HomeMy WebLinkAboutOrdinance 1837 (Transaction & Use Tax)CLERK'S CERTIFICATE
I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, and Ex -officio Clerk of the
Council of said City, do hereby certify that the foregoing Charter Ordinance No. 1837 entitled:
"AN ORDINANCE OF THE CITY OF SAN RAFAEL ADDING CHAPTER
3.19 TO THE SAN RAFAEL MUNICIPAL CODE IMPOSING A
TRANSACTIONS AND USE TAX TO BE 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 8,2005"
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 18th day of Julv. 2005,
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 1st day of August, 2005, by the
following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
WITNESS my hand and the official
seal of the City of San Rafael this
3rd day of August, 2005
JE M. LEONCINI, City Clerk
ORDINANCE NO. 1837
AN ORDINANCE OF THE CITY OF SAN RAFAEL ADDING
CHAPTER 3.19 TO THE SAN RAFAEL MUNICIPAL CODE
IMPOSING A TRANSACTIONS AND USE TAX TO BE
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 8, 2005.
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, the City of San Rafael projects a budget deficit in excess of $3 million next
year and each year for the foreseeable future. Last year the City cut $4.7 million. This comes on
top of millions in cuts over the previous three years. The City has already cut staff, reduced pay
for employees, reduced services in all departments, and been required to use emergency reserves
and increase fees; and
WHEREAS, three primary factors have contributed to the City's budget deficit. First, in
recent years the State government has taken away a larger and larger share of local tax revenue
that have historically been used to fund local government services like police, fire, streets and
libraries. The State took these funds to help deal with their own budget deficit. Second, growth
in local sales tax and property tax revenues have not kept pace with the increased costs of
providing City services. Last, like problems most businesses are facing, costs such as utilities,
workers compensation, healthcare benefits and others are on the rise; and
WHEREAS, if the City were to address this shortfall with cuts 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. These cuts are a last resort.
However, police and fire account for about half of San Rafael's budget. In order to address a
deficit of this magnitude, the City would have to include cuts to public safety; and
WHEREAS, because of the scale of the City's budget shortfall and the depth of the cuts
that have already been made, only two realistic choices remain for dealing with this deficit. San
Rafael must either generate additional revenue or begin making deep cuts to essential City
services; and
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WHEREAS, the City Council appointed a citizens committee, the Critical Facilities
Committee, to review the status of its critical facilities and then, due to the City's increasing
financial difficulties, expanded the committee's role to include a comprehensive review of the
City's operational budget and overall financial condition; and
WHEREAS, estimates show that San Rafael has over $75 million in facility and
infrastructure needs. Five of our six firehouses need seismic repairs to withstand an earthquake.
Our library and police station are undersized and outdated for a city of our size. However, the
Critical Facilities Committee reported to the City Council in April of 2005 that reducing the
City's operating deficit of over $3,000,000 per year should be the City Council's highest priority
and recommended that the City Council take steps to consider placing a '/z percent transactions
and use tax on the November, 2005 ballot; and
WHEREAS, all funds from a locally approved tax could not be taken away by the state
and would stay in San Rafael to benefit local residents; and
WHEREAS, after study of the financial issues facing the City, and following numerous
discussions with citizens in town hall meetings, neighborhood association and service group
meetings, after reviewing the Critical Facilities Committee's report, findings and
recommendations, 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 address the dire fiscal
circumstances now confronting the City, is to place before the voters a % percent transaction and
use tax and to recommend its adoption to the voters.
NOW THEREFORE, the City Council Of the City of San Rafael does hereby Ordain as
follows:
DIVISION 2.
A new Chapter 3.19 is hereby added to the San Rafael Municipal Code 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.
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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 under 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, 2006, 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
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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.
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 one-half of one percent
(.50%) 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 one-half of one
percent (.50%) 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.
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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:
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.
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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.
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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.
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.
By no later than June 30, 2006, the City Council shall establish a City Transactions and
Use Tax Committee to 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.
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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 8, 2005.
3.19.150 -- Termination Date.
The authority to levy the tax imposed by this Chapter shall expire on March 31, 2016, or
at the end of ten years from the operative date if the operative date is later than April 1, 2006 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 San Rafael, and shall be in full force
and effect thirty (30) days after its final passage.
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ALBFAT J. BOl� ayor�
ATTEST:
JE M. LEONC , City Clerk
The foregoing Ordinance No. 1837 was read and introduced at a Regular Meeting of the City
Council of the City of San Rafael, held on the 18`h day of July, 2005 and ordered passed to print by
the following vote, to wit:
AYES: Councilmembers : Cohen, Heller, Miller, Phillips and Mayor Boro
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 1st day of August, 2005, subject to voter approval at the General
Municipal Election to be held on Tuesday, November 8, 2005.
JEAWE M. LEONCM—', City Clerk
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