El Segundo Municipal Code Ch. 1 General Licensing Provisions

It is unlawful for any person to commence or conduct in the City, any business specified, named, designated or referred to in this Code without first having procured a license from the City so to do as provided in this Title, or without complying with all of the requirements or provisions of this Title and any other ordinance of the City now existing or which may hereafter be adopted by the City Council, and which refers or relates to such business. The commencing or conducting of any such business without having first procured the license and paid the required license fee or without having complied with any and all such requirements or provisions shall constitute a separate violation for each and every day that the business is so commenced and conducted. (Ord. 1054, 8-16-1983)

The City Manager shall have the discretion to designate any City official or employee as the licensing authority under this Title to exercise responsibility for administration of the license and fee requirements set forth herein in this Title. (Ord. 1127, 11-15-1988; amd. 2000 Code)

The fees provided for in this Title are exclusively a tax imposed for revenue purposes and imposed only with the intent of the City to have each commercial activity, as herein provided, sustain its just share of the burden or expense of local government, and defray the costs of administration of this Title. (Ord. 1252, 4-9-1996)

Any license fee for a license issued pursuant to the terms of this Chapter shall be denominated a business registration fee. In addition to any other legend the licensing authority considers appropriate, the business registration fee document shall carry on its face the following legend:

This business registration fee document does not constitute a permit to engage in any business. In appropriate cases when required by City ordinance a separate permit is issued.

(Ord. 1054, 8-16-1983; amd. Ord. 1127, 11-15-1988)

No license shall be issued for any business which is prohibited within the City by this Code or by any ordinance of the City. (Ord. 776, 11-22-1971)

Notwithstanding any other provision of this Title, every soldier, sailor or marine of the United States of America, who has received an honorable discharge or release from active duty under honorable conditions from the service and who is physically unable to obtain a livelihood by manual labor, and who is a voter of this State, shall have the right to peddle and vend any goods, wares or merchandise owned by him, except spirituous, malt, vinous or other intoxicating liquor, without payment of any license fee; and, the licensing authority shall issue to the soldier, sailor or marine without cost a license therefor, upon presentation of proper and sufficient credentials; provided, however, that no such business shall be commenced or continued by the soldier, sailor or marine without first procuring the license herein referred to. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

Nonprofit and charitable organizations not otherwise exempt from the payment of a business license fee pursuant to section 4-1-8 shall pay a business license fee of one hundred fifty dollars ($150.00) per year. The business license fee shall be subject to annual increases in accordance with section 4-2-1. The licensing authority may require any information or evidence necessary to establish nonprofit status. (Ord. 612, 10-28-1963; amd. Ord. 1643, 12-13-2022)

This Title shall not be construed to require the payment of a license fee by any person engaging in business when such person or business is exempt by virtue of the constitutions or applicable statutes of the United States or of the State of California. (Ord. 776, 11-22-1971; amd. Ord. 1643, 12-13-2022)

Notwithstanding any of the other provisions of this Title, the City Council reserves the right to waive the payment of any license fee required under this Title from any licensee who is recommended in writing to the City Council by the Vocational Rehabilitation Bureau of the State Department of Education, as worthy of consideration, and who, after personal interview of the applicant by the City Council sitting as a committee of the whole, may be extended such a privilege by the City Council. In case the privilege is so extended, the City Council may fix such conditions as to the City Council may seem proper or desirable in connection with the business, occupation or activity to be so licensed and conducted by the applicant. (Ord. 776, 11-22-1971)

Upon application therefor, and subject to any administrative requirements the City Manager may prescribe, the licensing authority is authorized to issue a license without payment of any license fee to any person under the age of eighteen (18) years where the following conditions are present:

A. Minor person conducting business is currently enrolled in school not above high school;

B. Business activity is conducted only outside of school hours or during school vacation;

C. Business activity produces not more than one thousand dollars ($1,000.00) in gross receipts during any calendar year, and any profits therefrom, accrue only to the applicant;

