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HomeMy WebLinkAbout18 CODE AMEND 03-002 04-07-03AGENDA REPORT Agenda Item Reviewed: City Manager Finance Director 18 MEETING DATE: APRIL 7, 2003 TO: WILLIAM HUSTON, CITY MANAGER FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: CODE AMENDMENT 03-002 - BUSINESS LICENSE TAX ORDINANCE SUMMARY Code Amendment 03-002 is an amendment to Chapter 5 of Article 2 of the Tustin City Code relating to the City's business license tax. The proposed amendment would establish a one-time business license application processing fee, give the Director of Community Development the authority to enforce the City's business license tax provisions, and make other minor Code changes. Applicant: City of Tustin Community Development Department RECOMMENDATION That the City Council introduce and have the first reading of Ordinance No. 1270, approving Code Amendment 03-002, and set for second reading at the Council's next scheduled meeting. FISCAL IMPACT Code Amendment 03-002 is a City-initiated project. The proposed amendment would amend the City's business license tax provisions. Changes to the annual business license tax are not proPosed. However, the ordinance would establish a one-time business license application processing fee of $40.00 for all new business that submit applications after the effective date of Ordinance No. 1270. Based on an average of 1,000 new business license applications per year, the processing fee would generate $40,000 annually for the City's General Fund. The processing fee would offset the staff costs associated with the processing of the business license application. There are no indirect fiscal impacts associated with the proposed code amendment. City Council Report Code Amendment 03-002 April 7, 2003 Page 2 ENVIRONMENTAL The proposed code amendment is not considered a "project" pursuant to Section 15378 of the California Environmental Quality Act because it does not have the potential for resulting in physical changes in the environment, directly or ultimately. DISCUSSION Chapter 5 of Article 2 of the Tustin City Code contains the City's business license tax provisions. These existing provisions were adopted incrementally beginning in 1966 and need to be updated to be consistent with State law and the City's operating procedures. The City's annual business license tax, which will remain unchanged, was last increased in 1970. In coordination with the City Attorney, the Community Development Department has developed the updated provisions that amend Chapter 5 of Article 2. The proposed updated business license tax provisions are included in draft Ordinance No. 1270. Proposed Provisions The proposed ordinance would make two procedural/policy changes related to the issuance of business licenses. These changes are noted below. One-Time Business License Application Processing Fee Ordinance No. 1270 would establish a one-time business license application processing fee of $40.00 that would apply to all new businesses submitting business license applications after the effective date of Ordinance No. 1270. The processing of a business license application involves the following steps: 1. Reviewing the application for completeness 2. Requesting the submittal of incomplete information, when applicable 3. Routing the application to other departments for review 4. Review by Building Division, Water Division, and Fire Authority representatives 5. Zoning Clearance by the Planning Division 6. Inputting information from the application into the Business License database 7. Generating and mailing the tax certificate City Council Report Code Amendment 03-002 April 7, 2003 Page 3 Staff obtained an informal survey of 42 California cities that collect a one-time processing fee, and the average fee was about $45. The average fee for the 13 Orange County cities in the survey was $33. Eight of the thirteen Orange County cities also charge an annual renewal processing fee, and the average cost for that fee was $18. An annual renewal processing fee is not included in Ordinance No. 1270. Role of the Director and City Council Under the City's existing business license tax provisions, the Finance Director is responsible for the City's business license tax provisions. However, the City's business license function is staffed by the Community Development Department. Therefore, Ordinance No. 1270 gives the Community Development Director the authority over the business license tax provisions. The City Council would remain as the appeal body for any appealed decisions of the Community Development Director with respect to the issuance or refusal to issue a business license. Applicability All businesses operating in the City would be required to comply with the new business license tax provisions regardless of when they began operating in Tustin. However, no changes to the annual business license tax are proposed so existing businesses would not be impacted fiscally. New businesses that submit business license applications after the effective date of Ordinance No. 1270 would be required to pay the one-time business license application processing fee of $40.00. FINDINGS Findings to support the proposed amendments are as follows: The code amendment would protect the public health, safety, and welfare of the City of Tustin and assure a safe, healthy, and aesthetically pleasing community for residents and businesses in that the proposed revisions will provide for the establishment of a one-time processing fee that will offset processing costs and enable more business license tax revenue to be used to defray the cost of City services, including law enforcement. 