Editor's Note: For specific information regarding business
licenses, regulations and permits, see Title 5 of this code.
This chapter shall be known as the "Business License Tax Ordinance"
of the city.
(Prior code § 6700; Ord. 90-277 § 1, 1990)
This chapter is enacted solely for the purpose of raising revenue
for general municipal purposes. It is not intended to be regulatory.
The payment of a business tax required by this chapter, and its acceptance
by the city, and the issuance of a business tax certificate to any
person shall not entitle the holder thereof to carry on any business
unless he or she has complied with all of the requirements of this
code and all other applicable laws, nor to carry on any business in
any building or on any premises designated in such business tax certificate
in the event that such building or premises are situated in a zone
or locality in which the conduct of such business is in violation
of any law.
(Prior code § 6701; Ord. 90-277 § 1, 1990)
Wherever they appear in this chapter, the following defined
terms shall have the meanings provided in this section, unless it
is apparent from their context that a different meaning is intended:
"Agent" or "agency"
shall mean a person who acts for, on behalf of, or in the
place of another person with authority and who receives compensation,
either directly or indirectly, for services rendered.
"Basis" or "tax basis"
shall mean the nature of the tax imposed under Section
3.36.040. The terms refer to gross receipts for those activities on which a tax is imposed by subsections
(a),
(b),
(c),
(e),
(f),
(g),
(h),
(j),
(k) and
(m) of Section
3.36.040, and to operating costs for those activities on which a tax is imposed by subsections
(d),
(i) and
(l) of Section
3.36.040.
"Broker"
shall mean a person or business who, by authority, acts as
an intermediary, representative or agent in the purchase or sale of
insurance, real or personal property, stocks, bonds, certificates,
notes, or other items of value.
"Business"
shall mean all activities engaged in or caused to be engaged
in within the city, including any commercial or industrial enterprise,
trade, profession, occupation, vocation, calling or livelihood, including
the rental or lease of residential or nonresidential real estate and
mobilehome parks, or the activities of independent contractors, whether
or not carried on for gain or profit, but shall not include: (1) the
services rendered by an employee to his or her employer, or (2) the
activities of one who manages residential real property that he or
she owns.
"Cannabis business"
means any person, business, organization or facility, regardless of form, whether operating for profit or not for profit, that cultivates, processes, stores, tests, packages, labels, distributes, transports, and/or sells, dispenses or delivers cannabis, cannabis products and/or devices for the use of cannabis or cannabis products, including, without limitation, cannabis adultuse retail, cannabis commercial cultivation, cannabis consumption area with on-site adult-use retail, cannabis delivery services, cannabis distribution, cannabis manufacturer, cannabis microbusiness, cannabis mobile consumption lounge, and cannabis testing laboratory, as all of those terms are defined in Section
19.90.020 of the municipal code. "Cannabis business" does not include personal medical or adult use cannabis cultivation authorized by state law and this code. A cannabis business shall not be considered to be a religious, social or charitable organization exempt from the payment of business taxes under this chapter.
"Engage in business"
shall mean to commence, operate, manage or carry on a business
and to exercise corporate or franchise powers, whether done as an
owner or by means of one or more officers, agents, managers, employees,
servants or otherwise, within the boundaries of the city, whether
or not the business is operated from a fixed location and whether
or not such location is within the boundaries of the city.
"Gross receipts"
shall mean the total amount actually received or receivable
in the course of business in a calendar year or calendar month from
sales or the performance of acts or services for which charge is made
or credit allowed. "Gross receipts" include, without limitation, cash
receipts, credits allowed, property received in lieu of cash, and
any other valuable consideration taken in exchange for goods, services
or other valuable consideration. "Gross receipts" do not include the
following:
a.
Cash or jobber discounts;
b.
Taxes that are measured by the price of goods or services and
that are included in the purchase price or otherwise collected by
a business from a consumer or purchaser of goods or services and paid
to a governmental agency. By way of example, and without limitation,
such taxes include a sales tax, use tax, gasoline tax, transient occupancy
tax, and real property transfer tax;
c.
Cash or credit refunded to a purchaser who returns property
upon the rescission of a contract of sale;
d.
Amounts received by persons acting as agents, brokers or trustees,
where such amounts have been collected for and are paid to another
party, provided the amounts paid and the names of the parties to whom
the amounts were paid are reported to the city. By way of example,
and without limitation, this subsection excludes from the definition
of "gross receipts": trust funds received and disbursed by a trustee,
fees separately itemized on statements and forwarded to a subcontractor
or fee consultant in payment for services rendered, and receipts collected
for, and repaid to, a lessor;
e.
Amounts received as refundable deposits, except those amounts
that are subsequently forfeited and taken as business income;
f.
Any credit that is granted for property provided by a customer
or purchaser as a part of a purchase price, such as trade-in merchandise,
provided the value of property taken is included in gross receipts
upon resale;
g.
An amount sufficient to compensate a business for bad debts
which were included in gross receipts in a year for which a tax imposed
by this chapter was paid and which prove uncollectible in a subsequent
year;
h.
Passive income; by way of example and without limitation, such
income includes interest on investments, dividends, and receipts from
the occasional sale of property or surplus equipment;
i.
Receipts not taxable by virtue of provisions of a franchise
agreement which was adopted prior to the effective date of the ordinance
which codified this chapter and which is binding on the city at the
time the receipts are received or costs incurred, or by virtue of
provisions of the laws or Constitution of the United States or of
the State of California; or
j.
Receipts received by a public utility, as that term is defined
in Section 216 of the California
Public Utilities Code.
"Operating costs"
shall mean all the expenses incurred in the operation of
a business, including, without limitation, the cost of personnel,
equipment and supplies, rent, lease or mortgage payments, utilities
and any other cost of doing business.
