Berkeley Municipal Code Ch. 9.04 Business Licenses

*For health and sanitation regulations, see Titles 11 and 12 of this code.

For buildings and construction, see Title 19 of this code.

Licensing of bicycles and bicycle establishments, see Ch. 14.68 of this code.

For the purpose of this chapter, certain words and phrases are defined and certain provisions shall be construed as set out in Sections 9.04.010 through 9.04.030, unless it is apparent from their context that a different meaning is intended. (Ord. 5017-NS § I (part), 1977)

"Business" includes all activities engaged in or caused to be engaged in within this City with the object of gain, benefit or advantage, whether direct or indirect, to the taxpayer or to another or to others, but does not include the services rendered by an employee to their employer or a casual or isolated transaction. Although an activity of a taxpayer may be incidental to another or other of their business activities, each such activity shall be considered to be business engaged in within the meaning of this chapter. (Ord. 5017-NS § I (part), 1977)

"Sale" and "sell" include and refer to the making of any transfer of title, in any manner or by any means whatsoever, to tangible personal property for a price, and to the serving, supplying or furnishing, for a price, of any tangible personal property fabricated or made at the special order of consumers who do or who do not furnish directly or indirectly the specifications therefor. A transaction whereby the possession of property is transferred but the seller retains the title as security for the payment of the price shall likewise be deemed a sale. The foregoing definitions do not exclude any transaction which is or which, in effect, results in a sale within the contemplation of the law. (Ord. 5017-NS § I (part), 1977)

"Engaging in business" means commencing, conducting or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business. (Ord. 5017-NS § I (part), 1977)

"Gross receipts," except as otherwise specifically provided in this chapter, means the gross receipts of the preceding fiscal year of the licensee or part thereof, and is defined as follows: the total amount actually received or receivable from all sales; the total amount of compensation 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 credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise; and gains realized from trading in stocks or bonds; interest discounts, rents, royalties, fees, commissions, dividends or other emoluments, however designated. Included in "gross receipts" are all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever, except that the following are excluded therefrom:

A. Cash discounts allowed and taken on sales;

B. Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as "gross receipts";

C. Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

D. Such part of the sale price of property returned by purchasers upon rescission of a contract of sale as is refunded either in cash or by credit;

E. Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar;

F. Amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected. These agents or trustees must provide the Finance Department with the names and the addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees;

G. Cash value of sales, trades or transactions between departments or units of the same business;

H. Transaction between a partnership and its partners;

I. Receipts from services or sales in transactions between affiliated corporations. An "affiliated corporation" is a corporation:

1. The voting and nonvoting stock of which is owned at least eighty percent by such other corporation with which such transaction is had,

2. Which owns at least eighty percent of the voting and nonvoting stock of such other corporation, or

3. At least eighty percent of the voting and nonvoting stock of which is owned by a common parent corporation which also has such ownership of the corporation with which such transaction is had;

J. Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the licensee in the regular course of the licensee’s business. (Ord. 5017-NS § I (part), 1977)

As used in this chapter, "Subcontractor" shall mean a person or business which has a contract (as an "independent contractor" and not an employee) to provide some portion of the work or services on a project which the Construction Contractor or Professional-Semi-professional business has agreed to perform. (Ord. 7338-NS § 1, 2014)

As used in this chapter, "occasional recreational, sporting or entertainment events" are any recreational, sporting or entertainment exhibitions, shows, games, motion pictures, screenings, or theatrical or vaudeville performances which are not operated or carried on regularly throughout the year in the City. (Ord. 5017-NS § I (part), 1977)

It shall be unlawful for any person, either for themselves or for any other person, to commence or carry on any business specified in this chapter, in the City, without first having procured a license from the City to do so, or without complying with any and all regulations of such business contained in this chapter. The carrying on of any business without first having procured a license from the City to do so, or without complying with any and all regulations of the chapter, shall constitute a separate violation of this chapter for each and every day that such business is so carried on. (Ord. 5017-NS § I (part), 1977)

A separate license must be obtained for each and every branch establishment or separate place of business in which a business is carried on. (Ord. 5017-NS § I (part), 1977)

"License," as used in this chapter, does not mean a permit. The fees prescribed by this chapter constitute a tax for revenue purposes, and are not regulatory permit fees. The payment of a license tax required by the provisions of this chapter, and its acceptance by the City, and the issuance of such license to any person, shall not entitle the holder to carry on any business unless they have complied with all of the requirements of this chapter and all other applicable laws and ordinances. (Ord. 6394-NS § 1, 1997; Ord. 5017-NS § I (part), 1977)

Every peddler, solicitor or other person claiming to be entitled to exemption from the payment of any license provided for in this chapter upon the ground that such license casts an unreasonable burden upon their right to engage in commerce with foreign nations or among the several states, or conflicts with the regulations of the United States Congress respecting interstate commerce, shall file a verified statement with the Finance Department, disclosing the interstate or other character of the business entitling such exemption. Such statement shall state the name and location of the company or firm for which the orders are to be solicited or secured; the name and address of the nearest local or state manager, if any; the kind of goods, wares or merchandise to be delivered; the place from which the same are to be shipped or forwarded; the method of solicitation of taking orders; the location of any warehouse, factory or plant within the state; the method of delivery; the name and location of the residence of the applicant; and any other facts necessary to establish such claim of exemption. A copy of the order blank, contract form or other papers used by such person in taking orders shall be attached to the affidavit for the information of the Finance Department. (Ord. 5017-NS § I (part), 1977)

Every person required to have a license under the provisions of this chapter shall make application for the same to the Finance Department of the City and, upon the payment of the prescribed fee to said department, the department shall issue to said person a license which shall contain the following:

A. The name of the person to whom the license is issued;

B. The business licensed;

C. The place where such business is to be carried on;

D. The date of the expiration of such license; and

E. Such other information as the Finance Department determines. (Ord. 5017-NS § 1 (part), 1977)

The Finance Department shall issue to each person to whom a license is issued an identification card for each employee who is engaged in peddling, soliciting or distributing for the licensee in the regular conduct of their business. (Ord. 5017-NS § I (part), 1977)

All licenses issued under this chapter, except the daily licenses issued to occasional recreational, sporting or entertainment events and the first license issued to a newly established business, shall be considered to be issued on January 1st of each year and shall expire on December 31st of the same year. (Ord. 5017-NS § I (part), 1977)

A. Every person subject to a license fee shall, before the license fee becomes delinquent, file with the Finance Department a written statement setting forth the then applicable factor or factors that constitute the measure of the fee, together with such other information as is required by the Finance Department to enable it to administer the provisions of this chapter, and shall pay at such time the amount of the fee computed thereon.

