Chico Municipal Code § 3.32.010 Short title

This chapter shall be known and may be cited as the “Business License Law of the City of Chico.”

(Prior code §13.1 (Ord. 1098))

This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation purposes.

(Prior code §13.2 (Ord. 1098))

For the purposes of this chapter, the definitions commencing with Section 3.32.040 and following shall be applicable, and unless otherwise defined in this code, all words shall be interpreted according to their commonly understood meaning, definition and usage.

(Prior code §13.3 (Ord. 1098))

“Business” includes professions, trades, and occupations and all and every kind of calling whether or not carried on for profit.

(Prior code §13.3-l (Ord. 1098))

“Customer or service connection” means the number of customers or service connections served within the city by a business during the first full month preceding the license year for which the tax is being paid.

(Prior code §13.3-2 (Ord. 1098, Ord. 1133 §1, Ord 2355 §1))

“Employees” shall mean each person engaged in the operation or conduct of any business, whether as owner, any member of the owner’s family, partner, agent, manager, solicitor, or salesman, whether on a permanent, seasonal, temporary, probationary, full- time or part-time basis, regardless of basis of compensation, and any and all other persons employed or working in such business, including but not limited to students and apprentices working in connection with instruction in any business, for which service the owner, operator or management receives compensation or a thing of value.

(Prior code §13.3-3 (Ord. 1098, Ord. 1133 §l, Ord. 2355 §2))

“Fixed place of business” shall mean having a physical location within the boundaries of the city of Chico, from which business is transacted for a period of not less than thirty consecutive days.

(Prior code §13.3-4 (Ord. 1098))

“Gross receipts” shall include the total of amounts actually received or receivable from sales and 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 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. Included in “gross receipts” shall be 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. Excluded from “gross receipts” shall be the following:

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;

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 the contract of sale as is refunded either in cash or by credit;

E. Amounts collected for others where the business is acting as an agent or trustee to the extent that such amounts are paid to those for whom collected, provided the agent or trustee has furnished the finance director with the names and addresses of the others and the amounts paid to them;

F. That portion of the receipts of a general contractor which represent payments to subcontractors, provided that such subcontractors are licensed under this chapter, and provided the general contractor furnishes the finance director with the names and addresses of the subcontractors and the amounts paid each subcontractor;

G. Receipts of refundable deposits, except that refundable deposits forfeited and taken into income of the business shall not be excluded;

H. As to a real estate agent or broker, the sales price of real estate sold for the account of others except that portion which represents commission or other income to the agent or broker;

I. As to a retail gasoline dealer, a portion of the dealer’s receipts from the sale of motor vehicle fuels equal to the motor vehicle fuel license tax imposed by and previously paid under the provisions of Part 2 of Division 2 of the Revenue and Taxation Code of the State of California;

J. As to a retail gasoline dealer, the special motor fuel tax imposed by Section 4041 of Title 26 of the United States Code if paid by the dealer or collected by the dealer from the consumer or purchaser.

(Prior code §13.3-5 (Ord. 1098, Ord. 1133 §2, Ord. 2113 §1), Ord. 2268, Ord. 2355 §3)

“License year” shall mean the twelve consecutive month period commencing the date the license is issued pursuant to section 3.32.180.

(Prior code §13.3-6 (Ord. 1098, Ord. 2355 §4))

“Sale” shall include the transfer, in any manner or by any means whatsoever, of title to property for a consideration; the serving, supplying, or furnishing for a consideration of any property; and a transaction whereby the possession of property is transferred and the seller retains the title as security for the payment of the price shall likewise be deemed a sale. The foregoing definitions shall not be deemed to exclude any transaction which is or which, in effect, results in a sale within the contemplation of law.

(Prior code §13.3-7 (Ord. 1098))

As used in this chapter, “sworn statement” shall mean an affidavit sworn to before a person authorized to take oaths, or a declaration or certification made under penalty of perjury.

(Prior code §13.3-8 (Ord. 1098))

“Transacting” shall mean the carrying on or engaging in, within the city, any business, trade, profession, calling, or occupation and shall include within its meaning, all or any part of the operations necessary and incidental to the conduct of any business, including but not limited to any one or a combination of the following: The taking of orders, excluding the taking of orders for resale; delivery of products; performance of services; maintenance of business office facilities; or actual conduct of the work.

(Prior code §13.3-9 (Ord. 1098))

Persons required to pay a license tax for transacting and carrying on any business under this chapter shall not be relieved from the payment of any license tax or fee for the privilege of doing such business required under any other ordinance of the city, and shall remain subject to the regulatory provisions of other ordinances.

