HomeMy WebLinkAboutCC Resolution 11874 (Administration TUT; Board of Equalization)RESOLUTION NO. 11874
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL APPROVING AND AUTHORIZING THE MAYOR TO
EXECUTE AN AGREEMENT WITH THE STATE BOARD OF
EQUALIZATION FOR THE ADMINISTRATION OF THE CITY OF SAN
RAFAEL'S TRANSACTIONS AND USE TAX.
WHEREAS, on July 18, 2005, the City Council of the City of San Rafael unanimously approved
Ordinance No. 1837 which, by adding Chapter 3.19 to the San Rafael Municipal Code, established a local
transactions and use tax; and
WHEREAS, pursuant to section 3.19.148 of the Ordinance, Chapter 3.19 became effective on
December 15, 2005, ten (10) days after the City Council declared (Resolution No. 11865) that the voters of
the City of San Rafael had approved Chapter 3.19 by a majority of votes cast at the consolidated general
municipal election held on Tuesday, November 8, 2005; and
WHEREAS, the City of San Rafael's local transactions and use tax will become operative April 1,
2006 provided that the City has approved and executed agreements for the implementation of the tax with
the State Board of Equalization; and
WHEREAS, the State Board of Equalization administers and collects the transactions and use
taxes for all applicable jurisdictions within the state; and
WHEREAS, the Board will be responsible to administer and collect the transactions and use tax
for the City; and
WHEREAS, the Board requires that the City enter into an "Administration Agreement" prior to
implementation of said taxes, and
WHEREAS, the Board requires that the City Council authorize the agreement.
NOW, THEREFORE BE IT RESOLVED the City Council of the City of San Rafael approves
and authorizes the Mayor to execute, the "Agreement for State Administration of City's Transactions and
Use Tax", a copy of which is incorporated herein and attached hereto as Exhibit `B".
I, Jeanne M. Leoncini, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution
was duly and regularly introduced and adopted at a regular meeting of the San Rafael City Council held on
the 17`h day of January, 2006, by the following vote to wit:
AYES:
Councilmembers:
Cohen, Heller, Miller, Phillips and Mayor Boro
NOES:
Councilmembers:
None
ABSENT:
Councilmembers:
None
JEAKNE M. LEONCIN�TI, City Clerk
} �1'dA ,�A
AGREEMENT FOR STATE ADMINISTRATION
OF CITY TRANSACTIONS AND USE TAXES
The City Council of the City of San Rafael has adopted, and the voters of the City of San
Rafael (hereafter called "City" or "District") have approved by the required majority vote, the
City of San Rafael Transactions and Use Tax Ordinance, Chapter 3.19 of the San Rafael
Municipal Code (hereafter called "Ordinance"), a copy of which is attached to the authorizing
Resolution. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation
Code and the Ordinance, the State Board of Equalization, (hereinafter called the "Board") and the
City do agree as follows:
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in the
Agreement, they shall be interpreted to mean the following:
1. "District taxes" shall mean the transactions and use taxes, penalties, and interest
imposed under an ordinance specifically authorized by Revenue and Taxation Code Section
7285.9, and in compliance with, Part 1.6, Division 2 of the Revenue and Taxation Code.
2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance
referred to above and attached hereto, Ordinance No. 1837, as amended from time to time, or as
deemed to be amended from time to time pursuant to Revenue and Taxation Code Section
7262.2.
ARTICLE II
ADMINISTRATION AND COLLECTION OF CITY TAXES
A. Administration. The Board and City agree that the Board shall perform
exclusively all functions incident to the administration and operation of the City Ordinance.
B. Other Applicable Laws. City agrees that all provisions of law applicable to the
administration and operation of the State Sales and Use Tax Law which are not inconsistent with
EXHIBIT B
Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration
and operation of the City Ordinance. City agrees that money collected pursuant to the City
Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund
and may be drawn from that Fund for any authorized purpose, including making refunds,
compensating and reimbursing the Board pursuant to Article IV of this Agreement, and
transmitting to City the amount to which City is entitled.
C. Transmittal of money.
1. For the period during which the tax is in effect, and except as otherwise
provided herein, all district taxes collected under the provisions of the City Ordinance shall be
transmitted to City periodically as promptly as feasible, but not less often than twice in each
calendar quarter.
