O1376
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CA:RMM:rmd264/ca
City Council Meeting 6-24-86
Santa Monica, Callfornle
ORDINANCE NUMBER l376(CCS}
(City CounCil Series)
.
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA
AMENDING SECTIONS 6116 AND 61168 OF
THE SANTA MONICA MUNICIPAL CODE AND
ADDING SECTION 6128 TO THE
SANTA MONICA MUNICIPAL CODE RELATING
TO THE BUSINESS LICENSE TAX AND
DECLARING THE PRESENCE OF AN EMERGENCY
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN
AS FOLLOWS:
SECTION 1. Section 6116 of the Santa Monica Municipal
Code 15 amended to read as follows:
SECTION
6116.
Statem~nt
of
Licensee.
(a) In all cases where the amount
of license to be paid by any person IS
based upon the amount of receipts, or
sales or of business transacted, or upon
the number of persons employed or upon the
number of wagons or other vehicles} used,
or
upon
the
amount of the maximum
admiSSion fee charged, or upon the number
of tables or chairs used for any game or
upon the number of units In any bUilding
1
e
e
or upon the seating capacity, such person,
before obtaining a license for such
bU5lne~5 and Within thirty (30) days after
the beginning
of
each
license period,
shall
file with the Director of Finance a
written statement In the form required by
the Director of Finance, supported by such
documentation requested by the Director of
Finance,
showing
the
total
amount
of
receipts
or
sales
or
of
bUSiness
transacted during
the
preceding license
wagons, or other
year,
or
the number of
vehicles used or the amount of the maximum
admiSSion
fee charged, or
the number of
un Its
contained In such bUilding, or the
seating capacity at
statement.
the
date of
such
(b)
If
two or more closely related
bUSinesses
are c!lrrled on
at
the same
location and under the same ownership and
the bUSinesses are on a gross recelpt~
baSIS,
reported
the
gro55
recelpt~ shall
be
together and the greater of the
rates applicable Will
be used
for the
compilation of
the annual
license fee.
When
two or more
non-related bUSinesses
2
e
e
are operated at
one
location, separate
Ilcen5es shall be required.
(c) If any person IS reqUired to
two or more licenses subject to a
have
license
fee under Sections 6225, 6225A,
6226,
person
6236,
5 ha 11
or 6240
of this
Code, the
pay, 1 n
addition
to the
minimum
(!innual
Ilcen58
ree
for each
license,
a single
license fee
for ell
licenses computed on the baSIS of the
total gross receipts of all licenses.
Cd) No stetement filed pursuant to
this Section shall be conclUSive upon the
City or upon any officer thereof as to the
matters therein set forth, and the same
she 11
not prejudice the right of the City
to
recover
any
amount
that may be
ascertained to be due from such person In
addition to the emount
shown by such
statement
should
It
be
found
to be
Incorrect.
(8) If
any person reqUired to file
pursuant to thiS Section
any
statement
shall
fall to do
&0,
such person shall be
license fee at the
reqUired to pay
a
maximum rate herein prescribed for the
bUSiness carried on by such person and
3
e
e
shall be gUllty of a vlolatlon of thls
Code and shall be pun1shable therefor 8$
hereinafter provlded.
(r) In any case where the flrst
llcense
15 to be
lssued
for a newly
establlshed buslness, the mlnlmum tax for
that type of bUslness shall be pa1d, and
at the termlnatlon of the llcense period
durlng
which
the
operatlon of such
bUs1ness
lS commenced,
the
license for
such
11cenSe perlod shall be adjusted and
In the manner provlded by thls
paid
Section for the ascertalnlng and paYlng of
llcenses for other llcense perlods, after
deductlng from the amount
50 found to be
due the amount pald at the tlme such flrst
llcense was lssued.
(g)
The
correctness
of
any
statement
flIed pursuant
to thls Sectlon
shall be subject to audlt and verlflcatlon
by the D1rector of Flnance, who 15 hereby
authorlzed and empowered to
lnspect and
audit the books and records of any and all
persons
licensed to carryon any bUSlness
speclfled
ln thls
Code. No person
llcensed
to carry
on any bUSlness
specified
ln
th1s Code $hall
refuse or
4
e
e
fall
to allow the Dlrector of Flnance to
Inspect
and audlt ~uch book~ and record~
or :shall
refuse or fall
to provlde such
addltlonal Informatlon as reque~ted by the
Dlrector of Flnance.
(h) Any statement flIed pursuant to
this Sectlon shall be signed and shall
contain the followlng:
III declare, under penalty of maklng
a false declaratlon, that I am authorized
to make thls statement and to the best of
my knowledge and bellef
It 15 a true,
correct and complete statement, made In
good faith for the perlod stated.1I
For making a false statement or
declaratlon
the
shall
person
s1gnlng
the
statement
be
gu 11 ty
of
l!l
mlsdemeanor.