The issuance of a license under this chapter shall not entitle the licensee to engage in any business which, for any reason, is in violation of any federal, state, or municipal law, rule, or regulation.

(Prior code §13.4 (Ord. 1098))

There are hereby imposed upon the businesses, trades, professions, callings and occupations specified in this chapter license taxes in the amounts hereinafter prescribed. It shall be unlawful for any person to transact and carry on any business, trade, profession, calling or occupation in the city without first having procured a license from said city so to do and paying the tax hereinafter prescribed or without complying with any and all applicable provisions of this chapter.

This section shall not be construed to require any person to obtain a license prior to doing business within the city if such requirement conflicts with applicable statutes of the United States or of the state of California. Persons not so required to obtain a license prior to doing business within the city nevertheless shall be liable for payment of the tax imposed by this chapter.

(Prior code §13.5 (Ord. 1098))

A. Separate licenses must be obtained for each branch, establishment, or separate place of business in which the business is carried on.

B. If more than one business activity licensed on an employee tax schedule basis under this law be engaged in by a single business owner at a single location in the city under the same business name, only one license shall be required, and such business owner shall be taxed hereunder on the basis of the tax schedule for the kind or class of business from which the greater portion of the gross revenue of the entire business at such single location is derived.

C. If more than one business activity licensed on an employee tax schedule basis under this law shall be engaged in at a single location by different business owners or by a single business owner under different business names, each of such business owners or single business owner doing business under different business names shall be licensed separately on each such business activity or name under the provisions hereof and shall be taxed separately.

(Prior code §13.6 (Ord. 1098))

A. No license tax provided for by this chapter shall be applied so as to create an undue burden upon interstate commerce or violate the equal protection and due process clauses of the Constitutions of the United States and the State of California. If such a license tax is believed by a licensee or applicant to place an undue burden upon interstate commerce or violate such constitutional clauses, the licensee or applicant may apply to the finance director for an adjustment of the tax. Such application may be made before, at, or within six months after payment of the tax. The licensee or applicant shall, by sworn statement and supporting testimony, show this method of business and the gross volume or estimated gross volume of business and such other information as the finance director may deem necessary in order to determine the extent, if any, of such undue burden or violation. The finance director shall then conduct an investigation, and, after having first obtained the written approval of the city attorney, shall fix as the license tax for the licensee or applicant, an amount that is reasonable and non-discriminatory, or if the license tax has already been paid, shall order a refund of the amount over and above the license tax so fixed.

B. In fixing the license tax to be charged, the finance director shall have the power to base the license tax upon a percentage of gross receipts or any other measure which will assure that the license tax assessed shall be uniform with that assessed on businesses of like nature, so long as the amount assessed does not exceed the license tax as prescribed by this chapter. Should the finance director determine the gross receipts measure of license tax to be the proper basis, the finance director may require the licensee or applicant to submit, either at the time of termination of licensee’s or applicant’s business in the city, or at the end of each three-month period, a sworn statement of the gross receipts and pay the amount of license tax therefor, provided that no additional license tax during any one calendar year shall be required after the licensee or applicant shall have paid an amount equal to the annual license tax as prescribed in this chapter.

(Prior code § 13.7 (Ord. 1098, Ord. 2113 §1), Ord. 2268)

Nothing in this chapter shall be deemed or construed to apply to any person transacting and carrying on any business exempt by virtue of the Constitution or applicable statutes of the United States or of the state of California from the payment of such taxes as are herein prescribed.

Any person claiming an exemption pursuant to this section, except for auctioneers and auction companies whose fixed place of business is located outside the boundaries of the city, shall file a sworn statement with the finance director stating the facts upon which exemption is claimed, and in the absence of such statement substantiating the claim, such person shall be liable for the payment of the taxes imposed by this chapter.

The finance director shall, upon a proper showing contained in the sworn statement, issue a license to such person claiming exemption under this section without payment to the city of the license tax required by this chapter.

The finance director, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided herein.

(Prior code § 13.8 (Ord. 1098, Ord. 1631, Ord. 2113 §1))

Every person required to have a license under the provisions of this chapter shall make application as hereinafter prescribed for the same to the finance director of the city, and upon the payment of the prescribed license tax the finance director shall issue to such person a license which shall contain the following information:

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

B. The name of the business licensed;

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

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

E. Such other information as may be necessary for the enforcement of the provisions of this chapter.

(Prior code § 13.9 (Ord. 1098, Ord. 2113 §1))

Every person required to have a license pursuant to this chapter shall make an initial application therefor to the finance director upon such application form as may be prescribed; provided that once a business has been licensed hereunder and continues to transact business, subsequent applications may be required from time to time by the finance director.