2. For periods subsequent to the expiration date of the tax whether by City's
self-imposed limits or by final judgment of any court of the State of California holding that
City's ordinance is invalid or void, all district taxes collected under the provisions of the City
Ordinance shall be transmitted to City not less than once in each calendar quarter.
3. Transmittals may be made by mail or electronic funds transfer to an
account of the City designated and authorized by the City. A statement shall be furnished at least
quarterly indicating the amounts withheld pursuant to Article IV of this Agreement.
D. Rules. The Board shall prescribe and adopt such rules and regulations as in its
judgment are necessary or desirable for the administration and operation of the City Ordinance
and the distribution of the district taxes collected thereunder.
E. Preference. Unless the payor instructs otherwise, and except as otherwise
provided in this Agreement, the Board shall give no preference in applying money received for
state sales and use taxes, state -administered local sales and use taxes, and district transactions
and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the
claims of the State, cities, counties, cities and counties, redevelopment agencies, other districts,
and City as their interests appear.
F. Security. The Board agrees that any security which it hereafter requires to be
furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it
also will be available for the payment of the claims of City for district taxes owing to it as its
7
interest appears. The Board shall not be required to change the terms of any security now held by
it, and City shall not participate in any security now held by the Board.
G. Records of the Board. When requested by resolution of the legislative body of
the City under section 7056 of the Revenue and Taxation Code, the Board agrees to permit
authorized personnel of the City to examine the records of the Board, including the name,
address, and account number of each seller holding a seller's permit with a registered business
location in the City, pertaining to the ascertainment of transactions and use taxes collected for the
City. Information obtained by the City from examination of the Board's records shall be used by
the City only for purposes related to the collection of transactions and use taxes by the Board
pursuant to this Agreement.
H. Annexation. City agrees that the Board shall not be required to give effect to an
annexation, for the purpose of collecting, allocating, and distributing District transactions and use
taxes, earlier than the first day of the calendar quarter which commences not less than two
months after notice to the Board. The notice shall include the name of the county or counties
annexed to the extended City boundary. In the event the City shall annex an area, the boundaries
of which are not coterminous with a county or counties, the notice shall include a description of
the area annexed and two maps of the City showing the area annexed and the location address of
the property nearest to the extended City boundary on each side of every street or road crossing
the boundary.
ARTICLE III
ALLOCATION OF TAX
A. Allocation. In the administration of the Board's contracts with all districts that
impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of
Division 2 of the Revenue and Taxation Code:
1. Any payment not identified as being in payment of liability owing to a
designated district or districts may be apportioned among the districts as their interest appear, or,
in the discretion of the Board, to all districts with which the Board has contracted using ratios
reflected by the distribution of district taxes collected from all taxpayers.
3
2. All district taxes collected as a result of determinations or billings made by
the Board, and all amounts refunded or credited may be distributed or charged to the respective
districts in the same ratio as the taxpayer's self -declared district taxes for the period for which the
determination, billing, refund or credit applies.
B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with
respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the
application for registration or on the certificate of ownership may be used by the Board in
determining the place of use.
ARTICLE IV
COMPENSATION
The City agrees to pay to the Board as the Board's cost of administering the City
Ordinance such amount as is provided for by law. Such amounts shall be deducted from the
taxes collected by the Board for the City.
ARTICLE V
MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first class United
States mail to the addresses listed below, or to such other addresses as the parties may from time
to time designate. A notification is complete when deposited in the mail.
Communications and notices to be sent to the Board shall be addressed to:
State Board of Equalization
P.O. Box 942879
Sacramento, California 94279-0073
Attention: Executive Director
Communications and notices to be sent to the City shall be addressed to:
4
City of San Rafael
Ken Nordhoff, Interim City Manager
P.O. Box 151560
San Rafael, CA 94915-1560
Unless otherwise directed, transmittals of payment of District transactions and use
taxes will be sent to the address above.
B. Term. The date of this Agreement is the date on which it is approved by the
Department of General Services. The Agreement shall take effect on April 1, 2006. This
Agreement shall continue until December 31 next following the expiration date of the City
Ordinance, or December 31, 2016, and shall thereafter be renewed automatically from year to
year until the Board completes all work necessary to the administration of the City Ordinance and
has received and disbursed all payments due under that Ordinance.
