Part 2 — GENERAL TAX PROVISIONS

Nothing contained in this Chapter 4.76 shall be deemed to repeal, amend, be in lieu of, replace or in any way affect any requirements for any license or permit required by, under or by virtue of any provision of any other title or chapter of this Code or any other ordinance or resolution of the city or of its council, nor be deemed to repeal, amend, be in lieu of, replace or in any way affect any tax, fee or other charge imposed, assessed or required by, under or by virtue of any other title or chapter of this Code or any other ordinance or resolution of the city or of its council.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

There are hereby imposed upon all persons engaged in business in the city business taxes in the amounts hereinafter in this chapter prescribed. It shall be unlawful for any person to commence, transact or carry on any business in the city not excluded by this chapter without first having procured a business tax certificate from the city to do so, or without complying with any and all provisions contained in this chapter. The carrying on of any business without complying with any and all provisions of this chapter shall constitute a separate violation of this chapter for each and every day that such business is so carried on.

B.

The business tax certificate required to be obtained and the business tax required to be paid are declared to be required pursuant to the taxing power of the city solely for the purpose of obtaining revenue and are not regulatory permit fees.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

The payment of a business tax required by this chapter, and its acceptance by the city, and the issuance of a certificate to any person evidencing payment of the business tax shall not entitle any person to carry on any business unless the person has complied with all of the requirements of this Code and all other applicable laws, nor to carry on any business in any building or on any premises in the event that such building or premises are situated in a zone or locality in which the conduct of such business is in violation of any law.

B.

No business tax certificate issued under the provisions of this chapter shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any business in violation of any ordinance of the city.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Every person required to have a business tax certificate under the provisions of this chapter shall make application for the same, or for renewal of the same, to the director. Such application shall be a written statement upon a form or forms provided by the director and shall be signed by the applicant under penalty of perjury. The application shall set forth such information as may be therein required and as may be reasonably necessary to properly determine the amount of the tax to be paid by the applicant, together with such other information as is required by the director to enable the director to administer the provisions of this chapter.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

No application shall be conclusive as to the matters set forth therein, nor shall the filing of the same preclude the city from collecting by appropriate action such tax as is actually due and payable under this chapter. Each application, and all statements and information therein contained, shall be subject to review, audit and verification by the director, his or her deputies, or other authorized employees of the city. All persons engaged in business in the city are hereby required to permit examination of their books, records and papers for the purposes set forth in this chapter.

B.

The information or data obtained from such examination or audit, or from any application required hereunder, shall be deemed to be confidential, subject to the exceptions set forth in this section. The foregoing information is referred to as business tax records.

C.

Publicly available information that is required to be included in the business tax application or is specified in the business tax application, including without limitation, the name, address, business tax account number, NAICS code and any other business classifications as the director deems appropriate for the identification and tracking of the business, and the administration of this chapter, are subject to disclosure.

D.

The provisions of this section shall not be construed to prevent the disclosure of business tax records by a city official, employee or agent for the purpose of administering or enforcing any provisions of this chapter.

E.

The provisions of this section shall not be construed to prevent the disclosure of business tax records to, or the examination of business tax records by, federal or state tax officials, or the tax officials of another city or county or city and county if a reciprocal arrangement exists for the exchange of tax information in order to assist the city with the enforcement of this chapter.

F.

The provisions of this section shall not be construed to prevent the disclosure of business tax records in response to a subpoena or a court order.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

If a person engages in two or more separate businesses at the same establishment or location, there shall be a separate business tax certificate issued for each business. Separate business operations are further defined as involving two or more separate and distinct business entities or names wherein separate sets of accounting records, bank accounts, and the like are maintained.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Notwithstanding any language in this chapter to the contrary, each branch establishment or location at or from which a person carries on the same business shall not be deemed a separate business, but all such branches and locations shall be treated as one business.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Every person operating any business, whether upon a cost, rental or commission basis as a concession or upon rented floor space in or upon the premises of any other person engaged in business under any provision of this chapter, shall be required to pay the tax and obtain a separate and independent business tax certificate pursuant to the appropriate provisions hereof, and shall be subject to all the provisions of this chapter.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

Any certificate evidencing payment of the business tax which is payable on an annual basis shall become valid on the date on which the city receives payment in full of the tax and, if applicable, interest and penalties. Regardless of the date of payment of the business tax, the certificate evidencing payment of the business tax by a new business shall be dated as of the date on which the business commenced and the certificate evidencing the annual payment of the business tax shall be dated as of the due date for payment of the business tax.

B.

The certificate issued on an annual basis shall remain valid until the due date for the annual payment of the business tax as specified in Section 4.76.270.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

All business taxes imposed by this chapter shall be due and payable as follows:

A.

