 21-119.3, and 21-120h shall hereby be added to Chapter 21 of the
Santa Ana Municipal Code and shall read as follows [new language in bold]:
Sec. 21-80.1. Same - Audit deficiency; application of penalty and interest;
Voluntary compliance; effect - Abatement of penalty and interest;
application.
In the event that the collector or his or her designated agents, whether
through an audit or otherwise, determine that any person has misstated their gross
receipts amount or other criteria upon which their current or prior years' business
license tax has been calculated resulting in an underpayment of the tax amount
owed, the collector shall separately calculate the deficiency for each distinct
license period affected and issue a statement of tax deficiency and add
delinquency penalties as applicable to the amount of the tax deficiency in
accordance with section 21-25, subsection (a) and section 21-83, subsection (a),
together with interest as provided under sections 21-84 and 21-85, as applicable,
until such time as the tax deficiency together with the accrued penalties and
interest, are satisfied.
Provided, however, that where any person voluntarily reports a tax deficiency such
person's penalty and interest assessment on said deficiency shall be abated until
the combined amount of tax, penalty and interest due is equalized to an amount
equivalent to the amount of current and prior years' taxes owing as computed or
determined based upon the business license tax rates and charges in effect for
the most current tax year. In computing the abatement of accrued penalties and
Page 29
75D-31
interest to arrive at a combined amount of tax, penalty and interest equivalent to
the amount of the current or prior years' taxes owing as computed or determined
based upon the business license tax rates in effect for the most current tax year
the collector in his or her discretion may retain a sufficient amount of accrued
penalty alone, or a sufficient amount of accrued interest alone, or any sufficient
combination of accrued penalty amount and accrued interest amount necessary.
Whenever the result of any audit performed pursuant to this chapter
determines that any licensee has, exclusive of penalties and interest, underpaid
the amount of their business license tax by ten (10) per cent or more of the total
amount due, but not less than two hundred fifty dollars ($250), then an audit
service fee in an amount as specified by resolution of the city council shall be
applied.
Sec. 21-83.1. Partial payment; not construed as meeting requirements of chapter -
Installment payments and/or deferral; permitted - Written agreement
to satisfy indebtedness; effect.
(a) Except as provided in section 21-83, subsection (b), acceptance of any
partial payment of business license tax or penalty or interest owing that is less than
the amount required under the terms of this chapter shall not be construed as
meeting the requirements of this chapter. No license or sticker, decal, tag, plate or
symbol shall be issued, nor shall one which has been suspended or revoked be
reinstated or reissued, to any person who, at the time of applying therefor, is
indebted to the city for any delinquent business tax, unless such person, enters
into an acceptable binding written agreement with the city to satisfy said
delinquency within one (1) year. With the consent of the collector such agreements
may be deferred or extended for a period exceeding one (1) year.
(b) The execution of any agreement to satisfy delinquent business license
taxes by means of installment payments and/or deferral shall not prevent the
accrual of penalties and interest as applicable on the unpaid balance as provided
under the terms of this chapter. However, such additional penalties as may accrue
and the interest on such penalties shall not be applied after the execution of such
agreement and the payment of the first installment and during such time as such
person shall not be in breach of the agreement. Upon the timely payment of the
final installment of the agreement such additional penalties and the interest thereon
as may have accrued shall be waived. In any agreement so entered into, such
person shall acknowledge the obligation owed the city and agree that, in the event
of failure to make timely payment of any installment, the whole amount unpaid,
principal together with accrued penalties and interest thereon, shall become
immediately due and payable. In the event such person fails within a period of thirty
(30) days thereafter to render payment in full, such person's current business
license may be revoked by the collector. In the event legal action is brought by the
city to enforce collection of any amount included in the agreement, such person
shall pay all costs of suit incurred by the city or its assignee, including attorney
Page 30
75D-32
fees. The execution of such an agreement shall render any subsequent appeal null
and void and shall constitute a waiver against future action.
Sec. 21-93.1. Enforcement; inspection/collection service fee - application.
(a) Whenever any person charged with the duty of enforcing this chapter
shall have cause to re-examine, re-inspect, re-investigate, or re-visit a place of
business for purposes of enforcing any portion of the business license tax code
or to collect any sum owed pursuant to this chapter, a separate inspection/
collection service fee shall be applicable in the amount as specified by resolution
of the city council.
(b) In the case of a re-examination, re-inspection, re-investigation, or re-
visitation of any local place of business pursuant to a violation of this chapter or
noncompliance with the business license tax code, a reasonable period of time
shall be given to the responsible party to correct the violation or to come into
satisfactory compliance with the requirements of this chapter. If the violation or
noncompliance necessitating the re-examination, re-inspection, re-investigation,
or re-visitation of any local place of business is remedied prior to the expiration
of the correction period no inspection/collection service fee shall be imposed.
(c) Whenever the collection of the unpaid balance of any business license tax
or other amount subject to the enforcement and collection requirements of this
chapter is sought by transfer to a collection agency, or any other method of
assignment not inconsistent with the provisions of this chapter, a transfer service
fee in the amount as specified by resolution of the city council shall also apply.
(d) The collector and his or her authorized agents charged with the duty of
enforcing this chapter, may waive the application of the inspection/collection
service fee or any other service fee elsewhere established pursuant to the
provisions of this chapter, in connection with any satisfactory agreement entered
into in accordance with Section 21-83 (c), or any compromise of claim, or any
agreement or settlement entered into pursuant to a court approved stipulation, or
for other good cause shown.
Sec. 21-118.1. In lieu deposits - election of alternate in lieu deposit.