C. Notice of Repeal of Ordinance. City shall give the Board written notice of the
repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal.
ARTICLE VI
ADMINISTRATION OF TAXES IF THE
ORDINANCE IS CHALLENGED AS BEING INVALID
A. Impoundment of funds.
1. When a legal action is begun challenging the validity of the imposition of
the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitted to
it under Article II. C., until a court of competent jurisdiction renders a final and non -appealable
judgment that the tax is valid.
2. If the tax is determined to be unconstitutional or otherwise invalid, the
City shall transmit to the Board the moneys retained in escrow, including any accumulated
interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees
becoming final and non -appealable.
B. Costs of administration. Should a final judgment be entered in any court of the
State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or
refund to taxpayers of any taxes collected under the terms of this Agreement, the parties mutually
agree that:
1. Board may retain all payments made by City to Board to prepare to
administer the City Ordinance.
2. City will pay to Board and allow Board to retain Board's cost of
administering the City Ordinance in the amounts set forth in Article IV of this Agreement.
3. City will pay to Board or to the State of California the amount of any taxes
plus interest and penalties, if any, that Board or the State of California may be required to rebate
or refund to taxpayers.
4. City will pay to Board its costs for rebating or refunding such taxes,
interest, or penalties. Board's costs shall include its additional cost for developing procedures for
processing the rebates or refunds, its costs of actually making these refunds, designing and
printing forms, and developing instructions for Board's staff for use in making these rebates or
refunds and any other costs incurred by Board which are reasonably appropriate or necessary to
make those rebates or refunds. These costs shall include Board's direct and indirect costs as
specified by Section 11256 of the Government Code.
5. Costs may be accounted for in a manner, which conforms to the internal
accounting, and personnel records currently maintained by the Board. The billings for such costs
may be presented in summary form. Detailed records will be retained for audit and verification
by City.
6. Any dispute as to the amount of costs incurred by Board in refunding taxes
shall be referred to the State Director of Finance for resolution and the Director's decision shall
be final.
7. Costs incurred by Board in connection with such refunds shall be billed by
Board on or before the 25th day of the second month following the month in which the judgment
of a court of the State of California holding City's Ordinance invalid or void becomes final.
Thereafter Board shall bill City on or before the 25th of each month for all costs incurred by
Board for the preceding calendar month. City shall pay to Board the amount of such costs on or
before the last day of the succeeding month and shall pay to Board the total amount of taxes,
5
interest, and penalties refunded or paid to taxpayers, together with Board costs incurred in
making those refunds.
CITY OF SAN RAFAEL
ALBERT J. BORO, Mayor
STATE BOARD OF EQUALIZATION
(Executive Director)
Date: (Typed Name)
Date:
AGREEMENT FOR STATE ADMINISTRATION
OF CITY TRANSACTIONS AND USE TAXES
The City Council of the City of San Rafael has adopted, and the voters of the City of San
Rafael (hereafter called "City" or "District") have approved by the required majority vote, the
City of San Rafael Transactions and Use Tax Ordinance, Chapter 3.19 of the San Rafael
Municipal Code (hereafter called "Ordinance"), a copy of which is attached to the authorizing
Resolution. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and Taxation
Code and the Ordinance, the State Board of Equalization, (hereinafter called the "Board") and the
City do agree as follows:
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, wherever the following terms appear in the
Agreement, they shall be interpreted to mean the following:
1. "District taxes" shall mean the transactions and use taxes, penalties, and interest
imposed under an ordinance specifically authorized by Revenue and Taxation Code Section
7285.9, and in compliance with, Part 1.6, Division 2 of the Revenue and Taxation Code.
2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance
referred to above and attached hereto, Ordinance No. 1837, as amended from time to time, or as
deemed to be amended from time to time pursuant to Revenue and Taxation Code Section
7262.2.
ARTICLE II
ADMINISTRATION AND COLLECTION OF CITY TAXES
A. Administration. The Board and City agree that the Board shall perform
exclusively all functions incident to the administration and operation of the City Ordinance.