D. Only the applicant and others under the age of eighteen (18) years shall be employed in the business;

E. The applicant has filed with the licensing authority the written consent of the parent or legal guardian, to issuance of the license. (Ord. 612, 10-28-1963; amd. Ord. 1127, 11-15-1988)

A. Interstate Commerce: Each person claiming exemption from payment of any license fee provided for in this Title upon the grounds that the imposition of such fee casts an undue burden upon his right to engage in commerce with foreign nations, or among the several states, or conflicts with the regulation of interstate commerce by the United States of America, shall file a verified statement with the licensing authority of the City, disclosing the interstate or other character of his business entitling him to such exemption. Such statement shall include the name and location of the person for whom the orders are to be solicited or secured, the name of the nearest local or State manager, if any, and his address; the kind of goods, wares, merchandise or services to be delivered or performed; the place from which the same are to be shipped or forwarded or the services performed; the method of solicitation or of taking orders; the location of any warehouse, factory, or plant within the State; the method of delivery; the applicant's residence, or any other facts necessary to establish such claim of exemption. The applicant shall also be required to furnish his fingerprints and thumbprints. A copy of the order blank, contract form or other papers used by such person in taking orders shall be attached to the affidavit. An application for exemption of license fee shall be filed with the licensing authority and the applicant shall pay a fee of ten dollars ($10.00) for processing the application. If the application is approved by the licensing authority, a certificate of exemption will be issued. The applicant shall not conduct any business prior to the issuance of this certificate of exemption. (Ord. 751, 12-28-1970; amd. Ord. 1127, 11-15-1988)

B. Filing Of Statement: Any person claiming a license exemption shall file a verified statement with the licensing authority upon an application form therefor approved by the licensing authority, stating the facts upon which the exemption is claimed. The licensing authority shall, upon a proper showing contained in the verified statement, issue a license or permit to the person claiming exemption under this Section without payment to the City of the license tax required by this Title. In addition to the above, the applicant shall obtain from the licensing authority an identification card to be carried on his person when conducting the business. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

A. Basis For Fee: In all cases, the amount of business license fee to be paid under the provision of this Title, by any person, is based upon the number of persons employed, or upon the number of square feet of floor space, or upon square acre of space owned, leased, or rented, or upon the number of vehicles used, or upon the number of machines or other devices used for any business, enterprise, game or activity, or upon the number of rooms or units in any building or structure.

B. Renewal Application: Before any person can obtain a business license renewal, and prior to January 31 of each year, that person must file a business license renewal application signed under penalty of perjury that all information is true, with the licensing authority for guidance in ascertaining the amount the person is required to pay or deposit, and provide the following information: the number of employees employed by the person, or upon the number of square feet of floor space, or upon square acre of space owned, leased, or rented, or the number of vehicles used, or the number of machines or other devices used for any business, enterprise, game or activity by the person, or the number of rooms or units contained in the building or structure, for the quarters in the calendar year during which the person was, or will actually be, doing business in the City.

C. Initial Application: If a business is seeking its initial El Segundo business license, that business shall, within the first five (5) days of business activity (or upon a timely written request, the licensing authority may grant an extension of time not to exceed 30 calendar days), file a business registration application, signed under penalty of perjury that all information is true, with the licensing authority for guidance in ascertaining the amount the business is required to pay or deposit, showing the number of employees employed by the business, or upon the number of square feet of floor space, or upon square acres of space owned, leased, or rented, or the number of machines or other devices used for any business, enterprise, game or activity by the business, or the number of rooms or units contained in the building or structure, for the quarters in the calendar year during which they will actually be doing business in the City.

