HomeMy WebLinkAboutOrdinance 1913 (Transaction and Use Tax)CLERK'S CERTIFICATE
I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, and Ex -Officio Clerk of the
Council of said City, do hereby certify that the foregoing:
ORDINANCE NO. 1913
AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING CHAPTER 3.19 OF
THE SAN RAFAEL MUNICIPAL CODE EXTENDING AND INCREASING THE
EXISTING TRANSACTIONS AND USE TAX ADMINISTERED BY THE STATE
BOARD OF EQUALIZATION, SUBJECT TO APPROVAL OF A MAJORITY OF THE
ELECTORS VOTING ON THE TAX MEASURE AT THE GENERAL MUNICIPAL
ELECTION TO BE HELD ON TUESDAY, NOVEMBER 5, 2013.
is a true and correct copy of an Ordinance of said City, and was introduced at a REGULAR
meeting of the City Council of the City of San Rafael, held on the 15th day of July, 2013,
was published as required by City Charter in the MARIN INDEPENDENT JOURNAL, a
newspaper published in the City of San Rafael, and passed and adopted as an Ordinance of said
City at a REGULAR meeting of the City Council of said City, held on the 5th day of August,
2013, by the following vote, to wit:
AYES: COUNCILMEMBERS: Colin, Connolly, Vice Mayor Heller
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: McCullough & Mayor Phillips
WITNESS my hand and the official
Seal of the City of San Rafael this
14th day of August 2013
., /e � C • Arc.,
ESTHER C. BEIRNE
City Clerk
ORDINANCE NO. 1913
AN ORDINANCE OF THE CITY OF SAN RAFAEL AMENDING
CHAPTER 3.19 OF THE SAN RAFAEL MUNICIPAL CODE
EXTENDING AND INCREASING THE EXISTING
TRANSACTIONS AND USE TAX ADMINISTERED BY THE
STATE BOARD OF EQUALIZATION, SUBJECT TO APPROVAL
OF A MAJORITY OF THE ELECTORS VOTING ON THE TAX
MEASURE AT THE GENERAL MUNICIPAL ELECTION TO BE
HELD ON TUESDAY, NOVEMBER 5, 2013.
The City Council of the City of San Rafael hereby makes the following findings in
connection with the adoption of this Ordinance:
DIVISION 1.
WHEREAS, In 2005, the San Rafael community voted in favor of Measure S, adding
Chapter 3.19 to the San Rafael Municipal Code establishing a local transactions and use tax (i.e.
sales tax) to protect vital city services from budget cuts; and
WHEREAS, the City has used these funds for a number of purposes, including
maintaining rapid emergency response times, adequate numbers of on -duty police officers and
firefighters and many additional core City services; and
WHEREAS, this one-half of one percent (0.5%) increase in our local sales tax accounts
for approximately 12% of the City's General Fund budget, has been shielded from State
appropriation, and has stayed in San Rafael to benefit local residents; and
WHEREAS, given the fiscal challenges that all cities have faced in recent years,
Measure S proved essential for protecting vital city services in San Rafael from budget cuts; and
WHEREAS, since the 2008 Great Recession, the City has been critically evaluating its
priorities and strategies for providing quality community services with new fiscal constraints. To
increase efficiency and work on a leaner budget, the City has established new partnerships with
other agencies to increase shared services, streamlined regulations to promote a positive business
climate, cut over 60 staff positions, temporarily reduced compensation for most staff, reformed
pensions, and scaled back employee retiree health benefits. The City will continue to analyze
which services are a priority, and the most cost-effective method of delivering these services;
and
WHEREAS, Measure S funding is scheduled to expire, and if the City were to address
this loss of locally -controlled funding with expenditure reductions alone it would have to
consider cuts to police patrols, firefighters and emergency response, street and sidewalk repair,
parks and community centers, and curtail access to libraries. Such cuts would be a last resort;
however, police and fire account for more than half of San Rafael's budget, and in order to
address a deficit of the magnitude that would occur if Measure S funding were to expire, the City
inevitably would be required to consider cuts to public safety; and
WHEREAS, even with the current sales tax in effect, there is not sufficient funding
available for several key infrastructure needs such as seismic improvements for emergency
dispatch as well as fire stations, information technology needs for improved service delivery,
contributions to the City's emergency reserves, and other infrastructure needs identified as
"unfunded" in the City's Five Year Capital Improvement Program; and
WHEREAS, after study of the financial issues facing the City, and following numerous
discussions with residents, neighborhood associations and business and service groups, and after
extensive efforts to gauge the public's opinions and priorities through several surveys of San
Rafael residents, the City Council has determined that the most prudent, reasonable and
financially responsible action it can take to preserve the fiscal stability of San Rafael and to
protect vital services and facilities in our City, is to place before the voters a ballot measure to
extend the existing one-half of one percent (0.5%) transactions and use tax for a period of 20
years and increase the rate by one-quarter of one percent (0.25%), and to recommend its
adoption to the voters; and
WHEREAS, if the increased and extended transactions and use tax is approved by the
voters at the municipal election on November 5, 2013, the existing tax would remain in effect
until the operative date of the extended and increased tax.