B. Other Applicable Laws. City agrees that all provisions of law applicable to the
administration and operation of the State Sales and Use Tax Law which are not inconsistent with
Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administration
and operation of the City Ordinance. City agrees that money collected pursuant to the City
Ordinance may be deposited into the State Treasury to the credit of the Retail Sales Tax Fund
and may be drawn from that Fund for any authorized purpose, including making refunds,
compensating and reimbursing the Board pursuant to Article IV of this Agreement, and
transmitting to City the amount to which City is entitled.
C. Transmittal of money.
1. For the period during which the tax is in effect, and except as otherwise
provided herein, all district taxes collected under the provisions of the City Ordinance shall be
transmitted to City periodically as promptly as feasible, but not less often than twice in each
calendar quarter.
2. For periods subsequent to the expiration date of the tax whether by City's
self-imposed limits or by final judgment of any court of the State of California holding that
City's ordinance is invalid or void, all district taxes collected under the provisions of the City
Ordinance shall be transmitted to City not less than once in each calendar quarter.
3. Transmittals may be made by mail or electronic funds transfer to an
account of the City designated and authorized by the City. A statement shall be furnished at least
quarterly indicating the amounts withheld pursuant to Article IV of this Agreement.
D. Rules. The Board shall prescribe and adopt such rules and regulations as in its
judgment are necessary or desirable for the administration and operation of the City Ordinance
and the distribution of the district taxes collected thereunder.
E. Preference. Unless the payor instructs otherwise, and except as otherwise
provided in this Agreement, the Board shall give no preference in applying money received for
state sales and use taxes, state -administered local sales and use taxes, and district transactions
and use taxes owed by a taxpayer, but shall apply moneys collected to the satisfaction of the
claims of the State, cities, counties, cities and counties, redevelopment agencies, other districts,
and City as their interests appear.
F. Security. The Board agrees that any security which it hereafter requires to be
furnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it
also will be available for the payment of the claims of City for district taxes owing to it as its
2
interest appears. The Board shall not be required to change the terms of any security now held by
it, and City shall not participate in any security now held by the Board.
G. Records of the Board. When requested by resolution of the legislative body of
the City under section 7056 of the Revenue and Taxation Code, the Board agrees to permit
authorized personnel of the City to examine the records of the Board, including the name,
address, and account number of each seller holding a seller's permit with a registered business
location in the City, pertaining to the ascertainment of transactions and use taxes collected for the
City. Information obtained by the City from examination of the Board's records shall be used by
the City only for purposes related to the collection of transactions and use taxes by the Board
pursuant to this Agreement.
H. Annexation. City agrees that the Board shall not be required to give effect to an
annexation, for the purpose of collecting, allocating, and distributing District transactions and use
taxes, earlier than the first day of the calendar quarter which commences not less than two
months after notice to the Board. The notice shall include the name of the county or counties
annexed to the extended City boundary. In the event the City shall annex an area, the boundaries
of which are not coterminous with a county or counties, the notice shall include a description of
the area annexed and two maps of the City showing the area annexed and the location address of
the property nearest to the extended City boundary on each side of every street or road crossing
the boundary.
ARTICLE III
ALLOCATION OF TAX
A. Allocation. In the administration of the Board's contracts with all districts that
impose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of
Division 2 of the Revenue and Taxation Code:
1. Any payment not identified as being in payment of liability owing to a
designated district or districts may be apportioned among the districts as their interest appear, or,
in the discretion of the Board, to all districts with which the Board has contracted using ratios
reflected by the distribution of district taxes collected from all taxpayers.
2. All district taxes collected as a result of determinations or billings made by
the Board, and all amounts refunded or credited may be distributed or charged to the respective
districts in the same ratio as the taxpayer's self -declared district taxes for the period for which the
determination, billing, refund or credit applies.
B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with
respect to vehicles, vessels, or aircraft, the address of the registered owner appearing on the
application for registration or on the certificate of ownership may be used by the Board in
determining the place of use.
ARTICLE IV
COMPENSATION
The City agrees to pay to the Board as the Board's cost of administering the City
Ordinance such amount as is provided for by law. Such amounts shall be deducted from the
taxes collected by the Board for the City.
