Chapter 5.04
GENERAL PROVISIONS
Sections:
5.04.010 Definitions.
5.04.020 Revenue measure.
5.04.030 Effect on other ordinances.
5.04.040 License and tax payment required.
5.04.050 Branch establishments – Separate license required.
5.04.060 Evidence of doing business.
5.04.070 Constitutional apportionment.
5.04.080 Exemptions.
5.04.090 Contents of license.
5.04.100 Application for first license.
5.04.110 Renewal of license.
5.04.120 Statements and records.
5.04.130 Information confidential.
5.04.140 Failure to file statement or corrected statement.
5.04.150 Appeal.
5.04.160 Additional power of collector.
5.04.170 License nontransferable – Changed location and ownership.
5.04.180 Duplicate license.
5.04.190 Posting and keeping licenses.
5.04.200 License tax – How and when payable.
5.04.210 Delinquent taxes – Penalties – Installment payment.
5.04.220 Refunds of overpayments.
5.04.230 Rules and regulations.
5.04.240 Enforcement.
5.04.250 License tax a debt.
5.04.260 Remedies cumulative.
5.04.270 Effect of ordinances on past actions – Unexpired licenses.
5.04.280 Charitable organizations.
5.04.290 Partial refund of annual tax.
5.04.010 Definitions.
For the purpose of Chapters 5.04 and 5.08 SMC, the following terms and phrases shall have the meanings ascribed to them in this section:
A. "Average number of persons employed" shall be determined by ascertaining the total number of hours of service performed by all employees of applicant within the city during the previous calendar year, and dividing the total number of hours of service thus obtained by the number of hours of service constituting a year’s work of one full-time employee according to the custom or laws governing such employment. In computing the average number of persons employed, a fraction of one-half or more of the customary or equal annual full-time employee hours shall be considered as one additional employee. For the purposes of this section, the term "person employed" includes proprietors and persons who have an interest in the business as well as relatives and members of the family who render services.
B. "Business" includes professions, trades and occupations and all and every kind of calling whether or not carried on for profit.
C. "Collector" means the city manager or designee.
D. "Person" includes all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, Massachusetts, business or common law trusts, societies, and individuals transacting and carrying on any business in the city, other than as an employee.
E. "Sale" includes the transfer, in any manner or by any means whatsoever, of title to property for a consideration; the serving, supplying or furnishing for a consideration of any property; and a transaction whereby the possession of property is transferred and the seller retains the title as security for the payment of the price shall likewise be deemed a sale. The foregoing definitions shall be deemed to include any transaction which is or which, in effect, results in a sale within the contemplation of law.
F. "Sworn statement" means an affidavit sworn to before a person authorized to take oaths, or a declaration or certification made under penalty of perjury. (Ord. 2000-13 § 1, 2000; Ord. 421 § 1, 1970).
5.04.020 Revenue measure.
Chapters 5.04 and 5.08 SMC are enacted solely to raise revenue for municipal purposes, and is not intended for regulation. (Ord. 421 § 2, 1970).
5.04.030 Effect on other ordinances.
Persons required to pay a license tax for transacting and carrying on any business under Chapters 5.04 and 5.08 SMC shall not be relieved from the payment of any license tax for the privilege of doing such business required under any other ordinance of the city, and shall remain subject to the regulatory provisions of other ordinances.
No license issued pursuant to the provisions of Chapters 5.04 and 5.08 SMC shall be construed as authorizing the conduct or continuance of any illegal or unlawful business. (Ord. 421 § 3, 1970).
5.04.040 License and tax payment required.
There are imposed upon the businesses, trades, professions, callings and occupations specified in Chapters 5.04 and 5.08 SMC license taxes in the amounts hereinafter prescribed. It is unlawful for any person to transact and carry on any business, trade, profession, calling or occupation in the city without first having procured a license from the city so to do and paying the tax hereinafter prescribed or without complying with any and all applicable provisions of Chapters 5.04 and 5.08 SMC.
This section shall not be construed to require any person to obtain a license prior to doing business within the city if such requirement conflicts with applicable statutes of the United States or of the state of California. Persons not so required to obtain a license prior to doing business within the city nevertheless shall be liable for payment of the tax imposed by Chapters 5.04 and 5.08 SMC. (Ord. 421 § 4, 1970).
5.04.050 Branch establishments – Separate license required.
A separate license must be obtained for each branch establishment or location of the business transacted and carried on and for each separate type of business at the same location and each license shall authorize the licensee to transact and carry on only the business licensed thereby at the location or in the manner designated in such license; provided, however, that if a separate federal income tax return is filed for a particular business, it shall, for purposes of this section, be conclusively presumed to be a separate business for which a separate license is required. (Ord. 421 § 5, 1970).
