Chapter 1 — SALES AND USE TAX

Note: Sections 6101 through 6107, adopted by Ordinance No. 1, as amended by Ordinance Nos. 2 and 183, amended in their entirety by Section 1, Ordinance No. 444, adopted October 30, 1973, operative January 1, 1974.

This chapter shall be known as the "Uniform Local Sales and Use Tax Law of the City of Downey."

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

The rate of the sales tax and use tax imposed by this chapter shall be one percent. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

The provisions of this chapter shall be operative on January 1, 1974. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

The Council hereby declares that this chapter is adopted to achieve the following, among other, purposes and directs that the provisions of this chapter be interpreted in order to accomplish those purposes:

• (a) To adopt a sales and use tax law which complies with the requirements and limitations set forth in Part 1.5 of Division 2 of the Revenue and Taxation Code of the State;

• (b) To adopt a sales and use tax law which incorporates provisions identical to those of the Sales and Use Tax Law of the State insofar as those provisions are not inconsistent with the requirements and limitations set forth in Part 1.5 of Division 2 of the Revenue and Taxation Code of the State;

• (c) To adopt a sales and use tax law which imposes a tax and provides a measure therefor that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the sales and use taxes of the State; and

• (d) To adopt a sales and use tax law which can be administered in a manner that will, to the degree possible consistent with the provisions of Part 1.5 of Division 2 of the Revenue and Taxation Code of the State, minimize the cost of collecting City sales and use taxes and at the same time minimize the burden of record keeping upon persons subject to taxation under the provisions of this chapter.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

Prior to the operative date of this chapter, the City shall contract with the State Board of Equalization to perform all the functions incident to the administration and operation of this sales and use tax law; provided, however, if the City shall not have contracted with the State Board of Equalization prior to such operative date, it shall nevertheless so contract, and, in such a case, the operative date shall be the first day of the first calendar quarter following the execution of such a contract rather than the first day of the first calendar quarter following the adoption of this chapter.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the City at the rate set forth in Section 6102 of this chapter of the gross receipts of the retailer from the sale of all tangible personal property sold at retail in the City on and after the operative date of this chapter.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

For the purposes of this chapter, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the State sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

An excise tax is hereby imposed on the storage, use or other consumption in this City of tangible personal property purchased from any retailer on and after the operative date for storage, use or other consumption in this City at the rate stated in Section 6102 of the sales price of the property. The sales price shall include delivery charges when such charges are subject to State sales or use tax regardless of the place to which delivery is made.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

Except as otherwise provided in this chapter, and except insofar as they are inconsistent with the provisions of Part 1.5 of Division 2 of the Revenue and Taxation Code of the State, all of the provisions of Part 1 of Division 2 of said Revenue and Taxation Code are hereby adopted and made a part of this chapter as though fully set forth in this chapter. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code of the State, wherever the State is named or referred to as the taxing agency, the name of the City shall be substituted therefor. Such substitution, however, shall not be made when the word "State" is used as part of the title of the State Controller, the State Treasurer, the State Board of Control, the State Board of Equalization, the State Treasury, or the Constitution of the State; such substitution shall not be made when the result of that substitution would require action to be taken by or against the City, or any agency thereof, rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this chapter; such substitution shall not be made in those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State, where the result of the substitution would be to provide an exemption from this tax with respect to certain sales, storage, use, or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use, or other consumption remains subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code of the State, or to impose this tax with respect to certain sales, storage, use, or other consumption of tangible personal property which would not be subject to tax by the State under the said provisions of that Code; such substitution shall not be made in Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797, or 6828 of said Revenue and Taxation Code; and such substitution shall not be made for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 of said Code or in the definition of that phrase in said Section 6203. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

If a seller's permit has been issued to a retailer under the provisions of Section 6067 of the Revenue and Taxation Code of the State, an additional seller's permit shall not be required by the provisions of this chapter.

(Added by Ord. 444, adopted 10-31-73, operative 1-1-74)

• (a) The amount subject to tax shall not include any sales or use tax imposed by the State upon a retailer or consumer.

• (b) The storage, use or other consumption of tangible personal property, the gross receipts from the sale of which have been subject to tax under a sales and use tax ordinance enacted in accordance with Part1.5 of Division 2 of the Revenue and Taxation Code by any City and county, or City in this State shall be exempt from the tax due under this ordinance.

• (c) There are exempted from the computation of the amount of the sale tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the City in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.

• (d) In addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code, the storage, use or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government is exempted from use tax.

• (Added by Ord. 444, adopted 10-30-73, operative 1-1-74; amended by Ord. 743, adopted

12-27-83, operative 1-1-84)

• (a) The amount subject to tax shall not include any sales or use tax imposed by the State upon a retailer or consumer.

• (b) The storage, use or other consumption of tangible personal property, the gross receipts from the sale of which have been subject to tax under a sales and use tax ordinance enacted in accordance with Part1.5 of Division 2 of the Revenue and Taxation Code by any City and county, county, or City in this State shall be exempt from the tax due under this ordinance.

• (c) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of waterborne vessels to be used or consumed principally outside the City in which the sale is made and directly and exclusively in the carriage of persons or property in such vessels for commercial purposes.

• (d) The storage, use or other consumption of tangible person property purchased by operators of waterborne vessels and used or consumed by such operators directly and exclusively in the carriage of persons or property of such vessels for commercial purposes is exempted from the use tax.

• (e) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the City in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.

• (f) In addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code, the storage, use or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued to the laws of this State, the United States, or any foreign government is exempted from the use tax.

• (Added by Ord. 444, adopted 10-30-73, operative 1-1-74; amended by Ord. 743, adopted 12-27-83)

• (a) Section 6112 shall be operative January 1, 1984.

• (b) Section 6113 shall be operative on the operative date of any act of the Legislature of the State of California which amends Section 7202 of the Revenue and Taxation Code or which repeals and reenacts Section 7202 of the Revenue and Taxation Code to provide an exemption from City sales and use taxes for operators of waterborne vessels in the same, or substantially the same, language as that existing in subdivisions (i)(7) and (i)(8) of Section 7202 of the Revenue and Taxation Code at those subdivisions read on October 1, 1983.

(Added by Ord. 743, adopted 12-27-83)

All subsequent amendments of the Revenue and Taxation Code of the State, which amendments relate to the sales and use tax and which are not inconsistent with the provisions of Part 1.5 of Division 2 of said Revenue and Taxation Code, shall automatically become a part of this chapter. (Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection of any tax or any amount of tax required to be collected under the provisions of this chapter or Part 1.5 of Division 2 of the Revenue and Taxation Code of the State.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

Any person violating any of the provisions of this chapter shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine of not more than $500, or by imprisonment for a period of not more than six months, or by both such fine and imprisonment.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the remainder of this chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

The provisions of this chapter, as adopted by Ordinance No. 1 and as amended by Ordinance Nos. 2 and 183, shall remain applicable for the purposes of the administration of said provisions and the imposition and collection of taxes with respect to the sales, storage, use, or other consumption of tangible personal property prior to January 1, 1974, the making of refunds, effecting credits, the disposition of moneys collected, and for the commencement or continuance of any action or proceeding under said provisions.

(Added by Ord. 444, adopted 10-30-73, operative 1-1-74)

CHAPTER 1A ROOM TAX

This chapter shall be known as the "Uniform Transient Occupancy Tax of the City of Downey." (Added by Ord. 255, adopted 10-13-64)

For the purposes of this chapter, certain words and phrases are defined and shall be construed as herein set forth, unless it is apparent from the context that a different meaning is intended. (Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

"Hotel" means any public or private hotel, inn, hostelry, tourist home or house, motel, rooming house, or other lodging place within the City, wherein the Operator, for compensation, furnishes lodging to any Transient.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

