§ 21.5

This article is known and may be cited as the Use Tax Ordinance for the City of Los Angeles.

(Amended by Ord. No. 136,867, Operative 9/1/68 by Ord. No. 137,011.)

The following words and phrases, whenever used in this article shall be construed as defined in this section unless it appears from the context that a different meaning is intended.

(a) “Sales Price” means that total amount for which tangible personal property is sold, valued in money, whether paid in money or otherwise, without any deduction on account of any of the following:

1. The cost of the property sold;

2. The cost of materials used, labor or service cost, interest charged, losses, or any other expenses;

3. The cost of transportation of the property prior to its purchase, except as excluded by other provisions of this section.

The total amount for which the property is sold includes all of the following:

1. Any services that are a part of the sale;

2. Any amount for which credit is given to the purchaser by the seller.

3. The amount of any tax imposed by the State of California that is conclusively presumed to be a direct tax on the retail consumer precollected by the seller for the purpose of convenience and facility only.

“Sales Price” does not include any of the following:

1. Cash discounts allowed and taken on sales;

2. The amount charged for property returned by customers when that entire amount is refunded either in cash or credit, but this exclusion shall not apply in any instance when the customer, in order to obtain the refund is required to purchase other property at a price greater than the amount charged for the property that is returned. For the purpose of this section refund or credit of the entire amount shall be deemed to be given when the purchase price less rehandling and restocking costs are refunded or credited to the customer.

3. The amount charged for labor or services rendered in installing or applying the property sold.

4. The amount of any federal tax, (not including, however, any manufacturers’ or importers’ excise tax) imposed upon or with respect to retail sales whether imposed upon the retailer or upon the consumer and regardless of whether or not the amount of federal tax is stated to customers as a separate charge, and the amount of any California State or local sales or use tax.

5. Separately stated charges for transportation from the retailer’s place of business or other point from which shipment is made directly to the purchaser, but the exclusion shall not exceed a reasonable charge for transportation by facilities of the retailer or the cost to the retailer of transportation by other than facilities of the retailer; provided, that if the transportation is by facilities of the retailer, or the property is sold for a delivered price, this exclusion shall be applicable solely with respect to transportation which occurs after the purchase of the property is made.

6. The amount of any motor vehicle fee or tax imposed by and paid to the State of California that has been added to or is measured by a stated percentage of the sales or purchase price of a motor vehicle.

(b) “Use” includes the exercise of any right or power over tangible personal property incident to the ownership of that property subject, however, to the following exceptions:

1. It does not include the sale of that property in the regular course of business.

2. It does not include the keeping, retaining or exercising of any right or power over tangible personal property shipped or brought into this City and which is thereafter transported outside the City for principal use or consumption outside the City, and which property is actually so used or consumed.

3. It does not include the use of such property for the purpose of being processed, fabricated, or manufactured into, attached to or incorporated into, other tangible personal property which is to be transported outside the City and thereafter used principally outside the City, or which is to be subsequently sold or resold in the regular course of business.

4. It does not include the exercise of any right or power over tangible personal property incident to ownership of that property if such property is shipped to a point outside this City pursuant to the contract of sale by delivery by the retailer to such a point by means of

(A) facilities operated by the retailer;

(B) delivery by the retailer to a carrier for shipment to a consignee at such point; or

(C) delivery by the retailer to a customer’s broker or forwarding agent for shipment outside this City; or such property sold to purchasers engaged in business wholly or partly outside the City of Los Angeles where the property is to be transported outside the City without undue delay; to be used only outside the City in such business. The purchaser shall deliver to the seller such certificate or other evidence of the proposed transportation and use mentioned herein as may be required by the rules and regulations of the Director of Finance.

(Amended by Ord. No. 137,130, Oper. 10/1/68.)

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 or after October 1, 1968, to and including March 31,1969, for storage, use or other consumption in the City of Los Angeles, at the rate of one percent of the sales price of the property.

Notwithstanding the foregoing provisions of this section, no excise tax is imposed by this section where the sales price of tangible personal property purchased for storage, use or other consumption in the City of Los Angeles was fixed pursuant to a contract of sale actually executed in good faith prior to October 1,1968.

The tax hereby levied, except as otherwise provided is levied in the same manner and to the same extent and under the same conditions as use taxes are levied pursuant to Part 1 of Division 2 of the California Revenue and Taxation Code, known as the “Sales and Use Tax Law,” as amended and in force and effect on October 1, 1968. (Amended by Ord. No. 137,130, Operative 10/1/68.)

