HomeMy WebLinkAboutAgenda Report - February 15, 1995 (52)OF
CITY OF LODi
COUNCIL COMMUNICATION
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AGENDA TITLE: Business Tax Ordinance
MEETING DATE: February 15, 1995
PREPARED BY: Finance Director
RECOMMENDATION: That the City Council consider the following recommendations:
a. Adopt Chapter 3.01 of the Municipal Ordinance titled "Business Tax Certification"; and, amend
Chapter 9.16.010B to define "solicitor". (Exhibit A)
b. Delete Chapter 5.04 titled: "Businesses Licenses Generally". (Exhibit B)
C. Adopt the attached Resolution setting the tax rates by business classification as provided in
Article II, Chapter 3.01 and waive late penalties under Chapter 5.04 . (Exhibit C)
BACKGROUND: On December 13, 1994, the City Council directed staff to revise the
current business license ordinance and tax rates for City Council review
and public comment at the first Council meeting in January 1995; and,
further directed staff to delay the collection of business license tax due
January 1, 1995 until directed by Council.
A revised Ordinance and Tax Rate Schedule was prepared by staff and presented to the City Council on
January 4, 1995. After receiving public comment at this meeting the draft ordinance and tax rate
schedule were revised and returned to the City Council on January 24 for further review and comment.
In addition to meeting with the City Council, City staff met with the Chamber of Commerce on four
occasions between January 15 and February 3 to present the draft ordinance and to discuss their
concerns. Based on these meetings a final draft ordinance and tax rate schedule was prepared and will
be presented to the City Council at a public hearing on February 15, 1995. The changes made to the
draft ordinance and tax rate schedule are listed below.
• Paragraph II, Section 3.01.020 was added to allow the City Council to waive in part or
whole the business tax for the conduct of business at street fairs or special events for those
vendors that do not have a business tax certificate and do not otherwise conduct business in
Lodi.
APPROVED: •
THOMAS A. PETERSON recycled paper
City Manager
cc -1
• Section 3.01.130 was changed to set a minimum tax rate and to disallow the proration of the
tax for applications and renewals submitted between January 1 and December 31.
• Section 3.01.140 was added to allow for the payment of the tax in four installments when the
amount due the City is greater than $750
• Section 3.01.500 was added to allow the public to appeal decisions of the Finance Director
and/or City Manager to the City Council.
• Wholesalers, contractors, public utilities and administrative headquarters were added to the
Group 1 tax rate schedule.
• Automobile dealers were added to the Group 5 tax rate schedule.
• The Group 1 tax rate schedule was adjusted to increase the number of tax brackets.
• The Group 3 tax rate schedule was adjusted to increase the number of tax brackets.
• The Group 4 tax rate schedule was adjusted to increase the number of tax brackets.
• The Group 5 tax rate schedule was adjusted to set the minimum tax at $200.
• The Group 6 tax rate schedule was adjusted to provide a tax rate based on a proxy and sets the
minimum tax at $200 and the tax ceiling at $4,000.
Financing services and new facilities
The City Council has been considering a range of options to finance additional services and to construct
new public facilities. In the last three years the City has struggled to balance the City's budget after the
State cut the City's property tax by $1.1 million. This cut forced the City to reduce services, impose a
hire freeze, cut 32 of 410 staff positions and defer capital maintenance programs. By Council direction,
new services and capital projects require the City to first identify either additional revenues or cost savings
before the approval . Some of the revenue options which have been under consideration include:
• Assessment Districts
• Redevelopment Agency
• Increased fees
• Added tax revenues
Business License Tax
Utility Users Tax
Per Capita Tax
• Public/Private partnerships
2
BUSINESS LICENSE TAX
The current initiative to revise the Business License Ordinance began in October 1993. The Hutchins
Street Square Foundation undertook this initiative to raise City revenues to finance a performing art
center. The Foundation contracted with Ralph Anderson & Associates to conduct the study and
determine whether the business tax should be increased. A report recommending a tax increase was
submitted to the Foundation in December 1993 and presented to the City Council in January 1994. The
City Council then directed staff to review the report and return with a recommendation.
The report of Ralph Anderson & Associates included the following findings and recommendations:
• The current ordinance and tax rates have not been changed since 1948.
• The business tax provides the City with .6% of the total general fund revenue compared to the
statewide average of 5.8% and the City's business tax revenue of 8% in 1949-50.
• The current tax rate is based on number of employees and is regressive.
• The current ordinance places an unfair tax burden on labor intensive businesses.
• Not all businesses are subject to the current tax.
• The recommended tax rate (Table 3) is based on gross receipts and is tiered at three levels based
on the general profitability of the businesses in each tier as published in Department of
Commerce statistics.
Review Process
In February and March 1994, City staff held town hall meetings to review the tax rates proposed by Ralph
Anderson & Associates. In March, the Chamber of Commerce conducted a random survey of its'
membership to determine the level of support in the business community for an increase in the business
license tax.
The survey found that the majority of the members would support an increase in the business license tax
and that a flat rate tax was favored by 61%, gross receipts was favored by 27%, no fee increase was
favored by 10% and a combination of gross receipts and flat rate was favored by 2%.
After receiving public comment at the town hall meetings and receiving the published results of the
Chamber of Commerce survey, staff developed a set of criteria on which to develop an alternative tax
structure. This criteria included the following assumptions:
• Large retail and service businesses will pay higher tax rates than small retail and service
businesses to recognize the impact that the large retail and service businesses have had on the
smaller family businesses of Lodi.
• Manufacturers will pay a lesser tax rate to recognize the importance of manufacturing jobs to the
economic health of the City and the contributions made by the City's manufacturers to the
community in terms of grants, gifts and donations.
3
• Recreation and leisure businesses will pay a lesser rate as a means to promote this business class
which supplements services provided by the City's park and recreation department and as a
means to promote the privatization of recreation/leisure services.
• Auto dealers will pay a lesser rate to recognize the importance of auto sales to the City's sales
tax revenue and to promote the regional markets of the City's auto dealers.
• Hotels and motels will pay a lesser business tax as a measure to promote the development of the
hotel/motel trade in Lodi, tourism and the future construction of a motel/hotel with convention
and meeting facilities.
• The business license tax will not be used to balance the City's budget but will be used to finance
new services and capital projects.
• The business tax structure will combine the concepts of a flat rate tax and a gross receipts tax
using a bracket structure.
Based on these assumptions staff developed a revised business license ordinance and tax rate structure
which was presented to the City Council on January 4, 1995. The recommended tax rate schedule is
shown in Table 2 and the estimated revenues are shown in Table 3.
Ordinance
The draft ordinance is organized into six articles as described below:
Article I - General Provisions
Defines the purpose, requirements for a business tax certificate, exemptions, definitions
used in the ordinance and business classifications.
Article II - Tax Amounts
Defines the basis for the tax, tax rates, minimum tax and payment schedule.
Article III - Application and Renewal
Provides for application process and forms to be used to obtain a business tax certificate.
Article IV - Business Tax Certificate Issuance
Defines the content of the Certificate, posting and keeping requirements, issuance of
duplicates, branch establishments and change of locations.
Article V - Administration
Defines requirements for filing tax, record retention, examination of records, interest and
penalties, determination of tax, protects the confidentiality of information submitted to
the Finance Department, empowers the Finance Director to adjust tax for good cause,
provides for penalties, enforcement powers and appeals.
Article VI - Implementation
Provides for the implementation of the ordinance in the first year the ordinance is
adopted by the City Council.
4
Estimated Revenues
The estimated revenues shown in Table 3 range from $600,000 to $800,000. These estimates are based
on a limited information available to the City on which to estimate revenues. Accordingly, these estimates
are considered to be conservative and may be materially different when collected.