"Permanent Resident" means any person who, as of a given date, has occupied or has had the right to occupy a room or rooms in a particular Hotel for the 90 consecutive days immediately preceding the given date.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

"Room Rental" means the total charge made by any Hotel for lodging and/or lodging space furnished to any Transient. If the charge made by the Hotel to the Transient includes any charge for services or accommodations in addition to that for lodging and/or lodging space, then the portion of the total charge which represents only the lodging and/or lodging space shall be distinctly set out and billed to the Transient by the Hotel as a separate item. (Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

"Transient" means any person who, for any period of 90 consecutive days or less, at his or her own expense or at the expense of another, obtains lodging or the use of any lodging space in any Hotel for which a charge is made. Transient does not include Permanent Residents. (Added by Ord. 255, adopted 10-13-64; amended by Ord. 819, adopted 5-13-86; amended by Ord. 1057, adopted 10-13-98)

"Operator" means the person who is proprietor of the Hotel, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the Operator performs his or her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an Operator for the purposes of this chapter, and shall have the same duties and liabilities as his or her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall be considered to be compliance by both.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

"Tax Administrator" means the Director of Finance who shall be charged with administration of the tax.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

For the privilege of occupancy in any Hotel, each Transient is subject to and shall pay a tax in the amount of 9% of the Room Rental charged by the Operator. Said tax constitutes a debt owed by the Transient to the City which is extinguished only by payment to the Operator or to the City. The Transient shall pay the tax to the Operator of the Hotel at the time the Room Rental is paid. If the Room Rental is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the Transient's ceasing to occupy space in the Hotel. If for any reason the tax due is not paid to the Operator of the Hotel, the Tax Administrator may require that such tax shall be paid directly to the Tax Administrator.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 765, adopted 8-14-84; Ord. 941, adopted 1-28-92; Ord. 1057, adopted 10-13-98)

No tax shall be imposed upon:

• (a) Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided;

• (b) Any Federal officer or employee when on official business;

• (c) Any officer or employee of a foreign government who is exempt by reason of express provision of Federal law or international treaty;

• (d) No exemption shall be granted except upon a claim therefor made at the time Room Rental is collected for a particular Transient and under penalty of perjury upon a form prescribed by the Tax Administrator.

• (Added by Ord. 255, adopted 10-13-64; amended by Ord. 819, adopted 5-13-86; Ord. 941, adopted 1-28-92; Ord. 1057, adopted 10-13-98)

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the Room Rental is collected from every Transient. The amount of tax shall be separately stated from the amount of Room Rental charged, and each Transient shall receive a receipt for payment from the Operator. No Operator of a Hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the Operator, or that it will not be added to the Room Rental, or that, if added, any part will be refunded except in the manner hereinafter provided.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 1013-98)

Within 30 days after the effective date of this chapter, or within 30 days after commencing business, whichever is later, each Operator of any Hotel renting occupancy to Transients shall register said Hotel with the Tax Administrator and obtain from him or her a "Transient Occupancy Registration Certificate" to be at all times posted in a conspicuous place on the premises. Said certificate shall, among other things, state the following:

• (1) The name of the Operator;

• (2) The address of the Hotel;

• (3) The date upon which the certificate was issued;

• (4) This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of Article VI, Chapter 1A of the Downey Municipal Code by registering with the Tax Administrator for the purpose of collecting from Transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in an unlawful manner, nor to operate a Hotel without strictly complying with all local applicable laws, including, but not limited to those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

Each Operator on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the Tax Administrator shall make a return to the Tax Administrator, on forms provided by him, of the total Room Rentals charged and received and the amount of tax collected for Transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the Tax Administrator. The Tax Administrator may establish shorter reporting periods for any certificate holder if he deems it necessary in order to insure collection of the tax and he may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by Operators pursuant to this chapter shall be held in trust for the account of the City until payment thereof is made to the Tax Administrator. (Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

• (a) Original Delinquency. Any Operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax.