2. The proposed amendment would make the City's business license tax provisions consistent with State law and the City's operating procedures. City Council Report Code Amendment 03-002 April 7, 2003 Page 4 Scott Reekstin Senior Planner ccreport\CA 03-00xBusiness License Tax Ordinance Attachments: Ordinance No. 1270 Elizabeth A. Binsack Community Development Director ORDINANCE NO. 1270 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, AMENDING CHAPTER 5 OF ARTICLE 2 OF THE TUSTIN CITY CODE RELATING TO THE BUSINESS LICENSE TAX. The City Council of the City of Tustin does hereby ordain as follows: Section I. The City Council finds and determines as follows: A, That an amendment to Chapter 5 of Article 2 of the Tustin City Code related to the business license tax has been prepared to identify the Director of Community Development or his or her designee as the person responsible for the provisions of the Chapter; to provide for the establishment of a business license application processing fee; and to make other minor changes. B, That the proposed amendment is not a "project" pursuant to the provisions of the California Environmental Quality Act (CEQA). C, That the proposed amended business license tax provisions are reasonably necessary to protect the health, safety, and welfare of the citizens of the City of Tustin. Do That the proposed amendments are consistent with the Tustin General Plan in that they comply with Goal 4 to assure a safe, healthy, and aesthetically pleasing community for residents and businesses. E, That amended provisions for the business license tax are necessary to make the City's provisions consistent with State law and the City's operating procedures. Section II. Chapter 5 of Article 2 of the Tustin City Code is hereby repealed in its entirety and new Chapter 5 of Article 2 of the Tustin City Code is hereby added to read as follows: Ordinance No. 1270 Page 2 CHAPTER 5 BUSINESS LICENSE TAX CHAPTER INDEX PART 1 GENERAL PROVISIONS 2511 2512 2513 2514 2515 2516 2517 INTRODUCTION LICENSE REQUIRED EXEMPTIONS FROM TAX PAYMENT STATEMENTS UNLAWFUL BUSINESS NOT AUTHORIZED ENFORCEMENT OF CHAPTER; RIGHT OF ENTRY REMEDIES DEEMED CUMULATIVE PART 2 FEES 2521 2522 2523 REQUIREMENTS TAX BASED ON GROSS RECEIPTS TAX SCHEDULES Ordinance No. 1270 Page 3 CHAPTER 5 BUSINESS LICENSE TAX PART 1 GENERAL PROVISIONS 2511 INTRODUCTION a Definitions Business. Professions, trades, and occupations, and all and every kind of calling, whether or not for profit. Director. designee. The Director of the Community Development Department or his or her Gross receipts. The total amount of the sale price of all sales in Tustin and the total amount charged or received for the performance of any act or service in Tustin of whatever nature it may be for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares, or merchandise. Included in "gross receipts" shall be all receipts, cash, credits, and property of any kind or nature without any deduction therefrom on account of the cost of the property sold, the cost of the materials used, labor or service costs, interest paid or payable or losses, or other expenses whatsoever. Excluded from "gross receipts" shall be anything exempted by State law, cash discounts allowed and taken on sales; credit allowed on property sold; and tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser; such part of the sale price of property returned by purchasers upon recision of the contract of sale as is refunded either in cash or by credit; amounts collected for others where the business is acting as an agent or trustee to the extent that such amounts are paid to those for whom collected. Person. An individual, partnership, or corporation. b Chapter for Revenue Purposes This Chapter is enacted solely to raise revenue for municipal purposes and is not intended for the purpose of regulation. c Not Substitute for Other Licensing Measures Persons required to pay a license tax for transacting and carrying on any business under this Chapter shall not be relieved from the payment of any license tax for the privilege of Ordinance No. 1270 Page 4 doing such business as required by any other ordinance of the City and shall remain subject to the regulatory provisions of other ordinances. d Effect on Prior Obligations and Actions Neither the adoption of this Chapter nor its 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. 2512 LICENSE REQUIRED a Business License Application Processing Fee Applicants for City business licenses required by this Article shall obtain an application form from the Director and shall pay any applicable business license application processing fee. The fee shall offset the cost of processing the application. b License Tax Imposed There are hereby imposed upon the businesses specified in this Chapter license taxes in the amounts hereinafter prescribed. It shall be unlawful for any person to transact and carry on any business in the City without first having procured a license from the City to do so, or without complying with any and all applicable provisions of this Chapter. Vendors, contractors, and similar businesses that provide work or services to the City under a City contract or agreement shall also comply with any and all applicable provisions of this Chapter. c Certain Businesses Exempted Subsection (b) 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 of America or of the State. Persons not required to obtain a license prior to doing business within the City because of conflict with applicable statutes of the United States of America or of the State shall be liable for the payment of the tax imposed by this Chapter. There shall be exempt from the provisions of this Chapter the business of any express corporation, freight forwarder, motor transportation broker, or person or corporation owning or operating motor vehicles in the transportation of property for hire upon the public highways, under the jurisdiction of the Public Utilities Commission of the State of California, which consists of the transportation of property and every service performed in Ordinance No. 1270 Page 5 connection therewith, other than where the origin point and the destination point of such transported property are within the boundaries of the City of Tustin. Services not directly related to the transportation of property, such as gasoline delivery, retrieval of keys from locked vehicles, and repair of broken windows shall not be exempt from the provisions of this Chapter. The following are exempt from the requirement to obtain a business license: (1) Small family day care homes. (2) Residential Community Care Facilities serving six or fewer individuals. d Branch Establishments A separate license must be obtained for each branch establishment or location of the business transacted and carried on and for each 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 that warehouses and distributing plants used in connection with and incidental to a business located in the City and licensed under the provisions of this Chapter shall not be deemed to be separate places of business or branch establishments. e Issuance of License Every person required to have a license under the provisions of this Chapter shall make application to the Director in such form as the Director shall