5.04.060 Evidence of doing business.
When any person makes use of signs, circulars, cards, telephone book, or newspapers, advertises, hold outs, or represents that he is in business in the city, or when any person holds an active license or permit issued by a governmental agency indicating that he is in business in the city, and such person fails to deny by a sworn statement given to the collector that he is conducting a business in the city, after being requested to do so by the collector, then these facts shall be considered prima facie evidence that he is conducting a business in the city. (Ord. 483 § 1(G), 1974; Ord. 421 § 6, 1970).
5.04.070 Constitutional apportionment.
None of the license taxes provided for by Chapters 5.04 and 5.08 SMC shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the equal protection and due process clauses of the Constitutions of the United States and the state of California.
In any case where a license tax is believed by a licensee or applicant for a license to place an undue burden upon interstate commerce or be violative of such constitutional clauses, he may apply to the collector for an adjustment of the tax. Such application may be made before, at, or within six months after payment of the prescribed license tax. The applicant shall, by sworn statement and supporting testimony, show this method of business and such information as the collector may deem necessary in order to determine the extent, if any, of such undue burden or violation. The collector shall then conduct an investigation and, after having first obtained the written approval of the city attorney, shall fix as the license tax for the applicant an amount that is reasonable and nondiscriminatory, or, if the license tax has already been paid, shall order a refund of the amount over and above the license tax so fixed. In fixing the license tax to be charged, the collector shall have the power to base the license tax upon any measure which will assure that the license tax assessed shall be uniform with that assessed on businesses of like nature so long as the amount assessed does not exceed the license tax as prescribed by Chapters 5.04 and 5.08 SMC. (Ord. 421 § 7, 1970).
5.04.080 Exemptions.
Nothing in Chapters 5.04 and 5.08 SMC shall be deemed or construed to apply to any person transacting and carrying on any business exempt by virtue of the Constitution or applicable statutes of the United States or of the state of California from the payment of such taxes as are herein prescribed.
Any person claiming an exemption pursuant to this section shall file a sworn statement with the
collector stating the facts upon which exemption is claimed, and in the absence of such statement substantiating the claim, such person shall be liable for the payment of the taxes imposed by Chapters 5.04 and 5.08 SMC.
The collector shall, upon a proper showing contained in the sworn statement, issue a license to such person claiming exemption under this section without payment to the city of the license tax required by Chapters 5.04 and 5.08 SMC.
The collector, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided herein. (Ord. 421 § 8, 1970).
5.04.090 Contents of license.
Every person required to have a license under the provisions of Chapters 5.04 and 5.08 SMC shall make application as hereinafter prescribed for the same to the collector of the city and, upon the payment of the prescribed license tax, the collector shall issue to such person a license which shall contain the following information:
A. The name of the person to whom the license is issued;
B. The business licensed;
C. The place where such business is to be transacted and carried on;
D. The date of the expiration of such license; and
E. Such other administrative information as may be necessary for the enforcement of the provisions of Chapters 5.04 and 5.08 SMC.
Whenever the tax imposed under the provisions of Chapters 5.04 and 5.08 SMC is measured by the number of vehicles, devices, machines, or other pieces of equipment used, the collector shall issue only one license; provided, that he may issue, for each tax period for which the license tax has been paid, one identification sticker, tag, plate, or symbol for each item included in the measure of the tax. (Ord. 421 § 9, 1970).
5.04.100 Application for first license.
Upon a person making application for the first license to be issued hereunder or for a newly established business, such person shall furnish to the collector a sworn statement, upon a form provided by the collector, setting forth the following information:
A. The exact nature or kind of business for which a license is requested;
B. The place where such business is to be carried on and, if the same is not to be carried on at any permanent place of business, the places of residences of the owners of same;
C. In the event that application is made for the issuance of a license to a person doing business under a fictitious name, the application shall set forth the names and places of residences of those owning the business;
D. In the event that the application is made for the issuance of a license to a corporation or a partnership, the application shall set forth the names and places of residences of the officers or partners thereof;
E. In all cases where the amount of license tax to be paid is measured by average number of persons employed, the application shall set forth such information as may be therein required and as may be necessary to determine the amount of the license tax to be paid by the applicant;
F. Any further administrative information which the collector may require to enable him to issue the type of license applied for.