"Person"
shall mean any domestic or foreign corporation, firm, association,
syndicate, joint-stock company, partnership of any kind, joint venture,
club, business or common law trust, society, individual, estate, receiver,
retirement plan, trustee, or any other group or combination of individuals
or entities acting as a unit.
"Taxpayer"
shall mean a person required to pay a tax imposed by this
chapter.
(Prior code § 6702; Ord. 90-277 § 1, 1990; Ord. 91-297 § 1, 1991; Ord. 95-426 §§ 1 – 3, 1995; Ord. 19-1065 § 1, 2019)
Except as provided in Section
3.36.120, every person who engages in business within the city, whether or not at a fixed place of business, shall pay a business tax as provided in this section:
a. Manufacturers. Any person who engages in a business consisting
mainly of extracting natural resources, manufacturing, packing, or
processing any goods, wares, merchandise or produce shall pay an annual
business tax of forty-eight cents ($0.48) per $1,000 of gross receipts.
b. Wholesalers. Any person who engages in a business consisting
mainly of carrying or selling goods, wares, or merchandise at wholesale
shall pay an annual business tax of forty-eight cents ($0.48) per
$1,000 of gross receipts.
c. Retailers. Any person who engages in a business consisting
mainly of selling goods, wares, or merchandise at retail shall pay
an annual business tax of forty-eight cents ($0.48) per $1,000 of
gross receipts. Businesses subject to taxation under this section,
shall include, but are not limited to, operators of vending machines,
restaurants, peddlers or itinerant vendors, news dealers, farmer's
markets, vendors of Christmas trees, pawnbrokers, and gasoline retailers.
d. Corporate Headquarters. Any person who engages in a business
consisting mainly of providing administrative or management services
such as, but not limited to, recordkeeping, data processing, research,
advertising, public relations, personnel administration, legal services
and corporate management services to other locations where the operations
of the same business are conducted which lead more directly to the
production of gross receipts shall pay an annual business tax of ninety-six
cents ($0.96) per $1,000 of operating costs.
e. Contractors. Any person, other than an owner, who contracts
with another person for a project and who is required to be licensed
as a contractor by the State of California and who engages in a business
consisting mainly of constructing, altering, repairing, adding to,
subtracting from, improving, moving, wrecking, or demolishing any
building, highway, road, railroad, excavation, or other structure,
project, development, or improvement, or doing any part thereof, including
the erection of scaffolding or other structures or who works in connection
therewith, including subcontractors and specialty contractors, shall
pay an annual business tax of ninety-six cents ($0.96) per $1,000
of gross receipts.
f. Service Providers. Any person who engages in a business that consists mainly of providing services, repairs or improvements to or on real or personal property including utility service, renting or leasing of personal property, the renting of real property for residential use by one who does not own that real property, the management of rental residential property by one who does not own that real property, the operation of a hotel or motel, and not including persons taxed as contractors under subsection
(e) of this section, and any person who engages in a business that consists mainly of providing personal services, other than persons taxed as providers of neighborhood services under subsection
(k) of this section, persons taxed under subsection
(h) of this section as providers of entertainment or amusement services, or persons taxed under subsection
(j) of this section as professionals, shall pay an annual business tax of ninety-six cents ($0.96) per $1,000 of gross receipts. Businesses subject to taxation under this section, shall include, but are not limited to, the following: auctioneers; swap meet operators; vending machine lessors; factorages or collection agencies; brokers of personal property; money lenders, check cashing services, bookkeepers, and other providers of financial services; auto and truck repair, leasing, wrecking and washing, and other auto and truck service providers; trade schools, beauty schools, modeling studios, art schools, dance schools and other similar vocational schools; refuse haulers, freight handlers, railways, truckers, haulers, common carriers, buses, taxis, and other providers of transportation; advertising agencies, public relations agencies, publishers of classified directories, theatrical agents, and providers of similar services; drapery installation, interior design firms, and similar businesses; mailing services; temporary help agencies, employment bureaus, and labor brokerages; travel agents; commercial laundries and linen suppliers; printers and copiers which are not taxed as production industries under subsection
(i) of this section; massage therapists, health clubs, and spas; fortunetellers and business and other consultants; cutlery grinders, jewelry repair, typewriter and other services and repairs to personal property; caterers, diaper services, and tailors; commercial artists, stenographers, data processors, telephone answering services, and other office services; gardening, landscaping, tree care, and other similar services; security agencies and private detectives.
g. Lessors of Nonresidential Property. Any person who engages in the business of renting or letting all or part of parcels of land, buildings or structures of any kind for purposes other than dwelling, sleeping or lodging, including without limitation, parking lots, office buildings, warehouses, billboards, sewerage facilities, and other commercial structures, other than a person taxed under subsection
(f) of this section as a residential realty manager or broker, shall pay an annual business tax of one dollar and forty-four cents ($1.44) per $1,000 of gross receipts.
h. Recreation and Entertainment Businesses. Any person who
engages in a business consisting mainly of providing recreation, entertainment
or amusement services, or who operates a place where any show, performance,
display or exhibition is presented, or any form of amusement, sport,
or entertainment is offered or allowed, including but not limited
to:
1. Museums,
galleries, exhibition halls, theaters, playhouses, concert halls,
auditoriums, motion picture theaters, arcades, shooting galleries,
bowling alleys, billiard halls, and other similar places;
2. Dancehalls,
discos, night clubs, bars and cocktail lounges;
3. Amusement
parks, carnivals, circuses, fairs, horse shows, dog shows, rodeos,
and other similar events;
4. Card
clubs and other places where games of skill are played, sporting events,
including basketball, baseball, softball, football, soccer, tennis,
polo, swimming, wrestling, and other games;
5. Sight-seeing
buses, tours, and other similar services;
6. The
offices of agents, brokers, and ticket salespersons for any form of
amusement, sport, or entertainment; shall pay an annual business tax
of ninety-six cents ($0.96) per $1,000 of gross receipts.
