[1]
Editor's Note: Ordinance No. 2016-02 was adopted by the voters
at the November 8, 2016 election and took effect upon adoption of
a resolution declaring the results of the election at a regular meeting
of the City Council held on December 5, 2016.
[Ord. No. 2016-02]
a.
In addition to any other taxes imposed by the City, the City hereby
levies a tax of one cent ($0.01) per fluid ounce on the privilege
of distributing sugar-sweetened beverage products in the City.
b.
For the purposes of this section, the volume, in ounces, of a sugar-sweetened
beverage product shall be calculated as follows:
1.
For a sugar-sweetened beverage, the volume, in fluid ounces, of sugar-sweetened
beverages distributed to any person in the course of business in the
City.
2.
For added caloric sweeteners, the largest volume, in fluid ounces, of Sugar-sweetened beverages that could be produced from the added caloric sweeteners. In accordance with rules and regulations promulgated by the City pursuant to subsection 4-13.5, the largest volume, in fluid ounces, that would typically be produced from the added caloric sweeteners shall be determined based on the manufacturer's instructions or, if the distributor uses the added caloric sweeteners to produce a sugar-sweetened beverage, the regular practice of the distributor.
c.
The tax shall be paid upon the first nonexempt distribution of a
sugar-sweetened beverage product in the City. To the extent that there
is a chain of distribution within Albany involving more than one distributor,
the tax shall be levied on the first distributor subject to the jurisdiction
of the City. To the extent the tax is not paid as set forth above
for any reason, it shall be payable on subsequent distributions and
by subsequent distributors; provided, that the distribution of sugar-sweetened
beverage products may not be taxed more than once in the chain of
commerce.
[Ord. No. 2016-02]
The tax imposed by this chapter shall not apply:
a.
To any distributor that is not subject to taxation by the City under
the laws of the United States or the State of California;
b.
To any distribution of a sugar-sweetened beverage product to a retailer with less than one hundred thousand ($100,000.00) dollars in annual gross receipts, as defined in subsection 4-13.4, in the most recent year;
c.
To any distribution of natural or common sweeteners; or
d.
To any distribution of added caloric sweeteners to a food and beverage sales retail store, as defined in Albany Municipal Code Section 20.16.030DD, if the food and beverage sales retail store then offers the added caloric sweetener for sale for later use by customers of that store.
The City Council, without a vote of the people, may, either
permanently or temporarily, increase the dollar amount of the threshold
for the small-business exemption in paragraph b.
[Ord. No. 2016-02]
a.
Added caloric sweetener shall mean any substance or combination of
substances that meets all of the following four (4) criteria:
1.
Is suitable for human consumption;
2.
Adds calories to the diet if consumed;
3.
Is perceived as sweet when consumed; and
4.
Is used for making, mixing, or compounding sugar-sweetened beverages
by combining the substance or substances with one or more other ingredients
including, without limitation, water, ice, powder, coffee, tea, fruit
juice, vegetable juice, or carbonation or other gas.
An added caloric sweetener may take any form, including but
not limited to a liquid, syrup, and powder, whether or not frozen.
"Added caloric sweetener" includes, without limitation, sucrose, fructose,
glucose, other sugars, and high fructose corn syrup, but does not
include a substance that exclusively contains natural, concentrated,
or reconstituted fruit or vegetable juice or any combination thereof.
b.
Alcoholic beverage shall mean any beverage subject to tax under Part
14 (commencing with Section 32001) of the California Revenue and Taxation
Code, as that Part may be amended from time to time.
c.
Beverage for medical use shall mean a beverage suitable for human
consumption and manufactured for use as an oral nutritional therapy
for persons who cannot absorb or metabolize dietary nutrients from
food or beverages, or for use as an oral rehydration electrolyte solution
for infants and children formulated to prevent or treat dehydration
due to illness. "Beverage for medical use" shall also mean a "medical
food" as defined in Section 109971 of the California Health and Safety
Code, as that definition may be amended from time to time. "Beverage
for medical use" shall not include drinks commonly referred to as
"sports drinks" or any other common names that are derivations thereof.
d.
Business entity shall mean any person except for a natural person.
e.
City shall mean the City of Albany, California.
f.
City Manager shall mean the City Manager of the City of Albany or
his or her designee.
g.
Consumer shall mean a natural person who purchases a sugar-sweetened
beverage product in the City for a purpose other than resale in the
ordinary course of business.
h.