(Prior code § 13.10 (Ord. 1098, Ord. 2113 §1))

Unless otherwise specifically provided, all annual license taxes payable hereunder shall be due and payable in advance on the first day of each license year.

Except as otherwise herein provided, license taxes, other than annual, required hereunder shall be due and payable as follows:

A. Daily flat-rate license taxes are payable each day in advance;

B. Other flat-rate license taxes are payable on the first day of business and thereafter on the first day of any applicable period provided for herein.

All annual licenses issued hereunder shall be effective on a license year basis. Licenses may be issued for a one or two year term.

(Prior code § 13.11 (Ord. 1098, Ord. 2355 §5, Ord. 2395 §1))

A. For failure to pay a license tax when due, the finance director shall add a penalty of ten percent of said license tax on the last day of each month after the due date thereof, providing that the amount of such penalty to be added shall not exceed fifty percent of the license tax due.

B. In addition to the penalties imposed, any operator who fails to remit the license tax imposed by this chapter shall pay interest at the rate of one percent per month, or fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

(Prior code § 13.12 (Ord. 1098, Ord. 1924 §1, Ord. 2113 §1))

No statements shall be conclusive as to the matters set forth therein, nor shall the filing of the same preclude the city from collecting by appropriate action such sum as is actually due and payable hereunder. Such statement and each of the several items therein contained shall be subject to audit and verification by the finance director, a designee, or such other employees as may be authorized by the finance director, who are hereby authorized to examine, audit, and inspect such book and records of any licensee or applicant for license, as may be necessary in their judgment to verify or ascertain the amount of license fee due.

All persons subject to the provisions of this chapter shall keep complete records supporting the basis upon which the license tax is determined and shall retain all such records for examination by the finance director for a period of at least three years. No person required to keep records under this section shall refuse to allow authorized representatives of the finance director to examine said records at reasonable times and places.

(Prior code § 13.13 (Ord . 1098, Ord. 2113 §1), Ord. 2268)

It shall be unlawful for the finance director or any person having an administrative duty under this chapter to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of records and equipment of any person required to obtain a license, or pay a license tax, or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth in any statement or application, or to permit any statement or application, or copy of either, or any book containing any abstract or particulars thereof to be seen or examined by any person. However, nothing in this section shall be construed to prevent:

A. The disclosure to, or the examination of records and equipment by, another city official, employee, or agent for collection of taxes for the sole purpose of administering or enforcing any provisions of this chapter, or collecting taxes imposed hereunder;

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, or city and county, if a reciprocal arrangement exists, or to a grand jury or court of law, upon subpoena;

C. The disclosure of information and results of examination of records of particular taxpayers, or relating to particular taxpayers to the city;

D. The disclosure after the filing of written request to that effect, to the taxpayer or the taxpayer’s successors, receivers, trustees, executors, administrators, assigns, and grantors, if directly interested, of information as to the items included in the measure of any paid tax, any unpaid tax or amounts of tax required to be collected, interest, and penalties. However, the city attorney shall approve each such disclosure and the finance director may refuse to make any disclosure referred to in this paragraph when, in the finance director’s opinion, the public interest would suffer thereby;

E. The disclosure of the names and addresses of persons to whom licenses have been issued, and the general type or nature of their business;

F. The disclosure by way of public meeting or otherwise of such information as may be necessary to the council in order to permit it to be fully advised as to the facts when a taxpayer submits an offer or compromise with regard to a claim asserted against such taxpayer by the city for license taxes, or when acting upon any other matter;

G. The disclosure of general statistics regarding taxes collected or business done in the city.

(Prior code § 13.14 (Ord. 1098, Ord. 1133 §3, Ord. 2113 §1, §6), Ord. 2268)

If any person fails to file any required statement within the time prescribed, or if after demand therefor made by the finance director such person fails to file a corrected statement, or if any person subject to the tax imposed by this chapter fails to apply for a license, the finance director may determine the amount of license tax due from such person by means of such information as the finance director may be able to obtain.

If the finance director is not satisfied with the information supplied in statements or applications filed, the finance director may determine the amount of any license tax due by means of any information that was able to be obtained.

When such a determination is made, the finance director shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States Post Office at Chico, California, postage prepaid, addressed to the person so assessed at such person’s last known address.

(Prior code § 13.15 (Ord. 1098, Ord. 2113 §1), Ord. 2268)

Any person aggrieved by any decision of the finance director with respect to the issuance or refusal to issue such license may appeal to the city council.

(Prior code §13.16 (Ord. 1098), Ord. 2004 §5)

The finance director also shall have the power, for good cause shown, to extend the time for filing any required sworn statement or application for a period not exceeding 30 days, and in such case to waive any penalty that would otherwise have accrued, except that a late charge of $5.00 shall be added to any tax determined to be payable.

