Merced Municipal Code Ch. 5.50 Tax on Construction

In this chapter, unless the context otherwise requires:

A. "Residential unit" is a structure or part thereof designed for residential use.

B. "Construction" includes construction of new units as well as alteration to existing units which would increase the square footage of the unit.

(Ord. 1569 § 2 (part), 1985).

A. Imposition—Rate. A business license tax is hereby imposed solely for revenue purposes, in addition to any other business license tax imposed in this title, upon every person transacting and carrying on the business of the construction of a residential unit or units in the city. The rate of such tax shall be ninety-one cents for each square foot of residential construction.

B. Due date—Computation. The amount of the tax shall be determined and paid at the time of issuance of a building permit for the construction applied for.

(Ord. 1772 § 1, 1990: Ord. 1761 § 1, 1990: Ord. 1728 § 1, 1989: Ord. 1699 § 1, 1988: Ord. 1668 § 1, 1987: Ord. 1647 § 1, 1987: Ord.1607 § 1, 1986: Ord. 1569 § 2 (part), 1985).

If the tax imposed by Section 1 of Ord. 1668 as codified in Section 5.50.024 is for any reason held to be unconstitutional or otherwise invalid, then such decision shall revive Section 5.50.020 as it read prior to the effective date of Ordinance 1668

(Ord. l668, 1987: Ord. 1647 § 2, 1987).

The tax imposed by this chapter shall not apply to the following:

A. The construction of a residential unit which is equal or smaller in size for a unit being removed from the same parcel of land;

B. The construction of any building or unit by a bank, including national banking associations;

C. The construction of a building by an "insurer," as that term is defined in Article XIII, Section 14-4/5, of the California Constitution;

D. The construction of a building on property which qualifies for tax exemption under Sections 206, 207, and 214 of the Revenue and Taxation Code, State of California, if the applicant for the building permit indicates that the building when constructed an the property shall be used for the same purposes for which said property is granted exemption.

E. The construction of a building by the federal or state government or any political subdivision of the state.

(Ord. 1569 § 2 (part), 1985).

In the event that a residential unit is constructed upon land covered by an agreement with the city and such agreement provides for the payment of a cost revenue impact fee (CRIS fee) payable at the time of the issuance of the building permit and such fee is paid pursuant to the terms of such agreement, then the fee so paid shall be credited toward the payment of the tax herein provided.

(Ord. 1569 § 2 (part), 1985).

The tax shall be due from the person by whom a residential unit is constructed. The finance officer or his designee shall collect the tax as set forth in Section 5.50.020 above. The amount due shall constitute a debt payable to the city, and an appropriate city official may bring action in the name of the city for the collection of such debt.

(Ord. 1569 § 2 (part), 1985).

Should a person construct a residential unit without having obtained a building permit therefor and/or without having paid the tax required by this chapter, if the unit is not abated by the city, the tax imposed by this chapter shall become immediately due and payable by the person originally liable for such tax, his successors or assigns. In addition to such tax, there shall be added a penalty of twenty-five percent of the tax, which shall become immediately payable in the same manner as the tax. The tax and penalty shall bear interest at the rate of one and one-half percent per month until paid. No occupancy permit may be issued for, and it shall be unlawful for any person to occupy or offer for occupancy a residential unit in the city unless the tax imposed upon the construction of such unit by this chapter is paid.

(Ord. 1569 § 2 (part), 1985).

The tax paid to the city under this chapter for a unit which is not constructed shall be refunded upon application of the taxpayer and a showing to the satisfaction of the finance officer that the unit has not been constructed or construction begun and that the building permit issued for the unit is cancelled or surrendered.

(Ord. 1569 § 2 (part), 1985).

The proceeds of the tax received pursuant to Section 5.50.020 shall be placed in the city's general fund.

(Ord. 1569 § 2 (part), 1985).