designate, and upon payment of any applicable business license application processing fee and a prescribed license tax, the Director shall issue to such person a license which shall contain: (1) the name of the person to whom the license is issued, (2) the business licensed, (3) the place where such business is to be transacted and carried on, (4) the date of expiration of such license, and (5) such other information as the Director may deem reasonable or necessary for the enforcement of the provisions of this Chapter. All information specified to be set forth on any application form prescribed by the Director shall be submitted completely and accurately and the license subsequently issued shall be based upon the information submitted. Any license shall be deemed based upon the application on file, and if the information is incomplete or inaccurate, the license shall be deemed invalid. If information submitted in an application subsequently becomes incomplete or inaccurate by reason of a change in circumstances, the license shall thereafter be deemed invalid. Upon the Director's learning of any inaccuracy or incompleteness, notice shall be given forthwith to the licensee, at the address shown on the license, that the license is invalid. If the address shown on the license is known to be inaccurate due to a change in circumstances, notice may be given to the licensee at any address deemed appropriate by the Director. Ordinance No. 1270 Page 6 f Investigation of Application The Director shall make such investigations and inspections required for particular businesses as may be necessary and may designate investigations and inspections to be made by other departments in accordance with the following general guides: (1) The Building Division shall review applications involving a change of occupancy of any portion of a building and in such other circumstances as may involve questions of compliance with building, electrical, plumbing, or other construction codes. (2) The Orange County Fire Authority shall review applications which involve businesses or premises which may constitute substantial fire risks, hazardous materials, or any risks of serious danger to human life or property. (3) The Police Department shall review applications for businesses which may affect public morals, involve substantial danger of fraud or deception, pose unusual police problems, may involve the handling or receiving of stolen goods to a higher degree than usual, tend to affect traffic control, involve public assembly, include police-type functions, or otherwise substantially affect public safety. If the Police Department, in the person of the Chief of Police or his or her designated representative, determines that it is reasonable or necessary, it may require fingerprinting and photographing of a proposed licensee, and any or all of its officers, partners, owners, managers, or employees. (4) The Orange County Health Department shall review applications for businesses which involve the preparation, storage or sale of food or drink, except in sealed containers. (5) The Water Operations Division of the City's Public Works Department shall review applications for businesses which involve the use of water in manufacturing or processing. (6) Other departments, agencies, or officers shall review applications when the proposed business poses special problems dealt with by such department, agency, or officer. g Appeal from Decision of the Director Any person may appeal to the City Council any decision of the Director with respect to the issuance or refusal to issue such license by filing a notice of appeal with the Director. The Council shall thereupon fix a time and place for hearing such appeal. The Director 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 Tustin, California, postage prepaid, addressed to such person at his or her last known address. The Council shall have the authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this Chapter. Ordinance No. 1270 Page 7 h Licenses Not Transferable No license issued pursuant to this Chapter shall be transferable, provided that where a license is issued authorizing a person to transact and carry on a business at a particular place, such licensee may, upon application therefor, have the license amended to authorize the transacting and carrying on of such business under such license at some other location to which the business is or is to be moved. Duplicate Licenses A duplicate license may be issued by the Director to replace any license previously issued hereunder which has been lost or destroyed, upon the licensee filing a statement of such fact. j Posting and Display of License All licenses must be kept and posted in the following manner: (1) Any licensee transacting and carrying on business at a fixed place of business in the City shall display the license in a conspicuous place upon the premises where such business is carried on. (2) Any licensee transacting and carrying on business, but not operated at a fixed place of business in the City, shall keep the license upon his or her person at all times while transacting and carrying on such business. (3) All vehicles licensed by the City shall have a sticker issued by the City placed in a conspicuous place upon such vehicle at all times. (4) All vending machines licensed by the City shall have a current sticker issued by the City placed upon such vending machine at all times in a conspicuous place. Any and all machines not having such required current sticker shall be subject to impoundment by the Chief of Police. 