D. Maintain Records For Calculating Tax: Each person subject to any tax in this Title shall retain records documenting the information upon which any applicable tax is calculated and which shall support the calculation of tax reflected on that person's return. Unless a subcontractor of a taxpayer has a valid City business license, said records shall include records of the taxpayer's subcontractors and the taxpayer shall be held responsible for the failure of any of its subcontractors to maintain records necessary to calculate any tax under this Title. Said records shall be kept for three (3) years from the date upon which the tax to which the records related is due. Where no records are available or those available are insufficient to calculate the tax due hereunder, the City shall have the authority to determine the tax due. Upon fifteen (15) days' notice (or upon a timely written request, the licensing authority may grant an additional extension of time, not to exceed 15 calendar days), a taxpayer or any business which the City contends should pay tax, must make available to the City, within the City, all records requested by the City relating to said tax.

E. Amount Due Per Statement: No statement shall be conclusive upon the City, or upon any officer thereof, as to the matters therein set forth, or otherwise, and the same shall not prejudice the right of the City to recover any amount that may be ascertained to be due from the person, in addition to the amount shown by the statement to be due, in case the statement should be found to be incorrect.

F. Failure To Provide Information; Penalty: If any person required by this Section to provide information fails to do so, the person shall be required to pay a penalty of fifty dollars ($50.00) per day if the business employs ten (10) or less employees or one hundred dollars ($100.00) per day if the business employs more than ten (10) employees until such time as the information required by this Section is properly filed with the licensing authority. That person shall be guilty of a violation of this Chapter which shall be punishable as provided in this Chapter. (Ord. 1127, 11-15-1988; amd. Ord. 1252, 4-9-1996)

Each person subject to any tax in this Title shall retain records documenting the information upon which any applicable tax is calculated and which shall support the calculation of tax reflected on that person's return. Said records shall include records of the taxpayer's subcontractors. The taxpayer shall be held responsible for the failure of any of the subcontractors to maintain records necessary to calculate any tax under this Title. Said records shall be kept for three (3) years from the date upon which the tax to which the records relate is due. Where no records are available or those available are insufficient to calculate the tax due hereunder, the City shall have the authority to determine the tax due. Upon five (5) working days' notice, a taxpayer or any business which the City contends should pay tax, must make available to the City at City Hall in El Segundo all records requested by the City relating to said tax. Failure to do so may result in a fine of two hundred dollars ($200.00) for every day, beyond the notice period, for which the person fails to comply. (Ord. 1252, 4-9-1996)

It shall be unlawful for any person required to apply for a license and pay a license fee under this Title to make any false statement on said application. (Ord. 1054, 8-16-1983)

A. Hearing Request Procedure: Any applicant for a business license under this Title, or any licensee hereunder, may appeal the amount of any tax, interest or penalty that has been overpaid or paid more than once or has been erroneously or illegally collected or received by the City under this Title, in the manner provided herein. Within ten (10) days of the provision of an interpretation of this Title, or of an opinion concerning this Title from a license inspector, auditor, or designated City official, any party affected thereby may pay the tax so assessed under protest and request a hearing before the licensing authority or his/her designee. Said hearing shall be held within thirty (30) days from the date of the first appeal and a final decision shall be rendered at the hearing. Within ten (10) days from the date of the hearing, an appeal of the licensing authority's decision may be filed with the City Council. Within thirty (30) days from the date of the filing of the second appeal, the matter shall be scheduled for hearing with the City Council. However, appeal to the City Council may only be made when the dispute concerns the accuracy of calculation of the amounts due, or the facts upon which a tax assessment is based.

B. Claim To Appeal Final Decision: A claim appealing the final decision of the licensing authority or of the City Council may be filed in writing, stating under penalty of perjury the specific grounds upon which the claim is founded, provided such claim is filed with the licensing authority within one year of the date of payment.