(1) Any statement flIed pursuant to
thiS Sectlon shall be confldentlal 1n
character and shall not be subject to
publlc
Inspectlon.
It shall be the duty
of the Dlrector of FInance to preserve and
keep
the statements so
that the contents
thereof may not become known except to the
persons
charged
by
law
wlth
the
admlnlstratlon of thIS Code.
s
e
e
SECTION 2.
SectIon 61168 of the Santa MonIca MunIcIpal
Code IS amended to re~d a~ follows:
SECTION 61168.
Gro~~ ReCl!lIot50.
(a) "Gross receipts," whenever u~ed
In thIS ArtIcle,
shall be construed ~s
defIned
In this SectIon unle~s from the
context ~ dIfferent meaning 15 Intended or
unless a dIfferent meaning IS speCIfically
defIned.
(b) JlGross receIpts" shell mean:
(1) For any tax due on or
after July 1, 1986,
gross receIpts sh~ll
be determIned based upon gross receipts
for
the
calender ye~r precedIng the
license
tax perIod for whIch
the tax 15
due.
For any tax due prIor
to July 1,
1986,
gross receIpts shall be determIned
based upon gross receIpts for the fIscal
year commencing on July 1 and ending on
June 30 precedIng the
license tax period
for which the tax IS due.
(2) The total amount of the
sale prIce of all sales, the total amount
charged or receIved for the performance of
any act, serVIce or employment of whatever
nature
It may be,
whether such serVice,
act or employment 15 done as part of or In
6
e
e
connection WIth the sale of goods, wares,
merchandise or not, for which ~ charge i5
made or credIt allowed, IncludIng all
receipts, cash, credIts and property of
any kind or nature, any amount for which
credIt 15 allowed by the seller to the
purchaser wIthout any deductIon therefrom
on account of the cost of the property
sold,
labor
the
CO:l5t
of
the
materials used,
interest paid or
or serVice costs,
payable,
105ses
or
any other expense
whatsoever.
(3) The amount of any federal
manufacturers'
Or
importers'
eXCise tax
included
in
the price of property sold,
even
though the manufacturer or Importer
15
also the retailer
thereof and whether
or not the amount of such tax i5 stated as
a separate charge.
(4)
In
connection
WIth
e
person leaSIng or renting property, all
amounts paid by a tenant to a lessor for
the serVices performed, or materIals used,
or utilities.
or faCilIties
furnis.hed by
the
lessor
on
the
the
premiSes. or
in
connection
Wi th
tenentls
use,
posseSSion,
or
the right
to possess the
7
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property; any rece1pts pa1d by a tenant to
a
lessor
for
the
use or possess1on of
land,
or the r1ght to use or possess lend
other than that upon wh1ch the bU1ld1ng or
structure
15 located but which IS used or
possessed
or
15 ava1lable
for use
or
posseSS1on
by
a
tenant
for purposes
related
to
the ten!llncy;
and all amounts
pa1d as prepa1d rent.
(5 )
Receipts of
.!!IIny person
received 85 comm1sS1ons or fees earned, or
charges
of
any
character
made
or
compensation of any character rece1ved,
for the performance of any service by said
person or any of
said personls employees
and
receipts of any person
received as
partial
or
fu II
compensation
or
reimbursement for salaries, payroll taxes,
fringe benef1ts and any and all slm1lar
expenses
for persons who are employees of
said person and
receipts of
any person
rece1ved as part1.!!lll or full compensation
or reimbursement for equ1pment, supplies,
utilities,
or
other
I t ems
or
services
acqu1red by said person
In that personls
name
and
used
or
consumed
In
the
performance of serV1ces.
8
e
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(0)
"Gross
recelptsll
sha 11 no t
Include:
(1) The amount of any federal
tax Imposed on or with respect to retail
sales whether Imposed upon the retailer or
upon
the
consumer and
regerdles5 of
whether or not the amount of federal tax
15 stated
to customers as a separate
cha rge.
(2 )
Any
California
state,
City,
or city and county sales or use tax
required by law to be Included In or added
to the purchase price and collected from
the consumer or purchaser.
(3) Such pa rt
of
the sales
price of any property previously sold and
returned by the purchaser
to the seller
which
15 refunded by the seller by way of
cash or credit allowances given or taken
as
part
payment on any property 50
accepted for resale.
(4) Cash dlscount~ allowed or
taken on sales.
(5) Receipts
of
persons
acting as agents or brokers, other than
reCBlpts
received as commissions or fees
earned and other than net interest Income
9
e
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earned from margin account
charges of any character
loans, or
made or
compensatIon of any character received for
the performance of any serVice as agent or
broker;
provided, however, any agent or
broker dealing In stocks or other similar
written Instruements eVIdencIng a rIght to
partiCipate In the asset~ of any bUSIness,
or dealing In bonds or other eVidences of
Indebtedne~s,
who also deals
In such
property as a prinCipal, shall Include In
gross
receipts the amount
of tradIng
profits resulting from such dealIngs.