ARTICLE V
MISCELLANEOUS PROVISIONS
A. Communications. Communications and notices may be sent by first class United
States mail to the addresses listed below, or to such other addresses as the parties may from time
to time designate. A notification is complete when deposited in the mail.
Communications and notices to be sent to the Board shall be addressed to:
State Board of Equalization
P.O. Box 942879
Sacramento, California 94279-0073
Attention: Executive Director
Communications and notices to be sent to the City shall be addressed to:
4
City of San Rafael
Ken Nordhoff, Interim City Manager
P.O. Box 151560
San Rafael, CA 94915-1560
Unless otherwise directed, transmittals of payment of District transactions and use
taxes will be sent to the address above.
B. Term. The date of this Agreement is the date on which it is approved by the
Department of General Services. The Agreement shall take effect on April 1, 2006. This
Agreement shall continue until December 31 next following the expiration date of the City
Ordinance, or December 31, 2016, and shall thereafter be renewed automatically from year to
year until the Board completes all work necessary to the administration of the City Ordinance and
has received and disbursed all payments due under that Ordinance.
C. Notice of Repeal of Ordinance. City shall give the Board written notice of the
repeal of the City Ordinance not less than 110 days prior to the operative date of the repeal.
ARTICLE VI
ADMINISTRATION OF TAXES IF THE
ORDINANCE IS CHALLENGED AS BEING INVALID
A. Impoundment of funds.
1. When a legal action is begun challenging the validity of the imposition of
the tax, the City shall deposit in an interest-bearing escrow account, any proceeds transmitted to
it under Article II. C., until a court of competent jurisdiction renders a final and non -appealable
judgment that the tax is valid.
2. If the tax is determined to be unconstitutional or otherwise invalid, the
City shall transmit to the Board the moneys retained in escrow, including any accumulated
interest, within ten days of the judgment of the trial court in the litigation awarding costs and fees
becoming final and non -appealable.
B. Costs of administration. Should a final judgment be entered in any court of the
State of California, holding that City's Ordinance is invalid or void, and requiring a rebate or
5
refund to taxpayers of any taxes collected under the terms of this Agreement, the parties mutually
agree that:
1. Board may retain all payments made by City to Board to prepare to
administer the City Ordinance.
2. City will pay to Board and allow Board to retain Board's cost of
administering the City Ordinance in the amounts set forth in Article IV of this Agreement.
3. City will pay to Board or to the State of California the amount of any taxes
plus interest and penalties, if any, that Board or the State of California may be required to rebate
or refund to taxpayers.
4. City will pay to Board its costs for rebating or refunding such taxes,
interest, or penalties. Board's costs shall include its additional cost for developing procedures for
processing the rebates or refunds, its costs of actually making these refunds, designing and
printing forms, and developing instructions for Board's staff for use in making these rebates or
refunds and any other costs incurred by Board which are reasonably appropriate or necessary to
make those rebates or refunds. These costs shall include Board's direct and indirect costs as
specified by Section 11256 of the Government Code.
5. Costs may be accounted for in a manner, which conforms to the internal
accounting, and personnel records currently maintained by the Board. The billings for such costs
may be presented in summary form. Detailed records will be retained for audit and verification
by City.
6. Any dispute as to the amount of costs incurred by Board in refunding taxes
shall be referred to the State Director of Finance for resolution and the Director's decision shall
be final.
7. Costs incurred by Board in connection with such refunds shall be billed by
Board on or before the 25th day of the second month following the month in which the judgment
of a court of the State of California holding City's Ordinance invalid or void becomes final.
Thereafter Board shall bill City on or before the 25th of each month for all costs incurred by
Board for the preceding calendar month. City shall pay to Board the amount of such costs on or
before the last day of the succeeding month and shall pay to Board the total amount of taxes,
G
interest, and penalties refunded or paid to taxpayers, together with Board costs incurred in
making those refunds.
CITY OF SAN RAFAEL
ALBtRT J.�Rb, Mayor
Date: January 17, 2006
ATTEST: (JE ANNE M.
ILO=NCIN�I.
City Clerk
7
STATE BOARD OF EQUALIZATION
(Executive Director)
(Typed Name)
Date: