Modesto Municipal Code Art. 1 Sales and Use Tax

For the privilege of selling tangible personal property at retail a tax is hereby imposed upon all retailers at the rate of one-half (½) of one (1) per cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the City on or after October 1, 1953, and to and including September 30, 1954, and at the rate of one (1) per cent thereafter; provided, however, that the rate of tax applied to gross receipts resulting from sales of tangible personal property at prices, including Modesto City sales or use taxes, agreed upon in contract executed in good faith prior to October 1, 1954, shall be that rate in effect when the contract was executed.

(Sec. 1, Ord. 1088-N.S., as amended by Sec. 1, Ord. 1136-N.S.)

For the privilege of using or consuming in the City tangible personal property (including spirituous, malt or vinous liquors) purchased from any retailer or retailer's agent, a tax is hereby imposed upon every person using or consuming such tangible personal property in the City at the rate of one-half (½) of one (1) per cent of the sales price of the property purchased on and after October 1, 1953, and to and including September 30, 1954, and at the rate of one (1) per cent thereafter; provided, however, that where the sales price of tangible personal property purchased for use or other consumption in the City pursuant to a contract of sale actually executed in good faith prior to October 1, 1954, includes Modesto City sales and use tax, the rate of tax applied shall be the rate in effect when the contract was executed.

(Sec. 2, Ord. 1088-N.S., as amended by Sec. 2, Ord. 1136-N.S.)

(a) "Use" is defined to mean the exercise of any right or power over tangible personal property incident to the ownership of that property, including the purchase thereof by the purchaser or the receipt thereof by the purchaser. Sale of an article in the regular course of business shall not be deemed a "use" or "consumption" of said article by the seller.

(1) "Use," however, does not include the keeping, retaining or exercising of any right or power over tangible personal property shipped or brought into this City for the purpose of storage only rather than sale 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.

(2) 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.

(3) It does not include the use of tangible personal property actually employed in the transportation or transmission of persons, property, gas, electricity or communications by persons engaged in the business of transporting or transmitting such persons, property, gas, electricity, or communications.

(b) "Purchase" means any transfer of title, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration.

A transaction whereby the possession of property is transferred but the seller retains the title as security for the payment of the price is also a purchase. A transfer for a consideration of tangible personal property which has been produced, fabricated, or printed to the special order of the customer, or of any publication, is also a purchase.

Purchase is defined to include also the act by the purchaser of requesting or directing (in person or by telephone, provided that either the purchaser is in the City at the time the request is made or the seller is in the City at the time the request is received) the withdrawal of tangible personal property from a point within the City, except a withdrawal pursuant to a transaction in foreign or interstate commerce which is immune from local taxation by reason of the provisions of the United States Constitution, for delivery to any place within or without the City, for the purpose of the transfer of title or possession, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever of the property.

(c) "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. The total amount for which the property is sold includes all of the following:

(aa) Any services that are a part of the sale;

(ab) Any amount for which credit is given to the purchaser by the seller.

"Sales Price" does not include any of the following:

(1) Cash discounts allowed and taken on sales;

(2) Any part of the amount charged for property returned by consumers and which amount is refunded either in cash or credit;

(3) The amount charged for labor or services rendered in installing or applying the property sold;

(4) The amount of any federal 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 municipal sales or use tax. (The term "Sales Price" does, however, include the amount of any manufacturer's or importer's excise tax included in the price of the property sold, even though the manufacturer or importer is also the retailer thereof, and whether or not the amount of such tax is stated as a separate charge);

(5) Transportation charges separately stated, if the transportation occurs after the purchase of the property is made.

(d) "Sale" means and includes:

(1) Any transfer of title or possession, exchange, barter, lease or rental, conditional or otherwise in any manner or by any means whatsoever, of tangible personal property for a consideration. "Transfer of possession," "lease," or "rental" includes only transactions found by the Director of Finance to be in lieu of a transfer of title, exchange or barter.

(2) Any withdrawal of tangible personal property from a point within the City, except a withdrawal pursuant to a transaction in foreign or interstate commerce which is immune from local taxation by reason of the provisions of the United States Constitution, for delivery to any place within or without the City, for the purpose of the transfer of title or possession, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of the property for a consideration.

(3) The producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting.