Whenever an applicant for a new business license for whom the gross
receipts of such business is made the basis for fixing the amount of such license is
required under the terms of sections 21-117 or 21-118 to post a deposit in lieu of
payment in advance of their business license tax, said applicant may alternatively
elect to post an adjusted deposit amount equal to the amount of their anticipated
tax based on an acceptable good-faith estimation of their expected gross receipts.
Page 31
75D-33
Sec. 21-119.1. Holding companies and pass-through entities - basic rate amount
only.
Whenever a business entity or other person functions as a holding company
or pass-through entity and does not directly generate gross receipts within the city,
but otherwise transacts and carries on business within the city, or maintains a
business presence in the city, or is registered as a business entity with the
California Secretary of State pursuant to the California Corporations Code as the
same now exists or as may be hereafter amended from time-to-time with a
designated or registered business entity address located in the city, then the
business license tax liability of such business entity or person under section 21-119
shall be limited to the applicable basic rate amount only.
Sec. 21-119.2. Home-based businesses - alternate tax.
(a) Persons liable under the terms of this chapter for gross receipts business
license taxes for business conducted from a home residence within the city shall
have the right to elect an alternate flat rate business license tax as set forth in
section 21-120h of this chapter for home based businesses and home based
occupations, in lieu of the gross receipts tax which would otherwise be applicable.
Such election shall be made in writing at the time of applicant's original application
for a business license or may be made once annually thereafter at the time of
licensee's application for a renewal license.
(b) Home based businesses and home occupations eligible for election of an
alternate flat rate tax assessment shall be deemed to be those businesses or
occupations conducted from a home residence in the city whose business or
occupational use of said residential premises meets the requirements for a Home
Occupation Permit as set forth in sections 41-193.1 through 41-607 of this code as
the same now exist or as they may be hereafter amended from time-to-time.
Sec. 21-119.3. Election of an alternate tax assessment basis - effect.
In every case where a licensee exercises a right under this chapter to elect an
alternate tax assessment basis the effect of said election shall be as follows:
(a) In the event an existing licensee elects to convert their annual license
assessment to an alternate tax assessment basis with an annual term
beginning one or more calendar quarters before the commencement of
their pre-existing tax assessment basis and ending one or more calendar
quarters after the conclusion of their pre-existing tax assessment basis,
then their initial alternate tax assessment shall be subject to a quarterly
proration to account for the reduced number of calendar quarters
remaining in the term of the newly elected tax assessment.
Page 32
75D-34
(b) In the event an existing licensee elects to convert their annual license
assessment to an alternate tax assessment basis with an annual term
beginning one or more calendar quarters after the commencement of their
pre-existing tax assessment basis and ending one or more calendar
quarters after the conclusion of their pre-existing tax assessment basis,
then their pre-existing tax assessment shall be retroactively increased
prorata by the number of quarters necessary to account for the quarterly
periods remaining between the conclusion of their pre-existing
licensing term and the commencement of their alternate tax assessment
licensing term.
Sec. 21-120h. Home-based businesses, home occupations.
HOME-BASED BUSINESS/HOME OCCUPATION ......................................... $165.00 A
SECTION 7: The elective alternate flat rate home-based business/home
occupation business license tax fee adopted pursuant to Section (6) of this ordinance
shall be applicable to any person in arrears for business license taxes related to a
home-base business or occupation in the city effective January 1, 2010. The prior
payment of business license taxes due for home-based businesses or occupations, by
any other person not in arrears for said taxes shall not be deemed to constitute grounds
for a request for a refund pursuant section 21-87(c).
SECTION 8: That sections 21-3, 21-12, 21-16, 21-41, 21-43, 21-44, 21-49, 21-60,
21-64, 21-80.1, 21-83.1, 21-93.1, 21-100, 21-115, 21-118.1, 21-119.1, 21-119.2, 21-
119.3, 21-120h, 21-122, shall come into full force and effect on the first day of the
calendar month following the effective date of this ordinance. To efficiently execute the
intent of this ordinance with respect to sections 21-25, 21-83, and 21-85, the collector
shall have the authority, in his or her discretion, to vary the strict time table and/or method
of implementation of these sections beginning between the first day of the calendar
month following the effective date of this ordinance and up to and including June 30,
2013. Notwithstanding this authority, sections 21-25, 21-83, and 21-85, shall come into
full force and effect not later than July 1, 2013.
SECTION 9: If any section, subsection, sentence, clause, phrase or portion of this
ordinance 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 ordinance. The City Council of the City of Santa Ana hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that any one or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Page 33
75D-35
SECTION 10: Neither the adoption of this ordinance nor the repeal hereby of any
ordinance shall in any manner affect the prosecution for violation of ordinances, which
violations were committed prior to the effective date hereof, nor be construed as
affecting any of the provisions of such ordinance relating to the collection of any tax or
penalty or the penal provision applicable to any violation thereof, nor to affect the
validity of any bond or cash deposit in lieu thereof, required to be posted, filed or
deposited pursuant to any ordinance and all rights and obligations thereunder
appertaining shall continue in full force and effect.
ADOPTED this day of
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
Jose Sandoval
Chief Assistant City Attorney
AYES:
NOES:
COUNCILMEMBERS:
COUNCILMEMBERS:
2013.
Miguel A. Pulido
Mayor
ABSTAIN: COUNCILMEMBERS:
NOT PRESENT: COUNCILMEMBERS:
CERTIFICATE OF ORIGINALITY & PUBLICATION
I, Maria D. Huizar, Clerk of the Council, do hereby certify the attached Ordinance No.
to be the original ordinance adopted by the City Council of the City of Santa
Ana on ; and that said ordinance was published in accordance with
the Charter of the City of Santa Ana.
Date:
Clerk of the Council
City of Santa Ana
Page 34
75D-36