Late Penalties
Under Chapter 5.04.170 of the Municipal Code, the Finance Director is required to add a penalty of 10%
of the business tax due for each month the tax payment is delinquent. At the December 13, 1994 Council
Meeting, the Council directed staff to delay collection of the business tax for 1995 until a decision is made
on a revised business tax ordinance and tax rate schedule. Accordingly, the staff recommends that the
City waive the penalties for taxes due January 1, 1995.
Schedule
The following is the schedule of meetings and hearings which must be held to adopt a change in the
business license ordinance and tax rates.
• Set Public Meeting
December 21, 1994
• Public Meeting
January 4, 1995
• Public Hearing
February 15, 1995
• Second Reading
March 1, 1995
• Effective Date of Chapter 5.01 of the Municipal Ordinance
March 2, 1995
• Taxes Due
April 1, 1995
"/ /' & '-- '4 �
/ Dixon Flynn
Finance Director
Attachments
Tax Rates (Table 1) page 6
Tax Revenues (Table 2) page 8
Tax Rate Recommendation - Ralph Anderson & Associates (Table 3) page 9
Draft Ordinance 3.01 and 9.16.010B (Exhibit A) page 10
Current Municipal Ordinance 5.04 (Exhibit B) page 24
Resolution to Adopt Tax Rates (Exhibit C) page 35
5
BUSINESS LICENSE i AX RATES
GROUP
Retail and Services
See
Rental Non -Residential Property
1$.60/
Wholesale
1
1
Gross Receipts 1 $50
$1,000
Contractors
$.50/$1,000
$110
$105
$100
Public Utilities
$250
$245
$240
Administrative Headquarters
$525
$510
$490
$0 to $200,000
$50
$50
$46
$42
$200,001 to $500,000
$98
$91
$80
$500,001 to $900,000
$210
$196
$175
$900,001 to $3,000,000
$450
$440
$430
$3,000,001 to $10,000,000
$.60/ $1,000
$.55/$1,000
$.50/$1,000
$10,000,001 and greater
$1.00./$1,000
$.90/$1,000
$.80/$1,000
GROUP 2
Rental Residential Property
See
Rental Non -Residential Property
1$.60/
$0 to $75,000
1
1
Gross Receipts 1 $50
$1,000
$.55/$1,000
$.50/$1,000
Professions
See
See
$0 to $75,000
$50
$50
$46
$44
$75,001 to $300,000
$50
$110
$105
$100
$300,001 to $500,000
$250
$245
$240
$500,001 to $1,500,000
$525
$510
$490
$1,500,000 to $5,000,000
$1,100
$1,050
$1,000
$5,000,001 and greater
S_60/ $1.000
1 $.55/$1,000
1 $.50/$1,000
GROUP4
Recreation and Entertainment
See
See
Hotel/Motel Services
$200
Options
Options
I
$0 to $150,000
$50
$50
$46
$42
$150,001 to $300,000
$85
$80
$75
$300,001 or greater
$.30/ $1,000
$.28/$1.000
$.26/$1.000
Automobile Dealers
See
See
Square Feet of Building Space
$200
Options
Options
I
Occupied
$200
$.02/Sq Ft
$.015/Sq Ft
$.01/Sq Ft
ManufacturersSee
See
See
Options **
$200
Options
Options
Options
* Minimum tax due in the first calendar year of business in Lodi (not prorated)
* * Not to exceed $4,000 per year
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BUSINESS LICENSE TAA REVENUES
ROUP 1
6 59,695 6
]detail and Services
6 56,700
'Wholesale
47,250
Contractors
6 44,000 6
]Public Utilities
355 Million 6 213,000
Administrative Headquarters
6
60 to $200,000
1850
4200,001 to $500,000
645
6500,001 to $900,000
270
6900,001 to $3,000,000
100
63,000,001 to $10 Million
70
610 Million and greater
10
GROUP 2
:dental Residential Property
:dental Non -Residential Prol
;cross Receipts
GROUP 3
$ 92,5UU 6 2 I'm 6 "/"/,"/UU
6 63,210
6 59,695 6
51,600
6 56,700
6 52,920 6
47,250
6 45,000
6 44,000 6
43,000
355 Million 6 213,000
6195,250
6
177,500
118 Million 6 118,000
6106,200
6
94,400
300 130.6 Millio 1 $ 18,360
Professions
6,guu
b
6,6UU
$0 to $75,000
150
$
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$75,001 to $300,000
125
Occupied **
$ 13,750
$300,001 to $500,000
45
$
$ 11,250
$500,001 to $1,500,000
8
$
$ 4,800
$1,500,000 to $5,000,000
2
$ 2,200
$5,000,001 and greater
L
$ -
Recreation and Entertainment
Hotel/Motel Services
50 to $150,000 52
$150,001 to $300,000 28
$300,001 and greater 10
6 16,83 $ 15,300
b
6,guu
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6,6UU
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$
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$
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Occupied **
10,800
$
4,600
$
4,400
$
2,100
$
2,000
s 2,6UU s 2,_192 5 2,184
$ 2,380 $ 2,240 $ 2,100
$5 M 1 $ 1,500 $ 1,400 S 1,300
Automobile Dealers
Square Feet of Building Space
7
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116 3,1Y
Occupied **
0
i $ 2,100
$ 132,000 $ 99,000 1 s 66,UUU 1
Ralph Anderson & Associates
Admin Option Option Option
BUSINESS CLASS Fee
Manufacturer
$15
$.30/$1,000
$.25/$1,000
$.20/$1,000
Public Utilities
Retail
Wholesale
Admin Headquarters
Contractors
$15
$.60/$1,000
$.50/$1,000
$.40/$1,000
Recreation
Rental Residential
Rental Nonresidential
Services
Professions 1 $15 $.90/$1.000 $.75/$1.000 $.60/$1.000
0
ORDINANCE 1607
AN ORDINANCE OF THE CITY OF LODI REPEALING
CHAPTER 5.04. AND 9.16.010 B, OF THE LODI MUNICIPAL CODE
AND ADDING CHAPTERS 3.01 AND 9.16.010 B TO THE LODI MUNICIPAL CODE
RELATING TO BUSINESS TAX CERTIFICATION AND BUSINESS PERMITS
WHEREAS, the City's business tax ordinance has not been revised since 1948; and
WHEREAS, the City Council established the revision of the business tax ordinance as a high priority at a
special Council meeting on December 13, 1994; and
WHEREAS, the staff developed a revised business tax ordinance to improve equity and administrative
simplicity and to increase revenues for general municipal purposes; and
WHEREAS, the revised ordinance was presented to the City Council at a public meeting on January 4,
1995; and
WHEREAS, forty-three days have passed between the public meeting on January 4, 1995 and the public
hearing on February 15 1995; and
WHEREAS, Chapter 5.04 which provides for the regulation of business is deleted and added as Chapter
3.01 to raise revenues for general municipal purposes; and
WHEREAS, Chapter 9.16.010 B does not include the definition for a solicitor but refers to the definition in
Chapter 5.04 which is to be deleted;
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of Lodi as follows:
1. Chapter 5.04, Business Licenses, Taxes and Regulations, is hereby deleted in its entirety. Title 5 is
hereby retitled: "Permits and Regulations".
2. New Chapters 3.01, Business Tax Certification is hereby added, as described below.
3. Chapter 9.16.010B, Solicitors and Peddlers is hereby amended as described below.
CHAPTER 3.01
BUSINESS TAX CERTIFICATION
ARTICLE I. GENERAL PROVISIONS
SECTION 3.01.010. PURPOSE
The provisions of this chapter are enacted solely to raise revenue for general municipal purposes and are not
intended for regulation.