(4) The furnishing and distributing of tangible personal property for a consideration by social clubs and fraternal organizations to their members or others.

(5) The furnishing, preparing, or serving for a consideration, of food, meals, or drinks.

(6) A transaction whereby the possession of property is transferred, but the seller retains the title as security for the payment of the price.

(7) A transfer of the title or possession of tangible personal property which has been produced, fabricated, or printed to the special order of the customer, or of any publication.

(Sec. 3, Ord. 1088-N.S.)

The taxes hereby levied, except as otherwise herein provided, are levied in the same manner, to the same extent and under the same conditions as sales and use taxes are levied pursuant to Part 1 of Division 2 of the Revenue and Taxation Code of the State of California, known as the "Sales and Use Tax Law," as amended and in force and effect on January 1, 1957.

(Sec. 4, Ord. 1088-N.S., as amended by Ord. 1094-N.S., as amended by Ord. 131-C.S., effective 1-1-57)

All of the provisions of the "Sales and Use Tax Law," as amended and in force and effect on January 1, 1957, except Sections 6006, 6008, 6051, 6052, 6053, 6066, 6067, 6068, 6069, 6070, 6071, 6201, 6202, 6203, 6204, 6207, 6226, 6451, 6826, 7052, 7056, 7057, 7101, 7102, 7151, 7152, and 7153 applicable to sales or purchase of property at retail, are hereby adopted and made a part of this article as though fully set forth herein, and all provisions of any other law in conflict therewith are inapplicable to this article and the tax hereby imposed; provided, however, the term "gross receipts," as used herein, does not include the amount of any taxes imposed by the State upon or with respect to retail sales whether imposed upon the retailer or upon the consumer.

All the provisions of the "Sales and Use Tax Law" hereby adopted, providing for the adoption of rules and regulations and for hearings on the part of the State Board of Equalization, shall be performed by the Council of the City. All other provisions of the "Sales and Use Tax Law," 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.

The City of Modesto shall be deemed substituted for the State of California whenever the State is referred to in said "Sales and Use Tax Law."

The City Attorney of the City of Modesto shall be deemed substituted for the Attorney General whenever the Attorney General is referred to in said "Sales and Use Tax Law."

The Director of Finance shall be deemed substituted for the State Controller and State Board of Control whenever the State Controller or State Board of Control is referred to in said "Sales and Use Tax Law."

The County of Stanislaus shall be deemed substituted for the County of Sacramento whenever the County of Sacramento is referred to in said "Sales and Use Tax Law."

(Sec. 5, Ord. 1088-N.S., as amended by Ord. 1094-N.S., as amended by Ord. 131-C.S., effective 1-1-57)

(a) In addition to the exemptions contained in Part 1 of Division 2 of the Revenue and Taxation Code of the State of California, there shall be excluded from the computation of the tax, gross receipts from:

(1) The amount of any sales or use tax imposed by the State of California upon a retailer or consumer;

(2) Receipts from the sale of tangible personal property upon which a sales or use tax has become due by reason of the same transaction to any other City and County, County other than Stanislaus County, or City in this State under a sales or use tax ordinance enacted by that City and County other than Stanislaus County, or City in this State, whether in accordance with, or purporting to be in accordance with Part 1.5 of Division 2 of the Revenue and Taxation Code of the State of California, or in accordance with the organic law of any such city.

(3) Sales or purchases of property imported into this State from a foreign country and sold by the importer in the original package in which imported.

(4) Sales or purchases of property sold to foreign purchasers for shipment abroad delivered to a ship, airplane, or other conveyance furnished by the purchaser for the purpose of carrying the property abroad and actually carried to a foreign destination, title and control of the property passing to the foreign purchaser upon delivery, and no portion of the property being used or consumed in the United States. Copies of U. S. Customs shippers' exports declarations filed with the Collector of Customs must be obtained and retained by retailers to support deductions taken under this subsection. Tax applies to the transaction if the property is diverted in transit or for any reason not actually delivered outside the State pursuant to the contract of sale or not shipped abroad by a foreign purchaser, regardless of documentary evidence held by the retailer of delivery of the property to a carrier for shipment outside the State, or to a foreign purchaser for shipment abroad.