(a) All of the provisions of the Sales and Use Tax Law, Part 1, Division 2, of the Revenue and Taxation Code of the State of California, as amended and in force and effect on October 1, 1968, except the provisions pertaining solely to the sales tax and Sections 6001 to 6004, inclusive, 6008, 6009, 6010.5, 6011, 6201 to 6204, inclusive, 6206, 6207, 6226, 6241 to 6246, inclusive, 6271 to 6292, inclusive, 6453, 6459, 6470, 6481 to 6592, inclusive, 6701 to 6828, inclusive, 6901 to 6981, inclusive, 7051 to 7057, inclusive, 7101 to 7154, inclusive, and 7176 are hereby adopted and made a part of this section as though fully set forth herein, and all provisions of the Los Angeles Municipal Code in conflict therewith are inapplicable to this article and the tax hereby imposed. (Amended by Ord. No. 137,130, Operative 10/1/68.)

(b) The word “storage,” as used in this article includes any keeping or retention in the City for any purpose except sale in the regular course of business or subsequent use solely outside the City of tangible personal property purchased from a retailer.

(c) All the provisions of the Revenue and Taxation Code hereby adopted providing for the performance of official action on the part of the State Board of Equalization shall be performed by the Director of Finance of the City of Los Angeles.

(d) The City of Los Angeles shall be deemed substituted for the State of California wherever the State is referred to in said provisions.

(e) The term “Sales Tax,” as used in said provisions, shall refer to the tax imposed by Section 21.199 of this Code.

(f) The Mayor of the City of Los Angeles shall be deemed substituted for the Governor whenever the Governor is referred to in said provisions.

(g) All taxes hereby levied shall be payable to the Director of Finance of the City of Los Angeles and any civil suit for the collection thereof may be filed in any court of competent jurisdiction in the State of California and the City Attorney of said City shall prosecute the action.

Except as otherwise specifically exempted, the tax hereby imposed applies to all tangible personal property purchased from a retailer and located in this City, provided, however, that if the purchaser proves to the satisfaction of the Director of Finance that the property was purchased prior to the effective date of this article, as revised in 1968, or was not purchased for use or consumption in this City and has not been nor will be so used or consumed, the purchaser shall be relieved of liability to pay the tax. (Amended by Ord. No. 136,867, Operative 9/1/68 by Ord. No. 137,011.)

(Amended by Ord. No. 137,733, Eff. 12/30/68.)

Every retailer maintaining a place of business in the City of Los Angeles shall apply to the Director of Finance for authorization to collect the tax hereby imposed from any person purchasing property from such retailer, the use or consumption of which is taxable hereunder. Upon receipt of any application in such form as required by the Director of Finance, the Director of Finance may authorize the applicant to make such collections and to forward the same to the Director of Finance. Nothing in this article, however, shall require a retailer maintaining places of business both within and outside the City to collect the tax imposed under this article from persons who purchase property from a place of business maintained by such retailer outside the City.

Every person using or otherwise consuming in this City tangible personal property purchased from a retailer is liable for the tax; provided, however, no tax shall be due hereunder if the tax imposed by Section 21.199 of this Code has been paid on the sale of such property. The person’s liability is not extinguished until the tax has been paid to this City, except that a receipt from a retailer, authorized pursuant to Section 21.5.07 given to the purchaser pursuant to Section 21.5.09 hereof, is sufficient to relieve the purchaser from further liability for the tax to which the receipt refers.

Every retailer maintaining a place of business in this City who is authorized by the Director of Finance to collect the tax imposed by this article and who makes sales of tangible personal property for use or other consumption in this City not exempted under the provisions of this article, shall collect the tax from the purchaser at the time of making the sale, or, if the use or other consumption of the tangible personal property is not then taxable hereunder, at the time the use or other consumption becomes taxable. Upon collecting the tax the retailer, on demand, shall give to the purchaser a receipt therefor in the manner and form prescribed by the Director of Finance. In all cases in which the tax is not collected by the retailer as aforesaid, the person upon whom such tax is imposed shall pay the same when due to the Director of Finance or the Director’s authorized agent. The tax so collected by the retailer constitutes a debt owed by the retailer to the City and it shall be unlawful for such retailer to fail to pay the same to the City in the manner and at the times elsewhere provided in this article.

The tax so collected by the retailer from the purchaser shall be displayed separately from the list price, the price advertised in the premises the marked price or other price on the sales check or other proof of sale.

Every retailer selling tangible personal property for use or other consumption in this City and which retailer maintains a place of business in this City or acts through agents located in this City, and which retailer is not registered under the provisions of Section 21.199 of the Los Angeles Municipal Code shall register with the Director of Finance and give the name and address of such agent or agents and offices or other places of business in the City.