B. The written statement provided for in this section shall be on a form prescribed by the Finance Department and shall include a declaration substantially as follows:

"I declare under penalty of perjury that to my knowledge all information contained in the statement is true and correct."

C. When any person terminates their business during the calendar year, the person shall file an amended declaration within ninety days of the cessation or sale of the business, or during the first annual renewal period after the business ceases operation or is sold, and pay a fee based upon the actual gross receipts generated and fee rate applicable to the business classification for the period of the year that the business was in operation. When a person terminates or sells their business, penalties as described in Section 9.04.110 and interest as described in Section 9.04.120 shall not be applicable. (Ord. 7338-NS § 2, 2014; Ord. 5830-NS § 1, 1987; Ord. 5017-NS § 1 (part), 1977)

A person applying for the first license for a newly established business shall pay the minimum tax as provided in Section 9.04.230 or 9.04.235 of this chapter. In addition, a registration fee in the amount of twenty-five dollars shall be paid within fifteen days from the date of commencement of business activity. The purpose of this fee is to offset a portion of the administrative costs. Failure to register shall subject the taxpayer to penalty and interest the same as provided for by Section 9.04.110. (Ord. 5844-NS § 1, 1987; Ord. 5830-NS § 2, 1987; Ord. 5017-NS § I (part), 1977)

In addition to the information required to be included in the written statement of the applicant for a first license, and of the licensee for a renewal of license, as provided in Section 9.04.070, and in addition to and as a part of the procedure to be followed in any assignment or transfer of a license, as provided in Section 9.04.095, each applicant, licensee or transferee who is subject to the contractors license law shall state that they are licensed under such law, that their license is in full force and effect, and the number thereof, or, if they are exempt from the provisions of the contractors license law, proof of the facts which entitle the applicant to such exemption. (Ord. 5017-NS § I (part), 1977)

A. No statement required in this chapter shall be conclusive upon the City or any department, officer or agent.

B. Whenever it appears to the satisfaction of the Finance Department or Auditor that any statement or declaration made pursuant to this chapter does not in any respect set forth the true facts of the business for which a license is required, or its gross receipts, the Finance Department or Auditor may withhold the issuance of the license until such time as the applicant furnishes to the department satisfactory evidence of the truth of such statement.

C. If such evidence is not furnished to the Finance Department or Auditor within a reasonable time specified by the department, or should it at any time appear to the department that, by reason of error, misrepresentation, fraud or any other cause whatsoever, the license fee has not been properly fixed for any license issued, the department shall give the licensee reasonable written notice to show cause, at a time and place fixed in the notice, why a license fee to be specified in the notice should not be fixed. Upon mailing of this notice, the licensee may not invoke an appeal under Section 9.04.270 of this chapter, and the process set forth in this section shall be the licensee’s exclusive remedy.

D. The licensee may appear at the time and place fixed in the notice and contest the specified license fee. If the licensee fails to appear in compliance with the notice or to obtain a continuance, the licensee shall be deemed to have waived any and all objections that could have been asserted against the license fee fixed in the notice.

E. After such hearing, or if the licensee fails to appear at such hearing, the Finance Department or Auditor shall promptly give written notice to the licensee of its determination and the amount of the license fee and any penalty and interest assessed. In determining the amount(s) due, the Finance Department or Auditor may rely on such reasonably reliable information as is available or provided by the licensee, and need not rely exclusively on reported gross receipts or other information provided by the licensee.

F. Determinations made pursuant to this section shall not be subject to appeal under Section 9.04.270. (Ord. 7150-NS § 4, 2010; Ord. 6917-NS § 1, 2006; Ord. 6394-NS § 2, 1997; Ord. 5017-NS § I (part), 1977)

No license granted or issued under any provisions of this chapter shall be in any manner transferred or assigned, or authorize any person other than the person named in the license to carry on the business therein named or to transact such business in any place other than the place or location therein named without the written consent of the Finance Department endorsed thereon. At the time such license is assigned or transferred or the place of location for the carrying on of such business is changed, the person applying for such transfer or change shall pay to the Finance Department a fee, as provided in Section 9.04.235, for each assignment or transfer. (Ord. 5017-NS § I (part), 1977)

Every person having a license under the provisions of this chapter and carrying on a business at a fixed place of business shall keep such license posted and exhibited while in force in some conspicuous part of said place of business.

Every person having a license and not having a fixed place of business shall carry such license in possession at all times while carrying on the business for which the same was granted. Every peddler having a license shall keep such license prominently displayed at all times. (Ord. 5017-NS § I (part), 1977)

The Finance Department shall make a charge, as provided in Section 9.04.235, for each duplicate license issued to replace any license issued under the provisions of this chapter which has been lost or destroyed; the applicant shall make satisfactory proof of such loss. (Ord. 5017-NS § I (part), 1977)

A. Every annual license renewal for which full payment is not received on or before February 28 of each year or, for newly established businesses, within thirty days after commencing business, is declared delinquent. The Finance Department shall thereupon assess and collect a penalty of ten percent of the license so delinquent. If such license renewal is not paid in full on or before April 1st of each year or, for a newly established business, within sixty days following the commencement of the business, a sum of fifty percent of the license shall be added thereto and collected as a penalty.

B. The City Manager or their designee may reduce a 50% penalty to a lesser percentage but not less than 10% if assessment of the 50% penalty resulted from failure of the City to provide a notice of the delinquency dates in this subdivision subsequent to January first of the year in which the delinquency occurs. Decisions under this subdivision are subject to appeal under section 9.04.270. (Ord. 7393-NS § 1, 2015; Ord. 7150-NS § 6, 2010; Ord. 6231-NS § 1, 1994; Ord. 5839-NS § 1 (part), 1987; Ord. 5830-NS § 3, 1987; Ord. 5017-NS § I (part), 1977)

Every daily license which is not paid at the close of the day when the same was due and payable is declared to be delinquent, and the Finance Department shall thereupon add to said license and collect a penalty of ten percent of the license as delinquent. If the license is not paid within ten days from the time such license became due and payable, an additional sum of fifty percent of said license shall be added to the license and collected as a penalty. (Ord. 5830-NS § 4, 1987; Ord. 5017-NS § I (part), 1977)

In addition to the penalties imposed, any person who fails to remit any license fee imposed by this chapter shall pay simple interest at the rate of one percent per month on the amount of the fee and penalties from the date on which the license fee first became delinquent. Interest shall continue to accrue at the simple interest rate of one percent per month and will be assessed on the 1st day of every month that an account remains delinquent until paid. (Ord. 7338-NS § 3, 2014; Ord. 5017-NS § I (part), 1977)

The amount of any license fee, penalty, and interest imposed by the provisions of this chapter shall be deemed a debt to the City; and any person carrying on any business without first having procured a license from the City to do so shall be liable to action in the name of the City, in any court of competent jurisdiction, for the amount of license, penalties, and interest imposed on such business.