(Prior code § 13.17 (Ord. 1098, Ord. 2113 §1), Ord. 2268)

A license issued pursuant to this chapter may be transferable upon paying a fee of $5.00, provided the licensee, having a fixed place of business within the city, makes application to the finance director on a form provided therefor, for such transfer because of changed location or ownership.

(Prior code § 13.18 (Ord. 1098, Ord. 2113 §1))

A duplicate license may be issued by the finance director to replace any license previously issued hereunder which has been lost or destroyed upon the licensee filing statement of such fact, and at the time of filing such statement paying to the finance director a duplicate license fee of $5.00.

(Prior code § 13.19 (Ord. 1098, Ord. 2113 §1))

A. Any licensee transacting and carrying on business at a fixed place of business in the city shall keep the license posted in a conspicuous place upon the premises where such business is carried on.

B. Any licensee transacting and carrying on business but not operating at a fixed place of business in the city shall keep the license upon licensee’s person at all times while transacting and carrying on the business for which it is issued.

C. Whenever identifying stickers, tags, plates, symbols or certificates have been issued for each vehicle, device, machine, or other piece of equipment included in the measure of a license tax, the person to whom such stickers, tags, plates, or symbols have been issued shall keep firmly affixed upon each vehicle, device, machine, or piece of equipment the identifying sticker, tag, plate or symbol which has been issued therefor at such locations as are designated by the finance director. Such sticker, tag, plate or symbol shall not be removed from any vehicle, device, machine, or piece of equipment to which it is issued.

D. No person shall fail to affix as required herein any identifying sticker, tag, plate, or symbol to the vehicle, device, machine, or piece of equipment for which it has been issued at the location designated by the finance director, or to give away, sell, or transfer such identifying sticker, tag, plate, or symbol to another person, or to permit its use by another person.

(Prior code § 13.20 (Ord. 1098, Ord. 1133 §4, Ord. 2113 §1), Ord. 2268)

A. Unless otherwise provided in this chapter, the following activities and organizations are exempt from payment of the license tax:

1. The conducting, managing, or carrying on of any business, occupation or activity, from any institution or organization which is conducted, managed, or carried on wholly for the benefit of charitable purposes or from which profit is not derived, either directly or indirectly, by any individual, firm or corporation;

2. The conducting of any entertainment, concert, exhibition, or lecture on scientific, historical, literary, religious, or moral subjects, whenever all the receipts thereof are to be appropriated to any church or school or to any religious or benevolent purpose;

3. The conducting of any entertainment, dance, concert, exhibition, or lecture by any religious, charitable, fraternal, educational, military, state, county or municipal organization or association, whenever the receipts of such are to be appropriated for the purpose and objects for which such organization or association was formed, and from which profit is not derived, either directly or indirectly, by any individual, firm or corporation.

B. In making a determination as to the exempt status of any organization or activity hereunder, the following criteria are to be considered by the finance director:

1. The organization or activity has received or has formally applied for, tax exempt status from the State Franchise Tax Board and/or Internal Revenue Service where applicable;

2. The proposed activity will not be in conflict with any provisions of this code, state or federal law.

For purposes of this section “charitable” shall mean and include the words patriotic, philanthropic, social service, welfare, benevolent, educational, civic, or fraternal, either actual or purported. An activity defined as “religious” or a “religion” shall not mean and include the word “charitable” as herein defined, but shall be given their commonly accepted definitions.

(Prior code § 13.21 (Ord. 1098, Ord. 2113 §1))

Any business which pays the city an annual franchise fee based upon gross receipts or an annual solid waste collector permit fee based upon gross receipts shall be exempt from the provisions of this chapter.

(Prior code §13.22 (Ord. 1098), Ord. 2276, Ord. 2276)

A. Unless otherwise provided under schedules B and C of this section, every person who engages in business within the city whose gross receipts in a license year exceeds $5,000.00, shall pay a license tax based upon the average number of employees employed during the prior year, as follows:

• 1 employee - $25.00.

• 2 - 5 employees - $40.00.

• 6 - 10 employees - $50.00

• 11 - 15 employees - $60.00.

• 16 - 20 employees - $70.00.

• 21 - 25 employees - $80.00.

Over 25 employees - $80.00 plus $1.00 for each employee in excess of 25.

In determining the average number of employees employed during the year preceding a license year, the number of employees earning wages during each of the four calendar quarters preceding the license year shall be added together and the sum thereof divided by four (4).

B. Flat Rate.

Amusement concession or ride - Each $10.00 per month.