In addition to those exemptions contained in Part 1 of Division 2 of the California Revenue and Taxation Code which are incorporated into this article by reference, there shall be excluded from the computation of the tax the sales price of:

(1) Purchases made by the State of California or by any agency, department, political subdivision, district or municipal corporation thereof.

(2) (None)

(3) (None)

(4) Purchases of motor vehicle fuel, the distribution of which in the State of California is subject to the tax imposed by Part 2 of Division 2 of the California Revenue and Taxation Code, except that users of motor vehicle fuel on which the motor vehicle fuel tax is refunded shall be liable for the tax impose by this article at the time and in the manner herein provided.

The Director of Finance may at the Director’s option accept a State of California re-sale certificate as evidence that any sale is not a sale for use or consumption, or the Director of Finance may in the Director’s discretion require an affidavit from the buyer setting forth such information respecting such sale as the Director of Finance deems necessary to determine the nature of such sale.

If the purchaser of fungible goods commingles such goods with other fungible goods not so purchased but of such similarity that the identity of the constituent goods in the commingled mass cannot be determined and thereafter withdraws for use a part of such commingled goods, the purchaser’s withdrawals shall be deemed to be from the goods not so purchased until a quantity of commingled goods equal to the quantity of goods not so purchased but so commingled has been withdrawn.

Each return filed by a retailer shall show the total sale price of the property sold by the retailer during the reporting period in respect of which the retailer collected the tax hereby imposed. Each return filed by a purchaser shall show the total sale price of the property purchased by the purchaser during the reporting period in respect of which a tax is due hereunder.

All returns shall show the amount of the taxes for the period covered by the return and such other information as the Director of Finance deems necessary for the proper administration of this article.

(a) The Director of Finance for good cause may extend for not more than 45 days the time for making any return or paying any sum required to be paid hereunder. The extension may be granted at any time provided a written request therefor is filed with the Director of Finance prior to the delinquency date. (Amended by Ord. No. 136,867, Operative 9/1/68 by Ord. No. 137,011.)

(b) All taxes payable hereunder shall be deemed delinquent if not paid within the time required. Whenever any tax required to be paid by this section is not paid on or before the date on which it becomes delinquent, penalties and interest shall accrue and deficiency determinations shall be made in the manner provided in Section 21.05 and Section 21.15.

(a) The Director of Finance shall administer and enforce the provisions of this article following procedures prescribed in Sections 21.00 to 21.49, inclusive, of this Code, insofar as they are not inconsistent with the provisions of this article, and, with the approval of the City Attorney, shall prescribe, adopt and enforce rules and regulations, for the purpose of administering and enforcing this article, and prescribing methods for the collection and payment of the tax. Such schedules shall conform as nearly as practicable to the sales tax reimbursement schedule provided in Subsection (b) of Section 21.199. Such schedules may be so determined as to facilitate collection of this tax at the same time as the retailer collects the tax imposed under the California Sales and Use Tax Law.

Such rules and regulations may, among other things, require each person affected by this article to keep such records, receipts, invoices and other pertinent papers as the Director of Finance may deem necessary for the purposes of administering and enforcing this article. (Amended by Ord. No. 137,130, Oper. 10/1/68.)

(b) Inasmuch as this article is patterned after the use tax provisions of the Revenue and Taxation Code of the State of California, and the State Board of Equalization has made various rules and regulations pertaining to the interpretation, administration and enforcement of such provisions of the Revenue and Taxation Code, it may be reasonably assumed that the City of Los Angeles will be confronted with many of the problems dealt with in the state rules and regulations, each such rule and regulation in so far as applicable, shall apply in the interpretation of this article until specifically abandoned by rules and regulations adopted by the Director of Finance pursuant to the authority of this article.

The inclusion of any clause, portion or part of the State Sales and Use Tax Law, Part 1, Division 2, of the Revenue and Taxation Code of the State of California verbatim in this section shall not in or of itself be deemed to exclude any of the remaining provisions of said Sales and Use Tax that are made a part hereof by reference only.

Any person required to make, render, sign or verify any report or return under the provisions of this article who makes any false or fraudulent return with intent to defeat or evade the determination of an amount due and required to be paid hereunder, or who fails to make any required return to the Director of Finance, or who fails to pay any tax imposed by the provisions of this Article, or who violates any of the other terms of this article, is guilty of a misdemeanor.

If any section, subsection, sentence, clause, phrase or portion of this article, including but not limited to any exemption is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this article. The Council of the City hereby declares that it would have adopted this article and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, clauses, phrases, or portions be declared invalid or unconstitutional.