i. Production Industries. Any person who engages in a business
that supports the radio or television broadcast industries or the
motion picture or publishing industries by such activities as producing,
cutting, scoring, editing, illustrating, distributing, or otherwise
contributing to the production and distribution, other than retail
distribution, of motion pictures, photoplays, books, magazines, or
other reading material shall pay an annual business tax of one dollar
and forty-four cents ($1.44) per $1,000 of operating costs. Businesses
subject to taxation under this section shall include, but are not
limited to, film producers, printers and wholesalers of reading materials,
typesetters, and bookbinders.
j. Professionals. Any person who engages in a business the
activities of which constitute a profession or vocation licensed by
a state, or are related to a licensed profession or vocation, and
which require a period of specialized training, including but not
limited to physicians, dentists, attorneys, accountants, real estate
brokers, morticians, veterinarians, architects, engineers, teachers,
pharmacists, opticians, optometrists, and chiropractors, shall pay
an annual business tax of one dollar and forty-four cents ($1.44)
per $1,000 of gross receipts.
k. Neighborhood Service Businesses. Any person who engages
in a business which is operated from a fixed location of no more than
1,200 square feet of enclosed area and which consists mainly of providing
one of the services listed in this section to the general public and
not to commercial entities, shall pay an annual business tax of forty-eight
cents ($0.48) per $1,000 of gross receipts. The services to which
this section applies are coin-operated laundries, dry cleaning, and
other garment and laundry cleaning services; photographic portrait
services; the services of beauty and barber shops; shoe shine or repair;
the repair of radios, televisions and other consumer electronic equipment;
and, upholstery and furniture repair.
l. Showrooms. Any person who engages in a business consisting
mainly of displaying product samples and providing information intended
to generate sales to occur outside of the city, shall pay an annual
business tax of forty-eight cents ($0.48) per $1,000 of operating
costs.
m. Miscellaneous. Any person who engages in a business not otherwise taxed by this section which produces gross receipts as defined in subsection
(h) of Section
3.36.030 shall pay an annual business tax of forty-eight cents ($0.48) per $1,000 of gross receipts.
n. Cannabis Business. Any person who engages in a cannabis
business of selling cannabis, cannabis products and/or devices for
the use of cannabis or cannabis products for adult-use shall pay an
annual business tax of seven and one-half percent of gross receipts
on the adult-use cannabis and adult-use cannabis products. No business
tax shall be applied to the gross receipts on medical cannabis and
medical cannabis products. If a cannabis business is engaged in retail
sales and/or delivery of both medical and adult-use cannabis, it shall
only be responsible for paying the tax on the gross receipts on the
adult-use cannabis and adult-use cannabis products provided that the
cannabis business identifies to the city, by reasonable and verifiable
standards, the portions of its gross receipts that are tied to medical
cannabis and those that are tied to adult-use cannabis, through the
cannabis business' books and records kept in the regular course of
business, and in accordance with generally accepted accounting principles,
and not specifically created and maintained for tax purposes. The
cannabis business has the burden of proving the proper apportionment
of taxes under this subsection. No cannabis business shall be deemed
to be exempt from the payment of the taxes identified above by any
other provision of this code, unless expressly exempted under this
chapter. This tax is a general tax, the revenues from which may be
used for unrestricted general revenue purposes of the city. The terms
herein shall be as defined in the West Hollywood Municipal Code, and
if not found in the code, as defined in state law.
1. The
People of the City of West Hollywood affirm that the following actions
shall not constitute an increase of the maximum rate or methodology
of the tax requiring subsequent voter approval:
A. The restoration of the rate of the tax to a rate that is no higher
than the seven and one-half percent maximum set by this voter-approved
chapter, if the City Council has previously acted to reduce the rate
of the tax;
B. An action that interprets or clarifies the methodology of the tax,
or any definition applicable to the tax, so long as interpretation
or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this chapter;
C. The establishment of a class of person or service that is exempt
or excepted from the tax or the discontinuation of any such exemption
or exception;
D. Resuming collection of the tax imposed by this chapter, even if the
city had, for some period of time, either suspended collection of
the tax or otherwise failed to collect the tax, in whole or in part;
and
E. Changes to the frequency or method of remittance of tax payments
to the city and promulgation of administrative guidelines for such
remittance.
2. The
payment of the tax required pursuant to this subsection shall not
be construed as authorizing the conduct or continuance of any illegal
business or of a legal business in an illegal manner. Nothing in this
chapter implies or authorizes that any activity connected with the
distribution or possession of cannabis is legal unless otherwise authorized
and allowed in strict and full conformance to the provisions of state
law and this code.
3. The
tax provided for under the provisions of this subsection is not a
sales, transactions or use tax and shall not be calculated or assessed
as such. The tax established under this subsection shall not be separately
identified or otherwise specifically assessed or charged to any customer
or client of a cannabis business.
4. This
subsection (n) was submitted to the voters for approval. Any amendment
to this subsection to increase the tax above the maximum rate of seven
and one-half percent shall not become effective until such amendment
is approved by the voters. The voters expressly authorize the City
Council to amend, modify, change, or revise any other provision of
this subsection (n) as the City Council deems in the best interest
of the city.
5. Pursuant
to California Constitution Article Xiiib, the appropriation limit
for the city is increased to the maximum extent over the maximum period
of time allowed under law consistent with the revenues generated by
the tax established by this chapter.
6. Unless
specifically provided otherwise, any reference to a state or federal
statute applicable to this subsection shall mean such statute as it
may be amended from time to time; provided, that such reference to
a statute herein shall not include any subsequent amendment thereto,
or to any subsequent change of interpretation thereto by a state or
federal agency or court of law, to the extent that such amendment
or change of interpretation would require voter approval under California
law, or to the extent that such change would result in a tax decrease.