(5) Sales or purchases of property mailed by the seller, pursuant to the contract of sale, to persons in the armed forces at points outside continental United States, notwithstanding the property is addressed in care of the Postmaster at San Francisco and forwarded by him to the addressee.

When mail is addressed to Army Post Offices (A.P.O.'s) in care of the Postmaster at San Francisco or to Naval forces addressed in care of the Postmaster at San Francisco, it will be presumed that it is forwarded outside California. The seller must keep records showing the names and addresses as they appear on the mailing matter and should keep evidence that the mailing was done by him.

(6) Sales or purchases of property shipped to a point outside this State pursuant to the contract of sale when the property is marked for export and delivered by the retailer to the "contracting officer," "officer in charge," "port quartermaster," or other officer of the United States for transportation and delivery to the purchaser at such a point.

(7) Sales or purchases of property to or by operators of common carriers and waterborne vessels to be used or consumed, in the operation of such common carriers or waterborne vessels, principally outside the city.

(b) No tax shall be due hereunder for sales of airplanes and parts and equipment for airplanes transported to a point outside this city pursuant to the contract of sale when such property is delivered to the United States Air Force or any other agency or instrumentally of the United States for transportation and delivery to the purchaser or someone designated by him at that point.

(c) The sales tax does not apply (either interstate or intra-state commerce) to sales of property shipped from a point outside the City to a purchaser inside the City, or to the retailer's agent in the City, for the delivery to the purchaser, if none of the elements of sale, other than such delivery, takes place in the City.

(d) The sales tax does apply (either in interstate or intra-state commerce) to sales of property shipped from a point outside the City to a purchaser inside the City, or to the retailer's agent in the City, for delivery to the purchaser where any element of the sale, in addition to such delivery, takes place in the City.

(e) "Element of Sale" is hereby defined to include solicitation of an order, the acceptance of an order, the giving of an order, whether such order is given in person, by telephone or by mail, or the payment of the purchase price.

(Sec. 6, Ord. 1088-N.S., as amended by Ord. 131-C.S., effective 1-1-57)

(f) No sales or use tax shall be due hereunder if a sales tax, purchase tax, use tax, or purchase and use tax imposed by any other city, city and county, or county of the State of California has been paid on the same transaction.

(Added by Ord. 156-C.S.)

The rules and regulations of the State Board of Equalization as amended and in force and effect on January 1, 1957, pertaining to the interpretation, administration, and enforcement of the "Sales and Use Tax Law," insofar as applicable, except Rule No. 55 (Section 2015, Title 18, California Administrative Code, Sales and Use Tax) shall apply in the interpretation of this article until specifically abandoned by the rules or regulations adopted by the Council pursuant to this article.

(Sec. 8, Ord. 1088-N.S., as amended by Ord. 131-C.S., effective 1-1-57)

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 article shall not in or of itself be deemed to exclude any of the remaining provisions of said "State and Use Tax Law" that are made a part hereof by reference only.

(Sec. 9, Ord. 1088-N.S.)

Every person using or consuming in the City tangible personal property purchased from a retailer or retailer's agent is liable for the use tax imposed herein, provided, however, no tax shall be due hereunder if the sales tax imposed by this article has been paid on the sale of such property. His liability is not extinguished until the tax has been paid to the City, except that a receipt from a retailer who is authorized by the Director of Finance, under such rules and regulations as he may prescribe to collect the tax, given to the purchaser, is sufficient to relieve the purchaser from further liability for the tax to which the receipt refers.

(Sec. 10, Ord. 1088-N.S.)

Every retailer maintaining a place of business in this City and making sales of tangible personal property for use or consumption in this City 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.

Any retailer not maintaining a place of business in this City may apply to the Director of Finance for authorization to collect the tax hereby imposed from any person purchasing property from such retailer the use of which is taxable hereunder. Upon receipt of any application for such form required by him, the Director of Finance shall in the case of retailers maintaining places of business in the City, and may in the case of a retailer not maintaining a place of business in the City, authorize the applicant to make such collection and forward the same to the Director of Finance.

Every agent, salesman or solicitor making sales of tangible personal property for use or consumption in this City whose company or employer has not applied for a permit to collect the tax hereby imposed shall apply to the Director of Finance for authorization to collect the tax hereby imposed from any person purchasing property from such retailer, company or employer, the use of which is taxable hereunder.