Animal show, carnival or circus - $100.00 per day.

Auto parking lot - $25.00 per parking lot.

Auto race track - $100.00 per year.

Bowling alley - $7.50 per alley.

Cardrooms, pool halls - $4.00 per table.

Christmas tree vendor - $10.00 per month.

Clairvoyants, fortune-teller s, astrologers, palmists - $100.00 per year.

Hospitals, sanitariums, rest and nursing homes - $1.50 per bed - Minimum $ 18.00.

Hotels, motels, apartments:

• 3 to 5 rental units - $18.00.

• 6 to 50 rental units - $18.00 plus $1.00 per unit in excess of 5 units.

• 51 to 100 rental units - $63.00 plus $0.50 per unit in excess of 50 units.

Over 100 rental units - $88.00 plus $0.25 per unit in excess of 100 units.

Lock boxes - $2.00 per box.

Pickup or delivery from outside city - $30.00 per year for first vehicle; $10.00 per year for each additional vehicle.

Retailers or wholesalers of concrete, aggregates, rock, sand, gravel, or plant mix - $25.00 per truck - Maximum $100.00.

Roominghouses and boardinghouses:

• 3 rooms - $13.00.

• 4 to 50 rooms - $13.00 plus $1.00 per room in excess of 3 rooms.

• 51 to 100 rooms - $70.00 plus $0.50 per room in excess of 50 rooms.

Over 100 rooms - $85.00 plus $0.25 per room in excess of 100 rooms.

Trailer courts - $18.00 for the first 5 rental units or less plus $1.00 for each unit in excess of 5 units - Maximum $65.00.

Vehicles for hire - Passenger - $24.00 per vehicle.

Water public utility - $1.50 per service connection within city.

C. Gross Receipts. In determining the tax liability under this section, the gross receipts from operations during the twelve (12)-month period immediately preceding the current license year shall be used. If a business has operated less than twelve (12) months immediately preceding the license year, gross receipts shall be estimated by the finance director for the current license year, for use in determining the amount of tax due.

Coin- or Currency-Operated Machines:

Gross receipts Tax

$5,000.00 - $10,000.00 $30.00

Over $10,000.00 $30.00 plus $1.00/$1,000.00 in excess of $10,000.00

Solid Waste Collectors: Percentage of all gross receipts from customers served within the city as follows:

Containers up to 32-gallon capacity and all other pickups not included in schedules below: 3% of gross receipts.

Container (1-to 3-yard capacity) - 2% of gross receipts. Drop box (Any container in excess of 3-yard): 1% of gross receipts.

(Prior code § 13.23 (Ord. 1098, Ord. 1103, Ord. 1115 §2, Ord. 2113 §1, Ord. 2355 §6))

A. The finance director shall enforce each and all of the provisions of this chapter.

B. The finance director, in the exercise of the duties imposed hereunder, and acting through duly authorized designees, shall examine or cause or to be examined all places of business in the city to ascertain compliance with the provisions of this chapter.

(Prior code § 13.24 (Ord. 1098, Ord. 1133 §6, Ord. 2113 §1), Ord. 2268)

The amount of any license tax and penalty imposed by the provisions of this chapter shall be deemed a debt to the city. An action may be commenced in the name of said city in any court of competent jurisdiction, for the amount of any delinquent license tax and penalties.

(Prior code §13.25 (Ord. 1098))

All remedies prescribed hereunder 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 hereof.

(Prior code §13.26 (Ord. 1098))

Neither the adoption of this chapter nor its superseding of any portion of any other ordinance of the city shall in any manner be construed to affect prosecution for violation of any other ordinance committed prior to the effective date hereof, nor be construed as a waiver of any license or any penal provision applicable to any such violation, nor be construed to affect the validity of any bond or cash deposit required by any ordinance to be posted, filed, or deposited, and all rights and obligations thereunto appertaining shall continue in full force and effect.

Where a license for revenue purposes has been issued to any person by the city and the tax paid for the business for which the license has been issued under the provisions of any ordinance heretofore enacted and the term of such license has not expired, then the license tax prescribed for said business by this chapter shall not be payable until the expiration of the term of such unexpired license.

(Prior code §13.27 (Ord. 1098))

This being a revenue chapter to provide funds for current municipal purposes, it shall become final upon adoption, to become effective on July 1, 1974.

(Prior code §13.28 (Ord. 1098))

Any person violating any of the provisions of this chapter shall be guilty of a misdemeanor and shall be punishable therefor by a fine of not more than five hundred dollars or by imprisonment for a period of not more than six months, or by both such fine and imprisonment.

(Ord. 1924 §2)