2513 EXEMPTIONS FROM TAX PAYMENT a Generally Nothing in t Chapter 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 of America or of the State, from the amount of such taxes as are herein prescribed. None of the license taxes provided for by this Chapter shall be so applied as to occasion an undue burden upon interstate commerce. In any case where a license tax is believed by a licensee or applicant for a license to place an undue burden upon such commerce, he may apply to the Director for an adjustment of the tax so that it shall not be discriminatory or unreasonable as to such commerce. Such application may be made before, at, or within six (6) months after payment of the prescribed license tax. The Ordinance No. 1270 Page 8 applicant shall, by affidavit and supporting testimony, show his or her method of business and the gross volume or estimated gross volume of business, and such other information as the Director may deem necessary in order to determine the extent, if any, of such undue burden on such commerce. The Director shall then conduct an investigation, and, after first having consulted with the City Attorney, shall affix 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 Director shall have the power to base the license tax upon a percentage of gross receipts, or any other measure which will assure that the license assessed will be uniform with that assessed on business of like nature, so long as the amount assessed does not exceed the license tax as prescribed by this chapter. Should the Director determine the gross receipts measure of license tax to be the proper basis, the Director may require the applicant to submit, either at the time of termination of applicant's business in the City or at the end of each three-month period, a sworn statement of the gross receipts and pay the amount of license tax therefrom, provided that no additional license tax, during any one calendar year, shall be required after licensee shall have paid an amount equal to the annual license tax, as prescribed in this Chapter. b Organizations and Persons Exempted A license shall be obtained without payment of the usual fee under the provisions of this section by the following: (1) Any institution or organization which is conducted, managed, or carried on wholly for the benefit of charitable, religious, eleemosynary, or benevolent purposes and from which no profit is derived, either directly or indirectly, subject to compliance with the provisions of this chapter. (2) Any nonprofit organization which engages in fundraising ventures, solicitations, carnivals, fairs, or other events, when all of the net proceeds from the fundraising venture, solicitation, carnival, fair, or other event is solely utilized for a charitable or eleemosynary purpose, and no direct or indirect monetary profit or benefit is derived by any other person, institution, or organization. However, any person or entity desiring to solicit donations for a charitable purpose must first comply with the requirements set forth in section 2513f of this chapter. In no event shall a solicitation or event be engaged in within the City except in conformance with the provisions of all applicable ordinances of the City regulating the particular event. If a portion of the proceeds of the charitable or eleemosynary fundraising venture, solicitation, carnival, fair, or other event are to be received by or are for the direct or indirect benefit of any other person, institution, or organization, then the fee which would ordinarily be charged for such venture, if it were wholly a profit venture, shall be reduced in proportion to the percentage of the proceeds which are to be received by any such person, institution, or organization. Ordinance No. 1270 Page 9 c Procedure for Obtaining Fee-Exempt License Businesses that are exempt from the payment of the license tax are required to obtain a fee-exempt business license. (1) A fee-exempt license may be issued by the Director to any person when the application for issuance of a business license is accompanied by a statement of facts that is verified or certified under penalty of perjury and clearly shows that the applicant meets the requirements of one or more of the classifications set forth in section 2513b. (2) The burden of proof of entitlement to exemption shall in all cases be upon the applicant to establish the facts showing entitlement to a fee-exempt license. The Director may prescribe the form or forms of statements of fact required and may require the applicant to present such other proof of entitlement as may be reasonable in the particular case. (Ord. No. 328, Sec. 13) d Appeal from Denial of Fee-Exempt License Any person denied a fee-exempt license or endorsement for a particular solicitation by the Director, after compliance with the procedural requirements thereof and believing himself or herself to be entitled to receive fee-exemption or solicitation endorsement on the basis of the information filed with the Director, may appeal to the City Council for its order directing the Director to grant such exemption or solicitation endorsement. Appeal shall be in writing, filed in triplicate with the Director, and shall clearly and concisely state: (1) Subdivision of section 2513b entitling such applicant to such exemptions or solicitation endorsement. (2) The facts relied upon to establish that applicant meets the requirements and conditions of such subdivision. (3) That the applicant has disclosed all such facts to the Director. (4) That the applicant has filed a duly executed statement of facts as required and such other proof of entitlement as the Director has requested. The City Council may decide such appeal and shall deny the same unless it finds that the written appeal complies with the requirements of this section, that the applicant has furnished to the Director all of the documents and data reasonably required by him or her, and that the applicant, upon the record, is entitled to exemption from the usual fees or to a solicitation endorsement. Ordinance No. 1270 Page 10 Limitations on Fee-Exempt Licenses (1) Every license issued without payment of the usual fee shall be stamped "Exempt" upon its face. (2) Any license issued as fee-exempt may be revoked by the Director in the event it is determined by the Director that the applicant is not entitled to exemption, except that no such license shall be revoked without forty-eight (48) hours notice to the licensee. If the license is revoked, the licensee shall be required to surrender the license to the Director within forty-eight (48) hours of receiving the notice of revocation from the Director. (3) Any license issued as fee-exempt shall be void and shall afford no defense in any civil or criminal prosecution if any material statement contained in the application, statement of facts, or any other document or representation made to the Director in claiming exemption is false or fraudulent. (4) No fee-exempt license may be transferred. (5) Upon any uncertainty, for lack of information or otherwise, as to the entitlement of any organization or activity to a fee-exempt license, the Director may require the filing of a verified report of all funds received and disbursed by any licensee. Upon demand such licensee shall file its report in the form and detail as required by the Director within fifteen (15) days after demand. Charitable