Only to the extent voter approval would otherwise be required or a
tax decrease would result, the prior version of the statute (or interpretation)
shall remain applicable. For any application or situation that would
not require voter approval or would not result in a decrease of a
tax, provisions of the amended statute (or new interpretation) shall
be applicable to the maximum possible extent. To the extent that the
city's authorization to collect or impose any tax imposed under this
subsection is expanded or limited as a result of changes in state
or federal law, no amendment or modification of this subsection shall
be required to conform the tax to those changes, and the tax shall
be imposed and collected to the full extent of the authorization up
to the full amount of the tax imposed under this subsection.
(Prior code § 6703; Ord. 90-277 § 1, 1990; Ord. 95-426 § 4, 1995; Ord. 03-654 § 1, 2003; Ord. 19-1065 § 2, 2019)
a. Except as provided in subsection
(b) of this section, an applicant for an initial tax certificate under this chapter shall report on the application required by Section
3.36.140 the actual or estimated gross receipts or operating costs of the business received or incurred in the calendar year immediately prior to the date of application to allow calculation of the tax imposed by Section
3.36.040, or the alternate tax imposed by Section
3.36.100.
b. An applicant for an initial tax certificate under this chapter who did not engage in business in the city until after February 1, 1992 shall file the application required by Section
3.36.140 and pay a tax of $25.
(Prior code § 6704; Ord. 90-277 § 1, 1990; Ord. 91-319U § 1, 1991)
Upon expiration of a tax certificate, a person engaged in business in the city shall report on the application required by Section
3.36.140 the precise or estimated actual gross receipts or operating costs of the business during the previous calendar year to allow calculation of the tax imposed by Section
3.36.040 or the tax imposed by Section
3.36.100.
(Prior code § 6705; Ord. 90-277 § 1, 1990)
a. The renewal tax imposed by Section
3.36.060 shall be reduced by an amount equal to the tax which would otherwise be payable on the gross receipts received or the operating costs incurred by a person for any month in the calendar year prior to the date on which the renewal application was due which precedes the thirteenth calendar month after that person first engaged in business in the city. No credit under this subsection may be had by any person who has previously received credit under this subsection for twelve months of gross receipts or operating costs for a business which involves substantially the same activities as the business for which tax is due; provided, that any person who has received credit under this subsection for fewer than twelve months of gross receipts or operating costs for a business which involves substantially the same activities as the business for which tax is due shall receive credit under this subsection until that person has received such credits against gross receipts received or operating costs incurred for fully twelve months.
b. The renewal tax imposed by Section
3.36.060 shall be reduced by an amount equal to the tax which would otherwise be payable on one-half of the gross receipts received or the operating costs incurred by a person for any month in the calendar year prior to the date on which the renewal application was due which follows the twelfth calendar month after that person first engaged in business in the city and which month precedes the twenty-fifth calendar month after that person first engaged in business in the city. No credit under this subsection may be had by any person who has previously received credit under this subsection for twelve months of gross receipts or operating costs for a business which involves substantially the same activities as the business for which tax is due; provided that any person who has received credit under this subsection for fewer than twelve months of gross receipts or operating costs for a business which involves substantially the same activities as the business for which tax is due shall receive credit under this subsection until that person has received such credits against gross receipts received or operating costs incurred for fully twelve months.
c. Upon the transfer of a business which has been operated in the city for less than two years, and the filing by the transferor of the application required by subsection
(b) of Section
3.36.260 and the filing by the transferee of an application for an initial business license under Section
3.36.050, the transferee shall be entitled to credits under this section only to the extent that the transferor would have been entitled to such credits had the business not been transferred.
d. Notwithstanding
anything in this section to the contrary, a person who does not engage
in business from a fixed location in the city shall not be entitled
to a credit pursuant to this section.
(Prior code § 6706; Ord. 90-277 § 1, 1990; Ord. 95-426 §§ 5, 6, 1995)
The taxes imposed by Sections
3.36.040 and
3.36.100 shall be reduced by the sum of any fee paid by a taxpayer pursuant to Title
5 of the West Hollywood Municipal Code in the calendar year prior to the date on which the taxes imposed by Sections
3.36.040 and
3.36.100 are due.
(Prior code § 6707; Ord. 90-277 § 1, 1990)
a. A qualifying
business that enters into a lease of five or more years for space
in the city shall be granted a one-time rebate of the tax imposed
by this chapter and paid by the qualifying business. The amount of
the rebate shall be equal to the amount of the business's business
license tax for the calendar year preceding the year in which the
business entered into the lease. A rebate shall only be made under
the following circumstances:
1. At
the time the application for a rebate is made, the qualifying business
is current in its business license tax payments and is otherwise in
compliance with the ordinances of the city, including but not limited
to Title 19 of this code.
2. The
qualifying business has not previously been granted a rebate pursuant
to this section.
3. The
qualifying business has submitted a copy of the fully executed lease
to the city.
4. The
city has not rebated more than a total of $50,000 in the fiscal year
in which the rebate application is made.
5. The
application is made within sixty days after the business enters into
the lease.
b. For
the purposes of this section, "qualifying business" shall mean any
business that meets one of the following criteria:
1. The
business employs one hundred or more persons assigned to primary work
site(s) located within the city, whether or not the work site(s) is/are
located at the leased premises;
2. The
business generated gross receipts of five million dollars ($5,000,000.00)
or more in the four quarters immediately preceding entering into the
lease;
3. The
business generated operating costs of five million dollars ($5,000,000.00)
or more in the twelve months immediately prior to entering into the
lease;
4. The
business occupies a total of 10,000 or more square feet of enclosed
floor space, at one or more locations, in the city.
c. For
the purposes of this section, "enter into a lease" includes entering
into a new lease, renewing an existing lease, or modifying an existing
lease to make it applicable to additional floor space.
d. Applications
for a rebate shall be made on a form provided by the city and accompanied
by a copy of the fully executed lease for the space. The Tax Administrator
may promulgate rules and regulations to effectuate the purpose of
this section.