10
SECTION 3.01.020 BUSINESS TAX CERTIFICATION REQUIRED
Business taxes are hereby imposed upon all businesses, professions, trades, vocations, enterprises,
establishments, occupations, or callings conducting business in the city to which a business tax may lawfully
apply, in an amount established by Resolution of the City Council. It shall be unlawful for any person to
transact and carry on any business, trade, vocation, enterprise, establishment, occupation, or calling in the
City not otherwise exempt without first having procured a business tax certificate from the City or
complying with all of the applicable provisions of this chapter.
The business tax certificate shall be evidence only of the fact that such business tax has been paid. Neither
the payment of the business tax nor the possession of the business tax certificate shall authorize, permit, or
allow the doing of any act which the person paying or holding such business tax certificate would otherwise
be entitled to do; nor shall it be construed as permission to conduct or carry on business at any place within
the City where the conduct or carrying on of such business is prohibited or fails to comply with the City's
zoning, planning, or building regulations, nor shall it be construed as permission to conduct or carry on a
business in such a manner as to create or maintain a nuisance.
SECTION 3.01.030. EXEMPTIONS
The following persons and organizations are exempt from the provisions of this Chapter.
A. MINORS UNDER THE AGE OF 18.
Businesses owned and conducted by minors under the age of eighteen (18) years shall be exempt
from the business tax provisions of this chapter where all of the following conditions exist and legal
documentation is provided to support that:
1. All persons engaged in the operation of the business are under the age of eighteen (18) years,
and
2. All persons engaged in the operation of the business have a bona fide ownership interest in
the business, and
3. Gross receipts do not exceed $3,000 per year.
B. CHARITABLE, RELIGIOUS, AND NONPROFIT ORGANIZATIONS.
1. Organization activities. The provisions of this chapter shall not be deemed or construed to
require the payment of a business tax to conduct, manage, or carry on any business, occupation, or activity
of any institution or organization recognized by the State of California or Internal Revenue Service of the
United States as a "Domestic Non Profit Organization" to conduct business which is wholly for the benefit
of charitable, religious, or nonprofit purposes and from which a profit is not derived, either directly or
indirectly, by any person.
2. Nonexempt activities. The exemption provisions of this section shall not be construed to
extend to any person, business, corporation, or organization receiving a fee, wage, stipend, salary,
remuneration, compensation, or pay for performance of any business, occupation, or activity related to
exempt organization activities. Any such person, business corporation, or organization shall be subject to
the business tax provisions of this chapter and shall obtain a Business Tax Certificate prior to any business,
occupation, or activity being undertaken in the City.
11
C. CONFLICTS WITH FEDERAL AND STATE LAWS OR CONTRACTUAL
AGREEMENTS. The provisions of this chapter shall not be construed to require a person to obtain a
business tax certificate prior to doing business within the City if such requirement conflicts with the
applicable statues, laws, or constitution of the United States or the State of California or other contractual
obligations or franchise agreements. The Finance Director may develop administrative guidelines
concerning exemptions, apportionment, and any other matters which he determines as necessary for the
lawful and effective implementation of this Chapter.
D. CERTAIN HOME OCCUPATIONS
1. Every person commencing, transacting, and carrying on in the city any business in his home
in a residential zone, not as a nonconforming use, whose annual gross receipts from such business is $3.000
or less shall not be required to pay a business tax.
2. Persons who by reason of age or infirmity are physically unable to earn a livelihood through
ordinary means of labor or business, whose annual gross receipts from such business is $5,000 or less shall
not be required to pay a business tax.
E. PUBLIC UTILITIES
Public utilities engaged in providing services or commodities to the City of Lodi under a
franchise agreement shall not be required to pay a business tax.
F. DISABLED VETERANS
Veterans of the armed forces of the United States qualified under the provisions of the Business
& Professions Code Section 16001 shall not be required to pay a business tax.
G. RESIDENTIAL RENTAL UNITS
Persons renting four or less residential units within the City shall not be required to pay a
business license tax.
H. STREET FAIRS AND SPECIAL EVENTS
Sponsors of street fairs or spacial events may request the City Council to waive the Business
License Tax in part or whole for participants of a street fair or special event when the waiver is for a limited
period of time and a participant does not otherwise conduct business within the City of Lodi either directly
or indirectly by positing,, advertising or other means as described in Section 3.01.470 below; and, when the
Citv Council determines a blanket waiver of the Business License Tax for a street fair or special event is in
the best interest of the Ci
SECTION 3.01.040 DEFINITIONS
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used
in this chapter are defined as follows:
12
A. 'Business" shall mean and include professions, trades, vocations, rentals, leases,
enterprises, establishments, and occupations and all and every kind of calling, any of which is conducted for
the purpose of earning in whole, or in part, a profit or livelihood, whether or not a profit or a livelihood
actually is earned thereby, whether paid in money, goods, labor, or otherwise, and whether or not the
business has a fixed place of business in the City.
B. "Finance Director" shall mean the individual designated by the City Manager to collect
business taxes pursuant to the provisions of this chapter.
C. "Gross Receipts" shall mean and include the total amounts received or receivable from
sales, services, rentals, or leases in the total amounts actually received or receivable for the performance of
any act or service, of whatever nature it may be, for which a charge is made or a credit allowed, whether
or not such act or service is done as a part of, or in connection with, the sale or rental of materials,
property (real or personal), goods, wares, or merchandise. Included in "gross receipts" shall be receipts,
cash, credits, and property of any kind or nature, without any deduction therefrom on account of the cost
of the property sold, rented or leased, the cost of the materials used, labor and service costs, interest paid
or payable, or losses or other expenses whatsoever.
Excluded from "gross receipts" shall be the following:
1. Cash and jobber discounts (which reduce selling price and ultimate receipts from
sale);
2. Any tax (such as a sales tax, use tax, gas tax, transient occupancy tax, real property
transfer tax) which is measured by the sales price and is included in the purchase price and collected from
the consumer or purchaser;
3. Any refund that is granted, either in cash or credit, to a purchaser who returns
property upon the rescission of a contract of sale;
4. Amounts received by persons acting as agents, brokers or trustees, where such
amounts have been collected for and are paid to another party (e.g., amounts collected by salesmen and
transmitted to manufacturer or distributor; trust funds received and transmitted by trustee; fees separately
itemized on statements and forwarded to a subcontractor or fee consultant as payment for services rendered,
provided that a list of subcontractors or consultants and amounts paid is reported to the city; receipts
collected for and subsequently paid to a lessor, provided that the name of the lessor and the amount paid is
reported to the city);
5. Amounts received as refundable deposits, except those amounts that are forfeited and
subsequently taken as business income;
6. Any credit that is granted for property provided by the consumer or purchaser as part
of the purchase price (trade-in merchandise), provided that the value of property taken is reported in gross
receipts when sold to someone else;
13
7. Bad debts, when credits are reported in total in the first year and prove uncollectible
in a subsequent year;
8. Passive income (e.g., interest on investments, dividends, occasional sale of property
or surplus equipment, etc.); and
9. Receipts not taxable by virtue of provisions included in the Federal or State
Constitution.
E. "Person" shall mean and include all domestic and foreign corporations, associations,
syndicates, joint-stock corporations, partnerships of every kind, clubs, Massachusetts trust, business, and
other common law trusts, societies, and individuals transacting and carrying on any business in the City,
other than an employee.
F. "Sworn Statement" shall mean an affidavit sworn to before a person authorized to take oaths
or a declaration or certification made under the penalty of perjury.
G. "Gross receipts subject to the business tax" shall be that portion of gross receipts relating to
business conducted within the City. For businesses with their headquarters located within the City of Lodi,
their total gross receipts shall be deemed to be related to business conducted within the City unless an
apportionment of gross receipts is requested by the business pursuant to Section 3.01.509 of this chapter.