(6 )
Any
refundable depOSit
which IS returned to the depOSItor.
(7) Gross receIpts from any
actiVIty for which a bUSiness
lIcense
would not be required under thiS Code and
WhICh
15
receIved
from
Incldentlal
activities of the lIcensee.
(8)
That
portIon
or
the
receIpts or a general contractor licensed
under Sections 6212, 62128, 6212C, or
6212E WhICh repre5ents payment5 to
subcontractors prOVIded such
subcontractors are lIcensed under the
prov151on5 of thIS Chapter and that the
10
e e
general contractor furnIshes the DIrector
of FInance wIth the names and addresses of
the subcontractors and the amounts paId to
each subcontractor.
(9) Gross
receIpts
attrIbut!'lble
to sales wIthIn a sIngle
bUSIness entIty when no net gaIn results,
IncludIng affIlIated corpOr!'ltIons when one
has at least !'In 80% Interest In the other,
who 11 y-owned
corporatIons}
and
partnershIps and partners.
(10) Bad
debts taken
from
gross receIpts reported durIng !'I prIor tax
year
In
accordO!lnce
WIth
gener!llly
acceptable accountIng practIces.
(11) AnythIng whIch the CIty
of Sant!l MonIca may not lawfully Include
by VIrtue of the ConstItutIon of the
UnIted States or the ConstItutIon of the
State of CalIfornIa.
Cd) When,
by
reason
of
the
the
prOVISIons of
the ConstItutIon of
UnIted States or the ConstItutIon of the
State of CalIfornIa, the bUSIness lIcense
fee Imposed by thIS ArtIcle cannot be
enforced
WIthout
there
beIng
!In
apportIonment
accordIng to the amount of
11
e
e
bUSiness done In the City of S~nta Monica,
or In the State of California, as the csse
may
be, apportionment
rules shall
be
established 85 follows:
(1)
The
City Councd
from
time
to
time shall adopt by resolution
general gUidelines for apportionment.
(2) The Director of Finance,
With the approval of the City Attorney,
may make such rules and regulations for
the
apportionment of
the tax as are
necessary and deSirable to overcome the
constitutional
objections and which are
conSistent
With the gener~l ~pportlonment
gUidelines adopted by resolution of the
City Councd.
The Director of Finance
shall
publish such rules and regulations
once In a newspaper of general Circulation
Within
the City of Santa Monica.
Within
10 days of the date of publication of such
rules
and
regulations, any
Interested
person may file a request With the City
Clerk
that
the City CounCil
review the
rules and regulations 50 published. The
rules Bnd
regulations shall be final at
the
eXpiration
of
the
period
for
requesting review In the event no request
12
e e
for reVIew IS f 11 ed, or In the event of
the f 111 ng of a request for reVIew, when
the rule~ and regulatIons have been
adopted by the CIty Counc11.
(3) The apportIonment shall
be made on the baSIS of payroll value and
SItus of tang1ble property, general
expense, or by reference to any other
method of apportIonment a5 WIll faIrly
determ1ne
the amount
of gross receIpts
derIved from or attrIbutable to engagIng
In bU5IneS5 In the CIty.
derIved
from
Isolated
GroS5 receIpts
or occasIonal
transactIons at places outSIde
the CIty
but WIthIn the State of CalIfornIa, where
the lIcensee 15 not regularly engaged In a
course of bUSIness transact10ns shall be
deemed
gros5
recelpta
derIved
From
Gross
engagIng
In bUSIness In
the CIty.
receIpts derIved from or attrIbutable to
sources WIthIn the CIty Include grOS5
receIpts from tangIble or IntangIble
property
located or haVIng a s1tU5 In the
CIty and, when not contrary to law, gross
receIpts from any actIVItIes carrIed on In
the CIty regardless of whether carrIed on
13
e
e
1n
Interstate,
Intrastate,
or
fore1gn
commerce.
SECTION 3.
Section 6128 lS added
to the Santa
MonIca MunicIpal Code to read as follows:
SECTION 6128.
Tax fHnn~~ t v and
Au.;h t ProljJ ram.
(a) The DIrector of F1nance shall
develop and admInIster a bU~Ine~5 lIcense
tax amnesty and audIt program as provIded
In thIS Section.
(b)
The
tax amnesty program shall
be conducted during the perIod from July
1,
1986,
through August 31,
1986.
The
program
sha I I
apply
to
delInquent,
unreported,
or
underreported business
lIcense taxes due during the perIod from
July 1, 1984, through June 30, 1986.