NOW THEREFORE, the City Council of the City of San Rafael does hereby Ordain as
follows:
111LIVA- [IM&A
Chapter 3.19 of the San Rafael Municipal Code is hereby amended to read as follows:
Chapter 3.19
TRANSACTIONS AND USE TAX
3.19.010 -- Short Title.
This Chapter shall be known as the City of San Rafael Transactions and Use Tax
Ordinance. This Chapter shall be applicable only in the incorporated territory of the City.
3.19.015 -- Definitions.
As used in this Chapter, "City" means the City of San Rafael and "tax" means the
transactions and use tax imposed Linder the provisions of this Chapter.
3.19.020 -- Operative Date.
"Operative Date" means the first day that the tax is imposed and collected. The
Operative Date shall be April 1, 2014, unless a later Operative Date becomes effective under the
provisions of Section 3.19.040.
3.19.030 -- Purpose.
This Chapter is adopted to achieve the following, among other purposes, and the City
Council directs that the provisions hereof be interpreted in order to accomplish those purposes:
A. To impose a retail transactions and use tax in accordance with the provisions of
Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and
Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance
which shall be operative only if a majority of the electors voting on the measure vote to approve
the imposition of the tax at an election called for that purpose.
B. To adopt a retail transactions and use tax ordinance that incorporates provisions
identical to those of the Sales and Use Tax Law of the State of California insofar as those
provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of
Division 2 of the Revenue and Taxation Code.
C. To adopt a retail transactions and use tax ordinance that imposes a tax and
provides a measure therefore that may be administered and collected by the State Board of
Equalization in a manner that adapts itself as fully as practicable to, and requires the least
possible deviation from, the existing statutory and administrative procedures followed by the
State Board of Equalization in administering and collecting the California State Sales and Use
Taxes.
D. To adopt a retail transactions and use tax ordinance that may be administered in a
manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of
Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions
and use taxes, and at the same time, minimize the burden of record keeping upon persons subject
to taxation under the provisions of this ordinance.
3.19.040 -- Contract With State.
Prior to the Operative Date, the City shall contract with the State Board of Equalization to
perform all functions incident to the administration and operation of this transactions and use tax
ordinance; provided however, that if the City shall not have contracted with the State Board of
Equalization prior to the Operative Date, it shall nevertheless so contract and in such a case the
Operative Date shall be the first day of the first calendar quarter following the execution of such
a contract.
3.19.050 -- Imposition of Transactions Tax; Transactions Tax Rate.
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For the privilege of selling tangible personal property at retail, a tax is hereby imposed
upon all retailers in the incorporated territory of the City at the rate of three-quarters of one
percent (0.75%) of the gross receipts of any retailer from the sale of all tangible personal
property sold at retail in said territory on and after the Operative Date of this ordinance.
3.19.060 -- Place of Transaction.
For the purposes of this Chapter, all retail sales are consummated at the place of business
of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to
an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The
gross receipts from such sales shall include delivery charges, when such charges are subject to
the state sales and use tax, regardless of the place to which delivery is made. In the event a
retailer has no permanent place of business in the State or has more than one place of business,
the place or places at which the retail sales are consummated shall be determined under rules and
regulations to be prescribed and adopted by the State Board of Equalization.
3.19.070 -- Imposition of Use Tax; Use Tax Rate.
An excise tax is hereby imposed on the storage, use or other consumption in the City of
tangible personal property purchased from any retailer on and after the Operative Date of this
ordinance for storage, use or other consumption in said territory at the rate of three-quarters of
one percent (0.75%) of the sales price of the property. The sales price shall include delivery
charges when such charges are subject to state sales or use tax regardless of the place to which
delivery is made.
3.19.080 -- Proceeds of Tax.
The proceeds of the transactions and use tax imposed by this Chapter shall be deposited
into the General Fund of the City to be used for all general government purposes which may
include, but are not limited to, fire and police protection, street and sidewalk repair and
maintenance, library services, park repair and maintenance, recreational programs, building and
code enforcement services, planning and zoning services, capital equipment requirements, repair
and replacement of City facilities, capital improvement projects, operational expenses, fiduciary
responsibilities, administration, indebtedness and general obligations of the City. The tax
imposed by this Chapter is intended to be and is, a general tax, the proceeds of which are to be
spent as the City Council shall in its discretion, from time to time, determine.
3.19.090 -- Adoption of Provisions of State Law.
Except as otherwise provided in this Chapter and except insofar as they are inconsistent
with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the
provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation
Code are hereby adopted and made a part of this Chapter as though fully set forth herein.
3.19.100 -- Limitations on Adoption of State Law and Collection of Use Taxes.
In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
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A. Wherever the State of California is named or referred to as the taxing agency, the
name of this City shall be substituted therefore. However, the substitution shall not be made:
1. When the word "State" is used as a part of the title of the State Controller,
State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the
Constitution of the State of California.
2. When the result of that substitution would require action to be taken by or
against this City or any agency, officer, or employee thereof rather than by or against the State
Board of Equalization, in performing the functions incident to the administration or operation of
this Chapter.
3. In those sections, including, but not necessarily limited to sections
referring to the exterior boundaries of the State of California, where the result of the substitution
would be to:
a. Provide an exemption from this tax with respect to certain sales,
storage, use or other consumption of tangible personal property which would not otherwise be
exempt from this tax while such sales, storage, use or other consumption remain subject to tax by
the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or
b. Impose this tax with respect to certain sales, storage, use or other
consumption of tangible personal property which would not be subject to tax by the state under
the said provision of that code.
4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715,
6737, 6797 or 6828 of the Revenue and Taxation Code.
B. The word "City" shall be substituted for the word "State" in the phrase "retailer
engaged in business in this State" in Section 6203 and in the definition of that phrase in Section
6203.
3.19.110 -- Permit Not Required.
If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and
Taxation Code, an additional transactor's permit shall not be required by this ordinance.
3.19.120 -- Exemptions and Exclusions.
A. There shall be excluded from the calculation of the transactions tax and the use
tax the amount of any sales tax or use tax imposed by the State of California or by any city, city
and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or
the amount of any state -administered transactions or use tax.
B. There are exempted from the computation of the amount of transactions tax the
gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products,
to operators of aircraft to be used or consumed principally outside the county in which the sale is
made and directly and exclusively in the use of such aircraft as common carriers of persons or
property under the authority of the laws of this State, the United States, or any foreign
government.
2. Sales of property to be used outside the City which is shipped to a point
outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his
agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the
purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject
to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the
Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code,
and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the
Vehicle Code by registration to an out -of -City address and by a declaration under penalty of
perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of
residence; and
b. With respect to commercial vehicles, by registration to a place of
business out -of -City and declaration under penalty of perjury, signed by the buyer, that the
vehicle will be operated from that address.
3. The sale of tangible personal property if the seller is obligated to furnish
the property for a fixed price pursuant to a contract entered into prior to the Operative Date of
this ordinance.
4. A lease of tangible personal property which is a continuing sale of such
property, for any period of time for which the lessor is obligated to lease the property for an
amount fixed by the lease prior to the Operative Date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, the sale or
lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or
lease for any period of time for which any party to the contract or lease has the unconditional
right to terminate the contract or lease upon notice, whether or not such right is exercised.
C. There are exempted from the use tax imposed by this Chapter, the storage, use or
other consumption in this City of tangible personal property:
1. The gross receipts from the sale of which have been subject to a
transactions tax under any state -administered transactions and use tax ordinance.
2. Other than fuel or petroleum products purchased by operators of aircraft
and used or consumed by such operators directly and exclusively in the use of such aircraft as
common carriers of persons or property for hire or compensation under a certificate of public
convenience and necessity issued pursuant to the laws of this State, the United States, or any
foreign government. This exemption is in addition to the exemptions provided in Sections 6366
and 6366.1 of the Revenue and Taxation Code of the State of California.
3. If the purchaser is obligated to purchase the property for a fixed price
pursuant to a contract entered into prior to the Operative Date of this Chapter.