SECTION 3.01.050 BUSINESS CLASSIFICATIONS
For purposes of this chapter, the broad classifications used in this chapter are defined as follows:
A. "Administrative Headquarters" - Any business operation where the principal business
transacted consists of providing administrative or management related services such as, but not limited to,
record keeping, data processing, research, advertising, public relations, personnel administration, legal and
corporate headquarters services, to other locations where the operations of the same business are conducted
which lead more directly to the production of gross receipts.
_ B. "Contractors" - Any person who is licensed as a contractor by the State of California and
who undertakes to or offers to undertake to or purports to have the capacity to undertake to or submits a bid
to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move,
wreck or demolish any building, highway, road, railroad, excavation or other structure, project,
development or improvement, or to do any part thereof, including the erection of scaffolding or other
structures or works in connection therewith, is defined as a contractor. The term contractor includes
subcontractor and specialty contractor.
C. "Manufacturers" - Any person conducting, managing or carrying on a business consisting
mainly of manufacturing, packing, or processing any goods, wares, merchandise or produce.
14
D. " Professions" - Any person, group, association, partnership, firm or corporation engaged
in a profession or vocation licensed by the State, related to a licensed profession or vocation, and/or
requiring a period of specialized training such as, but not limited to, physicians, dentists, attorneys, and
accountants.
E. "Public Utilities" - Any person, including the City of Lodi, engaged in the business of
providing utility services to the general public or to private businesses including such services as electrical,
gas, sanitary and garbage, water, sewer, cable television and telephone.
F. "Recreation and Entertainment" - Any person engaged in the business of providing
directly recreation, entertainment, or amusement services.
G. "Rental of Residential Property" - Any person engaged in the business of renting or letting
a building or structure to a tenant for purposes of dwelling, sleeping or lodging (i.e., apartment, duplex,
condominium or other residential property rental excluding hotels and motels).
H. "Rental of Non -Residential Property" - Any person engaged in the business of renting or
letting a building or structure to a tenant for purposes of conducting business (i.e., commercial retail space,
office buildings, warehouses or other non-residential property use). Space occupied by the owner is
exempt.
I. "Retail' - Any person conducting, managing or carrying on the business consisting mainly of
selling at retail any goods.
J. "Services" - Any business providing services, repairs or improvements to or on real and
personal property; renting or leasing personal property to businesses or persons; involving the operation of
hotel or motel; providing services to persons such as, but not limited to, laundries, cleaning and dyeing,
shoe repair, barber and beauty shops, photographic studios, and transportation.
K. "Wholesale" - Any person conducting, managing or carrying on the business consisting
mainly of selling at wholesale any goods_
L. "Miscellaneous" - Any person engaged in a business not specifically described by other
provisions of this ordinance and not otherwise exempt.
SECTION 3.01.060. SAVINGS CLAUSE
The provision of this chapter are severable. Should any portion of this chapter be deemed invalid by a court
of competent jurisdiction, the provisions of Chapter 3.01 shall remain in full force and effect.
ARTICLE H. TAX AMOUNTS
SECTION 3.01.110. TAX BASIS
The amount of the business tax to be paid by the applicant shall be paid at a rate determined by the business
classification established by resolution of the City Council.
15
SECTION 3.01.120. TAX RATE
The tax rate for all businesses shall be set by Resolution of the City Council.
SECTION 3.01.130. MINIMUM TAX
The minimum tax shall be paid in full on application for a Business License Certificate and shall not be
prorated for the calendar year of Januar}t 1 through December 31.
SECTION 3,01.140. PAYMENT SCHEDULE
When the Business License Tax is greater than $750. the tax may be paid to the City in four equal
installments due January 31. Apri130. July 31 and October 31.
ARTICLE III. APPLICATION AND RENEWAL
SECTION 3.01.210. BUSINESS TAX CERTIFICATE APPLICATIONS
Every person required to have a business tax certificate pursuant to the provisions of this chapter shall make
a written application to the Finance Director and submit the following information:
A. The nature or kind of business for which the business tax certificate is requested;
B. The place where the business is to be conducted and, if the business is not to be
conducted at a permanent location, the residence address, identified as such, of the owners of the
business;
C. If the application is made for the issuance of a business tax certificate to a person to do
business under a fictitious name, the names, social security numbers, and residence addresses of the
owner(s) of the business;
D. If the application is made for the issuance of a business tax certificate to a corporation or
partnership, the names, franchise tax number, and residence addresses of the officers or partners
thereof; and
E. Any further information which the Federal or State Taxing authority or the Finance
Director may require to enable the issuance of the business tax certificate.
SECTION 3.01.220 BUSINESS TAX CERTIFICATE RENEWALS
In all cases, the applicant for the renewal of the business tax certificate required by the provisions of this
chapter shall submit to the Finance Director a written statement, upon a form provided by the Finance
Director, written under penalty of perjury or sworn to before a person authorized to administer oaths,
setting forth the actual gross receipts earned the preceding calendar or fiscal year as reported to any
Federal or State taxing authority to which gross receipts are reported to enable the Finance Director to
ascertain the amount of the business tax to be paid. Unless otherwise specifically provided, all annual
business taxes required by the provisions of this chapter shall be due and payable on January 1st of each
year and shall be delinquent on January 31 st of each year.
16
No renewal of a business tax certificate shall be issued until payment in full of all delinquent business
taxes, including accrued interest and applicable penalties thereon is received by the City. It shall be the
responsibility of the applicant to ensure renewal of the business tax certificate.
ARTICLE IV. BUSINESS TAX CERTIFICATE ISSUANCE
SECTION 3.01.310. CONTENT
All business tax certificates required by the provisions of this chapter, unless otherwise provided in this
chapter, shall be prepared and issued by the Finance Director upon the payment to the City of the
proper amount of business tax. Each business tax certificate shall state upon the face thereof the
following:
A. The name of the person to whom the business tax certificate is issued
B. The type of business taxed
C. The location or address of the business taxed
D. The date of the expiration of the business tax certificate
E. That the possession of the business tax certificate shall not authorize, permit, or allow
the person to do any act which such person would not otherwise be lawfully entitled to do.
SECTION 3.01.320. POSTING AND KEEPING
All business tax certificates issued pursuant to the provisions of this chapter shall be posted and kept in
the following manner:
A. Any persons transacting and carrying on the business at a permanent location in the City
shall keep such business tax certificate posted in a conspicuous place upon the premises where such
business is carried on.
B. Any persons transacting and carrying on business, but not operating at a permanent
location in the City, shall keep such business tax certificate upon them at all times while transacting and
carrying on such business.
SECTION 3.01.330. DUPLICATES
A duplicate business tax certificate may be issued by the Finance Director to replace any business tax
certificate previously issued pursuant to the provisions of this chapter, which business tax certificate has
been lost or destroyed, upon the filing of a statement of such fact and the payment of a duplicate fee set
by resolution of the City Council.
SECTION 3.01.340. BRANCH ESTABLISHMENTS
A separate business tax certificate shall be issued for each branch establishment or location of business;
provided, however, warehouses and distribution plants used in connection with, and incidental to, a
business tax pursuant to the provisions of this chapter shall not be deemed to be separate places of
business or branch establishments; and provided, further, any person conducting two (2) or more types
17
of business at the same location and under the same management, or at different locations, but which
businesses use a single set or integrated set of books and records, may elect to pay only one business tax
calculated on all the gross receipts of the businesses, except that a fee set by resolution of the City
Council shall be paid upon issuance for each additional branch or location.
SECTION 3.01.350. CHANGE OF LOCATION
No business tax certificate issued pursuant to the provisions of this chapter shall be transferable;
provided, however, where a business tax certificate is issued for a person to transact and cant' on a
business at a particular place, such person, upon an application therefor and the payment of a fee set by
resolution of the City Council, may have the business tax certificate reissued for transacting and
carrying on of such business under such business tax certificate at some other location to which it is to
be moved.
ARTICLE V. ADMINISTRATION
SECTION 3.01.410. CERTIFICATION OF RECORDS
A. CONCLUSIVENESS OF STATEMENTS. No statement required by the provisions of this
chapter shall be conclusive as to the matters set forth therein, nor shall the filing of such statements
preclude the City from collection by appropriate action such sums as are actually due and payable
pursuant to the provisions of this chapter. Such statements and each of the several items therein
contained shall be subject to certification by the Finance Director, the deputies of the Finance Director,
or authorized employees or representatives of the City, who are hereby authorized to examine such
books and records of any certificate holder or applicant for a business tax certificate as may be necessary
in their judgment to verify or ascertain the amount of the business tax due.
B. RECORD RETENTION. All persons subject to the provisions of this chapter shall keep complete
records of all business transactions and shall retain such records for examination by the Finance
Director, the deputies of the Finance Director, or authorized employees or representatives of the City,
and maintain them for a period of at least three years from the annual due date of the federal tax return
or the City business tax return, whichever time period is greater. Records which shall be maintained for
audit purposes shall include State and Federal income tax returns, schedules and records included in
such returns, and any and all work papers used to prepare such returns.
C. EXAMINATION OF RECORDS. All business tax certificate holders, applicants for business tax
certificates, and persons engaged in business in the City are hereby required to permit an examination of
such books and records for the purposes set forth in this section during regular business hours and at
reasonable times.
D. INTEREST AND PENALTIES. If, subsequent to the examination, it is determined that the
business has been delinquent or has non -reported or under -reported gross receipts, thereby underpaying
business taxes, the certificate holder shall pay to the City within ten (10) days of notification of the
determination of the amount of tax due, interest in the amount equal to the current rate for ninety (90)
day Treasury Notes from the date the tax was due, and a penalty in the amount of the business tax due.
Interest shall continue to accrue on the additional tax amount until such amount is paid in full. A
mistake made in stating the amount of the business tax shall not, in any case, prevent or prejudice the
IN
Finance Director from collecting what is actually due from any person or entity carrying on a trade,
calling, profession, or occupation subject to a business tax under this chapter.
E. DETERMINATION OF TAX AMOUNTS DUE. If any person subject to the tax imposed by
this chapter fails to submit information required, or if the Finance Director is not satisfied with records
and statements filed, the Finance Director shall determine the amount of the business tax due from such
person by means of such information as may be obtainable and shall mail a notice of the amount so
assessed by serving it personally or by depositing it in the United States Post Office at Lodi, California,
postage prepaid, addressed to the person at their last -known address.
SECTION 3.01.420. INFORMATION CONFIDENTIAL
It shall be unlawful for the Finance Director or designee, or any person having an administrative duty
pursuant to the provisions of this chapter, to make known in any manner whatever the business affairs,
operations, or financial information obtained by an investigation of the records of any person required to
obtain a business tax certificate, or pay a business tax, or any other person visited or examined in the
discharge or the official duty of the Finance Director, or of the amount or source of income, profits,
losses, or expenditures, or any particular thereof, set forth in any statement or application, or amended
statement or application, or copy of either, or in any book containing any abstract or particulars therein
to be seen or examined by any person; provided, however, the provisions of this section shall not be
construed to prevent:
A. Disclosure to, or the examination of records and equipment by, another City official,
employee, or agent for the collection of taxes for the sole purpose of administering or enforcing the
provisions of this chapter or collecting the business taxes imposed by the provisions of this chapter;
B. The disclosure of information to, or the examination of records by, Federal or State
officials, or the tax officials of another city or county, if the reciprocal arrangement exists, or to a grand
jury or court of law upon a subpoena;
C. The disclosure of information and the results of examination of records of particular
taxpayers, or relating to particular taxpayers, to a court of law for proceedings brought to determine the
existence of the amount of any business tax liability of such particular taxpayers of the City;
D. The disclosure, after the filing of a written request to the effect, to the taxpayer, or to the
taxpayers' successors, receivers, trustees, executors, administrators, assignees, or guarantors if directly
interested, of information as to items included in the measure of any paid business tax, any unpaid
business tax, or any amount of business tax required to be collected, including interest and penalties;
further provided, however, that the City Attorney shall approve each such disclosure, and the Finance
Director or designee may refuse to make any disclosure referred to in this subsection when, in their
opinion, the public interest would suffer thereby;
E. The disclosure of the names and business address of persons to whom business tax certificates
have been issued and the general type and nature of their business;
19
F. The disclosure, by way of public meeting or otherwise, of such information as may be
necessary to the City Council in order to permit the City Council to be fully advised as to the facts if a
taxpayer files a claim for the refund of business taxes, or submits an offer of compromise with regard to
a claim asserted against them by the City for business taxes, or when acting upon any other similar
matter; and
G. The disclosure of general statistics regarding business taxes collected or business done in the
City.
SECTION 3.01.430. FINANCE DIRECTOR ADJUSTMENT POWERS
The Finance Director shall have the power, for good cause shown, and documented by the Finance
Director as a permanent record:
A. To extend the time for filing any required sworn statement;
B. To waive any penalties which would otherwise have accrued;
C. To adjust the amount of the business tax due;
D. To make refunds or prorations of taxes paid; and
E. To establish a basis or "proxy" to calculate gross receipts for those businesses and classes
of business which do not have a "gross receipts" on which to base the tax, i.e.
administrative headquarters.
SECTION 3.01.440 DEBT TO CITY
The amount of any business tax and penalty imposed by the provisions of this chapter shall be deemed a
debt to the City. A suit may be brought against any person to enforce the collection of the debt
described in this Chapter in any court of competent jurisdiction.
The conviction of any person for transacting any business without a certificate shall not excuse or
exempt such person from payment of any license due or unpaid at the time of such conviction and
nothing herein shall prevent a criminal prosecution for any violation of the provisions of this Chapter.
SECTION 3.01.450. DELINQUENCIES AND PENALTIES
For failure to pay the business tax required by the provisions of this chapter prior to the delinquency
date, the Finance Director shall add a penalty of Ten and no/100ths ($10.00) or ten percent (10%) of
the business tax, whichever is the greater, on the first day of each month after the delinquency thereof;
provided, however, the total amount of such penalty to be added in no event shall exceed one hundred
percent (100%) of the amount of the business tax due.
20
SECTION 3.01.460. ENFORCEMENT
A. DUTIES OF THE FINANCE DIRECTOR AND CHIEF OF POLICE. It shall be the duty
of the Finance Director to enforce each and all of the provisions of this chapter, and the Chief of Police
shall render such assistance in such enforcement as may from time to time be required by the Finance
Director.
B. INSPECTIONS. The Finance Director, in the exercise of the duties imposed by the provisions
of this section, and acting through deputies of duly authorized assistants, shall have the right to enter and
examine all places of business free of charge during normal business hours to ascertain whether the
provisions of this chapter are being complied with.
C. PENALTY FOR VIOLATION. Any person who violates any provision of Section 3.01.102
by transacting and carrying on any business, trade, vocation, enterprise, establishment, occupation, or
calling in the City without first having procured a business tax certificate is guilty of an infraction and is
subject to punishment as provided for in Chapter 1.12 of this municipal code.
SECTION 3.01.470 EVIDENCE OF DOING BUSINESS
When any person, by the use of a sign, circular, card, telephone book, newspaper, other publication, or
advertising media, shall advertise, hold out, or represent that they are in business in the City, or when
any person holds an active license or permit issued by a government agency indicating that they are
conducting a business in the City, and such person fails to deny, by a sworn statement given to the
Finance Director or designee, that they are not conducting a business in the City after being requested to
do so by the Finance Director or designee, then these facts shall be considered prima facie evidence that
such person is conducting a business in the City.
SECTION 3.01.480. REMEDIES CUMULATIVE.
All remedies prescribed by the provisions of this chapter 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.
SECTION 3.01.490 APPORTIONMENT
When the business tax imposed by this Chapter cannot be enforced without there being an
apportionment according to the amount of business done in the City of Lodi, apportionment rules shall
be established by the Finance Director. The Finance Director shall conduct an investigation and shall
fix as the business tax for the applicant an amount that is reasonable and nondiscriminatory or, if a
business tax has already been paid, shall order a refund of the amount over and above the business tax
so affixed. In fixing the business tax to be charged, the Finance Director shall have the power to base
the business tax upon a percentage of gross receipts, operating expenses, floor space, payroll, number of
employees, business taxes paid to other cities, or any other measure which will assure that the business
tax assessed shall be uniform with the amount of business done in the City of Lodi, or of businesses of a
like nature, so long as the amount assessed does not exceed the business tax set forth in this Chapter.
21
SECTION 3.01.500 APPEALS
A. Any tax payer aggrieved by a decision of the Finance Director with respect to the issuance or
reftisal to issue a business tax certificate may appeal such decision by first submitting a written Egguest
to the itv Manager for an—administrative hearinp- by the–City Manager or his designee who shall have
e power, for good cause shown to;
1. Waive any penalties which would other wise accrued:
2 Adjust the amount of the business tax due:
3. Make refunds or prorations of taxes paid: and
4. Establish a basis or "proxy to calculate the tax .
B. Any tax payer dissatisfied with the decision of the City Manager or his designee following an
administrative hearing may appeal to the city council by filing a notice of such appeal with the city
clerk. The city council shall thereupon fix a time and place for hearing such appeal. The city clerk
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 Lodi. California, postage prepaid, addressed to such
rson at his last -known address.
ARTICLE VI. IlVIPLEMENTATION
SECTION 3.01.510. EMIPLEMENTATION OF REVISED PROVISIONS
For business tax renewals due between January 1. 1995 and April 1. 1995, the tax rate upon renewal
will be the amount of tax paid in 1994 but not less than the minimum tax set by resolution of the City
Council.
The Finance Director shall have the power, for economic hardship or financial impact on any one
business, to adjust the amount of the business tax due through January 1997.
Chapter 9.16.010 Definitions, is hereby deleted.
9.16.010 Definitions:
Chapter 9.16.010 Definitions, is hereby added to read as follows:
9.16.010 Definitions.
B. "Solicitor" means any person who takes orders, or offers to sell or take orders for any
goods. wares, merchandise or thing, for future delivery, or for services to be performed, at any place in
the city other than a fixed place of business, and who does not follow a fixed route or serve prospective
purchasers in the city regularly or continuously. "Solicitor" does not include salesmen or agents for
wholesale houses or firms who sell to retail dealers for resale or sell to manufactures for manufacturing
purposes or to bidders for public works or supplies, or newspaper carriers.
22
All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may
exist.
This ordinance is for the usual and current expenses of the City and is adopted pursuant to Government
Code 36937(d). This ordinance shall be published one time in the Lodi News Sentinel, a daily
newspaper of general circulation printed and published in the City of Lodi and shall be in force and take
effect immediately upon its passage and approval.
Approved this day of
Stephen J. Mann, Mayor
Attest:
Jennifer M. Perrin
City Clerk
State of California
County of San Joaquin, ss
I, Jennifer M. Perrin, City Clerk of the City of Lodi, do hereby certify that Ordinance No. 1607 was
introduced at a regular meeting of the City Council of the City of Lodi held February 15, 1995 and was
thereafter passed, adopted and ordered to print at a regular meeting of said Council held by
the following vote:
Ayes: Council Members -
Noes: Council Members -
Absent: Council Members -
Abstain: Council Members -
I further certify that Ordinance No. 1607 was approved and signed by the Mayor on the date of its
passage and the same has been published pursuant to law.
Jennifer M. Perrin
City Clerk
Approved as to Form
Bobby W. McNatt
RESOLUTION NO 95-22
A RESOLUTION OF THE LODI CITY COUNCIL SETTING
THE TAX RATES FOR THE BUSINESS LICENSE TAX PROVIDED IN NEW
CHAPTER 3.01 OF THE LODI MUNICIPAL ORDINANCE AND WAIVING
LATE PENALTIES ON BUSINESS LICENSE TAXES DUE JANUARY 1, 1995 REQUIRED
UNDER CHAPTER 5.04 OF THE LODI MUNICIPAL CODE
WHEREAS, the City Council adopted Chapter 3.01 of the Lodi Municipal Code, Business Tax
Certification; and
WHEREAS, Article II, Tax Amounts, requires the business tax rates to be set by resolution of the
City Council, and
WHEREAS, the City Council has held a public meeting on January 4, and a public hearing on
February 15, 1995 to take public testimony; and,
WHEREAS, at a special City Council meeting on December 13, 1994, the City Council directed
the Finance Department to delay the collection of the business license tax due January 1, 1995 until after
hearings on a new business license ordinance and tax rates.
NOW, THEREFORE BE IT RESOLVED by the Lodi City Council as follows:
1. The tax rates required by Article II, Chapter 3.01, Business Tax Certification, and listed in Table 1
are hereby adopted.
2. The estimated revenue from the business license tax is $722,950.
3. Late penalties charged for payment of the Business License Tax after January 31, 1995 under the
provisions of Chapter 5.04, Business Licenses, Taxes and Regulations, are waived.
BE IT FURTHER RESOLVED that this Resolution No 95-22 shall become effective concurrent with
Ordinance No. 1607 (March 2, 1995)
Dated: February 15, 1995
I hereby certify that Resolution No. 95-22 was passed and adopted by the City Council of Lodi in a
regular meeting held February 15, 1995 by the following vote:
Ayes: Council Members - Pennino, Sieglock, and Mann (Mayor)
Noes: Council Members -Davenport and Warner
Absent: Council members - None
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26th thru 100th Employee
$7
101st thru 200th Employee
$5
Over 200 Employees
L
$2
The Group 6 tax rate will be a rate established by the Finance Director on application by the
manufacturer and based on either gross receipts, gross payroll, square feet of occupied space or number
Df employees as determined to be fair and equitable. The tax rate and tax method may be
adjusted to foster implementation of new rates over three years and when the economic
conditions of the City or manufacturer require an adjustment.
The tax rate and tax method will be set on a business by business basis with the minimum
tax set at $200 per year and the tax ceiling set at $4,000 per year. The tax rate, tax method,
minimum tax and tax ceiling will be reviewed and adjusted once every five years based on inflation.
and the economic conditions of the tax payor.
BUSINESS LICEiNSE TAX REVENUES
GROUP 1
Retail and Services
Rental Non -Residential Property
Wholesale
150
Gross Receipts 1 300
30.6 Millio
Contractors
125
$5 M
$ 13,750
Public Utilities
45
$ 11,250
Administrative Headquarters
8
$ 4,800
$0 to $200,000
1850
$ 92,500
$200,001 to $500,000
645
$ 63,210
$500,001 to $900,000
270
$ 56,700
$900,001 to $3,000,000
100
$ 45,000
$3,000,001 to $10 Million
70
$355 Millioi
$ 213,000
$10 Million and greater
10
$118 Million
$ 118,000
GROUP2
Rental Residential Property
Rental Non -Residential Property
$0 to $75,000
150
Gross Receipts 1 300
30.6 Millio
$ 18,360
GROUP 3
Yofessions
$0 to $75,000
150
6.6 M
$ 7,500
$75,001 to $300,000
125
$5 M
$ 13,750
$300,001 to $500,000
45
$ 11,250
$500,001 to $1,500,000
8
$ 4,800
$1,500,000 to $5,000,000
2
$ 2,200
$5,000,001 and greater
$ -
GROUP 4
Recreation and Entertainment
Hotel/Motel Services
1
6.6 M
$ 4,200
$0 to $150,000
$150,001 to $300,000
$300,001 and greater
52
28
10
$5 M
$ 2,600
$ 2,380
$ 1,500
Automobile Dealers
Square Feet of Building Space
7
6.6 M
$ 4,200
Occupied **
Manufacturers
Proxy
328
6.6 M
$ 66,000
CITY Or LODI NOTIG._. OF PUBLIC HEARING
Flo
Date: January 4,1995 (Public Meeting)
Carnegie Forum February 15,1995 (Public Hearing)
305 West Pine Street, Lodi Time: 7:00 p.m.
For information regarding this notice please contact:
Jennifer M. Perrin
City Clerk
Telephone: 209 333-6702
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Wednesday, January 4, 1995, at the hour of 7:00
p.m., or as soon thereafter as the matter may be heard, the City Council will conduct a
Public Meeting, and on February 15, 1995 at the hour of 7:00 p.m., or as soon thereafter
as the matter may be heard, the City Council will conduct a Public Hearing to consider the
following matter:
a) To consider and hear public testimony on the proposed Business License
Tax Ordinance.
Business taxes will be imposed on all businesses, professions, trades,
vocations, enterprises, establishments, occupations or callings conducted
in the City of Lodi to which a business tax may be lawfully applied using
the tax rates in Table 1 (attached). New businesses will not pay more
than the minimum tax in their first year of business whether located in or
outside of the City. The tax will be due and payable annually in January
for the prior year except for new businesses which will pay the minimum
tax at the time issued.
Businesses exempt from the business license tax:
• Minors under the age of 18 with gross receipts of less than $5,000
per year;
• Home occupations with gross receipts of less than $5,000 per year;
• Charitable, religious and non-profit organizations;
• Businesses exempt by Federal or State statutes, laws, franchise
agreements, or other contractual agreements. This includes banks,
insurance companies, their agents and other financial institutions,
cafe musicians, real estate auctioneers, businesses that
manufacture, sell, purchase, possess or transport alcoholic
beverages.
Excluded from the calculation of gross receipts is the following:
• All taxes;
• Discounts, refunds and credits;
• Passive income from investments, dividends and the occasional sale
of property;
• Bad debts;
• Amounts received by one party and paid to another party by persons
acting as agents, brokers and trustees.
JACITYURKTORMSW0TICE2MOC 1220/94
PUBLIC HEARING "7TICE
PROPOSED BUST, jS LICENSE TAX
JULY 6,1994
Table 2 (attached) shows the estimated revenue for each of the three
options, and it ranges from $887,00 to $601,000.
All interested persons are invited to present their views and comments on this matter.
Written statements may be filed with the City Clerk at any time prior to the hearing
scheduled herein, and oral statements may be made at said hearing.
By Order of the Lodi City Council:
J iter M. rrin
Ci Clerk
Dated: December 21,1994
Approved as to form:
IV
Bobby W. McNatt
City Attorney
JICRYURMFORMSWOTICE2.DOC 12/20199
BUSINESS LICENSE TAX RATES
TABLE 1
GROUP 1
Retail and Services
Gross Receipts
$30
'
1
1 $.60/$1,000
$0 to $200,000
$30
$40
$30
$20
$200,001 to $500,000
$30
$90
$70
$50
$500,001 to $900,000
$30
$150
$110
$80
$900,001 to $5 million
$30
$.60/ $1,000
$.55/$1,000
$.50/$1,000
$5,000,001 and greater
1 $30
1 $.90/$1,000
1 $.75/$1,000
1 $.60/$1,000
GROUP 2
Contractors
Rental Residential Property
$30
'
1
1 $.60/$1,000
Rental Non -Residential Property
$30
$.40/$1,000
$$.35/$1,000
$.30/$1,000
Gross Receipts
$30
$.60/$1,000
$.55/$1,000
$.50/$1,000
GROUP 3
Public Utilities
Administrative Headquarters
$30
$.90/$1,000
1
1 $.60/$1,000
Gross Receipts
$30
$.40/$1,000
$$.35/$1,000
$.30/$1,000
GROUP 4
Professions
Gross Receipts
$30
$.90/$1,000
1 $.75/$1,000
1 $.60/$1,000
GROUPS
Recreation and Entertainment
Hotel/Motel Services
Automobile Dealers
$30
$.02/ Sq Ft
$1.5/Sq Ft
$.01/Sq Ft
Gross Receipts
$30
$.25/$1,000
$.20/$1,000
$.15/$1,000
GROUP 6
Manufacturers/Wholesalers
Square Feet of Building Space
Occupied **
$30
$.02/ Sq Ft
$1.5/Sq Ft
$.01/Sq Ft
* Minimum tax due in the first calendar year of business in Lodi (not prorated)
** Not to exceed $3,000 per year
BUSINESS LICENSE TAX REVENUES
TABLE 2
GROUP
Retail and Services
Gross Receipts
Gross Receipts
$160 million
$ 144,000 1 $120,000
'
$0 to $200,000
1,660
$51 million
$ 66,400
$ 49,800
$ 33,200
$200,001 to $500,000
475
$170.4 millio
$ 42,750
$ 33,250
$ 23,750
$500,001 to $900,000
220
$ 33,000
$ 24,200
$ 17,600
$900,001 to $5 million
158
$348 million
$ 208,800
$191,400
$174,000
$5.000.001 and areater
12
$123 million
j $ 110,700
$ 92,250
1 $ 73,800
GROUP2
Contractors
Gross Receipts
Rental Residential Property
$160 million
$ 144,000 1 $120,000
'
Rental Non -Residential Property
5
$51 million
$ 20,400
$ 17,850
$ 15,300
Gross Receipts
1025
$170.4 millio
1 $ 102.240
$ 93.720
1 $ 85.200
GROUP 3
Public Utilities
Gross Receipts
Administrative Headquarters
$160 million
$ 144,000 1 $120,000
$ 96,000
Gross Receipts
5
$51 million
$ 20,400
$ 17,850
$ 15,300
GROUP4
Professions
Gross Receipts
330
$160 million
$ 144,000 1 $120,000
$ 96,000
GROUP 5
Recreation and Entertainment
Hotel/Motel Services
120,000
Automobile Dealers
330
Sq Ft
$132,000
$99,000
$66,000
Gross Receipts
94
$106 million
$ 26,510
$ 21,208
$ 15,906
Manufacturers/Wholesalers
Square Feet of Building Space
120,000
Occupied
330
Sq Ft
$132,000
$99,000
$66,000
�.r ��, � 1,� � � •`Z \fir 3� ��_��� 1� � � �.<� \ � ?� ��"
P.O. BOX 1150
Lodi City Council
City Hall, Lodi, CA
P 0 Box 3006
Lodi, CA 95241
LODI, CALIFORNIA 95241
Attention: Steve Mann - Mayor
Dear Members of the City Council:
PHONE (209) 388-5395
January 24, 1995
FAX (209) 339-1453
Following are some of my concerns on your proposed increase in Business
License.
Sales Figures - Used to figure Business License if we had contractors
base in Lodi that worked out of town. It would give them the incentive to
move out of town. For instance, Galt as their license is figured on employees.
This would also make you stop and reElly analyze if you wanted to expand.
One of the questions that I have is how many businesses do we have in
Lodi and why have so many not. paid Business License?
Building Footage - Would also be Unfair as the same contractor could only
have a small office in Lodi and could pay a small fee. Where manufacturers that
have large warehouse space would be penalized because of covered area (which we
are already paying in property taxes.)
Since we have locations in Lodi and Galt, our sales are all through the
Lodi office and we would be paying for the Galt production on Lodi Business
License if it is calculated on sales and then paying our Galt Business Li-
cense - this would be a duplication of taxes on the same operation.