If the taxes are not paid when due, such tax, penalty and interest shall constitute an assessment against such business property and shall be a lien on the property tax roll for the amount thereof, which lien shall continue until the amount thereof including all penalties and interest are paid, or until it is discharged of record.

The Director of Finance shall notify the owner of the business/business property not less than thirty days prior to notifying the county that a property tax lien will be placed on said property in the amount of the outstanding business license tax.

Annually, no later than August 10th, the Director of Finance shall turn over to the county Auditor-Controller for inclusion in the next property tax assessment roll the total sum of unpaid delinquent business tax charges consisting of the delinquent business taxes, penalties, and interest at the rate set in Section 9.04.120, and an administrative fee as adopted by resolution by the City Council to cover the costs of placing delinquent business license tax lien on the county property tax roll. Finance shall pursue collection of delinquent accounts until an account is submitted to the County Auditor-Controller for collection.

Thereafter, said assessment shall be collected at the same time and in the same manner as ordinary municipal taxes are collected, and shall be subject to the same penalties, interest, and the same procedure of sale as provided for delinquent ordinary municipal property taxes. The assessment liens shall be subordinate to other liens except for those of state, county and municipal taxes with which it shall be upon parity. The lien shall continue until the assessments and all interest and charges due and payable thereon are paid. All laws applicable to the levy, collection and enforcement of municipal taxes shall be applicable to said special assessments. (Ord. 7338-NS § 4, 2014; Ord. 5882-NS § 1, 1988; Ord. 5017-NS § I (part), 1977)

The conviction and punishment of any person for transacting any business without a license does not excuse or exempt such person from the payment of any license due or unpaid at the time of such conviction, and nothing in this chapter shall prevent a criminal prosecution of any violation of the provisions of this chapter. (Ord. 5017-NS § I (part), 1977)

A. Every person primarily engaged in the business of selling any goods, wares or merchandise at retail, and not otherwise specifically taxed by other provisions of this chapter, shall be classified within the category of retail trade and pay an annual license fee for each thousand dollars of gross receipts as provided in Section 9.04.240. Public utilities shall also be classified within the category of retail trade.

B. For the purpose of this section, a "retail sale" or "sale at retail" means a sale of goods, wares or merchandise for any purpose other than resale in the regular course of business.

C. Persons engaging in retail trade and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 5017-NS § I (part), 1977)

A.

1. Every Medical Cannabis Business that is not a Nonprofit Organization as defined in Section 9.04.305, and every Non-Medical Cannabis Business, shall pay an annual tax for each thousand dollars of gross receipts as provided in Section 9.04.240. If the "Regulate, Control and Tax Cannabis Act of 2010" on the November 2010 state ballot passes and takes effect, the maximum gross receipts rate that may be applied to medical cannabis businesses shall be reduced to 1.8%, or $18 per $1000.

2. Except as provided in paragraph 1 of this subdivision, the tax on Medical Cannabis Businesses that is imposed by this Section shall be phased in as follows:

(a) The tax payable in 2011 shall be $18 per $1000 of gross receipts after June 30, 2010.

(b) The tax payable in 2012 shall be $25 per $1000 of gross receipts after January 1, 2011.

(c) The tax payable in subsequent years shall be $25 per $1000 of gross receipts during the preceding calendar year.

3. Temporary Exemption.

(a) Every Medical Cannabis Business and every Non-Medical Cannabis Business shall be temporarily exempt from the tax rates provided in this section and Section 9.04.020 for the period beginning January 1, 2023 and ending July 1, 2025. This temporary exemption shall apply retroactively beginning January 1, 2023. Payment of taxes due for calendar year 2022 will still be applicable.

(b) For the period beginning January 1, 2023 and ending July 1, 2025, in lieu of paying the Medical Cannabis Business and Non-Medical Cannabis Business tax rates provided for in this section and Section 9.04.020, each cannabis business will pay the business license tax rate for the business type that most closely represents the nature of its current operations, e.g. retail trade (Section 9.04.145), manufacturing (Section 9.04.185), and wholesale trade (9.04.150).

(c) Any late penalties levied between the period of January 1, 2023 and enactment of this amendment including but not limited to penalties provided for in Section 9.04.110 and 9.04.115 shall be waived. Any interest on late penalties accrued pursuant to Section 9.04.120 during this same period shall also be waived.

(d) Any tax payments already made for the first quarter (January 1, 2023 to March 31, 2023) of the 2023 fiscal year shall be applied as a credit against the payment of future taxes or fee payments made pursuant to this Section, including payments due under subsection 9.04.136.A.3.b.

B. For purposes of this Chapter:

1. "Medical Cannabis Business" means any activity regulated or permitted by Chapter 12.26 or Title 23 that involves planting, cultivating, harvesting, transporting, dispensing, delivering, selling at retail or wholesale, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing, any part of the plant Cannabis sativa L. or any of its derivatives, pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83.

2. "Non-Medical Cannabis Business" means any of the activities described in the preceding paragraph that are not conducted pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83, but are otherwise authorized by state law.

3. "Cannabis Business" includes both Medical Cannabis Businesses and Non-Medical Cannabis Businesses.

4. A Cannabis Business shall be deemed a "Business" under Section 9.04.010 and as that term is used in this Chapter.

C. For purposes of this Section and Section 9.04.305.A.2, "gross receipts" includes any monetary consideration for medical cannabis whatsoever, including but not limited to: membership dues; reimbursement pursuant to Health & Safety Code sections 11362.5 and 11362.7-11362.83; and any money received for wholesale or retail sales.

D.

1. The annual tax rate imposed by Section 9.04.240 on Non-Medical Cannabis Businesses shall apply to the sum of gross receipts as defined in Section 9.04.025 and this Section.

2. The City Council may impose the tax authorized by this Section at a lower rate, and may establish an exemption for Cannabis Businesses whose gross receipts are below a specified amount. The Council may adopt different rates and exemption levels for Medical and Non-Medical Cannabis Businesses. No action by the Council under this paragraph shall prevent it from subsequently increasing the tax rate for any type of Cannabis Business to the maximum specified in this Section and Section 9.04.240 or from modifying or eliminating any exemption.