Business taxes paid on an annual basis shall be paid in advance. Business taxes shall become due and payable on the following dates:

Subject to the provisions of Section 4.76.290, the first business tax payment is due and payable on the first date on which the person engaged in business in the city; and

Each business tax payment thereafter is due and payable annually on the fifteenth day of the calendar month during which the person first engaged in business in the city.

B.

Notwithstanding Subsection A.2., for those business tax accounts that were assigned to make the annual payment of the business tax during a calendar quarter that was not the calendar quarter in which the business tax was first due to the city, the business taxpayers shall make their annual payment of the business tax on the fifteenth day of the first month of the calendar quarter in which they have been making payment of the business tax, as determined by the director.

C.

The due date for business taxes that are paid on a monthly basis shall be the last day of the month immediately following the month for which the tax is payable.

D.

In the case of a business that is discontinued, dissolved or otherwise terminated before the expiration of a business tax period, the due date for any taxes accrued and owing to the city under the provisions of this chapter, including any business taxes that would not otherwise be paid until the close of the business tax period during which termination occurs or would not otherwise be paid until the time of paying the tax for the next succeeding business tax period, shall be the date of termination of the business.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

In any year that the city offices are closed, by action of the city council, during the period of December 24 through January 1, the taxes imposed under this chapter shall be due as follows:

Business taxes which are paid on an annual basis, pursuant to Section 4.76.270.A., which would be due on the first day of the year, shall be deemed timely if payment is made on or before seven days after the due date.

Business taxes which are paid on a monthly basis, pursuant to Section 4.76.270.C., which would be due on December 31, shall be deemed timely if payment is made on or before seven days after the due date.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

Whenever any payment, statement, report, request or other communication received by the director is received after the time prescribed by this chapter for the receipt thereof, but is in an envelope bearing a postmark showing that it was mailed prior to the time prescribed in this chapter for the receipt thereof, or whenever the director is furnished substantial proof that the payment, statement, report, request or other communication was in fact deposited in the United States mail prior to the time prescribed for receipt thereof, the director may regard such payment, statement, report, request or other communication as having been timely received.

B.

If the due day falls on Saturday, Sunday or a holiday, the due day shall be the next regular business day on which the city hall is open to the public.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Unless otherwise specifically provided under other provisions of this chapter, all business taxes required to be paid pursuant to this chapter shall be deemed delinquent if not paid on or before the due date specified in Section 4.76.270.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

The director is not required to send a renewal, delinquency or other notice or bill to any person subject to the provisions of this chapter and failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this chapter.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Every person subject to a business tax shall, before the business tax becomes delinquent, file with the director such information as required by the director to enable the director to administer the provisions of this chapter and shall pay at such time the amount of the tax computed thereon.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

Any person who fails or refuses to pay any business tax required to be paid pursuant to this chapter on or before the due date shall pay penalties and interest as follows:

A penalty equal to twenty-five percent of the amount of the tax in addition to the amount of the tax, plus interest on the unpaid tax calculated from the due date of the tax at a rate established by resolution of the city council; and

An additional penalty equal to twenty-five percent of the amount of the tax if the tax remains unpaid for a period exceeding thirty days beyond the due date, plus interest on the unpaid tax and interest on the unpaid penalties calculated at the rate established by resolution of the city council.

B.

Notwithstanding Subsection A., if the first time the business tax is due the taxpayer pays the tax in full within ninety days of the due date, the city shall waive all penalties and interest accruing to the date of payment. This waiver only applies to the first time that the business tax is due for a new business.

C.

Any person engaged in the business of operating a solid waste disposal facility who fails to pay any business tax required to be paid under Section 4.76.490 on or before the due date shall pay penalties and interest equal to ten percent of the amount of the tax, in addition to the amount of the tax, if payment is received by the director within one business day of the due date. Thereafter, penalties and interest shall accrue at the rates provided in Subsection A., above.

D.

Whenever a check is submitted in payment of a business tax and the check is subsequently returned unpaid by the bank upon which the check is drawn, and the check is not redeemed prior to the due date, the taxpayer will be liable for the tax amount due plus penalties and interest as provided for in this section plus any amount allowed under state law.

E.

Except for new businesses that qualify under Subsection B., if any person has failed to apply for and secure a valid business tax certificate, the business tax due shall be that amount due and payable from the

first date on which the person was engaged in business in the city, together with applicable penalties and interest calculated in accordance with Subsection A., above.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

rental units.