Distribution or Distribute shall mean the transfer of title or possession
(1) from one business entity to another for consideration or (2) within
a single business entity, such as by a wholesale or warehousing unit
to a retail outlet or between two or more employees or contractors.
"Distribution" or "Distribute" shall not mean the retail sale to a
consumer.
i.
Distributor shall mean any person who distributes sugar-sweetened
beverage products in the City.
k.
Milk shall mean natural liquid milk, regardless of animal source
or butterfat content, natural milk concentrate, whether or not reconstituted,
regardless of animal source or butterfat content, or dehydrated natural
milk, whether or not reconstituted and regardless of animal source
or butterfat content, and plant-based milk substitutes, that are marketed
as milk, such as soy milk and almond milk.
l.
Natural or common sweetener shall mean granulated white sugar, brown
sugar, honey, molasses, xylem sap of maple trees, or agave nectar.
m.
Person shall mean an individual, trust, firm, joint stock company,
business concern, business trust, government, receiver, trustee, syndicate,
social club, fraternal organization, estate, corporation, including,
but not limited to, a limited liability company, and association or
any other group or combination acting as a unit.
n.
Retailer shall mean any person who serves sugar-sweetened beverage
products to a consumer.
o.
Simple syrup shall mean a mixture of water and one or more natural
or common sweeteners without any additional ingredients.
p.
Sugar-sweetened beverage shall mean any beverage intended for human
consumption to which one or more added caloric sweeteners has been
added and that contains at least two (2) calories per fluid ounce.
1.
"Sugar-sweetened beverage" includes, but is not limited to all drinks
and beverages commonly referred to as "soda," "pop," "cola," "soft
drinks," "sports drinks," "energy drinks," "sweetened ice teas," or
any other common names that are derivations thereof.
2.
"Sugar-sweetened beverage" shall not include any of the following:
(a)
Any beverage in which milk is the primary ingredient, i.e.,
the ingredient constituting a greater volume of the product than any
other;
(b)
Any beverage for medical use;
(c)
Any liquid sold for use for weight reduction as a meal replacement;
(d)
Any product commonly referred to as "infant formula" or "baby
formula"; or
(e)
Any alcoholic beverage.
q.
Sugar-sweetened beverage product shall mean a sugar-sweetened beverage
or added caloric sweetener.
[Ord. No. 2016-02]
Means the gross receipts of the preceding fiscal year of
the distributor or part thereof, and is defined as follows: the total
amount actually received or receivable from all sales; the total amount
of compensation actually received or receivable 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; and gains realized from trading in stocks or bonds;
interest discounts, rents, royalties, fees, commissions, dividends
or other emoluments, however designated. Included in "gross receipts"
are all receipts, cash, credits and property of any kind or nature,
without any deduction therefrom on account of the cost of the property
sold, the cost of materials used, labor or service costs, interest
paid or payable, or losses or other expenses whatsoever, except that
the following are excluded therefrom:
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, at which time the sales price
shall be included as "gross receipts";
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 a contract of sale as is refunded either in cash or
by credit;
e.
Receipts of refundable deposits, except that such deposits when forfeited
and taken into income of the business shall not be excluded when in
excess of one ($1.00) dollar;
f.
Amounts collected for others where the business is acting as an agent
or trustee and to the extent that such amounts are paid to those for
whom collected. These agents or trustees must provide the Finance
Department with the names and the addresses of the others and the
amounts paid to them. This exclusion shall not apply to any fees,
percentages, or other payments retained by the agent or trustees;
g.
Cash value of sales, trades or transactions between departments or
units of the same business;
h.
Transaction between a partnership and its partners;
i.
Receipts from services or sales in transactions between affiliated
corporations. An "affiliated corporation" is a corporation:
1.
The voting and nonvoting stock of which is owned at least eighty
(80%) percent by such other corporation with which such transaction
is had,
2.
Which owns at least eighty (80%) percent of the voting and nonvoting
stock of such other corporation, or
3.
At least eighty (80%) percent of the voting and nonvoting stock of
which is owned by a common parent corporation which also has such
ownership of the corporation with which such transaction is had;
j.
Receipts derived from the occasional sale of used, obsolete or surplus
trade fixtures, machinery or other equipment used by the licensee
in the regular course of the licensee's business.
[Ord. No. 2016-02]
a.
It shall be the duty of the City Manager to collect and receive all
taxes imposed by this section, and to keep an accurate record thereof.
b.