E. In order to aid in the City’s collection of taxes due under this Chapter and ensure that all Cannabis Businesses are taxed consistently to the best of the City’s ability, beginning January 1, 2011, in any Cannabis Business, that obtains any product containing Cannabis sativa L. or any of its derivatives for monetary consideration that constitutes gross receipts under subdivision (C) for the provider of that Cannabis sativa, shall either:

1. Report quarterly to the City all such transactions, the monetary consideration involved, and the identity and contact information of the person or entity to whom or to which monetary consideration was provided; or

2. Collect the tax that would be payable as a result of the transaction from the person or entity to whom monetary consideration was provided and remit it to the City.

F. The City Manager may promulgate regulations to implement and administer this Section, including allowing Medical Cannabis Businesses to remit taxes more frequently than annually. (Ord. 7880-NS § 1, 2023; Ord. 7160-NS § 1, 2010)

A. Every person primarily engaged in business as a grocer shall be classified within the grocer category and pay a license fee for each one thousand dollars of gross receipts as provided in Section 9.04.240.

B. "Grocer" includes any business in which the principal activity of the business consists of the retail or wholesale sale of foodstuffs intended for human consumption, but does not include restaurants or any other businesses where food products are prepared on the premises for immediate consumption.

C. Persons engaging in grocery sales and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 5017-NS § I (part), 1977)

A. Every person engaged in the business of selling new or used motor vehicles at retail shall pay a license fee for each thousand dollars of gross receipts as provided in Section 9.04.240.

B. Persons engaging in motor vehicle sales and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license, if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 5017-NS § I (part), 1977)

A. Every person primarily engaged in the business of selling any goods, wares or merchandise at wholesale, and not otherwise specifically taxed by other provisions of this chapter, shall be classified within the wholesale trade category and shall pay an annual license fee for each thousand dollars of gross receipts as provided in Section 9.04.240.

B. For the purpose of this section, "a wholesale sale" or "sale at wholesale" means a sale of goods, wares or merchandise for the purpose of resale in the regular course of business.

C. Persons engaging in wholesale sales and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license, if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 5017-NS § I (part), 1977)

Nothing in Sections 9.04.135 through 9.04.150 shall be construed to require the inclusion, in the computation of the amount of the license fee due thereunder, of the gross receipts of the sales of goods which are shipped by the seller to points outside of the state. (Ord. 5839-NS § I (part), 1987; Ord. 5017-NS § I (part), 1977)

A. Every person primarily engaged in the business of providing business, personal or repair services, or social services, or transportation services, as defined in the most practicable version of the U.S. Government printing office publication North American Industrial Classification System Manual, not specifically taxed by other provisions of this chapter, shall be classified within the business, personal and repair services category and pay a license fee for each thousand dollars of gross receipts for services performed within the City as provided in Section 9.04.240.

B. Persons engaging in business, personal and repair services and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license, if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 7125-NS § 7, 2009; Ord. 6714-NS § 1, 2002; Ord. 6598-NS § 1, 2000; Ord. 5984-NS § 1, 1990; Ord. 5017-NS § 1 (part), 1977)

A. Finance, Insurance, Banking (including Savings and Loans) and Real Estate. Every person in any business, profession or occupation within the business field of finance, insurance and real estate, as described in the most practicable version of the U.S. Government Printing Office publication North American Industrial Classification System Manual, except for those persons whose business is primarily renting real property, as defined in Section 9.04.195, shall be classified as a professional-semiprofessional.

B. Health, Veterinary, Legal, Educational, Engineering-Architectural-Surveying, Accounting-Auditing-Bookkeeping, and Miscellaneous Services Not Classified Elsewhere. Every person in any business, profession, or occupation within the business fields of health, veterinary, legal, education, engineering-architectural surveying, accounting-auditing-bookkeeping, and miscellaneous services not classified elsewhere, as described in the current U.S. Government Printing Office publication entitled North American Industrial Classification System Manual shall be classified as professional-semi-professional.

C. Nothing contained in this section shall be deemed or construed as applying to any person engaged in any of the professions or occupations enumerated in this section solely as an employee or partner of any other person or entity conducting, managing or carrying on any such business in the City.

D. Any person subject to a license under provisions of this section may exclude from gross receipts the portion of those receipts paid to subcontractors, providing that a list of such subcontractors and the amounts of payment are reported to the Director of Finance. The Finance Department shall pursue collection of the business license tax from all reported subcontractors.

E. Any person subject to a license under provisions of this section may exclude governmental or philanthropic research and development (“R&D”) grants from gross receipts (as defined in Section 9.04.025), providing that a list of those grants and the amounts of payments received are reported to the City as defined by the Director of Finance. (Ord. 7937-NS § 1, 2024; Ord. 7655-NS § 1, 2019; Ord. 7338-NS § 5, 2014; Ord. 6714-NS § 2, 2002; Ord. 6598-NS § 2, 2000; Ord. 5984-NS § 1, 1990; Ord. 5017-NS § I (part), 1977)

A. Every person primarily engaged in the business of providing entertainment, recreation or amusement, and not otherwise specifically taxed by other provisions of this chapter, shall be classified recreation and entertainment and pay an annual license fee for each thousand dollars of gross receipts as provided in Section 9.04.240. Occasional recreational, sporting or entertainment events, as defined in Section 9.04.030, shall pay a daily license fee at the recreational and entertainment rate for each thousand dollars of gross receipts as provided in Section 9.04.240.

B. The business of providing entertainment, recreation or amusement includes, but is not limited to the following: theatrical or musical entertainment; all shows or exhibits; exhibiting motion pictures, films; nonprofessional sports and athletic exhibition or contest; pool or billiard room; bowling alley; golf course; circus, penny arcade, carnivals, menageries; charter boats, sportsfishing.

C. Persons engaging in recreation and entertainment businesses and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license, if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 5017-NS § 1 (part), 1977)

A. As used in this chapter, "professional sports event" means any sporting activity held at any place in the City wherein the participants are paid or compensated for their sporting services, whether in cash, securities or otherwise, and regardless of the amount of such services. This definition does not include athletes or students participating in athletic events, wherein such athletes or students receive scholarships, grant-in-aid, or similar financial support for educational purposes.

B. Every person commencing, transacting or carrying on any professional sports event in the City shall pay a daily license tax of ten percent of gross receipts measured as of the time or times such event or events as to which this tax is applicable may commence, be transacted or be carried on in the City. (Ord. 5017-NS § I (part), 1977)

A. As of July 1, 2000, every person engaged in the business of providing private refuse hauling services shall obtain a nonexclusive franchise pursuant to Section 9.60 of this code to be engaged in said business.