Section 4.76.290 notwithstanding, every person engaged in the business of renting or leasing residential real estate of fewer than three (3) rental units in the City for which the business tax is owed for the first time as of July 1, 2017, shall have a grace period until June 29, 2018 to apply for and secure a valid business tax certificate from the City and pay the business tax without incurring penalties and interest. In the event that payment of the business tax is made after June 29, 2018, interest and penalties will accrue in accordance with the provisions of Section 4.76.290 A. retroactive to July 1, 2017.

(Ords. 29848, 30058.)

Editor's note— Section 2 of Ord. 30058, adopted Feb. 6, 2018, provides that the provisions of said ordinance shall go into effect retroactively on December 15, 2017.

The director may waive the first and second penalties of twenty-five percent each imposed upon any person if:

A.

The person provides evidence satisfactory to the director that failure to pay timely was due to circumstances beyond the control of the person and occurred notwithstanding the exercise of ordinary care and the absence of willful neglect, and the person paid the delinquent business tax and accrued interest owed the city prior to applying to the director for a waiver.

B.

The waiver provisions specified in this subsection shall not apply to interest accrued on the delinquent tax and a waiver shall be granted only once during any twenty-four-month period.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

• Change of business name.

A.

Business tax certificates issued pursuant to this chapter are not transferable or assignable to any other person, nor shall any tax paid by any person under the provisions of this chapter be applied in whole or in part to the payment of any tax due or to become due from any other person.

B.

Every person issued a business tax certificate shall apply to the director for the issuance of an amended business tax certificate prior to changing the location of the principal place of business, business name, or business mailing address specified in the business tax certificate. Issuance of an amended business tax certificate shall be subject to the payment of the application fee specified in the schedule of fees and charges established by resolution of the city council.

C.

It shall be unlawful for any person to sell, give or otherwise transfer to another person, or allow any other person to use or display, damage or remove, or to possess, except as authorized by this chapter, any business tax certificate issued to another person.

D.

The transfer of the stock or assets of any business which results in a change in the control of the business shall constitute a change of ownership.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Every person issued a business tax certificate under the provisions of this chapter for engaging in business at a fixed place of business shall keep such business tax certificate posted for exhibition, while in force, in some conspicuous place and in plain public view in the place of business. Every person having such a business tax certificate and not having a fixed place of business shall carry such business tax certificate at all times while carrying on the business for which the same was issued. Every person having a business tax certificate shall produce and exhibit the same whenever requested to do so by any police officer or any person authorized to issue or inspect business tax certificates or collect business taxes under the provisions of this chapter.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

The director may require any person who uses vehicles in the conduct of business to display prominently within such vehicle a sticker, device, sign or business tax certificate or facsimile which shall have printed thereon the words "San José, California," or any abbreviation thereof, together with the current term of the business tax certificate, and shall be in such form and color and contain such other information as the director shall determine.

B.

No person to whom a vehicle identification tag has been issued shall give away, sell or transfer any such identification tag or permit its use by any other person.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Duplicate certificates may be issued by the director to replace any business tax certificate previously issued which has been lost or destroyed upon the filing of an affidavit attesting to such fact, and at the time of filing such affidavit paying to the director a fee as set forth in the schedule of fees and charges established by resolution of the city council.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

No refund shall be made of any tax collected pursuant to this Chapter except as provided in Section 4.76.340.

B.

No refund of any tax collected pursuant to this Chapter shall be made because of the discontinuation, dissolution or other termination of a business.

C.

Any person entitled to a refund of taxes paid pursuant to this chapter may elect in writing to have such refund applied as a credit against such person's business taxes for the next succeeding calendar year.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

Whenever the amount of any business tax, penalty or interest has been overpaid, paid more than once, or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded to the claimant who paid the tax provided that a written claim for refund is filed with the director, and the provisions of Chapter 4.82 are satisfied.

B.

The director or the director's authorized agent shall have the right to examine and audit all the books and business records of the claimant in order to determine the eligibility of the claimant to the claimed refund. No claim for refund shall be allowed if the claimant therefor refuses to allow such examination of claimant's books and business records after request by the director to do so.

C.

In the event that the business tax was erroneously paid and the error is attributable to the city, the entire amount of the tax erroneously paid shall be refunded to the claimant. If the error is attributable to the claimant, the city shall retain the amount set forth in the schedule of fees and charges established by resolution of the city council from the amount to be refunded to cover processing expenses.

D.

The director shall initiate a refund of any business tax which has been overpaid or erroneously collected whenever the overpayment or erroneous collection is uncovered by a city audit of business tax receipts. In the event that the business tax was erroneously paid and the error is attributable to the city, the entire amount of the tax erroneously paid shall be refunded to the claimant. If the error is attributable to the claimant, the city shall retain the amount set forth in Subsection C., above from the amount to be refunded to cover processing expenses.