If the amount of the license tax to be paid by the applicant is measured by average number of persons employed, he shall estimate the average number of persons to be employed for the period to be covered by the license to be issued. Such estimate, if accepted by the collector as reasonable, shall be used in determining the amount of license tax to be paid by the applicant; provided, however, the amount of the license tax so determined shall be tentative only, and such person shall, within 30 days after the expiration of the period for which such license was issued, furnish the collector with a sworn statement, upon a form furnished by the collector, showing the average number of persons employed during the period of such license, and the license tax for such period shall be finally ascertained and paid in the manner provided by Chapters 5.04 and 5.08 SMC for the ascertaining and paying of renewal license taxes for other businesses, after deducting from the payment found to be due, the amount paid at the time such first license was issued.
The collector shall not issue to any such person another license for the same or any other business, until such person has furnished to him the sworn statement and paid the license tax as herein required. (Ord. 421 § 10, 1970).
5.04.110 Renewal of license.
In all cases, the applicant for the renewal of a license shall submit to the collector on or before July 1st an application for renewal containing a sworn statement upon a form to be provided by the collector, setting forth such information concerning the applicant’s business during the preceding calendar year as may be required by the collector to enable him to verify the amount of the license tax to be paid by the applicant pursuant to the provisions of Chapters 5.04 and 5.08 SMC. (Ord. 421 § 11, 1970).
5.04.120 Statements and records.
No statements shall be conclusive as to the matters set forth therein, nor shall the filing of the same preclude the city from collecting by appropriate action such sum as is actually due and payable hereunder.
In the event that the collector deems it necessary, he may require that a licensee or applicant for license submit a statement by a certified public accountant attesting to such financial information as may be necessary to ascertain the amount of license fee due, or, at the option of the licensee or applicant, may authorize the collector, his deputies, or authorized employees of the city to examine his records or business transactions in order that the proper license fee may be computed. (Ord. 421 § 12, 1970).
5.04.130 Information confidential.
It is unlawful for the collector or any person having an administrative duty under the provisions of Chapters 5.04 and 5.08 SMC to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of records and equipment of any person required to obtain a license, or pay a license tax, or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or to permit any statement or application, or copy of either, or any book containing any abstract or particulars thereof to be seen or examined by any person; provided, that nothing in this section shall be construed to prevent:
A. The disclosure of records and equipment to, or the examination of records and equipment by, another city official, employee, or agent for collection of taxes for the sole purpose of administering or enforcing any provisions of Chapters 5.04 and 5.08 SMC, or collecting taxes imposed hereunder;
B. The disclosure of information and results of examination of records of particular taxpayers, or relating to particular taxpayers, to a court of law in a proceeding brought to determine the existence or amount of any license tax liability of the particular taxpayers to the city;
C. The disclosure after the filing of a written request to that effect, to the taxpayer himself, or to his successors, receivers, trustees, executors, administrators, assignees and guarantors, if directly interested, of information as to the items included in the measure of any paid tax, any unpaid tax or amounts of tax required to be collected, interest and penalties; further provided, however, that the city attorney approves each such disclosure and that the collector may refuse to make any disclosure referred to in this paragraph when, in his opinion, the public interest would suffer thereby;
D. The disclosure, by way of public meeting or otherwise, of such information as may be necessary to the city council in order to permit it to be fully advised as to the facts when a taxpayer files a claim for refund of license taxes, or submits an offer of compromise with regard to a claim asserted against him by the city for license taxes, or when acting upon any other matter;
E. The disclosure of general statistics regarding taxes collected or business done in the city. (Ord. 421 § 13, 1970).
5.04.140 Failure to file statement or corrected statement.
If any person fails to file any required statement within the time prescribed, or if after demand therefor made by the collector he fails to file a corrected statement, or if any person subject to the tax imposed by Chapters 5.04 and 5.08 SMC fails to apply for a license, the collector may determine the amount of license tax due from such person by means of such information as he may be able to obtain and shall give written notice thereof to such person. (Ord. 421 § 14, 1970).
5.04.150 Appeal.
Any person aggrieved by any decision of the collector with respect to the issuance or refusal to issue such license may appeal to the council by filing a notice of appeal with the clerk of the council within 15 days after receipt of written notice from the collector. The council shall thereupon fix a time and place for hearing such appeal. The clerk of the council shall give notice to such person of the time and place of hearing by serving it personally or by depositing it in the United States Post Office at Sonoma, California, postage prepaid, addressed to such person at his last known address. The council shall have authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of Chapters 5.04 and 5.08 SMC. (Ord. 421 § 15, 1970).