(Prior code § 6707.5; Ord. 94-406 § 1, 1994; Ord. 95-426 § 17, 1995)
The City Council may, by resolution, authorize a waiver or rebate
of business tax to any business that is: (1) subject to this chapter;
(2) operating on a property that is subject to the West Hollywood
Design District Business Improvement District (WHDD) assessment and
fronts within two hundred linear feet of the work zone for the Design
District Streetscape Improvement project (excluding the Pacific Design
Center); and (3) in compliance with this chapter with respect to any
previous tax year as of the date the rebate or waiver is sought. The
resolution shall specify the process for obtaining the rebate or waiver
and identify the specific properties that are eligible.
(Ord. 22-1201 § 1, 2022)
a. Adult-Use Cannabis Businesses. Starting on October 1, 2020, the adult-use retail businesses owned by the top eight ranking adult-use applicants, as defined in Chapter 5.70.010, shall receive a tax rebate equal to a two and one-quarter percent reduction in the seven and one-half percent cannabis business tax (Section
3.36.040(n)). Once the rebate is applied, the cannabis business tax paid by each business will be equal to five and one-quarter percent. The tax rebate shall be subject to the following limitations.
1. If more than eighty-five percent of an adult-use business license is assigned under Section
5.70.060, the rebate shall cease for that business.
2. The
rebate of two and one-quarter percent shall be reduced by three-quarters
percent for each licensed legacy medical business that closes and
whose license is no longer in effect.
3. Starting
July 1, 2023, in the event city general fund revenues decline by more
than ten percent in a fiscal year, the rebate is suspended for a twelve-month
period starting on October 1st following the end of the fiscal year
in which the ten percent decline occurred.
4. Starting
on October 1, 2023, the dollar amount of the rebate for the subsequent
twelve-month period, for each eligible adult-use business, shall be
capped at the following dollar amounts.
A. If four or fewer of the adult-use retail businesses that are owned
by the top eight ranking adult-use applicants are operating and receiving
the rebate, the amount of the rebate per business shall be capped
at an amount equal to fifteen percent of the total business tax received
from the legacy medical businesses in the prior fiscal-year (July
1 to June 30).
B. If between five and six of the adult-use retail businesses that are
owned by the top eight ranking adult-use applicants are operating
and receiving the rebate, the amount of the rebate per business shall
be capped at an amount equal to twelve and one-half percent of the
total business tax received from the legacy medical businesses in
the prior fiscal-year (July 1 to June 30).
C. If seven or more of the adult-use retail businesses that are owned
by the top eight ranking adult-use applicants are operating and receiving
the rebate, the amount of the rebate per business shall be capped
at an amount equal to ten percent of the total business tax received
from the legacy medical businesses in the prior fiscal-year (July
1 to June 30).
D. Once the cap is reached in each twelve month period (October 1 to
September 30), the rebate shall cease until the next twelve-month
period starts. The rebate cap shall be recalculated each fiscal-year
and the reduction will commence again on October 1st for a new twelve-month
rebate period. The numeric thresholds above in subsections (a)(4)(A),
(B), and (C), related to the number of businesses operating and receiving
the rebate, shall be reduced by one for each applicable adult-use
retail business that is assigned pursuant to subsection (a)(1) above
and is no longer eligible to receive a tax rebate. For example, if
an adult-use business is assigned pursuant to subsection (a)(1) above,
the threshold in item (a)(4)(A) above would change to "three or less",
the threshold in (a)(4)(B) above would change to "between four and
five", and the threshold in (a)(4)(C) would change to "six or more."
b. Consumption Area (Smoking, Vaping, Ingestion) Businesses Located
on the Same Premises as Adult-Use Retail Businesses. Starting on October 1, 2020, a consumption area (smoking, vaping, ingestion), which is owned by one of the top eight ranking adult-use applicants, as defined in Section
5.70.010, shall receive a tax rebate equal to a three-quarters percent reduction in the seven and one-half percent cannabis business tax (Section
3.36.040(n)). Once the rebate is applied, the cannabis business tax paid by each business will be equal to six and three-quarters percent. The tax rebate shall be subject to the following limitations.
1. If more than eighty-five percent of consumption area (smoking, vaping, ingestion) business license is assigned under Section
5.70.060, the rebate shall cease for that business.
2. Starting
July 1, 2023, in the event city general fund revenues decline by more
than ten percent in a fiscal year, the rebate is suspended for a twelve-month
period starting on October 1st following the end of the fiscal year
in which the ten percent decline occurred.
3. Starting
on October 1, 2023, the dollar amount of the rebate for the subsequent
twelve-month period, for each eligible consumption area (smoking vaping,
ingestion) business, shall be capped at a dollar amount equal to ten
percent of the total business tax received from the sale of combustible
products at all consumption area (edible/ingestion only) businesses
in the prior fiscal-year (July 1 to June 30). Once the cap is reached
in each twelve-month-period (October 1 to September 30), the rebate
shall cease until the next twelve-month period starts. The rebate
cap shall be recalculated each fiscal-year and the reduction will
commence again on October 1st for a new twelve-month rebate period.
c. In addition to the rebates above, starting on January 1, 2024, all cannabis businesses in operation during this period under Chapter
5.70 shall receive a temporary tax rebate equal to a one percent reduction in the applicable cannabis business tax (Section
3.36.040(n)) for the period January 1, 2024, through June 30, 2024.
d. In addition to the rebates above, starting on July 1, 2024, all cannabis businesses in operation during this period under Chapter
5.70 shall receive a temporary tax rebate equal to a two percent reduction in the applicable cannabis business tax (Section
3.36.040(n)) for the period July 1, 2024, through June 30, 2025.