Solicitation Permits (1) No person shall solicit donations for charitable purposes within the City without first obtaining a permit from the Director for the particular solicitation and for the stated purposes and period provided therein. (2) A completed application for a permit to solicit donations for charitable purposes shall be filed with the Director prior to soliciting donations in the City and a permit issued for such solicitation. The application shall contain all of the following information: (a) The name and address of the person or organization; (b) The State Charitable Trust number;* (c) Name, address, telephone number, and birth date, along with any aliases used, of the individual in charge of the solicitation; (d) The purpose of the solicitation; (e) The type of donations to be solicited; (f) If the solicitation is for a special event, the nature of the event and the time and place of the event; Ordinance No. 1270 Page 11 (g) The anticipated beginning and ending dates of the solicitation; (h) Whether the solicitation is on behalf of an organization other than the applicant and if so, the name, address, and business telephone number of the other organization; (i) The method of solicitation to be utilized; (j) If paid solicitors are used, the total estimated cost of fundraising expenses; (k) The estimated percentage of the amount of donations which will be used for charitable purposes; (1) The names, residential addresses, and day-time telephone numbers of all officers and directors of the applicant; (m) The names, business addresses, and day-time telephone numbers of all agents, volunteers, solicitors, promoters, and managers to be involved with the solicitation; In addition, the applicant shall provide the following documents, as they apply: (a) The articles of incorporation and bylaws of corporations and bylaws of unincorporated entities; (b) The Internal Revenue Service Notice of Tax-Exempt Status; (c) The notice from the California Attorney General Registrar of Charitable Trusts confirming registration in good standing or in the case of a religious corporation sole, a Certificate of Status of Domestic Corporation from the Secretary of the State; (d) A copy of the most recent periodic report filed with the Attorney General;* (e) A copy of the solicitation or sale for charitable purposes card which must be exhibited to prospective donors pursuant to Business and Professions Code Section 17510.3;* and (f) If the solicitation is for the benefit of an organization other than the applicant, a letter from such organization authorizing applicant's solicitation. Upon submittal of the application, the Director shall verify within five (5) working days as to whether the application is complete. If complete, a permit will be issued within five (5) Ordinance No. 1270 Page 12 working days, or the City will apply to the court for an order enjoining the applicant's solicitation. If the Director determines that the application is incomplete, the applicant shall be notified within five (5) working days of such determination, along with the specific reasons therefor. The permit is valid for six (6) months. *Not applicable to a corporation solely organized for religious purposes. 2514 STATEMENTS a Not Conclusive No statement shall be conclusive as to the matters set forth therein, nor shall the filing thereof preclude the City from collecting, by appropriate action, such sum as is actually due and payable hereunder. b Examination by Experts The Director, with the approval of the City Council, is hereby authorized and empowered to retain from time to time accountant or accountants licensed by the State of California to examine, audit, and inspect the books and records of any licensee or applicant for a license to ascertain and verify that the matters in any statement or statements are correct. Upon any such verification by accountant or accountants, no information shall be given to the Director by such accountant or accountants other than the statement is correct or incorrect. All licensees, applicants for licenses, and persons engaged in business in the City are hereby required to permit examination of their books and records for the purposes aforesaid. The information furnished or secured pursuant to this section or section 2512d shall be confidential. Any unauthorized disclosure or use of such information by any officer or employee of the City or by any accountant or accountants retained as provided herein shall constitute a misdemeanor, and such person shall be subject to the penalty provisions of section 1121, in addition to any other penalties provided by law. c Failure to File; Hearing Before City Council If any person fails to file any required statement within the time prescribed, or if at the demand therefor made by the Director the person fails to file a corrected statement, the Director may determine the amount of license tax due from such person by means of such information as he may be able to obtain. If such a determination is made, the Director shall give a notice of the amount so assessed by serving it personally or depositing it, by certified mail, in the United States Post Office in Tustin, California, addressed to the person so assessed at his or her last-known address. Such person may, within fifteen (15) days after the mailing or serving Ordinance No. 1270 Page 13 of such notice, make application in writing to the Director for a hearing on the amount of the license tax. If such application is made, the Director shall cause the matter to be set for hearing within fifteen (15) days before the City Council. The Director shall give at least ten (10) days notice to such person of the time and place of hearing in the manner prescribed for service of notices of assessment. The City Council shall consider all evidence produced and shall make findings thereon, which shall be final. Notice of such findings shall be served upon the applicant in the manner prescribed above for serving notices of assessment. d Extension of Time for Filing In addition to all other authority conferred upon him or her, the Director shall have the authority, for good cause shown, to extend the time for filing any required sworn statement for not exceeding thirty (30) days, and in such cases to waive any penalty that would otherwise have accrued and shall have the further authority, with the consent of the City Council, to compromise any claim as to the amount of license tax due. 2515 UNLAWFUL BUSINESS NOT AUTHORIZED No license issued under the provisions of this chapter or the payment of any tax required under the provisions of this chapter shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in any illegal manner. Licenses issued to unlawful businesses shall be deemed invalid and shall be surrendered to the Director within forty-eight (48) hours of receiving notice from the Director. 2516 ENFORCEMENT OF CHAPTER; RIGHT OF ENTRY It shall be the duty of the Director to enforce each and all of the provisions of this chapter, and the Chief of Police shall render such assistance in the enforcement hereof as may from time to time be required by the Director or the City Council. The Director, in the exercise of the duties imposed upon him or her hereunder, and acting through his or her deputies or duly authorized assistants, shall examine or cause to be examined all places of business in the City to ascertain whether the provisions of this chapter have been complied with. The Director and other City staff shall have the power and authority 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 certificate. Any person having such license certificate theretofore issued in his or her possession or under his or her control who willfully fails to exhibit the same on demand shall be guilty of a misdemeanor and subject to the penalties provided for by section 1121. It shall be the duty of the Director to cause a complaint to be filed against any and all persons found to be violating any of such provisions. 2517 REMEDIES DEEMED CUMULATIVE Ordinance No. 1270 Page 14 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 of this chapter. Ordinance No. 1270 Page 15 PART 2 FEES 2521 REQUIREMENTS a Generally Every person who engages in business within the City shall pay a license tax upon business done within the City annually, unless otherwise provided in this chapter, in the amounts and at the rates hereinafter designated. Every person who engages in business within the City and submits a business license application after the effective date of Ordinance No. 1270 shall pay a one-time business license application processing fee of $40.00 to offset the costs associated with the processing of the application. b Unexpired Licenses Where a license for revenue purposes has been issued to any business by the City, the tax paid therefor under the provisions of any ordinance heretofor enacted, and the terms of such license have not expired, then the license tax prescribed by this chapter for such business shall not be required to be paid until the expiration of the term of such unexpired license. c Penalties for Failure to Pay When Due For failure to pay the license tax when due, the Director shall add a penalty of twenty-five percent (25%) of such license tax on the last day of each month after the due date thereof, provided that the amount of such penalty to be added shall in no event exceed one hundred percent (100%) of the amount of the license tax due. d When Payable Unless otherwise specifically provided, all annual license taxes under the provisions of this chapter shall be due and payable in advance on the first day of January of each year, provided that license taxes covering new operations commenced after the first day of January may be prorated for the balance of the license period, by quarters. Except as otherwise herein provided, license taxes required hereunder shall be due and payable as follows: (1) Annual: Due and payable on the first day of January of each year; delinquent on February 1st of the same year. (2) Daily flat-rate license taxes: Each day, in advance. (3) New businesses: Due immediately prior to commencement of business and delinquent on the last day of the month in which business commenced. Ordinance No. 1270 Page 16 e Deemed Debt Owed City The amount of any license tax and penalty imposed by the provisions of this chapter 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 penalties. 2522 TAX BASED ON GROSS RECEIPTS a Original License Upon a person making application for the first license to be issued hereunder or for a newly established business, in all cases where the amount of the license tax is to be measured by gross receipts, such person if engaged in business or registering in the first quarter of the calendar year shall pay the amount based on anticipated annual gross receipts. For succeeding quarters, the payment shall be reduced by one-fourth if made after March 31st, by one-half if made after June 30th, and by three-fourths if made after September 30th. The Director shall not issue to any person another license for the same or any other business until such person has submitted a complete application to the Director and paid the license tax required by this Chapter. Determination of Tax The license fee for any business whose license fee is determined under Sections 2523a, b, and c shall be based upon the gross receipts of such business for the preceding year, except that in the case of a new business, the fee shall be based upon an estimate of the gross receipts which the business will have for the year for which the license is granted. The amount of the actual gross receipts used to determine the license tax shall be consistent with the amount reported to the State and the Federal government for tax purposes. All gross receipts and license taxes shall be prorated on the basis of the quarter of the year in which they are initially paid. For businesses paying the license tax prior to March 31st, the full amount shall be paid based upon estimated gross receipts for the year. For license taxes paid subsequently, the amount shall be three-fourths of the full amount if paid after March 31st, but prior to June 30th; one-half of the full amount if paid after June 30th, but prior to September 30th; one-fourth of the full amount if paid after September 30th. Persons making application for any such business shall furnish to the Director a verified written statement upon the form provided by the Director, setting forth such information as may be therein referred to and required and as may be necessary to determine the amount of license tax to be paid by the applicant, which estimate, if accepted by the Director as reasonable, shall be used to determine the amount of license tax to be paid. Ordinance No. 1270 Page 17 2523 TAX SCHEDULES a Retail and Wholesale Sales Generally Retail and wholesale sales businesses, and all other businesses not otherwise specified: 0 to 999.99 