Petaluma Municipal Code Ch. 4.18 Transactions and Use Tax

This chapter is entitled "Transactions and Use Tax" and shall be applicable in the incorporated territory of the city.

(Ord. 2761 NCS §1, 2020.)

"Operative date" means the Lrst day of the Lrst calendar quarter commencing more than one hundred ten days

after the adoption of this chapter, the date of such adoption being December 7, 2020.

(Ord. 2761 NCS §1, 2020.)

This chapter is adopted to achieve the following, among other purposes, and directs that the provisions hereof be

interpreted in order to accomplish those purposes:

A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with

Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which

authorizes the city to adopt this chapter which shall be operative if a majority of the electors voting on the

measure vote to approve the imposition of the tax at an election called for that purpose.

B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the

Sales and Use Tax Law of the state of California insofar as those provisions are not inconsistent with the

requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.

C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefor that

can be administered and collected by the California Department of Tax and Fee Administration 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 California Department of Tax and Fee Administration in administering

and collecting the California state sales and use taxes.

D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the

greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation

Code, minimize the cost of collecting the transactions 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.

(Ord. 2761 NCS §1, 2020.)

Prior to the operative date, the city shall contract with the California Department of Tax and Fee Administration to

perform all functions incident to the administration and operation of this chapter; provided, that if the city shall

not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it

shall nevertheless so contract and in such a case the operative date shall be the Lrst day of the Lrst calendar

quarter following the execution of such a contract. (Ord. 2761 NCS §1, 2020.)

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the

incorporated territory of the city at the rate of one percent of the gross receipts of any retailer from the sale of all

tangible personal property sold at retail in said territory on and after the operative date of this chapter. (Ord. 2761

NCS §1, 2020.)

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 California Department of Tax and Fee Administration. (Ord.

2761 NCS §1, 2020.)

An excise tax is hereby imposed on the storage, use or other consumption in the city of tangible personal property

purchased from any retailer on and after the operative date of this chapter for storage, use or other consumption

in said territory at the rate of one percent 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.

(Ord. 2761 NCS §1, 2020.)

Except as otherwise provided in this chapter and except insofar as they are inconsistent with the provisions of Part

1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001)

of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this chapter as though

fully set forth herein. (Ord. 2761 NCS §1, 2020.)

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

A. Wherever the state of California is named or referred to as the taxing agency, the name of the city shall be

substituted therefor. However, the substitution shall not be made when:

1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or

the Constitution of the State of California.

2. The result of that substitution would require action to be taken by or against the city or any agency,

oNcer, or employee thereof rather than by or against the California Department of Tax and Fee

Administration, in performing the functions incident to the administration or operation of this chapter.

3. In those sections, including, but not necessarily limited to, sections referring to the exterior boundaries

of the state of California, where the result of the substitution would be to:

a. 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; or

b. 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 provision of that code.

4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the

Revenue and Taxation Code.

B. The word "city" shall be substituted for the word "State" in the phrase "retailer engaged in business in this

State" in Section 6203 and in the deLnition of that phrase in Section 6203.

1. "A retailer engaged in business in the District" shall also include any retailer that, in the preceding

calendar year or the current calendar year, has total combined sales of tangible personal property in this

state or for delivery in the state by the retailer and all persons related to the retailer that exceeds Lve

hundred thousand dollars. For purposes of this section, a person is related to another person if both persons

are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations

thereunder.

(Ord. 2761 NCS §1, 2020.)

If a seller’s permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an

additional transactor’s permit shall not be required by this chapter. (Ord. 2761 NCS §1, 2020.)

A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax

or use tax imposed by the state of California or by any city, city and county, or county pursuant to the Bradley-

Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.

B. There are exempted from the computation of the amount of transactions tax the gross receipts from:

1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be

used or consumed principally outside the county 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.

2. Sales of property to be used outside the city which is shipped to a point outside the city, pursuant to the

contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier

for shipment to a consignee at such point. For the purposes of this subsection, delivery to a point outside the

city shall be satisLed:

a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to

Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in

compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under

Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-city address

and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact,

his or her principal place of residence; and

b. With respect to commercial vehicles, by registration to a place of business out-of-city and

declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that

address.

3. The sale of tangible personal property if the seller is obligated to furnish the property for a Lxed price

pursuant to a contract entered into prior to the operative date of this chapter.

4. A lease of tangible personal property which is a continuing sale of such property, for any period of time

for which the lessor is obligated to lease the property for an amount Lxed by the lease prior to the operative

date of this chapter.