(Sec. 11, Ord. 1088-N.S.)

Every retailer or person 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 or person on demand shall give to the purchaser a receipt therefor in the manner and form prescribed by the Director of Finance. The tax so collected by the retailer or person constitutes a debt owed by the retailer or person 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.

In all cases in which the tax is not collected by the retailer or person as aforesaid, the person upon whom such tax is imposed shall pay the same when due to the Director of Finance. In all cases of transactions upon credit or deferred payment, the payment of tax to the retailer may be deferred in accordance therewith, and the retailer shall be liable therefor at the time and to the extent that such credits are paid or deferred payments are made in accordance with the rate of tax owing on the amount thereof.

The Director of Finance shall have the power to adopt rules and regulations prescribing methods and schedules for the collection and payment of the tax and such methods and schedules shall eliminate fractions of one cent. Such schedules may provide that no tax need be collected and paid upon purchases below a small and stated sum and such schedules may be so determined as to facilitate collection of this tax at the same time as the retailer or person collects the tax imposed under the California Sales and Use Tax Law.

(Sec. 12, Ord. 1088-N.S.)

Every retail sale of tangible personal property outside the City for use or other consumption within the City shall be subject to the use tax imposed herein, except that in other cities levying a sales tax, a receipt furnished by the retailer to the purchaser showing payment of such sales tax will exempt said purchaser from the payment of the use tax imposed herein on said purchase.

(Sec. 13, Ord. 1088-N.S.)

For the purpose of the proper administration of this article, and to prevent evasion of the sales tax, it shall be presumed that all gross receipts are subject to the tax until the contrary is established by the permittee.

For the purpose of the proper administration of this article and to prevent evasion of the use tax and the duty to collect the use tax, it shall be presumed that tangible personal property sold by any person in the City or from any person in the City or sold or purchased for delivery into the City, is sold for use or other consumption in the City, until the contrary is established by the user or consumer.

(Sec. 14, Ord. 1088-N.S.)

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 otherwise registered under the provisions of this article 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.

(Sec. 15, Ord. 1088-N.S.)

Every person desiring to engage in or conduct business as a seller within the City shall file with the Director of Finance an application for a permit for each place of business. Every application for a permit shall be made upon a form prescribed by the Director of Finance and shall set forth the name under which the applicant transacts or intends to transact business, the location of his place or places of business, and such other information as the Director of Finance may require. The application shall be signed by the owner, if a natural person; in the case of an association or partnership, by a member or partner; in the case of a corporation, by an executive officer or some person specifically authorized by the corporation to sign the application, to which shall be attached the written evidence of his authority.

(Sec. 16, Ord. 1088-N.S.)

After compliance with Section 8-2.116 of this Code, by the applicant, the Director of Finance shall grant and issue to each applicant a separate permit for each place of business. A permit is not assignable and is valid only for the person in whose name it is issued and for the transaction of business at the place designated therein; provided, however, a change of location may be endorsed upon the permit by the Director of Finance upon the payment of a fee of One and no/100ths ($1.00) Dollar. The permit shall at all times be conspicuously displayed at the place for which issued.

(Sec. 17, Ord. 1088-N.S.)

Whenever any person fails to comply with any provisions of this article or any rule or regulation adopted pursuant hereto, the Director of Finance, upon hearing, after giving the person ten (10) days notice in writing, specifying the time and place of hearing and requiring him to show cause why his permit or permits should not be revoked, may revoke or suspend any one or more of the permits held by the person. The notice may be served personally or by mail in the manner prescribed for the service of notice of a deficiency determination under the "Sales and Use Tax Law". The Director of Finance shall not issue a new permit unless he is satisfied that the former holder of a permit will comply with the provisions of this article and the rules and regulations adopted pursuant hereto.

(Sec. 18(a), Ord. 1088-N.S.)

Any person aggrieved by any decision of an administrative officer or agency with respect to the determination of the amount of tax due, or of the suspension or revocation of any permit or permits, may appeal in accordance with the procedure prescribed by Chapter 4, Title 1 of this Code.

(Sec. 18 (b), Ord. 1088-N.S.)