B. Every person engaged in the business of providing private rubbish hauling services where fifty percent or more of the material by weight is recycled or salvaged, or who has obtained a nonexclusive franchise pursuant to Section 9.60 of this code to be engaged in the business of providing private rubbish hauling services, shall pay a license fee for each thousand dollars of gross receipts for services performed within the City as provided in Section 9.04.240 for "Private Franchised/ Recycling Rubbish Haulers."

C. In the event the requirement that every person engaged in the business of providing private rubbish hauling services be franchised is repealed or invalidated, all such persons shall pay a license fee for each thousand dollars of gross receipts for services performed within the City as provided in Section 9.04.240 for "Private Rubbish Haulers." (Ord. 6518-NS § 1 (part), 1999; Ord. 6002-NS § 1, 1990)

A. Every person engaged in the business of selling firearms or firearms ammunition, as defined by this chapter, shall pay a license fee of one hundred fifty dollars for each thousand dollars of gross receipts from all merchandise sold in the same premises as the firearms or firearm ammunition is sold, as provided in Section 9.04.240.

B. Notwithstanding Section 9.04.225, no person engaged in the business of selling firearms or firearms ammunition, as defined by this chapter, may elect to combine gross receipts as set forth in Section 9.04.225, but shall pay a license fee at the rate provided in Section 9.04.220 for persons engaged in the business of selling firearms or firearms ammunition.

C. As used herein, the term "firearm" means any device, designed to be used as a weapon, from which is expelled through a barrel a projectile by the force of any explosion, or other form of combustion. The term also includes any rocket, rocket propelled projectile launcher, or similar device containing any explosive or incendiary material and not designed for emergency or distress signaling purposes.

D. As used herein, the term "firearm ammunition" means any projectiles with their fuses, propelling charges, or primers fired from weapons, and any of the individual components thereof, including, but not limited to, black powder and reloading primers.

E. As used herein, the term "engaged in the business of selling firearms or firearm ammunition" means the selling, leasing or transferring of firearms or firearm ammunition. No person shall be "engaged in the business of selling firearms or firearm ammunition" within the meaning of this chapter if they are not required to obtain a permit to sell firearms or firearm ammunition (munitions) pursuant to Chapter 9.72 of the Berkeley Municipal Code, or if they are an auctioneer or auction company required to maintain a bond or deposit pursuant to California Civil Code Section 1812.600 or any successor statute. (Ord. 6349-NS § 1, 1996)

A. Every person primarily conducting or carrying on a business who is licensed as a contractor by the state and who undertakes to, or offers to undertake to, or purports to have the capacity to undertake to, or submits bids to, or does personally 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. "Contractor," as used in this section, also includes subcontractor and specialty contractor, whether operating within the City or from outside the City with no fixed place of business in the City. A contractor shall pay an annual license fee as provided in Section 9.04.240 for each thousand dollars of gross receipts for work engaged in at sites within the City.

B. Any person subject to a license under provisions of this section may exclude from gross receipts the portion of those receipts paid to subcontractors, providing that a list of such subcontractors and the amounts of payment is reported to the Finance Department. The Finance Department shall pursue collection of the business license tax from all reported subcontractors.

C. Persons engaging in construction contracting and other business activities taxed on the basis of gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license, if the provisions of Section 9.04.225 apply to the combined activities. (Ord. 7338-NS § 6, 2014; Ord. 5017-NS § I (part), 1977)

A. Every person primarily engaged in the business of manufacturing or processing any goods, wares, merchandise, food, article, substance or commodity at a fixed place of business within the City shall be classified manufacturing and pay an annual license fee as provided for in Section 9.04.240 for each thousand dollars of gross receipts, less the value of raw materials (including the cost of energy resources) or the value of the partially completed product at the time it enters the manufacturing process within the City.

B. Whenever (1) there are no gross receipts because the manufacturing process within the City does not result in a finished product, (2) where it is shown to the satisfaction of the Finance Department that the licensee’s present method of accounting, using generally accepted principles of accounting consistently applied, does not permit it to determine gross receipts, (3) where the costs of raw material cannot be determined, or (4) where the final product consists principally of raw materials or component parts manufactured elsewhere by the licensee, the following alternative method of calculating gross receipts under this section shall be used: the total of all expenses incurred in the manufacturing process at the business location within the City for payroll, utilities, rent and depreciation.

C. A business taxed under this section shall not be considered either a retailer or wholesaler with respect to the sale of goods manufactured by such business within the City.

D. Persons engaging in manufacturing and other business activities taxed on gross receipts under different rates, as provided by this chapter, may elect to combine gross receipts at one rate and obtain one license if the provisions of Section 9.04.225 of this chapter apply to the combined activities. (Ord. 5017-NS § I (part), 1977)

A. Every person conducting or carrying on the operation of an administrative headquarters shall be classified administrative headquarters and pay a license fee as provided in Section 9.04.240 for each thousand dollars of gross payroll of all persons employed by the business at such administrative headquarters.

B. "Administrative headquarters" means a location where the principal business transacted consists of providing administrative or management-related services, such as, but not limited to, recordkeeping, 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.

C. A business shall be taxed as an administrative headquarters if the number of employees engaged in managing the business activities exceeds the total number of employees engaged in activities at the same location which would be otherwise taxable under this chapter. The gross payroll on which the license fee is to be computed shall include those employees engaged in those activities otherwise taxable under this chapter.

D. "Gross payroll" means and includes the total gross amount of all salaries, wages, commissions, bonuses or other money payment of any kind which a person received from, or is entitled to receive from or be given credit for by, their employer for any work done or personal service rendered in Berkeley, from any trade, occupation or profession, including any kind of deductions before "take home" pay is received; but does not mean or include amounts paid to traveling salespersons or other workers as allowance or reimbursement for traveling or other expenses incurred in the business of the employer, except to the extent of the excess of such amounts over such expenses actually incurred and accounted for by the employee to the employer. (Ord. 5017-NS § I (part), 1977)

A. Every person engaged in the business of renting or letting a building structure or other property, or a portion of such building, structure or property, within the City for any purpose, except property designated for and used exclusively for residential use which contains fewer than three dwelling units, shall pay an annual license fee as provided in Section 9.04.240 for each thousand dollars of gross receipts.

B. Every person engaged in the business of providing lodging for five or more persons, for direct or indirect compensation, shall pay an annual license fee as provided in Section 9.04.240 for each thousand dollars of gross receipts.

C. A lessor may exclude from gross receipts any receipts received which represent rent for the use of space by the lessor, by a partner, when the lessor is a partnership, or by an affiliated corporation, as defined in Section 9.04.025(I).