C. Nonpayment; Penalty And Interest Continue: If the full amount of the tax and any penalty and interest due is not paid, there shall be no rights of appeal, and penalty and interest shall continue to run. (Ord. 1127, 11-15-1988; amd. Ord. 1252, 4-9-1996)

D. Loss Of Appeal Rights: Any appeal rights provided for herein are lost if the procedures set forth herein are not fully complied with and if the appeal is not made in writing with the licensing authority within the time specified herein. (Ord. 1127, 11-15-1988; amd. Ord. 1252, 4-9-1996; 2000 Code)

It shall be the duty of the licensing authority to prepare in duplicate a license under this Title for every person liable to pay a license fee hereunder; provided, that the licensing authority may prepare such additional number of duplicate copies thereof as the business and accounting practices of the City may require. Each license shall show the amount of the fee therefor, the period of time covered thereby, the name of the person to whom issued, the business license, and if a fixed or established place of business, the location or place where the business is to be commenced or conducted. All licenses under this Title shall be signed by the licensing authority or his authorized deputy. (Ord. 1054, 8-16-1983; amd. Ord. 1127, 11-15-1988)

A. Investigation By City: Notwithstanding any provisions of this Title, when in the discretion of the licensing authority it shall be deemed necessary, an application for a business license or permit, or renewal thereof, shall be forwarded to the appropriate departments of the City, including, but not limited to, City Manager, City Attorney, Police Department, Fire Department, and Community Development Department for investigation and/or inspection.

B. Time Limit: The appropriate departments shall conduct any investigation and/or inspection to determine whether said license or permit should be issued in accordance with the appropriate provisions of this Code. A period of not less than thirty (30) days shall be allowed for the purpose of conducting said services.

C. Fees: In addition to the applicable licensing and permit fees, all investigation and inspection fees shall be due and payable at the time the application is filed. (Ord. 1252, 4-9-1996; amd. Ord. 1315, 1-18-2000; Ord. 1639, 9-20-2022)

When the required license fee has been paid and all other provisions of this Title have been complied with, the licensing authority shall issue the original license provided for in this Title to the licensee named in the license, and shall retain the first duplicate copy of the license on file in his office. Other duplicate copies, if any, shall be filed as the business and accounting practices of the City may from time to time require. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

Annual license fees shall be due and payable in advance on January 1. A license fee for a new business commenced on or after July 1 of any year shall be prorated on a semiannual basis, except that no prorated fee shall be less than twelve dollars ($12.00). (Ord. 1054, 8-16-1983)

No error or mistake on the part of the licensing authority or otherwise in the determination, statement or collection of the amount of any license fee shall prevent or prejudice the collection by or for the City what shall be actually due from any person commencing or conducting any business subject to a license under this Title. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

A. Transferability Generally: Licenses are nontransferable; however, an owner of a relocated business may obtain a license for the business at the new location for the unexpired calendar year upon surrendering the license issued for the former place of business and the payment of a six dollar ($6.00) fee.

B. Acquisition Of Business: Notwithstanding anything in this Code to the contrary, where a business that is properly licensed under this Code is the subject of an acquisition, merger or reorganization and the nature of such business will remain substantially the same as prior to the acquisition, merger or reorganization, the owner or new owner, as the case may be, may obtain a license for the business for the unexpired calendar year upon surrendering the previously issued license and the payment of a six dollar ($6.00) fee. The owner or new owner, as the case may be, shall provide documentation verifying such acquisition, merger or reorganization to the satisfaction of the Chief Financial Officer. The acquisition, merger or reorganization of an ongoing business that is properly licensed under this Code where the nature of such business will remain substantially the same as prior to the acquisition, merger or reorganization shall not be deemed to be a new business for purposes of Title 4 of this Code. (Ord. 1294, 2-2-1999; amd. Ord. 1620, 11-17-2020)

The licensing authority may on receipt of an affidavit filed in the office of the licensing authority by or on behalf of any licensee stating that any license issued under this Title has been lost or destroyed, issue a duplicate of the license to the licensee therein named. A charge of three dollars ($3.00) shall be made for each such duplicate license issued, which sum shall be paid into the Treasury of the City to the credit of the General Fund. (Ord. 1054, 8-16-1983; amd. Ord. 1127, 11-15-1988)