5.04.160 Additional power of collector.
In addition to all other power conferred upon him, the collector shall have the power, for good cause shown, to extend the time for filing any required sworn statement or application for a period not exceeding 30 days, and in such case to waive any penalty that would otherwise have accrued. (Ord. 421 § 16, 1970).
5.04.170 License nontransferable – Changed location and ownership.
No license issued pursuant to Chapters 5.04 and 5.08 SMC shall be transferable; provided, that where license is issued authorizing a person to transact and carry on a business at a particular place, such licensee may upon application therefor and paying a fee of $5.00 have the license amended to authorize the transacting and carrying on of such business under the license at some other location to which the business is or is to be moved; provided further, that transfer, whether by sale or otherwise, to another person under such circumstances that the real or ultimate ownership after the transfer is substantially similar to the ownership existing before the transfer shall not be prohibited by this section. For the purpose of this section, stockholders, bondholders, partnerships, or other persons holding an interest in a corporation or other entity herein defined to be a person are regarded as having the real or ultimate ownership of such corporation or other entity. (Ord. 421 § 17, 1970).
5.04.180 Duplicate license.
A duplicate license may be issued by the collector to replace any license previously issued hereunder which has been lost or destroyed upon the licensee filing statement of such fact and, at the time of filing such statement, paying to the collector a duplicate license fee of $5.00. (Ord. 421 § 18, 1970).
5.04.190 Posting and keeping licenses.
A. Any licensee transacting and carrying on business at a fixed place of business in the city shall keep the license posted in a conspicuous place upon the premises where such business is carried on.
B. Any licensee transacting and carrying on business but not operating at a fixed place of business in the city shall keep the license upon his person at all times while transacting and carrying on the business for which it is issued. (Ord. 421 § 19, 1970).
5.04.200 License tax – How and when payable.
Unless otherwise specifically provided, all annual license taxes under the provisions of Chapters 5.04 and 5.08 SMC shall be due and payable in advance on the first day of July of each year; provided, that license taxes covering new operations, commenced after the first day of January, may be prorated 50 percent for the final six months of the license period. For new businesses within the city the business license tax shall become due prior to the opening of the business but no later than five days after mailing a notice of the amount of such tax by the tax collector.
Except as otherwise herein provided, license taxes, other than annual, required hereunder shall be due and payable as follows:
A. Semiannual license taxes on the first day of July and the first day of January of each fiscal year;
B. Quarterly license taxes on the first day of July, October, January, April of each fiscal year;
C. Monthly license taxes on the first day of each and every month;
D. Weekly flat-rate license taxes on Monday of each week in advance;
E. Daily flat-rate license taxes each day in advance;
F. Other flat-rate license taxes are payable in advance on the first day of business and thereafter on the first day of any applicable period. (Ord. 86-11 § 20, 1986; Ord. 421 § 20, 1970).
5.04.210 Delinquent taxes – Penalties – Installment payment.
A. License tax must be paid for all times during which a business is carried on within the city even for periods when the business has been carried on illegally due to lack of a valid license.
B. For failure to pay a license tax when due, the collector shall add a penalty of 10 percent of the license tax on the first day of each month after the due date thereof until paid. When the last day of the month falls on a day when the City Hall is closed, payment of the license tax due may be made on the first working day of the next month without penalty. Penalties in such cases shall attach on the second working day of the succeeding month.
C. The tax collector shall have no authority to waive penalties for delinquent payment of taxes, and penalties shall be added automatically. It shall be the obligation of the business to furnish statements to the city when requested and to pay the tax when due, and failure on the part of the city to send notice of the tax due shall be no excuse for failure to pay the tax on time. It is the business owner’s responsibility to see that the business license fee is paid promptly and in due time.
D. Any license issued pursuant to Chapters 5.04 and 5.08 SMC may be suspended by the collector upon the failure of the licensee to pay any charges imposed by Chapters 5.04 and 5.08 SMC or to file reports as required by this article within 60 days after such charges or reports become delinquent. No license shall be issued, nor shall one which has been suspended or revoked be reinstated or reissued, to any person who, at the time of applying therefor, is indebted to the city for any delinquent license taxes, unless such person, with the consent of the collector, enters into a written agreement with the city, through the collector, to pay such delinquent taxes, plus five percent simple annual interest upon the unpaid balance, in monthly installments, or oftener, extending over a period of not to exceed one year.