(c) The prOVISions of thIS SectIon
aha II
apply to any person requIred to pay
a bUSIness lIcense tax under thIS ArtIcle
who,
on or after July 1, 1986, and on or
before August 31, 1986:
(1) FlIes
8 completed
tax
amnesty
application
for
FIscal
Year
1984-85 and/or FIscal Year 1985-86.
(2) Pays
In full
the unp!JId
taxes plus Interest from the date the tax
14
e
e
was first due In the amount determined by
the Director of Finance ba~ed upon the
CltylS
actual
rate of
return on
Its
Inve~ted funds.
(d) For any taxpayer who meets the
requlrement~ of this Section:
(1) The Director of Finance
shall
waive all penalties
Imposed under
Sections 6109 and 6112.
(2) No criminal action shall
be brought against the taxpayer, for any
tax period for which tax penalty amnesty
IS requested, based upon the delinquent,
non-reporting, or under-reporting of tax
liabilities.
This subdivIsion shall not
effect,
bar, or require the dismissal of
any criminal
prosecution prior
to
the
effective date of this Section.
(e) The Director of Finance shall
develop an audit program to randomly audit
up
to 50" of
the bUSIness
license tax
returns of bUSinesses operating
In the
City of Santa Monica during the two annual
tax periods ending on or before June 30,
1986.
If,
subsequent
to
an audit
conducted between July 1,
1986, and June
30,
1987,
It
IS determined that
the
15
e
e
bUSIness has
been delInquent, or has
or under-reported gross
non-reported
receIpts,
thereby under-paYIng busIness
license
taxes, the lIcensee
shall pay to
the CIty, withIn 10 days of notIficatIon
of the determInation, the amount of tax
due,
due
Interest
from the date
the tax was
In
the
amount
determined by the
Director of FInance based upon the CIty'S
actual
funds,
rate
of
return on
Its Invested
and a penalty In the amount of the
tax due.
( f)
The
DIrector of
FInance shall
15sue
forms
and
Instructions
and
take
other
actIons as needed to Implement thIS
SectIon.
SECTION 4.
Any prOVISIon of the Santa MonIca MunICIpal
Code or appendices thereto InconSIstent With the prOVISIons of
thIS ordInance, to the extent
of such InconSistencIes and no
further,
are hereby
repealed or
modifIed
to
that extent
necessary to affect the prOVISIons of thIS ordInance.
SECTION
?
If
any sectIon,
subsectIon,
sentence,
clause,
or phrase of thIS ordInance IS for any reason held to
be InvalId or unconstitutIonal by a deCISIon of any court of
any competent JurIsdIction, such deCISIon shall not affect the
valIdity of the remaInIng portions of the ordinance.
The CIty
CounCil
hereby declares
that
1 t
would have
pe5sed
th15
16
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e
ordinance and each and every section, subsection, sentence,
clause or phrase not
declared Invalid or uncon~tltutlQnal
without
regard to whether any portion of the ordinance would
be subsequently declared invalid or unconst1tut1onal.
SECTION 6.
The Mayor shall sign and
the C1ty Clerk
sha 1 1
attest
to
the passage of thiS ordinance.
Th IS C 1 t Y
Clerk sha 11
cause
the same
to be published once
1n the
official newspaper Within 15 days after Its adoption.
SECTION 7.
Pursuant to City Charter Sections 619(c) and
619(d),
thiS ord1nance shall take effect and be In full force
Immediately after the passage and adoption thereof.
SECTION
8.
ThiS ordinance
15 declared
to be an
emergency measure adopted pursuant to the provIsions of City
Charter Section 615 and 15 necessary for preserving the publiC
peace, health, and safety, and the urgency for ItS adopt1on 15
so that the tax amnesty and aud1t program may commence on July
1, 1986, which IS essential to ensure continuity of revenue to
provide essential City services and which Will aVOid divertIng
resources from the prosecution of seriOUS crime.
APPROVED AS TO FORM:
~ ""^-.
Robert M. Myers
C1ty Attorney
~
17
!
.
.
Adopted and approved thlS 24th day of June, 1986.
f)_L~)~
( . --- Mayor -
I hereby certIfy that the foregolng Ordinance No. 1376(CCS)
was duly and regularly introduced at a meeting of the City
CouncIl on the 24th day of June 1986; that the said Ordinance was
thereafter duly adopted at a meeting of the CIty Council on the
24th day of June 1986 by the following Council vote:
Ayes: Councilmembers:
Conn, Epstein, Jennings, A. Katz,
H. Katz, Zane and Mayor Reed
Noes: Councilmembers:
None
AbstaIn: Councilmembers:
None
Absent: Councilmembers:
None
ATTEST:
~" :!h' ~A~
-- ~:>i ty .:~le~'rk, -
--
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