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HomeMy WebLinkAboutORD FOR INTRODUCTION 11-05-90DATE: TO: FROM: SUBJECT: ?a �a NOVEMBER 51 1990 ORDIT FS FOR INTRODUCTION NO. 1 11 -5 -- WILLIAM A. HUSTON, CITY MANAGER COMMUNITY DEVELOPMENT DEPARTMENT BUSINESS LICENSE TAX AMNESTY PROGRAM RECOMMENDATION: Inter - Com That Ordinance No. 1053, declaring a Business License Tax Amnesty Program during the months of December 1990, January and February 1991 have first reading by title only and introduction. BACKGROUND: The Business License Division has determined through the use of the City's business license computer program, Orange County Fire Department inspection lists, and consumer and credit verifications that there exists numerous unlicensed and delinquent businesses in Tustin resulting in a substantial loss of revenue to the City. After reviewing two recent and successful Tax Amnesty Programs conducted by the cities of Los Angeles, and Santa Monica the Community Development Department has developed what is expected to be an equitable and manageable Business License Tax Amnesty Program. The program will allow unlicensed businesses and licensed businesses delinquent in payment, to apply for licensing without fear of prosecution or payment of penalties. Pursuant to Tustin City Ordinance No. 328, Section 8, penalties for delinquent filing are 25% of the total license tax due, for each month after the due date, not to exceed 100% of total tax due. This can prove costly for many unlicensed and delinquent businesses. The Amnesty Program is proposed to run from December 1, 1990 through February 28, 1991. The program will target businesses in the City that have failed to pay their business license tax along with approximately 525 delinquent business license accounts. All penalties will be waived under the program, but the City will have the authority to collect up to three years back taxes. Business License Amnesty page 2 In order to reach the unlicensed and delinquent businesses, press releases and advertisements will be run in local publications, including the Tustin Weekly, Tustin News and The Chamber of Commerce's monthly newsletter. Within the marketing program a number of advantages will be brought to the attention of business owners. 1. Penalties on past due taxes usually equal l00% of the tax due (This creates a substantial savings in fees) 2. Elimination of prosecution for late and delinquent filing 3. City of Tustin has lowest business license tax in the County of Orange CONCLUSION: The Business License Amnesty Program would not only capture many unlicensed businesses, but create a business license tax awareness within the business community as well. This would hopefully reduce the amount of delinquent accounts in the future. C ist e Shin leton Director of Community Deve opment CAS/jw Community Development Department 1 19 3 4 5 G i 8 9 10 11 12 13 14 15 16 17 18 A 20 21 22 23 24 25 26 27' 28 ORDINANCE NO. 1053 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DECLARING A BUSINESS LICENSE AMNESTY PROGRAM DURING THE MONTHS OF DECEMBER, 1990, JANUARY AND FEBRUARY 1991. The City Council of the City of Tustin does hereby ordain as follows: I. The City Council finds and determines as follows: A. Section 2521(c) of the Tustin City Code provides a penalty for failure to pay the business license tax when due. B. There are presently a number of businesses who have never obtained a business license. If they obtain a business license at this time, they will be subject to penalty fees under Section 2521(c). C. It would be to the benefit of the City if all unlicensed businesses were encouraged to license. The City Council finds that a three month amnesty, during the months of December, 1990, January and February, 1991, during which no penalties would be due for failure to pay license taxes when due, would encourage unlicensed businesses to license during those months. II. The City Council does hereby declare: A. That Section 2521(c) of the Tustin City Code shall be of no force and effect during the months of December, 1990, January and February, 1991. All businesses that pay license fees during that three-month period shall be excused from paying the penalties imposed by such Section. B. Except for the months of December, 1990, January and February, 1991, Section 2521(c) of the Tustin City Code, and all other provisions pertaining to business licenses, shall be in full force and effect. III. This Ordinance shall be effective during the months of December, 1990, January and February, 1991, only, and shall not be codified in the Tustin City Code. '41 4 J G 8 1(1 11 12 13 14 15 1C It 1� i� 2( 21 2` 2: 2� 2: 21 2' 2 of of PASSED AND ADOPTED by the City Council of the City Tustin, at a regular meeting on the day ,1990. ATTEST: City Clerk Mayor PRESS RELEASE Beginning December 1, 1990 through February 28, 1991 the City of Tustin will conduct a Business License Amnesty Program in order to allow unlicensed businesses to apply or reapply for business license without prosecution or payment of penalties. Licensed businesses delinquent in payments will also be eligible. During the Amnesty Period all penalties for past due business license taxes will be waived although the City will have authority to collect up to 3 years back taxes. This is a tremendous opportunity for those businesses who are delinquent in obtaining their business licenses in the City. Once the Amnesty Program is concluded business tax penalties are 25% of the tax due for each month the fee is delinquent, not to exceed 100% of the tax due. Local business owners should note that Tustin's license tax fees are the lowest in the county. Information and application materials are available at the Community Development Department 300 Centennial Way, Tustin, CA 92680, or by calling (714) 544-8890, extension 271.