HomeMy WebLinkAbout2361 ORDINANCE NO. 2361
AN ORDINANCE OF THE PEOPLE OF THE CITY OF ARCADIA,
CALIFORNIA ADDING PART 5.5 TO CHAPTER 6 (TAXES) OF ARTICLE
II (ADMINISTRATION) OF THE ARCADIA MUNICIPAL CODE TO
ESTABLISH A THREE-QUARTERS PERCENT (THREE-QUARTER
PERCENT) GENERAL TRANSACTIONS AND USE TAX (SALES TAX),
SAID TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT
OF TAX AND FEE ADMINISTRATION
THE PEOPLE OF THE CITY OF ARCADIA, CALIFORNIA DO HEREBY ORDAIN
AS FOLLOWS:
SECTION 1. Part 5.5 is hereby added to Chapter 6 (Taxes) of Article II
(Administration) of the Arcadia Municipal Code to read as follows:
"CHAPTER 6. TAXES
Part 5.5 — LOCAL TRANSACTIONS AND USE TAX
2655. Title. This Part shall be known as the Arcadia Transactions and Use Tax
Ordinance. The City of Arcadia hereinafter shall be called "City." This Part shall be
applicable in the incorporated territory of the City.
2655.1. Operative Date. "Operative Date" means the first day of the first calendar
quarter commencing more than 110 days after the effective date of this Part, the effective
date being as set forth below.
2655.2. Purpose. This Part is adopted to achieve the following, among other purposes,
and 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 Cal. Revenue
and Taxation Code and § 7285.9 of Part 1 .7 of Division 2 which authorizes the City to
adopt this tax chapter which shall be operative 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 Cal. Revenue and Taxation Code.
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C. To adopt a retail transactions and use tax ordinance that imposes a tax and
provides a measure therefore that can be administered and collected by the California
Department of Tax and Fee Administration 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 California Department of Tax and
Fee Administration in administering and collecting the California State Sales and Use
Taxes.
D. To adopt a retail transactions and use tax ordinance that can 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 Cal. 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.
2655.3. Contract with State. Prior to the operative date, the City shall contract with the
California Department of Tax and Fee Administration to perform all functions incident to
the administration and operation of this transactions and use tax ordinance; provided, that
if the City shall not have contracted with the California Department of Tax and Fee
Administration 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.
2656. 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 three-quarters percent (3/4%) 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.
2656.1. Place of Sale. For the purposes of this ordinance, 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 California Department of Tax and Fee
Administration.
2657. Use Tax Rate. An excise tax is hereby imposed on the storage, use or other
consumption in the City of tangible personal property purchased from any retailer on and
after the operative date of this ordinance for storage, use or other consumption in said
territory at the rate of three-quarters percent (3/4%) 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.
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2658. Adoption of Provisions of State Law. Except as otherwise provided in this
ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of
Division 2 of the Cal. Revenue and Taxation Code, all of the provisions of Part 1
(commencing with Section 6001) of Division 2 of the Cal. Revenue and Taxation Code
are hereby adopted and made a part of this chapter as though fully set forth herein.
2658.1. Limitations on Adoption of State Law and Collection of Use Taxes.
In adopting the provisions of Part 1 of Division 2 of the Cal. 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 therefor. However, the substitution
shall not be made when:
1. The word "State" is used as a part of the title of the State Controller,
State Treasurer, State Victim Compensation and Government Claims Board, State
Treasury, or the Constitution of the State of California;
2. 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
California Department of Tax and Fee Administration, 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 Cal.
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 §§ 6701, 6702 (except in the last sentence thereof), 6711, 6715,
6737, 6797 or 6828 of the Cal. 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 § 6203 of the Cal. Revenue and Taxation
Code and in the definition of that phrase in § 6203.
2658.2. Permit Not Required. If a seller's permit has been issued to a retailer under §
6067 of the Cal. Revenue and Taxation Code, an additional transactor's permit shall not
be required by this ordinance.
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2658.3. Exemptions and Exclusions.