• (b) Continued Delinquency. Any Operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and 10% penalty first imposed.

• (c) Fraud. If the Tax Administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (a) and (b) of this section.

• (d) Interest. In addition to the penalties imposed, any Operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one-half of one percent (.50%) 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.

• (e) Penalties Merged With Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax required to be paid by this chapter.

Determination of Tax by Tax Administrator. If any Operator shall fail or refuse to collect said tax and to make, within the time provided in this chapter, any report and remittance of said tax or any portion thereof required by this chapter, the Tax Administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the Tax Administrator shall procure such facts and information as he or she is able to obtain upon which to base the assessment of any tax imposed by this Ordinance and payable by any Operator who has failed or refused to collect the same and to make such report and remittance, he or she shall proceed to determine and assess against such Operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the Tax Administrator shall give notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the Operator so assessed at his last known place of address. Such Operator may within 10 days after the serving or mailing of such notice make application in writing to the Tax Administrator for a hearing on the amount assessed. If application by the Operator for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five days' written notice in the manner prescribed herein to the Operator to show cause at a time and place fixed in said notice why said amount specified therein should not be so fixed for such tax, interest and penalties. At such hearing, the Operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing the Tax Administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in Section 6134.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

Any Operator aggrieved by any decision of the Tax Administrator may appeal the decision to the City Manager by filing a notice of appeal with the City Clerk within 15 days of the serving or mailing of the determination of tax due. The City Manager shall fix a time and place for hearing such appeal, and the City Clerk shall give notice in writing by mail to such Operator at his or her last known place of address. The findings of the City Manager or his designee shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the mailing of the City Manager's or his or her designee's findings.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

It shall be the duty of every Operator liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he may have been liable for the collection of and payment to the City, which records the Tax Administrator shall have the right to inspect at all reasonable times.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

• (a) Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the City under this chapter, it may be refunded as provided in this section.

• (b) No refund may be made except upon a written claim verified by the person who paid the tax, or by his or her guardian or conservator, or by the executor or administrator of his or her will or estate. The written claim must be presented to the Tax Administrator within one year after the payment of the amount sought to be refunded, and must state the grounds upon which the claim is made. An Operator may claim a refund or claim a credit against taxes collected but not yet remitted to the City of the amount overpaid, paid more than once, or erroneously or illegally collected. However, in the case of a tax erroneously or illegally collected by the Operator but not yet remitted to the City, no refund shall be allowed unless a written, verified claim has been submitted to the Operator, in the form prescribed above, by the person who paid the tax, and the amount thereof has either been refunded by the Operator to the person who paid the tax, or credited against Room Rental subsequently payable by such person.

• (c) No refund shall be paid under the provisions of this section unless a written claim for refund is presented according to this section. No suit for money, damages, or a refund may be brought against the City until a written claim for the refund has been presented to the City and has been acted upon or has been deemed to be rejected by the City, in accordance with this section. Only the person who filed the claim may bring such a suit, and if another person should do so, judgment shall not be rendered for the plaintiff. .

• (d) No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto.

• (Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

Any tax required to be paid by any Transient under the provisions of this chapter shall be deemed a debt owed by the Transient to the City. Any such tax collected by an Operator which has been paid to the City shall be deemed a debt owed by the Operator to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City of Downey.

(Added by Ord. 255, adopted 10-13-64; amended by Ord. 1057, adopted 10-13-98)

• (a) The Tax Administrator shall have the power and duty, and is hereby directed to enforce each and all provisions of this Ordinance.

• (b) The Tax Administrator shall have the power to adopt rules and regulations not inconsistent with the provisions of this Ordinance for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the Tax Administrator's office.

• (c) The Tax Administrator shall review all claims for exemption and shall determine the eligibility of any such claim.

(Added by Ord. 1057, adopted 10-13-98)

CHAPTER 1B CIGARETTE TAX

§ 6140. – 6153. SUSPENDED. (Suspended by Ord. 337,adopted8-22-67)