The City Manager is hereby charged with the enforcement of this section,
except as otherwise provided herein, and may prescribe, adopt, and
enforce rules and regulations relating to the administration and enforcement
of this section, including provisions for the reexamination and correction
of returns and payments, and for reporting. Such rules and regulations
may include, but are not limited to, the following:
1.
The determination of the frequency with which a distributor must
calculate the tax. This determination shall not constitute an increase
of the tax.
2.
The determination of the frequency with which a distributor must
pay the tax. This determination shall not constitute an increase of
the tax.
3.
The determination of whether and how a distributor must register
with the City.
4.
The determination of whether and how a distributor who receives,
in the City, sugar-sweetened beverage products from another distributor
must report to the City the name of that distributor.
5.
The determination of whether and how a distributor who receives,
in the City, sugar-sweetened beverage products from another distributor
must report to the City the volume of sugar-sweetened beverage products
received from that distributor.
6.
The determination of what other documentation is required to be created
or maintained by a distributor.
c.
The City Manager shall annually verify that the taxes owed under
this section have been properly applied, exempted, collected, and
remitted.
[Ord. No. 2016-02]
a.
The amount of any tax, penalty, and interest imposed under the provisions
of this section shall be deemed a debt to the City. Any distributor
owing money under the provisions of this section shall be liable in
an action brought in the name of the City for the recovery of such
amount.
b.
In order to aid in the City's collection of taxes due under this section, any retailer that receives sugar-sweetened beverage products from a distributor shall, in accordance with rules and regulations promulgated by the City Manager pursuant to subsection 4-13.5, either:
1.
Report to the City all such transactions, the volume in ounces of
sugar-sweetened beverage products received in each transaction, and
the identity and contact information of the distributor from whom
the sugar-sweetened beverage products were received; or
2.
Collect the tax that would be payable as a result of the transaction
by the distributor from whom the sugar-sweetened beverage product
was received and remit it to the City; or
3.
Provide to the City evidence that the distributor from whom the sugar-sweetened
beverage products were received has registered as a distributor with
the City and that registration is current.
c.
The City Council is authorized to have the taxes imposed by this
section collected by the County of Alameda or the California Board
of Equalization in conjunction with the collection of other taxes
for the City. If the City Council exercises this authorization, the
duties and responsibilities of the City Manager shall be given, as
appropriate, to the County of Alameda or the California Board of Equalization,
which may delegate such duties and responsibilities as necessary and
as authorized by law.
[Ord. No. 2016-02]
Whenever any tax under this section has been overpaid or has been erroneously or illegally collected or received by the City, it may be refunded only as provided Albany Municipal Code subsection 2-28.1, as that Section now reads or may hereafter be amended by ordinance adopted by the City Council. A vote of the people shall not be required to amend the City's claim procedures. Compliance with the City's claim procedures shall be a prerequisite to any suit or other legal proceeding seeking a refund or any payment of money or damages.
[Ord. No. 2016-02]
Except as otherwise provided by this section or by rule or regulation
promulgated by the City Manager, the tax imposed by this section shall
be administered in the same manner as taxes imposed pursuant to Albany
Municipal Code Section 5-2 and, without limitation, shall be subject
to the same delinquency penalties, appeals processes and other enforcement
provisions set forth in Albany Municipal Code Section 5-2.
[Ord. No. 2016-02]
The tax imposed by this section is a tax upon the privilege
of conducting business, specifically, distributing sugar sweetened
beverage products within the City of Albany. It is not a sales, use,
or other excise tax on the sale, consumption or use of sugar-sweetened
beverage products.
[Ord. No. 2016-02; amended 3-16-2020 pursuant to Ord.
No. 2020-02]
The City Council shall conduct an annual special study session,
in conjunction with the City's budget process, for the purpose of
receiving input and recommendations regarding the expenditure of proceeds
from the tax created by this section. Prior to the special study session,
the City Council shall solicit recommendations from the City's Parks
and Recreation Commission, Social and Economic Justice Commission,
and Transportation Commission, as well as a designated representative
of the Albany Unified School District, regarding the use of tax proceeds.
Additionally, the City shall solicit recommendations from individuals
with specialized expertise in areas such as public health issues and
programs relating to diabetes, obesity and sugary drink consumption;
and any other individuals or organizations as deemed appropriate by
the City Council.
[Ord. No. 2016-02]
By no later than December 31st of each year after the operative
date, the City's independent auditors shall complete a report reviewing
the collection, management and expenditure of revenue from the tax
levied by this section.