A. There shall be excluded from the measure 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 section, 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 § 4000) of Division 3 of
the Cal. Vehicle Code, aircraft licensed in compliance with § 21411 of the Public Utilities
Code, and undocumented vessels registered under Division 3.5 (commencing with §
9840) of the Cal. Vehicle Code by registration to an out-of-City address and by a
declaration under penalty of perjury, signed by the buyer, stating that such address is, in
fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place
of business out-of-City and declaration under penalty of perjury, signed by the buyer, that
the vehicle will be operated from that address.
3. The sale of tangible personal property if the seller is obligated to
furnish the property for a fixed price pursuant to a contract entered into prior to the
operative date of this ordinance.
4. A lease of tangible personal property which is a continuing sale of
such property, for any period of time for which the lessor is obligated to lease the property
for an amount fixed by the lease prior to the operative date of this ordinance.
5. For the purposes of paragraphs (B)(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.
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C. There are exempted from the use tax imposed by this ordinance, 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 §§ 6366 and 6366.1 of the Cal. Revenue and Taxation Code.
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 ordinance.
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 ordinance.
5. For the purposes of paragraphs (C)(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 paragraph (C)(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 § 4000) of Division 3 of the Cal. Vehicle Code, aircraft licensed in
compliance with § 21411 of the Cal. Public Utilities Code, or undocumented vessels
registered under Division 3.5 (commencing with § 9840) of the Cal. 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 Cal.
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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.
2659. Annual Audit. By no later than December 31 of each year, the City shall cause
an independent auditor to complete a "Arcadia Transactions and Use Tax Report." Such
report shall review whether the tax revenues collected pursuant to this ordinance are
collected, managed and expended in accordance with the requirements of this chapter.
2659.1. Amendments. All amendments subsequent to the effective date of this
ordinance to Part 1 of Division 2 of the Cal. 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 Cal. Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of
Division 2 of the Cal. Revenue and Taxation Code, shall automatically become a part of
this ordinance, provided however, that no such amendment shall operate so as to affect
the rate of tax imposed by this chapter.
2659.2. 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 ordinance, or Part 1.6 of Division 2 of the Cal. Revenue and Taxation
Code, of any tax or any amount of tax required to be collected.
2659.3. Duration of Tax.
The authority to levy the tax imposed by this ordinance shall continue until this ordinance
is repealed."
SECTION 2. Pursuant to California Constitution, Article XIIIC, Section 2(b) and
Revenue and Taxation Code Section 7285.9, this ordinance was approved for placement
on the ballot by a unanimous affirmative vote of the City Council and by at least a two-
thirds affirmative vote of all members of the City Council on March 5, 2019.
SECTION 3. Once the City Council certifies passage of this ordinance by the
voters, the City Clerk shall publish the same as required by applicable law, and forward
a copy of the adopted ordinance to the California Department of Tax and Fee
Administration.
SECTION 4. If any provision of this ordinance or the application thereof to any
person or circumstances is held invalid or unconstitutional by any court of competent
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jurisdiction, such invalidity or unconstitutionality shall not affect any other provision or
applications, and to this end the provisions of this ordinance are declared to be severable.
The City Council, and the electorate by initiative, do hereby declare that they would have
adopted this ordinance and each section, subsection, sentence, clause, phrase, part or
portion thereof, irrespective of the fact that any one or more sections, subsections,
clauses, phrases, parts or portions thereof, be declared invalid or unconstitutional.
SECTION 5. Pursuant to Elections Code Section 9217, this ordinance shall be
deemed adopted and become effective only if approved by a majority of the eligible voters
of the City of Arcadia voting thereon, at an election to be held on June 4, 2019, and shall
take effect ten (10) days after the City Council has certified the results of that election by
resolution.
SECTION 6. The Mayor is hereby authorized to attest to the adoption of this
ordinance by signing where indicated below.
Passed, approved, and adopted by the People of the City of Arcadia on the 4th
day of June, 2019.
IIP.;
.:*or of the City of Arcadia
ATTEST:
•'t Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
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