D. A lessor may not combine returns, or include income derived from real property rental with income from other business activities taxed under other provisions of this chapter. A separate license is required for each building or structure or lodging property, subject to business license taxation, as provided in this section. (Ord. 6231-NS § 2, 1994; Ord. 5017-NS § I (part), 1977)

A. Notwithstanding Section 9.04.195, this Section shall govern the taxation of gross receipts from the rental of five or more residential rental units in the city of Berkeley.

B. Every person engaged, directly or indirectly, including through an interest in another entity, in the business of renting or leasing dwelling units in the City of Berkeley shall pay an annual tax as provided in Section 9.04.240 for each thousand dollars of gross receipts.

C. Gross receipts from the following categories of dwelling units shall not be subject to this Section, but shall be subject to section 9.04.195:

1. dwelling units owned by a nonprofit corporation whose primary purpose is the provision of affordable housing, as provided in Section 9.04.300;

2. dwelling units whose rents are controlled under state or federal law, deed restrictions, or agreements with public agencies, at rental rates that are affordable to households earning no more than 80% of AMI and whose tenants must be income-qualified;

3. any unit subject to rent control under Chapter 13.76 that are occupied by a tenant who resided in that unit prior to January 1, 1999;

4. units occupied by tenants receiving monthly rental assistance (such as Section 8 vouchers or Shelter + Care) from the Berkeley Housing Authority or City of Berkeley; and

5. any dwelling unit during the first 12 years after the issuance of a certificate of occupancy.

D. Any person who would otherwise be subject to the tax imposed under this Section may seek a 1-year hardship exemption due to exceptional circumstances. The City Manager may approve such applications for good cause. Such approvals shall be in writing and specifically state the factors that constitute good cause. Any hardship exemption shall be effective for one tax year only, after which it will expire. Taxpayers who seek hardship exemptions must reapply every year.

E. The City Council may reduce the tax rate set forth in Section 9.04.240 under this Section for rental of five or more dwelling units, and may terminate any such reductions, without further voter approval.

F. The tax imposed by this Chapter shall not be passed on to sitting tenants in the form of rent increases or in any manner, even if permitted under Chapter 13.76. (Ord. 7523-NS § 2, 2016)

Every person engaged in the business of soliciting or peddling any goods, wares, merchandise or other things of value, not otherwise specifically licensed by this chapter or any ordinance of the City, shall pay a license fee annually as provided in Section 9.04.235.

A. For the purpose of this chapter, "peddling" means going from house to house, place to place, or in or along the streets, within the City, selling and making immediate delivery of, or offering for sale and immediate delivery of, any goods, wares, merchandise or anything of value, in possession of the peddler, but does not include selling and delivering, and offering to sell and deliver, items of food and drink for immediate human consumption by a vendor to regular customers along established routes where such sales and deliveries and offers of sale and delivery are made only to such regular customers on the premises of their place of residence or their place of employment or business, in accordance with invitations previously made to such vendor to make regular calls at specific intervals at such premises for the purpose of making sales and deliveries of such items of food and drink for immediate human consumption.

B. For the purpose of this chapter, "solicitor" means any person who engages in the business of going from house to house, place to place, or in or along the streets within the City of Berkeley selling or taking orders for, or offering to sell or take orders for, goods, wares, merchandise or other things of value for future delivery, or for services to be performed in the future.

C. This section does not include peddlers of personally manufactured articles or produce specifically licensed in Section 9.04.205. (Ord. 5017-NS § I (part), 1977)

Every person engaged in a business as "peddler and solicitor, personally manufactured articles or produce" shall pay a license fee according to the schedule below. "Peddler or solicitor" means a person who peddles or solicits anything which they have personally manufactured or produced, and includes, but is not limited to, any farmer, poultryman or horticulturist soliciting or peddling their own produce. This term is limited to natural persons and includes the farmer, poultryman or horticulturist, members of their immediate family, or an employee who is regularly engaged in assisting in the production of the produce. This term does not include persons who buy articles or produce for resale as well as selling their own produce or articles.

A. Category A and Category B licenses are those licenses defined in Chapter 9.48.

B. A schedule of license fees for peddling and soliciting, as defined in this section, is provided in Section 9.04.235. (Ord. 5017-NS § I (part), 1977)

Every person primarily conducting, managing or carrying on the business of distributing handbills, advertising, samples, dodgers, advertising matter or printed matter of any kind shall pay a license fee annually, as provided in Section 9.04.235. (Ord. 5017-NS § 1 (part), 1977)

Every person engaged in taxicab, ambulance or limousine service in the City shall pay an annual license fee as provided in Section 9.04.235. (Ord. 5017-NS § I (part), 1977)

Any person engaged in a business not specifically taxed by other provisions of this chapter and not otherwise exempted shall pay an annual license fee as provided in Section 9.04.240 for each thousand dollars of gross payroll. (Ord. 5017-NS § I (part), 1977)

Whenever a person is engaged in two or more business activities, except rental of real property, which are taxed on the basis of gross receipts under different rate provisions of this chapter, such person may elect to combine all such gross receipts and pay a tax determined by applying the rate of tax applicable to that business activity producing the greatest amount of gross receipts, subject to the following provisions:

A. Both businesses are conducted at the same location;

B. Business activities to be included in the gross receipts, as provided by this section, shall not exceed twenty percent of the total of the combined total gross receipts of the businesses. (Ord. 5017-NS § I (part), 1977)

A. Every person commencing, transacting or carrying on the business of renting real property, as defined in Section 9.04.195 of this chapter, shall pay a minimum license fee of seventy-seven dollars for each building, structure, or property subject to licensing.

B. Every person commencing, transacting or carrying on any business in their home in a residential zone not as a nonconforming use, whose annual gross receipts are two thousand dollars or less, shall pay an annual license fee of twenty-six dollars.

C. Every nonprofit corporation or association as defined in Section 9.04.305 of this chapter, shall pay a minimum annual license fee of twenty-six dollars.

D. Every person or organization not covered by the provisions of subsections A, B or C of this section, or charged a flat license fee as provided in Section 9.04.235 of this chapter, who maintains an office or operates a business in the City of Berkeley, shall pay a minimum license fee of fifty-one dollars per year, whether or not any gross receipts of such person are derived from or attributable to the business activities by such person in the City of Berkeley. (Ord. 5760-NS § 1, 1986; Ord. 5672-NS § 1 (part), 1985; Ord. 5650-NS § 1 (part), 1984; Ord. 5552-NS § 1 (part), 1983; Ord. 5329-NS § 1, 1981; Ord. 5055-NS § 1, (part), 1978; Ord. 5017-NS § 1 (part), 1977)

A. Flat rates.

(Ord. 6112-NS § 1, 1992; Ord. 5760-NS § 1, 1986; Ord. 5672-NS § 1 (part), 1985; Ord. 5605-NS § 1 (part), 1984; Ord. 5552-NS § 1 (part), 1983; Ord. 5017-NS § 1 (part), 1977)

The base rate for gross receipts business license taxes is established at one dollar and twenty cents for each one thousand dollars gross receipts per year.