Every person having a license issued under the provisions of this Title and commencing or conducting the business therein mentioned at a fixed place shall keep the license conspicuously posted and exhibited in the place of business while the same is in force. Every person having the license and not having a fixed place of business shall carry or transport the license with him at all times while conducting the business. (Ord. 776, 11-22-1971)

Every person having a license issued under the provisions of this Title shall exhibit the same to the licensing authority or his authorized deputy when applying for a renewal thereof, and whenever requested to do so by any police officer of the City or by any inspector or officer thereof authorized to issue or inspect licenses or collect license fees. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

In all instances in which a license is required under the provisions of this Title and a vehicle is used in conducting the business, the licensee shall request and the licensing authority shall furnish the licensee with a suitable license tag or plate therefor, which tag or plate shall be permanently displayed in a seven inch (7") square in the lower corner of the windshield farthest removed from the driver. The sum of fifty cents ($0.50) for the tag or plate shall be paid by the licensee. (Ord. 1054, 8-16-1983; amd. Ord. 1127, 11-15-1988)

All licenses issued under this Title are granted and accepted by all parties receiving licenses with the express understanding that the City Council may revoke the same at any time if satisfied that any of the conditions of the license or terms of this Title have been violated, that the license was obtained by fraudulent representation or that the holder of the license is an unfit person to be trusted with the privileges granted by the license; provided, however, that no license shall be revoked without first giving the holder an opportunity to appear before the City Council in his own behalf. On the revocation of the license, no part of the money in the hands of the City shall be returned but the license fee shall be forfeited to the City. When the license of any person is revoked for any cause, no new or other license shall be granted to the same person within six (6) months from the date of the revocation. (Ord. 776, 11-22-1971)

A. Other Than Fixed Place Of Business: A license for a business from other than a fixed place of business within the City is due and payable upon the first day of business activity, and delinquent thereafter.

B. New Business, Fixed Place: A license for a new business with a fixed place of business within the City is due and payable upon the first day of business activity, and delinquent five (5) days thereafter.

C. Previously Licensed Business, Fixed Place: A license for a business previously licensed, or doing business in the City during the prior tax year from a fixed place of business, is due and payable January 1, and delinquent February 1.

D. Interest: Any person who fails to pay any tax required to be paid by this Title shall pay interest at the rate of one percent (1%) per month, or fraction thereof, on the amounts of the tax, exclusive of penalties, from the date on which the tax first became delinquent until paid. Interest shall run during any period of time for which an extension of time has been granted by the City for payment of the tax. Interest required by any of the provisions of this Title shall not be subject to waiver or compromise except as the City Council may direct. Said interest shall not be compounded, but shall be on principal only.

E. Penalties: All taxes imposed by this Title shall be subject to the following penalties.

1. Delinquency: Any person who fails to pay any tax, or any fraction thereof required to be paid by this Title within the time required, shall pay a penalty of twenty percent (20%) per month of the amount of the unpaid tax. Such penalty shall not exceed one hundred percent (100%) of the tax for any calendar year for each year that the tax is unpaid. This penalty shall accrue on the first day of each calendar month for which the tax remains unpaid.

2. Fraud: If the City official administering the tax, after notice to taxpayer and hearing, determines that the nonpayment of any tax due under this Chapter is due to fraud, a penalty of ninety percent (90%) of the amount of the unpaid tax shall be added thereto, in addition to any other penalties set forth in this Section. Where, after notice and hearing to the taxpayer, the City determines that a corporate director, officer, or shareholder is responsible for the fraud resulting in the nonpayment of the tax of a corporation, the City may designate the tax, interest, and penalties unpaid, including the penalty provided for in this subsection due to said fraud as a personal debt of said director, officer, or shareholder.