(Ord. 20-1116 § 3, 2020; Ord. 20-1117 § 3, 2020; Ord. 24-02, 2/5/2024; Ord. 24-15, 5/20/2024)
a. Any person engaged in business subject to taxation under subsections
(a),
(b),
(c),
(e),
(f),
(g),
(h),
(j),
(k), or
(m) of Section
3.36.040 who receives annual gross receipts of less than five million dollars ($5,000,000.00) may, at his or her option, elect to pay an alternate business tax under this section, rather than the tax that would otherwise be applicable to that person under Section
3.36.040.
b. Any person engaged in business subject to taxation under subsections
(d),
(i) or
(l) of Section
3.36.040 who incurs annual operating costs of less than five million dollars ($5,000,000.00) may, at his or her option, elect to pay an alternate tax under this section, rather than the tax that would be applicable to that person under Section
3.36.040.
c. Rather than reporting to the city his or her precise gross receipts or operating costs and paying the tax that would be due under Section
3.36.040,
a person eligible to pay the alternate tax may determine his or her gross receipts or operating costs with sufficient precision to determine in which fifty thousand dollar ($50,000.00) increment between zero and two hundred thousand dollars ($200,000.00), or in which one hundred thousand dollar ($100,000.00) increment between two hundred thousand dollars and one cent ($200,000.01) and five million dollars ($5,000,000.00) a precise gross receipts or operating cost figure would lie. The taxpayer shall then round that estimate up to the next highest figure which is $50,000, $150,000, or a multiple of $100,000 and report the resulting figure to the city. The alternative tax due shall be the sum of the tax rate applicable to the taxpayer under Section
3.36.040 and the reported, rounded gross receipts or operating costs.
d. Pursuant to the authority granted by Section
3.36.290, the Tax Administrator may publish a table listing the tax payable for each fifty thousand dollar ($50,000.00) increment between zero and two hundred thousand dollars ($200,000.00) and each one hundred thousand dollar ($100,000.00) increment between two hundred thousand dollars and one cent ($200,000.01) and five million dollars ($5,000,000.00) for each tax rate imposed by Section
3.36.040 to assist taxpayers in calculating the alternate tax.
(Prior code § 6708; Ord. 90-277 § 1, 1990; Ord. 95-426 § 7, 1995)
Notwithstanding anything in this chapter to the contrary, and except for a person exempted from taxes by Section
3.36.120, the minimum renewal tax payable under this chapter shall be the sum of $50,000 and the tax rate applicable to the taxpayer as provided in Section
3.36.040.
(Prior code § 6708.5; Ord. 95-426 § 8, 1995)
a. The
taxes imposed by this chapter shall not apply to any business or activity
which is exempt from payment of a tax imposed by this chapter by virtue
of the provisions of a franchise agreement which was adopted prior
to the effective date of the ordinance which codified this chapter
and which is binding on the city at the time the receipts are received
or costs incurred, or by virtue of provisions of the laws or Constitution
of the United States or of the State of California.
b. The
tax imposed by this chapter shall not be applicable to any business
or activity of a public utility, as that term is defined in Section
216 of the California
Public Utilities Code, or to any business or
activity which is wholly for the benefit of charitable purposes; or
for any entertainment, concert, exhibition or lecture on scientific,
historical, literary or religious subjects within the city whenever
the receipts of any such entertainment, concert, exhibition or lecture
are to be appropriated to any church or school not operated for profit
or to any religious or benevolent purpose; and such tax shall not
be applicable to the conduct of any entertainment, dance, concert,
exhibition or lecture by any religious, charitable, fraternal, nonprofit
educational, military, state, county or municipal organization or
association whenever the receipts of any such entertainment, dance,
concert, exhibition or lecture are to be appropriated for the purpose
and objects for which such organization or association was formed
and from which profit is not derived, either directly or indirectly,
by any individual.
c. The
taxes imposed by this chapter shall not apply to the activities of
an individual who engages in a business operated entirely in his or
her personal residence that is permissible under applicable land use
regulations and who does not employ, or otherwise retain the services
of, any other person in the operation of the business; provided, however,
that a person who performs any significant portion of his or her business
activities at locations within the city other than his or her home,
including without limitation, at the homes or business locations of
his or her clients or customers, shall not be entitled to a tax exemption
under this subsection.
d. Any
person claiming an exemption from the tax imposed by this chapter
shall file a verified statement of exemption on a form prescribed
by the Tax Administrator and shall, unless exempted from the taxes
imposed by this chapter pursuant to a provision of state or federal
law, pay a twenty-five dollar ($25.00) tax for the filing of the statement
of exemption. Once granted pursuant to this section, an exemption
shall remain in effect, without need for an additional filing or tax
payment, for so long as the person claiming the exemption engages
in the business or activity for which the exemption is claimed.
(Prior code § 6709; Ord. 90-277 § 1, 1990; Ord. 91-297 § 2, 1991; Ord. 95-426 §§ 9, 10, 1995)
a. A separate
tax certificate is required for each branch or location of a business
and for each separate type of business at a single location. Each
tax certificate shall authorize the tax certificate holder to transact
and carry on only the business stated therein at the location or in
the manner designated in such certificate; provided, however, a business
may obtain certificates for separate locations either by submitting
a combined application for two or more locations or by submitting
separate applications for each location.
b. If two or more activities of a single taxpayer are taxable under Section
3.36.040 at the same rate and on the same tax basis, the taxpayer may calculate and report the tax due for the activities as a group. If two or more activities are taxable on the same tax basis, but at different tax rates, the taxpayer may calculate the tax for each activity separately or may calculate the tax for the activities as a group by applying the highest tax rate applicable to any activity in the group. If two or more activities are taxed on differing tax bases, the tax must be calculated for each activity separately.
(Prior code § 6710; Ord. 90-277 § 1, 1990)
Each applicant for a business tax certificate shall file a written
statement with the Tax Administrator upon forms provided by the Tax
Administrator indicating the business activity to be conducted, the
location of the business, the officers or other principals of the
business, and sufficient information to allow computation of the business
tax due.
(Prior code § 6711; Ord. 90-277 § 1, 1990)
When necessary, the Tax Administrator shall refer an application
or a notice of changed or new addresses to the appropriate city officers
for determination as to whether the proposed business activity and
the premises in which it is to be conducted comply with applicable
laws and ordinances. In the event it is determined that the proposed
activity may not be maintained in compliance with the law, the Tax
Administrator shall so inform the applicant and no new or renewed
tax certificate may issue.
(Prior code § 6712; Ord. 90-277 § 1, 1990)
All tax certificates shall be prepared and issued under the
direction of the Tax Administrator. Each certificate shall state the
following information upon its face:
a. The
person to whom it is issued;
b. The
nature of the business or activity for which tax has been paid;
c. The
location of the business;
d. The
expiration date of the certificate; and
e. Such
other information as is deemed necessary by the Tax Administrator.
No certificate shall be issued to any person until any previous
indebtedness for taxes and fees imposed by this chapter has been paid.
|
(Prior code § 6713; Ord. 90-277 § 1, 1990)
a. Each certificate shall expire on the last day of January of the year following the year in which it is granted. The Tax Administrator may issue certificates for either shorter or longer periods for any certificate holder or any class of certificate holders if necessary or desirable to insure collection of the tax or to increase the efficiency of its administration. Every renewal tax shall be due and payable on the first day of February of each year and shall become delinquent thirty days thereafter and the penalties of Section
3.36.180 shall then attach.
b. Every new business shall file an application for a tax certificate and pay the tax prior to the first day of operation, and the tax shall become delinquent ninety days thereafter and the penalties of Section
3.36.180 shall then attach.
(Prior code § 6714; Ord. 90-277 § 1, 1990; Ord. 92-326U § 1, 1992; Ord. 95-426 § 11, 1995)
a. Upon
a taxpayer's failure to pay the entire tax when due, the Tax Administrator
shall add a penalty of fifteen percent of the tax, or unpaid portion
thereof, on the first day of each month following the date the tax
was due; provided, however, no penalty shall be assessed in excess
of fifty percent of the tax due. For the purposes of this chapter,
a payment made by mail shall be deemed received on the date shown
on a postage cancellation stamp imprinted on the envelope in which
the payment is received, or if payment is made by means other than
U.S. Mail, payment shall be deemed received on the date the payment
is stamped "received" by the Tax Administrator or his or her designee.
b. On the first day of the month following the date on which the maximum penalty provided for in subsection
(a) has accrued, interest at the rate of one-half of one percent per month shall begin to accrue. Interest shall accrue at this rate on the amount of the unpaid tax, exclusive of penalties, for each month or portion of a month until the tax is paid.
(Prior code § 6715; Ord. 90-277 § 1, 1990; Ord. 95-426 § 12, 1995)
No tax shall be refunded unless it is determined by the Tax
Administrator that a tax has been paid in error, computed incorrectly,
overpaid, or collected illegally. No refund shall be made unless a
request is received by the Tax Administrator within one year of the
payment of the tax.
(Prior code § 6716; Ord. 90-277 § 1, 1990)
a. The determination of the class of business in which an applicant for a tax certificate is deemed to be engaged under Section
3.36.040 shall be a ministerial task of the Tax Administrator.
b. In the
event an applicant disagrees with the determination of the Tax Administrator
as to the class of business in which the applicant is engaged, the
applicant may file an application for reclassification with the Tax
Administrator. This application shall set forth with specificity the
facts upon which it is based. Upon receipt of a reclassification application,
the Tax Administrator shall investigate and review the matter and
shall either affirm the original classification or assign a new classification
and shall notify the applicant of the decision in writing.
c. The
Tax Administrator may refuse to accept an application for reclassification
from an applicant who has applied for reclassification within the
previous twelve months if the application fails to state material
and relevant facts which were not and could not have been presented
in the previous reclassification application.
d. The
decision of the Tax Administrator on an application for reclassification
shall be final.
(Prior code § 6717; Ord. 90-277 § 1, 1990)
Information concerning gross receipts or operating costs furnished
or secured pursuant to the provisions of this chapter shall be confidential,
shall not be subject to public inspection, and shall not be made available
to anyone who is not charged with the administration of this chapter.
(Prior code § 6718; Ord. 90-277 § 1, 1990; Ord. 95-426 § 13, 1995)
All certificates shall be kept and posted in the following manner:
a. Any
certificate issued for a fixed business location in the city shall
be displayed by the taxpayer in a conspicuous place on the premises
for which the certificate is issued.
b. Any
certificate issued for a business that is not conducted from a fixed
location in the city shall be kept upon the person of the taxpayer
while he or she is conducting business in the city. If the taxpayer
conducts business in the city through several individuals or other
agents, duplicate certificates may be issued for named agents by the
Tax Administrator. No person other than the Tax Administrator shall
copy or otherwise duplicate any certificate issued under this chapter.
c. The
Tax Administrator, any police officer, and any other person authorized
by the Tax Administrator shall have the authority to enter any place
of business taxed under this chapter at any reasonable time and demand
an exhibition of its certificate. No person to whom a certificate
was issued or who has custody or control of a certificate shall willfully
fail to exhibit the certificate upon the demand of a person authorized
to inspect it under this subsection.
(Prior code § 6719; Ord. 90-277 § 1, 1990)
When a person who engages in a business taxed under this chapter fails to procure a certificate within the time permitted by this chapter, or after demand by the Tax Administrator, the Tax Administrator may then determine the amount of the tax upon such information as may be available. The Tax Administrator shall then notify such person of the amount due, including penalties imposed under Section
3.36.180, and demand payment. Such payment shall be made within thirty days after demand is made by the Tax Administrator.
(Prior code § 6720; Ord. 90-277 § 1, 1990)
The use of signs, circulars, cards or any other advertising
media, including, without limitation, the use of telephone solicitation,
or any other means by which a person may hold him or herself out as,
or represent that he or she is, doing business in the city may be
used as evidence that a person is doing business in the city.
(Prior code § 6721; Ord. 90-277 § 1, 1990)
a. Any
person engaged in a business taxed under this chapter shall maintain
and preserve, for a period of at least two years, suitable records
as may be necessary to determine the amount of the tax due under this
chapter and shall, upon request of the Tax Administrator, provide
the necessary records to substantiate the tax paid or due for such
business. If upon audit of such records, the Tax Administrator determines
the tax imposed by this chapter has not been paid in full, the Tax
Administrator shall notify the taxpayer of the balance due, including
any accrued penalties. Such amount shall be paid within thirty days
after notice is issued by the Tax Administrator.
b. If an
audit reveals an overpayment, the Tax Administrator shall notify the
taxpayer of the amount overpaid. Unless the taxpayer requests a refund
of the overpayment within thirty days after notice is issued by the
Tax Administrator, the overpayment shall be applied as a credit against
the next annual tax due.
c. If an
audit reveals an underpayment of $25 or less, the Tax Administrator
shall take no action to collect the underpayment.
d. Rather than request information and conduct an audit, the Tax Administrator may request an applicant to file a corrected application for tax certificate. If such an application is filed and the Tax Administrator is satisfied with its accuracy, the existence of any underpayment or overpayment under this section shall be determined with reference to that corrected application. If a taxpayer fails to file a corrected application or if the Tax Administrator is not satisfied with a corrected application, the Tax Administrator may conduct an audit under subsection
(a) of this section.
(Prior code § 6722; Ord. 90-277 § 1, 1990)
a. No tax
certificate issued under this chapter may be transferred by a tax
certificate holder to any other person.
b. Whenever any person required to pay a tax pursuant to this chapter shall quit business or dispose of a business, any tax payable under this chapter shall be immediately due and payable, and such person shall immediately file the application required by Section
3.36.140 and pay the tax due.
c. Whenever any person required to pay a tax pursuant to this chapter transfers a business to another person, the transferor and transferee of the business shall be jointly and severally liable for the tax due pursuant to subsection
(b) of this section. No tax certificate may issue to the transferee until the tax due under subsection
(b) of this section is paid.
(Prior code § 6723; Ord. 90-277 § 1, 1990; Ord. 95-426 § 14, 1995)
Every taxpayer who changes his or her place of business, or
who locates a business previously operated without a fixed place of
business, shall notify the Tax Administrator in writing of the new
address of the business. Every taxpayer who transfers all or part
of the ownership of his or her business shall notify the Tax Administrator
in writing of the change in ownership. The notices required under
this section must be received by the Tax Administrator within thirty
days of the change of address or ownership.
(Prior code § 6724; Ord. 90-277 § 1, 1990; Ord. 95-426 § 15, 1995)
Any notice required to be provided a taxpayer under this chapter
shall be sufficient if deposited with postage prepaid in the United
States Mail and addressed to the address provided on the application
unless a change of address notice has been received, in which case
notice is sufficient if mailed to the most recent address of which
the Tax Administrator has been informed.
(Prior code § 6725; Ord. 90-277 § 1, 1990)
The Tax Administrator, in consultation with the City Attorney,
and subject to the approval of the City Manager, may promulgate guidelines
for the apportionment of the gross receipts or operating costs of
businesses which operate both inside and outside the city to assist
taxpayers in calculating the portion of their activities subject to
the tax imposed by this chapter. The Tax Administrator, in consultation
with the City Attorney, and subject to the approval of the City Manager,
may adopt any other rules or regulations necessary or desirable for
the enforcement of this chapter.
(Prior code § 6726; Ord. 90-277 § 1, 1990; Ord. 95-426 § 16, 1995)
A violation of this section is subject to the administrative penalty provisions of Sections
1.08.030 through
1.08.070 of this code. It is a violation of this chapter to knowingly or intentionally misrepresent to any officer or employee of the city any material fact, relative to any tax imposed under the provisions of this chapter.
(Prior code § 6727; Ord. 90-277 § 1, 1990; Ord. 97-489 § 9, 1997; Ord. 97-507 § 15, 1997)
The amount of tax, fee, penalty, or interest imposed by the
provisions of this chapter shall be deemed a debt to the city. An
action may be commenced in any court of competent jurisdiction in
the name of the city for the amount of such debt.
(Prior code § 6728; Ord. 90-277 § 1, 1990)
The conviction and punishment of any person for failure to comply
with the provisions of this chapter shall not relieve such person
from paying any tax, fee, penalty, or interest due and unpaid at the
time of such conviction, nor shall payment prevent prosecution of
a violation of any of the provisions of this chapter. All remedies
shall be cumulative, and the use of one or more remedies by the city
to enforce this chapter shall not bar the use of any other remedy.
(Prior code § 6729; Ord. 90-277 § 1, 1990)
If any section, subsection, sentence, clause, phrase or portion
of this chapter is for any reason held to be invalid or unconstitutional
by the decision of any court of competent jurisdiction, such decision
shall not affect the validity of the remainder of the chapter. The
City Council hereby declares that it would have adopted this chapter
and each section, subsection, sentence, clause, phrase, or portion
thereof, irrespective of the fact that any one or more sections, subsections,
phrases, or portions be declared invalid or unconstitutional.
(Prior code § 6730; Ord. 90-277 § 1, 1990)