E. In any agreement so entered into, such person shall acknowledge the obligation owed to the city and agree that, in the event of failure to make timely payment of any installment, the whole amount unpaid shall become immediately due and payable and that his current license shall be revocable by the collector upon 30 days’ notice. In the event legal action is brought by the city to enforce collection of any amount included in the agreement, such person shall pay all costs of suit incurred by the city or its assignee, including a reasonable attorney’s fee. The execution of such an agreement shall not prevent the prior accrual of penalties on unpaid balances at the rate provided in this section, but no penalties shall accrue on account of taxes included in the agreement, after the execution of the agreement, and the payment of the first installment, and during such time as such person shall not be in breach of the agreement. (Ord. 86-11 § 21, 1986; Ord. 82-4 § 6, 1982; Ord. 421 § 21, 1970).
5.04.220 Refunds of overpayments.
No refund of an overpayment of taxes imposed by Chapters 5.04 and 5.08 SMC shall be allowed in whole or in part unless a claim for refund is filed with the collector within a period of one year from the last day of the calendar month following the period for which the overpayment was made, and all such claims for refund of the amount of the overpayment must be filed with the collector on forms furnished by him and in the manner prescribed by him. Upon the filing of such a claim and when he determines that an overpayment has been made, the collector may refund the amount overpaid. (Ord. 421 § 22, 1970).
5.04.230 Rules and regulations.
The collector may make rules and regulations not inconsistent with the provisions of Chapters 5.04 and 5.08 SMC as may be necessary or desirable to aid in the enforcement of the provisions of Chapters 5.04 and 5.08 SMC. (Ord. 421 § 25, 1970).
5.04.240 Enforcement.
It shall be the duty of the collector, and he is directed to enforce each and all of the provisions of Chapters 5.04 and 5.08 SMC, and the chief of police shall render such assistance in the enforcement hereof as may from time to time be required by the collector or the city council.
The collector, in the exercise of the duties imposed upon him hereunder, and acting through his deputies or duly authorized assistants, may examine, or cause to be examined, any place of business in the city to ascertain whether the provisions of Chapters 5.04 and 5.08 SMC have been complied with.
The collector and each and all of his assistants and any police officer shall have the power and authority (upon obtaining an inspection warrant therefor) to enter, free of charge, and at any reasonable time, any place of business required to be licensed herein, and demand an exhibition of its license. Any person having such license theretofore issued, in his possession or under his control, who willfully fails to exhibit the same on demand, shall be guilty of a misdemeanor and subject to the penalties provided for by the provisions of Chapters 5.04 and 5.08 SMC. It shall be the duty of the collector and each of his assistants to cause a complaint to be filed against any and all persons found to be violating any of the provisions. (Ord. 421 § 26, 1970).
5.04.250 License tax a debt.
The amount of any license tax and penalty imposed by the provisions of Chapters 5.04 and 5.08 SMC shall be deemed a debt to the city. An action may be commenced in the name of the city in any court of competent jurisdiction for the amount of any delinquent license tax and penalties. (Ord. 421 § 27, 1970).
5.04.260 Remedies cumulative.
All remedies prescribed hereunder shall be cumulative and the use of one or more remedies by the city shall not bar the use of any other remedy for the purpose of enforcing the provisions hereof. (Ord. 421 § 28, 1970).
5.04.270 Effect of ordinances on past actions – Unexpired licenses.
Neither the adoption of Chapters 5.04 and 5.08 SMC nor their superseding of any portion of any other ordinance of the city shall in any manner be construed to affect prosecution for violation of any other ordinance committed prior to the effective date hereof, nor be construed as a waiver of any license or any penal provision applicable to any such violation, nor be construed to affect the validity of any bond or cash deposit required by any ordinance to be posted, filed, or deposited, and all rights and obligations thereunto appertaining shall continue in full force and effect.
Where a license for revenue purposes has been issued to any person by the city, and the tax paid for the business for which the license has been issued under the provisions of any ordinance heretofore enacted, and the term of such license has not expired, then the license tax prescribed for the business by Chapters 5.04 and 5.08 SMC shall have subtracted therefrom the prorated amount of the unexpired license. (Ord. 421 § 29, 1970).
5.04.280 Charitable organizations.
The provisions of Chapters 5.04 and 5.08 SMC shall not be deemed to require payment of a license fee to carry on a business wholly and exclusively for the benefit of philanthropic, social service, benevolent or patriotic purposes. (Ord. 421 § 32, 1970).
5.04.290 Partial refund of annual tax.
Effective July 1, 1975, any person who has paid an annual business license tax in advance and who terminates the subject business during the first half of the fiscal year for which the tax is paid may have a refund of one-half the annual tax on condition that application is made to the city clerk within 30 days after the date on which the business is terminated. (Ord. 75-7 § 1, 1975).