Part 1 — Purpose and Definitions

This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

The definitions set forth in this part shall govern the application and interpretation of this chapter.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

The term "business" shall include all activities engaged in or caused to be engaged in within the city, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood, whether or not carried on for gain or profit, but shall not include the services rendered by an employee to his or her employer.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

"Business tax certificate" means the certificate issued by the city to the taxpayer upon completion of the business tax application and payment of the tax prescribed by Chapter 4.76.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

The term "cannabis" means all parts of the plant Cannabis Sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10; Ord. 30273.)

Editor's note— Ord. 30273, § 4, adopted June 4, 2019, renumbered § 4.66.100 as 4.66.042 and amended said section to read as set out herein.

The term "cannabis business" means business activity including but not limited to, planting, cultivation, harvesting, transporting, manufacturing, compounding, converting, processing, preparing, storing, packaging, wholesale, and/or retail sales of cannabis and any ancillary products in the city, whether or not carried on for gain or profit.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10; Ord. 30273.)

Editor's note— Ord. 30273, § 5, adopted June 4, 2019, renumbered § 4.66.110 as 4.66.044 and amended said section to read as set out herein.

"Business tax" or "cannabis business tax" or "cannabis tax" shall mean the tax due for engaging in cannabis business in San José.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10; Ord. 30273.)

Editor's note— Ord. 30273, § 6, adopted June 4, 2019, renumbered § 4.66.120 as 4.66.046 and amended said section to read as set out herein.

"Director" means the director of the finance department of the City of San José or such other director designated by the city manager to administer this chapter.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

"Employee" means each and every person engaged in the operation or conduct of any business, whether as owner, member of the owner's family, partner, associate, agent, manager or solicitor, and each and every other person employed or working in such business for a wage, salary, commission or room and board.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

A.

"Engaged in business" means the commencing, conducting, operating, managing or carrying on of a cannabis business and the exercise of corporate or franchise powers, whether done as owner, or by means of an officer, agent, manager, employee, or otherwise, whether operating from a fixed location in the city or coming into the city from an outside location to engage in such activities.

B.

A person shall be deemed engaged in business within the city if:

Such person or person's employee maintains a fixed place of business within the city for the benefit or partial benefit of such person;

Such person or person's employee owns or leases real property within the city for business purposes;

Such person or person's employee regularly maintains a stock of tangible personal property in the city for sale in the ordinary course of business;

Such person or person's employee regularly conducts solicitation of business within the city;

Such person or person's employee performs work or renders services in the city on a regular and continuous basis involving more than five working days per year;

Such person or person's employee utilizes the streets within the city in connection with the operation of motor vehicles for business purposes.

The foregoing specified activities shall not be a limitation on the meaning of "engaged in business."

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10; Ord. 30273)

Whenever any person shall, by use of signs, circulars, cards or any other advertising media, including the use of internet or telephone solicitation, represent that such person is engaged in cannabis business in the city, then these facts may be used as evidence that such person is engaged in business in the city.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10; Ord. 30273)

"Gross receipts," except as otherwise specifically provided, means the total amount actually received or receivable from all sales; the total amount or compensation actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise; discounts, rents, royalties, fees, commissions, dividends, and gains realized from trading in stocks or bonds, however designated. Included in "gross receipts" shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever, except that the following shall be excluded therefrom:

A.

Cash discounts allowed and taken on sales;

B.

Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as gross receipts;

C.

Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

D.

Such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts;

E.

Receipts from investments where the holder of the investment receives only interest and/or dividends, royalties, annuities and gains from the sale or exchange of stock or securities solely for a person's own account, not derived in the ordinary course of a business;

F.

Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the taxpayer in the regular course of the taxpayer's business;

G.

Cash value of sales, trades or transactions between departments or units of the same business;

H.

Whenever there are included within the gross receipts amounts which reflect sales for which credit is extended and such amount proved uncollectible in a subsequent year, those amounts may be excluded from the gross receipts in the year they prove to be uncollectible; provided, however, if the whole or portion

of such amounts excluded as uncollectible are subsequently collected, they shall be included in the amount of gross receipts for the period when they are recovered;

I.

Transactions between a partnership and its partners;

J.

Receipts from services or sales in transactions between affiliated corporations. An affiliated corporation is a corporation:

The voting and non-voting stock of which is owned at least eighty percent by such other corporation with which such transaction is had; or

Which owns at least eighty percent of the voting and non-voting stock of such other corporation; or

At least eighty percent of the voting and non-voting stock of which is owned by a common parent corporation which also has such ownership of the corporation with which such transaction is had;

K.

Transactions between a limited liability company and its member(s), provided the limited liability company has elected to file as a Subchapter K entity under the Internal Revenue Code and that such transaction(s) shall be treated the same as between a partnership and its partner(s) as specified in Subsection I. above;

L.

Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar;

M.

Amounts collected for others where the business is acting as an agent or trustee and to the extent that such amounts are paid to those for whom collected. These agents or trustees must provide the finance department with the names and the addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustees.

"Gross receipts" subject to the business tax shall be that portion of gross receipts relating to business conducted within the city.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

Editor's note— Ord. 30273, § 4, adopted June 4, 2019, renumbered former § 4.66.100, which pertained to marijuana and derived from Ord. 2010.2, adopted Nov. 2, 2010, as § 4.66.042.

Editor's note— Ord. 30273, § 5, adopted June 4, 2019, renumbered former § 4.66.110, which pertained to marijuana business and derived from Ord. 2010.2, adopted Nov. 2, 2010, as § 4.66.044.

Editor's note— Ord. 30273, § 6, adopted June 4, 2019, renumbered former § 4.66.120, which pertained to marijuana business tax and derived from Ord. 2010.2, adopted Nov. 2, 2010, as § 4.66.046.

"Person" means, without limitation, any natural individual, organization, firm, trust, common law trust, estate, partnership of any kind, association, syndicate, club, joint stock company, joint venture, limited liability company, corporation (including foreign, domestic, and nonprofit), municipal corporation (other than the city), cooperative, receiver, trustee, guardian, or other representative appointed by order of any court.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)

"Sale" means and includes any sale, exchange, or barter.

(Measure U (Ord. 2010.2), adopted by electorate, 11-2-10)