Excluding all activities conducted wholly within the limitations and definitions of "Home Occupation" as provided in Ordinance No. 330 of the City of Tustin. $25.00 1,000 to 25,000 25,001 to 100,000 100,001 to 200,000 200,001 to 300,000 300,001 to 600,000 600,001 and over 25.00 4O.OO 50.00 60.00 80.00 100.00 b Manufacturing Any business consisting primarily of manufacturing, packing, processing, canning, or fabricating goods or produce: 0 to 999.99 Excluding all activities conducted wholly within the limitations and definitions of "Home Occupation" as provided in Ordinance No. 330 of the City of Tustin. $ 25.00 1,000 to 25,000 25,001 to 100,000 100,001 to 200,000 200,001 to 300,000 300,001 to 600,000 600,001 and over 25.00 40.00 50.00 60.00 80.00 100.00 Services Generally Any profession, trade, or occupation, not including retail or wholesale sales or manufacturing, and not otherwise specifically named or described, and involving principally a service rather than a sale or the furnishing or rendering of a facility or thing: 0 to 999.99 Excluding all activities conducted wholly within the limitations and definitions of "Home Occupation" as provided in Ordinance No. 330 of the City of Tustin. $ 25.00 Ordinance No. 1270 Page 18 1,000 to 25,000 25,001 to 100,000 100,001 to 200,000 200,001 to 300,000 300,001 to 600,000 600,001 and over 25.00 40.00 50.00 60.00 80.00 100.00 d Enumerated Businesses The taxes for certain particular business shall be as follows: Ambulance ............................................................................................................. $ 25.00 per vehicle Amusement facilities and devices: (1) Parks and facilities, card rooms, bowling alleys, skiball, batball, handball, shuffleboard, pool-for each facility ................................................................. 25.00 Plus, for each table, court, alley, ride, or device, in excess of one ..................... 5.00 (2) Billiards, similar facilities, amusement parks of all kinds, mechanical devices of any kind-for each facility ....................................................................................... 25.00 Plus, for each table, court, alley, ride, or device, in excess of one ..................... 5.00 (3) Rinks, ranges, and courses: Ice or roller skating rinks ................................................................................. 50.00 Shooting Gallery ............................................................................................. 50.00 Golf Course .................................................................................................... 50.00 Miniature Golf Course .................................................................................... 50.00 Archery Range ................................................................................................ 50.00 Golf Driving Range ......................................................................................... 50.00 Riding Academy or Stable .............................................................................. 50.00 Go-Cart, Bicycle, or similar courses ............................................................... 50.00 Similar Facilities .............................................................................................. 50.00 Ordinance No. 1270 Page 19 (4) Places of assembly: Cafe with Dancing ........................................................................................ 100.00 Nightclub ....................................................................................................... 100.00 Dance hall (admission charged) ................................................................... 100.00 Public hall for rent ......................................................................................... 100.00 (5) Coin-operated Machines Coin-operated machines shall be taxed upon the gross receipts received from said machines in accordance with the schedule set forth in Section 2523. Licensees shall, with the business license application and each renewal thereof, file with the Director a list of each location within the City at which licensee has machines, showing the number of machines at each such location. Within fifteen (15) days after any change in location or in the number of machines at such location, the licensee shall file an amended and current list. (6) Entertainment: Circus or carnival (all devices, shows, sales, and facilities included)--for each consecutive series of days ........................................................................... 100.00 Plus ........................................................................................................ 25.00 each day in excess of one Motorcycle or car show ..................................................................... 35.00 per day Parade advertising any circus or carnival where business is located outside the City .................................................................................. 25.00 per day Traveling lecture or professional theatrical performance of any kind, except in a licensed theater ........................................................ 25.00 Plus ........................................................................................................ 12.50 per day in excess of one Trained animal show, per day ........................................................................ 35.00 Circus, carnival, lecture, parade, or other theatrical performance of any kind if determined by the City Clerk to be primarily educational, non-professional, or sponsored by a school P.T.A.--type group primarily for children and primarily non-profit, per day ........................... 2.00 Ordinance No. 1270 Page 20 Sports arena, hall or stadium: Under 500 seats, per exhibition ........................................................................... 30.00 500 or more seats, per exhibition ........................................................................ 60.00 Auction sales, house, or yard .................................................................................. 200.00 An auction of goods conducted by an individual who personally owns such goods and who did not acquire such goods for resale, house, or yard, per day .............................................................................................. 25.00 or per year ................................................................................................................ 