5. For the purposes of subsections (B)(3) and (B)(4) of this section, the sale or lease of tangible personal

property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which

any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice,

whether or not such right is exercised.

C. There is exempted from the use tax imposed by this chapter the storage, use or other consumption in the city

of tangible personal property:

1. The gross receipts from the sale of which have been subject to a transactions tax under any state-

administered transactions and use tax ordinance.

2. Other than fuel or petroleum products 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 certiLcate of public convenience and necessity issued pursuant to the laws

of this state, the United States, or any foreign government. This exemption is in addition to the exemptions

provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the state of California.

3. If the purchaser is obligated to purchase the property for a Lxed price pursuant to a contract entered

into prior to the operative date of this chapter.

4. If the possession of, or the exercise of any right or power over, the tangible personal property arises

under a lease which is a continuing purchase of such property for any period of time for which the lessee is

obligated to lease the property for an amount Lxed by a lease prior to the operative date of this chapter.

5. For the purposes of subsections (B)(3) and (B)(4) of this section, storage, use, or other consumption, or

possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be

obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is

exercised.

6. Except as provided in subsection (C)(7) of this section, a retailer engaged in business in the city shall not

be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or

delivers the property into the city or participates within the city in making the sale of the property, including,

but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the

retailer in the city or through any representative, agent, canvasser, solicitor, subsidiary, or person in the city

under the authority of the retailer.

7. "A retailer engaged in business in the city" shall also include any retailer of any of the following: vehicles

subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle

Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels

registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be

required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an

address in the city.

D. Any person subject to use tax under this chapter may credit against that tax any transactions tax or

reimbursement for transactions tax paid to a district imposing, or retailer liable for, a transactions tax pursuant to

Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the

storage, use or other consumption of which is subject to the use tax.

(Ord. 2761 NCS §1, 2020.)

All amendments subsequent to the ePective date of this chapter to Part 1 of Division 2 of the Revenue and

Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division

2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and

Taxation Code, shall automatically become a part of this chapter; provided, however, that no such amendment

shall operate so as to aPect the rate of tax imposed by this chapter. (Ord. 2761 NCS §1, 2020.)

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 oNcer of the state or the city, to prevent or enjoin the

collection under this chapter, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount

of tax required to be collected. (Ord. 2761 NCS §1, 2020.)

A. The proceeds of the tax imposed pursuant to this chapter shall be placed in the city’s general fund and

available for expenditure for any and all governmental purposes, including such purposes as: maintaining and

preventing cuts to LreLghting equipment/Lre engines and adequate twenty-four-hour staNng; ensuring public

health, wildLre, natural disaster emergency preparedness and maintaining 911 emergency response times to

ensure Lrst responders can respond quickly to calls for services; continuing homeless prevention programs and

community partnerships while ensuring our local businesses, public areas, and neighborhoods are safe, stable,

and secure for everyone; maintaining properly trained community based public safety oNcers, community

outreach programs, and ensuring adequate twenty-four-hour staNng; keeping public areas safe and clean;

supporting local business and job retention through recovery; enhancing street maintenance, repaving, and

pothole repair on Petaluma’s three hundred ninety-six miles of streets; addressing existing road hazards and

improving road safety for drivers, bicyclists, and pedestrians, including maintaining safe routes to schools; and

improving conditions of local roads by better addressing one hundred forty-one million dollars in repairs backlog

and preventing road ratings from further decreasing per the standard Pavement Condition Index, among other

purposes. The proceeds of the tax imposed pursuant to this chapter and expenditures using such proceeds shall

be monitored and proceeds tracked separately from other city tax receipts.

B. The city council shall appoint an independent citizen oversight committee consisting of Lve members to

review and report on the use of proceeds of the tax imposed pursuant to this chapter. The committee members

shall be city residents who pay the tax imposed pursuant to this chapter and who are not employees or elected

oNcials of the city or members of any other city body. The city will provide administrative support necessary for

the oversight committee to carry out its functions.

C. The city’s Lnance director will oversee preparation of biannual reports for submission to the oversight

committee and publication on the city’s website on all tax proceeds collected pursuant to this chapter and use of

the proceeds. The citizen oversight committee will meet biannually to review and comment on the reports. The

meetings and records of the oversight committee will be open to the public in accordance with Article 1, Section 3,

subdivision (b) of the California Constitution, and the requirements of the Ralph M. Brown Act, California

Government Code Section 54950 and following, and the California Public Records Act, California Government Code

Section 6250 and following, as amended from time to time.

(Ord. 2761 NCS §1, 2020.)