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4. If the possession of, or the exercise of any right or power over, the
tangible personal property arises under a lease which is a continuing purchase of such property
for any period of time for which the lessee is obligated to lease the property for an amount fixed
by a lease prior to the Operative Date of this Chapter.
5. For the purposes of subparagraphs (3) and (4) of this section, storage, use,
or other consumption, or possession of, or exercise of any right or power over, tangible personal
property shall be deemed not to be obligated pursuant to a contract or lease for any period of
time for which any party to the contract or lease has the unconditional right to terminate the
contract or lease upon notice, whether or not such right is exercised.
6. Except as provided in subparagraph (7), a retailer engaged in business in
the City shall not be required to collect use tax from the purchaser of tangible personal property,
unless the retailer ships or delivers the property into the City or participates within the City in
making the sale of the property, including, but not limited to, soliciting or receiving the order,
either directly or indirectly, at a place of business of the retailer in the City or through any
representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of
the retailer.
7. "A retailer engaged in business in the City" shall also include any retailer
of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with
Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section
21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5
(commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect
use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address
in the City.
D. Any person subject to use tax under this ordinance may credit against that tax any
transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer
liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code
with respect to the sale to the person of the property the storage, use or other consumption of
which is subject to the use tax.
3.19.130 -- Amendments.
All amendments subsequent to the effective date of this Chapter to Part 1 of Division 2 of
the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent
with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments
to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically
become a part of this Chapter, provided however, that no such amendment shall operate so as to
affect the rate of tax imposed by this Chapter.
3.19.140 -- Enjoining Collection Forbidden.
No injunction or writ of mandate or other legal or equitable process shall issue in any
suit, action or proceeding in any court against the State or the City, or against any officer of the
State or the City, to prevent or enjoin the collection under this Chapter, or Part 1.6 of Division 2
of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.
3.19.142 -- Annual Audit.
The proceeds resulting from this Transactions and Use Tax shall be deposited into the
City's General Fund and become subject to the same independent annual audit requirements as
other general fund revenue.
3.19.144 -- Independent Citizen Oversight.
A City Transactions and Use Tax Committee, to be established by the City Council by
Resolution, shall review the collection and expenditure of tax revenues collected under the
authority of this Chapter. The Committee shall consist of at least five members, who shall be
residents of the City. The terms of the Committee members and their specific duties shall be
established by resolution of the City Council.
3.19.146 -- All Funds Staying Local.
All tax revenues collected under the authority of this Chapter shall be expended solely on
local municipal services, and shall not be used for any other purposes.
3.19.148 -- Effective Date.
This ordinance levying the tax described herein shall be effective ten days after the date
on which the City Council has declared that the voters of the City of San Rafael have approved
said ordinance by a vote of no less than a majority of the votes cast by the electors voting on the
tax measure set forth in this ordinance at the general municipal election to be held on Tuesday,
November 5, 2013, and the tax established herein shall become operative on April 1, 2014 or on
such later date as provided in Section 3.19.040.
3.19.150 -- Termination Date.
The authority to levy the tax imposed by this Chapter shall expire on March 31, 2034, or
at the end of twenty years from the Operative Date if the Operative Date is later than April 1,
2014 as provided in Section 3.19.040.
DIVISION 3:
If any section, subsection, sentence, clause or phrase of this Ordinance or the application
thereof to any person or circumstance is for any reason held to be invalid, such decision shall not
affect the validity of the remaining portions of this Ordinance.
DIVISION 4:
This ordinance shall be published once in full before its final passage, in a newspaper of
general circulation, published and circulated in the City of 4an RafayI,1
O. P IJLIPS, Mayor
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ATTEST:
ESTHER BEIRNE, City Clerk
The foregoing Ordinance No. 1913 was read and introduced at a Regular Meeting of the City
Council of the City of San Rafael, held on the 15'h day of July, 2013 and ordered passed to print by
the following vote, to wit:
AYES: Councilmembers: Colin, Connolly, Heller, McCullough & Mayor Phillips
NOES: Councilmembers: None
ABSENT: Councilmembers: None
and will come up for adoption as an Ordinance of the City of San Rafael at a Regular Meeting of the
Council to be held on the 5th day of August, 2013, subject to voter approval at the General
Municipal Election to be held on Tuesday, November 5, 2013.
ESTHER BEIRNE, City Clerk
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