A seller whose permit has been previously suspended or revoked shall pay the Director of Finance a fee of Ten and no/100ths ($10.00) Dollars for the renewal or issuance of a permit.

(Sec. 19, Ord. 1088-N.S.)

A person who engages in business as a seller in the City without a permit, or after a permit has been suspended or revoked and before the renewal or issuance of a permit, and each officer of any corporation which so engaged in business, is guilty of a misdemeanor.

(Sec. 20, Ord. 1088-N.S.)

The sales taxes imposed by this article are due and payable to the Director of Finance on or before the last day of the month next succeeding each quarterly period. The sales taxes of a retailer, who has signified his desire to pay his sales taxes on a monthly basis in his application with the Director of Finance, are due and payable to the Director of Finance on or before the last day of the month next succeeding the month of sale. The use taxes imposed by this article shall become due and payable from the purchaser at the time of purchase from a retailer in this City, or, if not so purchased, at the time of otherwise using tangible personal property in this City. All amounts of such taxes collected by any retailer are due and payable to the Director of Finance on or before the last day of the month next succeeding each quarterly period. The use taxes collected by a retailer, who has signified his desire to pay over his collected use taxes on a monthly basis in his application with the Director of Finance, are due and payable to the Director of Finance on or before the last day of the month next succeeding the month of sale.

The Director of Finance, for good cause, may authorize in writing the making of a return and the payment of the taxes imposed by this article on an annual basis.

(Sec. 21, Ord. 1088-N.S.)

All taxes payable hereunder shall be deemed delinquent if not paid within the time required. Whenever any tax required to be paid by this article is not paid on or before the date on which it becomes delinquent, a penalty of ten (10) per cent of the amount due, plus interests at the rate of one-half (½) of one (1) per cent per month, or fraction thereof, shall be imposed. Every penalty shall become a part of the tax imposed by this article.

(Ord. 1088-N.S., § 22)

The Director of Finance, for good cause, may extend for not more than thirty (30) 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.

(Ord. 1088-N.S., § 23)

The sales tax hereby imposed shall be collected by the retailer from the consumer insofar as it can be done.

(Ord. 1088-N.S., § 24)

It is unlawful for any retailer to advertise or hold out or state to the public or any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the retailer or that it will not be added to the selling price of the property sold or that, if added, it or any part thereof will be refunded. Any person violating any provision of this section is guilty of a misdemeanor.

(Ord. 1088-N.S., § 25)

All taxes hereby levied shall be payable to the Director of Finance; and any civil suit for the collection thereof may be filed in any court of competent jurisdiction in the State, and the City Attorney shall prosecute the action.

(Ord. 1088-N.S., § 26)

The Director of Finance may at his option accept a State of California Resale Certificate as evidence that any sale is not a sale at retail, or he may in his discretion require an affidavit from the seller setting forth such information respecting such sale as he deems necessary to determine the nature of such sale.

(Ord. 1088-N.S., § 27)

All moneys received pursuant to the provisions of this article shall be deposited as follows:

(a) All of said moneys shall be deposited and paid into the General Fund of the City; except that

(b) The Council by resolutions adopted from time to time may direct that up to one-half of said money shall be paid into the Special Capital Outlay Fund and shall be expended solely for capital outlays.

(Ord. 1088-N.S., § 28, amended by Ord. 1136-N.S., § 3, and Ord. 1753-C.S., § 1, effective 8-16-78)

It is unlawful for any officer or employee of the City having an administrative duty under this article to make known in any manner whatever the business, affairs, operations or information obtained by an investigation of records and equipment of any retailer 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 or disclosed in any return, or to permit any return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person. However, the Council may by resolution authorize examination of the returns by Federal or State officers or employees or by the tax officers of this or any other City if a reciprocal arrangement exists. Successors, receivers, trustees, executors, administrators, assignees and guarantors, if directly interested, may be given information as to the items included in the measure and amounts of any unpaid tax or amounts of tax required to be collected, interest and penalties.

(Ord. 1088-N.S.)

Any person required to make, render, sign or verify any report 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, is guilty of a misdemeanor, and upon conviction thereof, shall be punishable by fine of not more than one thousand dollars ($1,000.00) or by imprisonment for a period of not more than one (1) year, or by both such fine and imprisonment.

(Ord. 1088-N.S.)