3. Merger Of Interest And Penalties: Such interest as is accrued, and every penalty imposed under the provisions of this Section, shall become a part of the tax required to be paid under this Title.

4. Penalties On Principle: All penalties imposed hereunder shall be calculated on principle only, and shall not be compounded. (Ord. 1252, 4-9-1996)

A. Past Penalties Paid: A credit against the business license tax for past penalties paid shall be granted beginning with the tax due in January 1992, to be calculated and administered as follows:

1. For Tax Due January 1, 1992: Any taxpayer who has been assessed and has, by September 10, 1991, paid a penalty for the tax year 1989 and/or 1990 and/or 1991, shall receive a credit in a sum equal to fifty percent (50%) of the penalty paid, to be applied against the business license tax due January 1, 1992 and years thereafter. Said credit shall only be effective if the entire tax (less the credit) is paid before February 1, 1992. As provided for in subsection A3 below, the credit granted hereunder may be carried over from year to year until exhausted.

2. For Subsequent Tax Years: Any taxpayer who has been assessed a penalty and paid that penalty by September 30 in the year prior to the January 1 a tax is due, may claim a credit against that tax in the amount of fifty percent (50%) of said penalty paid if the tax (less the credit) is paid before February 1 of the year in which the tax is due.

3. For All Tax Years: City staff shall calculate the credit granted hereunder and reflect the amount of said credit upon tax statements mailed to taxpayers.

B. Amount Of Reduction: No tax, to which the credit granted hereunder is applied, shall be reduced by said credit to less than fifty percent (50%) of the amount due before application of the credit, in any tax year. However, where the amount of the credit exceeds fifty percent (50%) of the tax due in any given year, the unused balance of the credit may be carried over to future tax years and applied to the tax then due so long as the full amount of the tax (less the credit) is paid by February 1 of the year in which the tax is due. (Ord. 1252, 4-9-1996)

The amount of any license fee imposed by this Title shall be deemed a debt to the City, and any person commencing or conducting any business without having a license under this Title so to do shall be liable to an action by the City in any court of competent jurisdiction for the amount of the license fee imposed by this Title on the business. (Ord. 776, 11-22-1971)

It is the duty of the Chief of Police to cause a complaint to be made against all persons violating any of the provisions of this Title, and as soon as he has knowledge of the same, to deliver to the licensing authority the names of all persons not paying a license whom he believes should be charged with the payment of a license fee. (Ord. 776, 11-22-1971; amd. Ord. 1127, 11-15-1988)

The conviction and punishment of any person for commencing or conducting any business without a license as required by the provisions of this Title, or without a special permit from the City Council when required, shall not excuse or exempt the person from the payment of any license fee due or unpaid under this Title at the time of the conviction, and nothing contained in this Title shall prevent a criminal prosecution for any violation of any of the provisions of this Title. (Ord. 776, 11-22-1971)

Upon the filing of an application for a small income business license and an affidavit stating, among other things, that the volume of contemplated business would be so small that the regular business license fee therefor would impose a hardship of unfair proportions; and upon the City Council's finding and determining that the representations are true and correct, the City Council may order the issuance of a small income business license which shall be for the current fiscal year, and shall be issued upon payment of a ten dollar ($10.00) license fee. (Ord. 1054, 8-16-1983; amd. Ord. 1252, 4-9-1996)

All police officers of the City and all other authorized persons shall have and exercise their power to enter, free of charge, any place of business for which a license is required and provided, and to demand the exhibition of the license for the current term from any person engaged or employed in the transaction of the business, and the person then and there shall exhibit the license. (Ord. 612, 10-28-1963)

The City shall retain as confidential all tax statements, returns and receipts submitted or provided under this Title, any records required to be submitted by a taxpayer hereunder and any business data disclosed to the City as a result of any tax audit hereunder. (Ord. 1252, 4-9-1996)