(Ord. 7590-NS § 1, 2018; Ord. 7523-NS § 3, 2016; Ord. 7160-NS § 2, 2010; Ord. 6518-NS § 1 (part), 1999; Ord. 6349-NS § 2, 1996; Ord. 6002-NS § 2, 1990; Ord. 5760-NS § 1, 1986; Ord. 5672-NS § 1 (part), 1985; Ord. 5605-NS § 1 (part), 1984; Ord. 5552-NS § 1 (part), 1983; Ord. 5055-NS § 1 (part), 1978; Ord. 5017-NS § 1 (part), 1977)

Whenever there are included, within the gross receipts used to determine the license fee of a business under this chapter, amounts which reflect sales for which credit is allowed, and such amounts prove uncollectible in a subsequent year, those amounts may be excluded from gross receipts in the year they prove to be uncollectible; provided, however, if the whole or a portion of such amounts excluded uncollectible are subsequently collected, they shall be included in the amount of gross receipts for the period when they are recovered. (Ord. 5017-NS § I (part), 1977)

It shall be the duty of the Director of Finance, and they are directed, to enforce each and all of the provisions of this chapter. Each department of the City which issues permits for work to be done shall require the production of a valid unexpired license prior to the issuance of such a permit.

The Director of Finance, in the exercise of the duties imposed upon them under this chapter, and acting through deputies or duly authorized assistants, shall examine or cause to be examined all places of business in the City to ascertain whether the provisions of this chapter have been complied with.

The Director of Finance, and each and all of their assistants and any police officer, shall have the power and authority to enter, free of charge and at any reasonable time, any place of business required to be licensed in this chapter and demand an exhibition of its license certificate. Any person, having such license certificate heretofore issued in their possession or under their control, who willfully fails to exhibit the same on demand, shall be guilty of an infraction and subject to the penalties provided in this chapter. It shall be the duty of the Director of Finance and each of their assistants to cause a complaint to be filed against any and all persons found to be violating any of said provisions. (Ord. 5591-NS § 1, 1984; Ord. 5017-NS § I (part), 1977)

The conviction and punishment of any person for transacting any business without obtaining a license shall not excuse or exempt such person from the payment of any license tax due or unpaid at the time of such conviction, and nothing in this chapter shall prevent a criminal prosecution of any violation of the provisions of this chapter. All remedies prescribed under 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. (Ord. 5017-NS § I (part), 1977)

Any person violating any provision or failing to comply with any of the requirements of this chapter shall be deemed guilty of an infraction as set forth in Chapter 1.20 of this code. (Ord. 5591-NS § 1 (part), 1984; Ord. 5017-NS § I (part), 1977)

Whenever the amount of any tax, penalty or interest has been paid more than once or has been erroneously or illegally collected or received by the City under this section, it may be refunded provided a verified claim in writing, stating the specific grounds upon which said claim is founded, is filed with the Finance Department pursuant to Chapter 7.20 of this code. The claim shall be audited by the Department of Finance and shall be made in accordance with current City refund procedures. If the claim is approved, the refund may be refunded or may be credited on any amounts then due and payable from the person from whom it was collected or by whom paid, and the balance may be refunded to such person or to their administrators or executors. (Ord. 6394-NS § 3, 1997; Ord. 5017-NS § I (part), 1977)

A. Any person aggrieved by any decision of an administrative officer or agency with respect to the issuance or refusal to issue a license, or the amount of a license tax, may appeal to the City Manager by filing a notice of appeal with the City Manager within fourteen days from the latter of the effective date of the ordinance codified in this chapter or the decision of the administrative officer or agency, setting forth in full the grounds of the appeal.

B. Said appeal shall be scheduled for hearing by the City Manager or their designee, and the appellant shall be given no less than fourteen days notice of the time and place of said hearing.

C. The licensee may appear at the time and place fixed in the notice and present their appeal. If the licensee fails to appear in compliance with the notice or to obtain a continuance, the licensee shall be deemed to have waived any and all grounds of appeal that could have been asserted against the City.

D. Within thirty days after the conclusion of the hearing, the City Manager or their designee shall notify the appellant in writing of the decision, which shall be final. If the decision establishes an amount of tax, penalties and/or interest due, the total amount shall be due and payable as of the date the original license fee was due and payable, together with any penalties that may be due; provided, however, if the amount of such license tax is fixed in accordance with the original statement of the applicant, then no penalty shall attach by reason of any delinquency. (Ord. 7366-NS § 1, 2014; Ord. 6673-NS § 1, 2002; Ord. 6394-NS § 4, 1997; Ord. 5017-NS § 1 (part), 1977)

The provisions of this chapter shall not apply to any person, association, or corporation, or to any property, as to whom or which it is beyond the power of the City Council to impose the license fee provided in this chapter. If any sentence, clause, section or part of this chapter, or any license fee against any individual or any of the several groups specified in this chapter, is found to be unconstitutional, illegal or invalid, such unconstitutionality, illegality or invalidity shall affect only such clause, sentence, section or part of this chapter and shall not affect or impair any of the remaining provisions, sentences, clauses, sections or other parts of this chapter. It is declared to be the intention of the City Council that this chapter would have been adopted had such unconstitutional, illegal or invalid sentence, clause, section or part thereof not been included in this chapter. (Ord. 5017-NS § I (part), 1977)

A. When, by reason of the provisions of the Constitution of the United States or the Constitution of California, this chapter cannot be enforced without there being an apportionment of the licensee’s gross receipts, the Department of Finance shall determine the appropriate formula for apportionment and shall determine the amount of gross receipts to be apportioned pursuant thereto, based on information provided by the licensee.

B. It shall be the licensee’s obligation to request apportionment and to provide all information necessary for the Finance Department to determine the appropriate formula for apportionment and determine the amount of gross receipts to be apportioned, no later than thirty days prior to the delinquency date established in Section 9.04.110A, and if the licensee does not so request in writing, it shall be conclusively deemed to have waived any apportionment for that year. (Ord. 6394-NS § 5, 1997; Ord. 5017-NS § I (part), 1977)

The Director of Finance or any authorized employee, is authorized to examine the books, papers and records of any person subject to this chapter for the purpose of verifying the accuracy of any return made or, if no return was made, to ascertain the license fees due under this chapter. Every licensee or supposed licensee is directed and required to furnish to the Director of Finance, or their duly authorized agent or employee, the means, facilities and opportunity for making such examination and investigations as are authorized by this section. The director is authorized to examine any person, under oath, for the purpose of verifying the accuracy of any return made, or, if no return was made, to ascertain the license fee due under this chapter, and for this purpose may compel the production of books, papers and records and the attendance of all persons before them, whether as parties or witnesses, whenever they believe such persons have knowledge of such matters.