200.00 Baths, steam rooms, pools, gymnasiums, and health clubs .................................. $ 35.00 Bill posting (except billboards), per day ....................................................................... 5.00 Building Construction, general contractors ............................................................... 80.00 Building construction, sub-contractors ...................................................................... 40.00 Day nursery or child care center ............................................................................... 25.00 Hand bill or sample distribution ................................................................................. 50.00 Homes for the aged and rest homes: 1 to 4 guests ...................................................................................................... 15.00 5 to 9 guests ....................................................................................................... 25.00 10 or more guests ............................................................................................. 35.00 House movers ........................................................................................................... 40.00 Newspapers and magazine sellers or distributors selling, distributing, or delivering materials printed or published outside of the City to local dealers or to any other persons, by means of agents or employees (excluding newsstands and magazine stands operated by a licensee including such activity in gross receipts tax rate) ...................................................... 25.00 Lawn care and gardeners (if not State-licensed contractors) .................................... 25.00 Outdoor advertising (billboards with space available), per sign per year ........................................................................................................ 50.00 Outdoor advertising (not including billboards with space available), per year ...................................................................................................................... 40.00 Ordinance No. 1270 Page 21 Outdoor advertising (benches only) First ten ............................................................................................................. 50.00 Over ten, each ..................................................................................................... 5.00 Pawn Broker ............................................................................................................ 100.00 Private patrolman, detective agency, and §ecurity patrol ........................................... 25.00 Rental of real property, residential, commercial, or industrial: Fewer than 4 rental units in the City ............................................................... No tax 4 or more rental units in the City ....................................................................... 25.00 Plus for each unit in excess of 4 ......................................................................... 1.00 Rooming house or boarding house: Fewer than 4 roomers or boarders ................................................................. No tax 4 to 9 roomers or boarders ............................................................................... 25.00 10 or more roomers or boarders ....................................................................... 35.00 Route sales or services (no established place of business in the City; occasional solicitation only), each vehicle ......................................................... 25.00 Searchlight/beacon advertising, each device per day .................................................. 2.00 Or annually ........................................................................................................ 25.00 Sign building, installation, and construction companies ............................................ 40.00 Solicitors-Solicitors, registered agents (persons having non-employed agents as itinerant or transient merchants, vendors, peddlers, hawkers, hucksters, canvassers, solicitors, and the like), itinerant or transient merchant or vendor, peddler, hawker, huckster, canvasser, solicitor, photographer, or book agent, or like business (employees of licensees excluded), per day per person .................................................................................................... 10.00 Transfer, moving, or any other business involving the movement of anything whatsoever, excepting human passengers, by means of vehicles, not included in any other specific category, minimum ........................... 25.00 Plus for each vehicle stored, garaged, or principally used in the City ................ 5.00 Trailer parks and mobile home parks, for the first 4 spaces ..................................... 25.00 Each space in excess of 4 .................................................................................. 1.00 e Vehicles Every person not having a fixed place of business within the City who delivers goods, wares, or merchandise of any kind by vehicle or who provides any service by the use of vehicles in the City, shall pay a license tax of twenty-five dollars Ordinance No. 1270 Page 22 ($25.00) per vehicle, provided that any such person may elect to pay a license tax measured by gross receipts from business done within the City, pursuant to the preceding provisions of this chapter. f Fortunetelling Every person engaging in the business of fortunetelling, as defined by Section 3141 of the Tustin City Code, shall pay an annual license tax of one hundred dollars ($100.00). Section III. If any section, subsection, sentence, clause, phrase, or portion of this ordinance is for any reason determined to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Tustin hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular meeting on the 21 st day of April, 2003. TRACY WILLS WORLEY Mayor PAMELA STOKER City Clerk Ordinance No. 1270 Page 23 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) SS CERTIFICATION FOR ORDINANCE NO. 1270 PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is 5; that the above and foregoing Ordinance No. 1270 was duly and regularly introduced at a regular meeting of the Tustin City Council, held on the 7th day of April, 2003 and was given its second reading, passed, and adopted at a regular meeting of the City Council held on the 21st day of April, 2003 by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER City Clerk