I feel that the fairest way is by the number of employees as this is an
area that when recession hits is adjustable. Also, I feel the minimum license
fee should be $100.00 per year. This is a fair figure for anyone doing business
in Lodi.
This could eliminate some of these year around garage sales and another
one of my peeves is that when you call City Hall to check if someone has a
Business License they can't give you an answer on this. I have personally called
on two separate locations and to this day I don't know if they have a Business
License.
In 1994, our Business License was $71.00 with 40 employees. I would re-
commend your new rates to be comparable to Galt fees which is $40.00 for owner
or manager and $10.00 per employee. If it were raised to the above figures,
our fee for 40 employees would then be:
iTl
Following are some of my concerns on your proposed increase in Business
License.
Sales Figures - Used to figure Business License if we had contractors
base in Lodi that worked out of town. It would give them the incentive to
move out of town. For instance, Galt as their license is figured on employees.
This would also make you stop and reElly analyze if you wanted to expand.
One of the questions that I have is how many businesses do we have in
Lodi and why have so many not. paid Business License?
Building Footage - Would also be Unfair as the same contractor could only
have a small office in Lodi and could pay a small fee. Where manufacturers that
have large warehouse space would be penalized because of covered area (which we
are already paying in property taxes.)
Since we have locations in Lodi and Galt, our sales are all through the
Lodi office and we would be paying for the Galt production on Lodi Business
License if it is calculated on sales and then paying our Galt Business Li-
cense - this would be a duplication of taxes on the same operation.
I feel that the fairest way is by the number of employees as this is an
area that when recession hits is adjustable. Also, I feel the minimum license
fee should be $100.00 per year. This is a fair figure for anyone doing business
in Lodi.
This could eliminate some of these year around garage sales and another
one of my peeves is that when you call City Hall to check if someone has a
Business License they can't give you an answer on this. I have personally called
on two separate locations and to this day I don't know if they have a Business
License.
In 1994, our Business License was $71.00 with 40 employees. I would re-
commend your new rates to be comparable to Galt fees which is $40.00 for owner
or manager and $10.00 per employee. If it were raised to the above figures,
our fee for 40 employees would then be:
Page 2
Cont., Lodi Iron Wor' Inc. letter dated January 24, 5
$390.00
40.00
$430.00
which would be six times more than 1994. If you take City of Lodi's 1994
receipts for Business License, how much would this add to your income?
Please consider this closely before you pass the new fees, as they
would never be reduced - - - - but increased.
Thank you for your consideration on this matter.
As Ever,
LODI IRON RKS, I
Ile
Vickie Van teenb ge (Mrs.)
President
VVS/rls
cc: Dave Warner
Ray Davenport
Phil Peinno
Jack Seigloch
GEMIKEF'�IsA
PROPERTIES
January 25, 1995
Ms. Jennifer Perrin, City Clerk
Mr. Dixon Flynn, Finance Director
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
RE: Proposed Business License Tax Increase - Hotel/Motel Category
Dear Mayor, Council Members, & Mr. Flynn:
1'
Following are additional comments to those I made at yesterday's, (January 24th), shirtsleeve
Council meeting in regards to the proposed increase in the Business License Tax.
As stated yesterday, the motels operating in the City currently pay a Transient Occupancy Tax,
("T.O.T."), equal to 9% of the gross revenue. As Mayor Mann pointed out yesterday, most of
our revenue is not subject to sales tax. Thus, it could be assumed that the T.O.T. monies provide
a slightly greater revenue to the City compared to a similar -volume business that collects sales
tax. In actuality, the T.O.T. provides a significantly greater revenue stream to the City's General
Fund due to the fact that the City keeps all of the T.O.T. income, versus a small portion of the
total sales tax collected.
For example, a $1,000,000. per year retail business generates $77,500. yearly in sales tax income,
of which approximately 25% is received by the City, or $19,375. This same business, under the
highest fee option, would pay $600. in business license tax, for a total income to the City of
$19,975., annually. The same sales -volume motel would provide $90,000. yearly in T.O.T., in
addition to $300. in business license tax, for a total income to the City of $90,300., which means
the motel provided $70,925. more income to the City than a comparably sized retail business in
just 1 year's time.
Certainly an increase in the business license tax is in order. However, motels are already taxed on
their gross receipts at a level much higher than retail businesses, as illustrated above. The
principle of an additional gross -receipts tax for motels appears unreasonable, based on the income
already being derived via the T.O.T. I suggest that the proposed business license fee structure
include a separate category for hotels/motels with a flat fee.
Lodi 209/334-6500 • Stockton 209/466-8571 • 1045 S. Cherokee Lane, Lodi, CA 95240 • P.O. Box 1210, Lodi, CA 95241
As operators of Lodi Motor Inn, we have discussed this with the other 2 motels, (Comfort Inn &
Best Western Royal Host), that along with our motel, comprise most of the current T.O.T.
income. Though I do not speak for them, they support the flat rate business license tax for the
same reasons.
In conclusion, this minor change would have little impact on the overall revenue generated by the
proposal before you, although it would have significant positive impact to the perception of a fair
and equitable method of increasing the business license tax as it applies to hotels/motels. I am
available to discuss this issue further or answer questions at your convenience.
Sincerely,
Dale N. Gillespie
for Geweke Properties, dba Lodi Motor Inn
cc: Daryl Geweke, Jane Willett, Mary Bagnell - Lodi Motor Inn
Comfort Inn
Best Western Royal Host Inn
DNG/gd
Lodi City Council
Lodi City Hail
221 W. Pine St.
Lodi G4 95240
Gentlemen:
February 14, 1995
I would like to encourage you to adopt the proposed business license fee increase. This
increase is way past due and could certainly benefit a number of worth while programs.
You have my full support.
Sin erely
Marlo Kerne
MARLO KERNER & ASSOCIATES
P. O. Box 1690
Lodi, California 95241
Phone (209) 366-0691
FAX (209) 368-0691
2/15/95 LODI CITY COUNCIL MEETING
PROPOSED LODI BUSINESS TAX
COMMENTS SUBMITTED BY COREY WRIGHT, VIENNA CONVALESCENT HOSPITAL, 800
SOUTH HAM LANE LODI, CA. 95242. 368-7141
All business' should be treated the same, whether it be by gross
receipts, square footage or numbers of employees. Certain business'
should not have the option of choosing a method that benefits them the
most.
Why should my business pay more , proportionately, compared to some of
the larger manufacturing companies where they are capped at $3,000.00.
We pump millions of dollars into the local community also via payroll
and daily operating expenses every year.
I've heard the argument that car dealerships are paying their tax based
on square footage, which results in a lower tax, because they provide
sales tax to the community. This is a fallacy. The buyers of their
cars pay the sales tax not the car dealership. They just collect the
tax and turn it over to the city.
What's to prevent a business from falsifying their gross receipts to
the city? There are no checks and balances here. I don't know of any
regulation that gives the city the authority to go into a business and
audit their income statements.
Why should our tax dollars be spent
i.e. the downtown business', when
property. They should pay for its
and its appearance at our own cost.
to improve someone elses property,
they are receiving rents on their
upkeep. We maintain our property
I understand that the taxes generated will benefit the city in terms
of a new fire station, more police etc... (this benefits the entire
city; why should business bear the entire burden).
I am not complaining about paying higher taxes as much as I am
concerned on how the tax is to be implemented and the fact that there
are "tax breaks" and limits for certain companies.
Feb. 15, 1995
To: LODI C.l'TY COUNCIL MEMBERS
From: THE LODI COMMUNTI'Y CONCERT ASSOCIATION, INC.
Subject: Business Tax Increase.
We are in favor of this long overdue tax increase.
Board of Directors
-iGlatif iSeirick" � ` <
President