The refusal of such examination by any employer or person subject or presumed to be subject to the license fees shall be deemed a violation of this chapter. (Ord. 5017-NS § I (part), 1977)

The Director of Finance may grant to any person who, by reason of physical infirmity, unavoidable misfortune, or unavoidable poverty, merits exemption from any license fee required by any provisions of this chapter, an exemption of one annual free license for the conduct of any one business licensed by any provisions of this chapter, provided, however, that when it appears to the satisfaction of the Director of Finance that the conditions which warranted an exemption under this section no longer exist, the director may revoke such exemption and the license issued. (Ord. 5017-NS § I (part), 1977)

A license operating a warehouse solely for the purpose of servicing the retail, wholesale or manufacturing activities of such licensee within the City shall not be subject to a license fee for such warehousing operations. (Ord. 5017-NS § I (part), 1977)

A. The provisions of this chapter shall not require the payment of a license tax to conduct, manage or carry on any business, occupation or activity from any of the following:

1. An institution or organization which is conducted, managed or carried on wholly for the benefit of charitable purposes and from which profit or income is not derived, either directly or indirectly, by any employee, officer or director of the organization.

2. An institution or organization which is exempt from filing information returns under 26 U.S.C. § 6033(a)(2) as it existed on November 1, 1992, provided, however, this exemption shall not apply to ordinary business transactions, unrelated to the exempt purposes of the institution or organization, involving the sale of goods or rental of property when such sale or rental produces gross receipts in excess of five hundred thousand dollars per license per year. Such transactions shall be taxed at the same rate and in the same manner as activities covered by Section 9.04.305.

B. A charitable organization shall file a statement each year with the Finance Department affirming its status as a charitable organization based on the criteria in this chapter by February 1st of each year. (Ord. 6177-NS § 1 (part), 1993; Ord. 5017-NS § I (part), 1977)

A.

1. Notwithstanding section 9.04.300, there is imposed on every large nonprofit organization exempted under Article XIII, Section 26 of the California Constitution from local taxes or fees measured by income or gross receipts, a tax of fifty-one cents per square foot on all business improvements over the first one hundred twenty thousand square feet of business improvements occupied by that large nonprofit organization. For purposes of this section, all of the square feet of business improvements owned, rented, leased or otherwise occupied by a given nonprofit organization within the City shall be cumulated.

(a) Notwithstanding section 9.04.300, there is imposed on every Cannabis Business that is a Nonprofit Organization and that generates gross receipts, including all of its ancillary locations, regardless of the number of square feet it occupies, a tax on each square foot on all business improvements occupied by that Cannabis Business as follows:

(b) If the "Regulate, Control and Tax Cannabis Act of 2010" on the November 2010 state ballot passes and takes effect, the foregoing tax rates shall be reduced as follows:

(c) For purposes of this Section, all of the square feet of business improvements owned, rented, leased or otherwise occupied or used by a Cannabis Business within the City shall be cumulated.

B.

1. The charge imposed by this Section may be increased annually for the following year in May, by the greater of the increase in the cost of living in the immediate San Francisco Bay Area or per capita personal income growth in the state, as verified by official United States Bureau of Labor statistics.

2. In addition to any other reductions permitted or required by this Section, the City Council may impose the tax authorized by this Section at a reduced rate in the event that one or more permitted Medical Cannabis Businesses taxable under this Section significantly expand in square footage. It is the intent of the voters in adopting this provision that the total tax burden on Medical Cannabis Businesses not be unreasonably increased solely by virtue of expansions in square footage that do not increase their receipts. The Council may adopt different rates for Medical and Non-Medical Cannabis Businesses.

C. For purposes of this Section, the following terms shall have the following meanings:

"Building" means any structure having a roof supported by columns or by walls and designed for the shelter or housing of any person, chattel or property of any kind. The word "building" includes the word "structure."

"Business improvements" means square footage used, on a regular basis, for the operation of a nonprofit organization as defined in Article XIII Section 26 of the California Constitution, regardless of whether it is owned or leased.

"Improvements" means all buildings or structures erected or affixed to the land.

"Large nonprofit organization" means any nonprofit organization exempted under Article XIII, Section 26 of the California Constitution from local taxes or fees measured by gross receipts, which occupies over one hundred twenty thousand square feet of business improvements in the City, but excludes any Cannabis Business.

"Nonprofit Organization" means any association, corporation or other entity that is exempt from taxation measured by income or gross receipts under Article XIII, Section 26 of the California Constitution.

"Square foot" and "square footage" means the horizontal areas of all floors, including usable basement and cellars, below the roof and within the outer surface of the main walls of buildings (or the center lines of party walls separating such buildings or portions thereof) or within lines drawn parallel to and two feet within the roof line of any building or portion thereof without walls (which includes square footage of all porches), and including pedestrian access walkways or corridors, but excluding the following:

(1) Areas used for off-street parking spaces or loading berths and driveways and maneuvering aisles relating thereto.

(2) Areas which are outdoor or semi-outdoor areas included as part of the building to provide a pleasant and healthful environment for the occupants thereof and the neighborhood in which the building is located. This exempted area is limited to stoops, balconies and to natural ground areas, terraces, pools and patios which are landscaped and developed for active or passive recreational use, and which are accessible for use by occupants of the building.

(3) Arcades, porticoes, and similar open areas which are located at or near street level, which are accessible to the general public, and which are not designed or used as sales, display, storage, service or production areas.

"Structure" means anything constructed or erected, the use of which requires location on the ground or attachment to something having location on the ground.

D. Pursuant to California Constitution Article XIIIB, the appropriation limit for the City is increased by the aggregate sum authorized to be levied by this ordinance for each of the four fiscal years from 2011-2012 through 2014-2015.

E. The City Council may repeal the ordinance codified in this section, or amend it in a manner which does not result in an increase in the charge imposed herein, without further voter approval. If the City Council repeals said ordinance, it may subsequently reenact it without voter approval, as long as the reenacted ordinance does not result in an increase in the charge imposed herein.

F. The City Manager may promulgate regulations to implement and administer this Section, including allowing Medical Cannabis Businesses to remit taxes more frequently than annually. (Ord. 7160-NS § 3, 2010; Ord. 6470-NS §§ 1--6, 1998)