This chapter shall be known as the "Business License Tax Ordinance" of the city.
(Prior code § 6700; Ord. 90-277 § 1, 1990)
Editor's Note: For specific information regarding business licenses, regulations and permits, see Title 5 of this code.
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:
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.
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.
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.
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.
shall mean a tax imposed by this chapter.
has the same meaning as in Section 26001 of the California Business and Professions Code.
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.
has the same meaning as in Section 11018.1 of the California Health and Safety Code.
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.
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:
Cash or jobber discounts;
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;
Cash or credit refunded to a purchaser who returns property upon the rescission of a contract of sale;
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;
Amounts received as refundable deposits, except those amounts that are subsequently forfeited and taken as business income;
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;
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;
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;
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
Receipts received by a public utility, as that term is defined in Section 216 of the California Public Utilities Code.
shall mean any person who holds a valid, current business tax certificate issued to that person under Section 3.36.160.
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.
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.
shall mean the City Manager or designee.
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.
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.
(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 renews a commercial lease for an additional five or more years for exclusive occupancy of a space in the city shall be granted a 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 renewed its lease. The rebate shall not include the business license applicant's payment of a fee paid pursuant to Government Code Section 4467. 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, has no outstanding debt owed to the city, and is in full compliance with all city regulations and ordinances, including, but not limited to, Title 19 of this code.
2.
The qualifying business has submitted either a copy of the fully executed lease to the city or submitted a signed affidavit confirming a minimum five-year lease renewal has been executed.
3.
The city has not yet expended the amount budgeted for such rebates in the fiscal year in which the rebate application is made.
4.
The application is made within sixty days after the business enters into the lease renewal.
5.
The applicant is eligible for a rebate under this section once every five years per property.
b.
For the purposes of this section, "qualifying business" shall mean any business that meets one of the following criteria:
1.
The business occupies a commercial lease for space in the city that is at least five years in length. A commercial lease refers to a lease for space primarily for business operations, including, but not limited to, office spaces, retail establishments, restaurants, or other locations where business activities with employees or the public take place.
c.
Businesses that do not meet the above criteria and are considered exempt from eligibility for the lease renewal rebate include:
d.
This section applies to renewals of an existing commercial lease or modifications of an existing commercial lease to extend the lease term. It does not include new commercial leases. A business that renews or modifies an existing lease for a term of at least five years shall be eligible for the rebate; however, the rebate applies only to the first year of each qualifying renewal or extension.
e.
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 exclusive occupancy of the space or an affidavit in a form prescribed by the city. 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; Ord. 25-06, 4/7/2025)
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, 2026.
(Ord. 20-1116 § 3, 2020; Ord. 20-1117 § 3, 2020; Ord. 24-02, 2/5/2024; Ord. 24-15, 5/20/2024; Ord. 25-17, 8/18/2025)
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.
(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)