E.

Under any of the following circumstances, no refund shall be made pursuant to this section unless and until the claimant surrenders to the director the business tax certificate evidencing payment of the tax for which refund is sought:

Where the tax was paid for a new business but the new business did not become operational within sixty days of the payment of the tax.

Where the tax was paid to renew a business tax certificate for a business not in existence at the time the tax was paid.

Where a business tax certificate was issued for a business for which another business tax certificate had been issued for the same time period.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

A small business owner shall be exempt from the payment of any business tax imposed under the provisions of this chapter where the gross receipts of the small business do not exceed the poverty level for the calendar year in which the business tax is due, and the small business owner satisfies each of the requirements set forth in Subsection C., below.

B.

For the purposes of this section:

The term "poverty level" means the income amount established by the U.S. Department of Health and Human Services as the poverty guideline for a single person multiplied by two for the calendar year in which the business tax is due. In the event the U.S. Department of Health and Human Services

discontinues publication of poverty guidelines, the director shall use as a reference poverty population statistics published by either the state or a federal department or agency that the director determines to be comparable in assessing the eligibility for the exemption under this section.

The term "gross receipts" means gross receipts as defined by the Internal Revenue Code of the United States and the regulations established therewith.

C.

A small business owner is eligible for an exemption in accordance with the provisions of Subsection A., provided that:

The exemption request is filed with the director on or before the date the business tax is due; and

The exemption request is made upon a form provided therefor by the director, stating under penalty of perjury that it is anticipated that the gross receipts of the small business will be at or below the poverty level for the calendar year in which the business tax is due.

D.

The director shall have the right to examine and audit all the books and records of the small business owner, including state and federal income tax returns or other documentation of gross receipts of the small business deemed adequate by the director, in order to determine the eligibility of the small business owner for the exemption. If the director determines that the small business owner was not entitled to an exemption previously issued, then the business tax for such calendar year shall be due within thirty days of notification by the city. If the business tax is not paid on or before the thirtieth day, penalties and interest shall accrue pursuant to Section 4.76.290.

E.

No exemption shall be allowed if the small business owner refuses to allow examination of his or her books and records, including either state or federal income tax returns or other documentation of gross receipts of the small business deemed adequate by the director, after requested by the director to do so.

F.

Any decision of the director made under this section shall be final.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

A.

A small business owner shall be exempt from the payment of any business tax imposed under the provisions of this chapter where the adjusted gross income of the small business owner and the small business owner's spouse or domestic partner, as applicable, added together do not exceed the poverty level for the calendar year in which the business tax is due, and the small business owner satisfies each of the requirements set forth in Subsection C., below.

B.

For the purposes of this section:

The term "poverty level" means the income amount established by the U.S. Department of Health and Human Services as the poverty guideline for a single person multiplied by four for the calendar year in which the business tax is due. In the event the U.S. Department of Health and Human Services discontinues publication of poverty guidelines, the director shall use as a reference poverty population statistics published by either the state or a federal department or agency that the director determines to be comparable in assessing the eligibility for the exemption under this section.

The term "adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code of the United States and the regulations established therewith.

C.

A small business owner is eligible for an exemption in accordance with the provisions of Subsection A., provided that:

The exemption request is filed with the director on or before the date the business tax is due; and

The exemption request is made upon a form provided therefor by the director, stating under penalty of perjury that it is anticipated that the adjusted gross income of the small business owner and his or her spouse or domestic partner, as applicable, added together will be at or below the poverty level for the calendar year in which the business tax is due.

D.

The director shall have the right to examine and audit all the books and records of the small business owner, including state and federal income tax returns or other documentation of adjusted gross income deemed adequate by the director, in order to determine the eligibility of the small business owner for the exemption. If the director determines that the small business owner was not entitled to an exemption previously issued, then the business tax for such calendar year shall be due within thirty days of notification by the city. If the business tax is not paid on or before the thirtieth day, penalties and interest shall accrue pursuant to Section 4.76.290.

E.

No exemption shall be allowed if the small business owner refuses to allow examination of his or her books and records, including either state or federal income tax returns or other documentation of adjusted gross income deemed adequate by the director, after requested by the director to do so.

F.

Any decision of the director made under this section shall be final.

(Measure G (Ord. 2016.2), adopted by electorate, 12-13-16)

Notwithstanding Sections 4.76.345 and 4.76.345.5 to the contrary, for the period of October 1, 2020 through June 30, 2022, any person engaged in business in the City, whether or not a small business or small business owner, may apply for a financial hardship exemption under Section 4.76.345 or Section 4.76.345.5.

(Ords. 30483, 30673.)