San Jose Municipal Code Part 5 Exemptions

Except as may be otherwise specifically provided in this chapter, the terms hereof shall not be deemed or construed to apply to any person when imposition of the tax upon that person would violate the Constitution of the United States or that of the State of California or preemptive federal or state law.

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

Any person desiring to claim exemption from the payment of the business tax shall make application therefor upon forms prescribed by the director and shall furnish such information and make such affidavits as may be required. Upon the determination being made that the applicant is entitled to exemption from the payment of the business tax for any reason set forth in this chapter, the director shall issue a business tax certificate free to such person, which shall show upon its face that the business is exempt from payment of the tax.

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

A. The director may revoke any business tax certificate issued pursuant to Section 4.76.610, upon information that an exemption from payment of the tax is not warranted.

B. Notice of revocation shall be given in the same manner and within the same time period as is provided for notices of assessment in Sections 4.76.850 through 4.76.870, and the person to whom the notice of revocation was issued shall have the same right of hearing and of appeal as is provided in Sections 4.76.850 through 4.76.870.

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

For the purposes of Sections 4.76.640 and 4.76.650, the payment of necessary expenses incurred in the conducting or staging of any amusement or entertainment, concert, exhibition, lecture, dance or athletic event from the receipts derived therefrom shall not be deemed to be the use of receipts for private gain of any person.

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

The following organizations or associations shall be exempt from the payment of any business tax imposed by the provisions of this chapter upon any of the following businesses, entertainments or activities:

A. Any religious, fraternal, student cooperative, educational, military, state, county or municipal organization or association for the conducting of any business, which business is open to the members thereof only and not open to the public;

B. Any religious, fraternal, educational, military, state, county or municipal organization or association for the conducting or staging of any amusement or entertainment, concert, exhibition, lecture, dance or athletic event, when the receipts derived are to be used wholly for the benefit of such organization and not for private gain of any person;

C. Any student organization, association or cooperative sanctioned by the educational institution from which the membership is drawn, for the conducting or staging of any amusement or entertainment, concert, exhibition, lecture, dance or athletic event, when the receipts derived are to be used wholly for the benefit of such organization and not for private gain of any person;

D. Any organization or association for the conducting or staging of any amusement or entertainment, concert, exhibition, lecture, dance or athletic event, when the use of the premises upon which such activity is conducted or staged is a municipal use. "Municipal use" means a use or performance which benefits the city as a whole or an organization or activity which benefits the city as a whole, and which is sponsored by an organization deriving all or part of its income from the city, or is for the benefit of an organization or activity supported in whole or part by the city.

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

Any person conducting or staging any concert, exhibition, lecture, dance, amusement or entertainment where the receipts, if any, derived therefrom are to be used solely for charitable or benevolent purposes and not for private gain shall be exempt from the payment of any business tax under the provisions of this chapter.

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

The following organizations shall be exempt from the payment of a business tax under the provisions of this chapter: Any charitable institution, organization or association organized for charitable purposes only.

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

Any natural person engaged in any of the businesses, professions or occupations mentioned in Sections 4.76.630 through 4.76.660 and 4.76.710 through 4.76.730, solely as an employee of any other person conducting, managing or carrying on any such business in the city, and not an owner, partner, associate or principal in such business, shall be exempt from payment of any business tax on the business, profession or occupation.

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

The provisions of this chapter shall not be construed as requiring farmers, poultrymen or horticulturists residing and doing business in Santa Clara County to pay a business tax under this chapter for the privilege of selling exclusively their own products. This exemption shall not apply to nurseries or other commercial establishments who buy goods for resale as well as selling their own produce.

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

Every peddler, solicitor or other person claiming to be entitled to exemption from the payment of any business tax provided for in this chapter upon the ground that such tax casts a burden upon the right to engage in commerce with foreign nations or among the several states, or conflicts with the regulations of the United States Congress respecting interstate commerce, shall file a verified statement with the director, disclosing the interstate or other character of the business entitling such exemption. Such statement shall state the name and location of the company or firm for which the orders are to be solicited or secured, the name of the nearest local or state manager, if any, and the address, the kind of goods, wares or merchandise to be delivered, the place from which the same are to be shipped or forwarded, the method of solicitation or taking orders, the location of any warehouse, factory or plant within the State of California, the method of delivery, the name and address of the applicant, and any other facts necessary to establish such claim of exemption. A copy of the order blank, contract form or other papers used by such person in taking orders shall be attached to the affidavit for the information of the director.

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

A. The provisions of this chapter shall not apply to persons having no fixed place of business within the city who come into the city for the purpose of transacting a specific item of business at the request of a specific patient, client or customer, provided that such person does not come into the city for the purpose of transacting business on more than five days during any calendar year.

B. For any person not having a fixed place of business within the city who comes into the city for the purpose of transacting business and who is not exempt as provided in Subsection A., of this section, the business tax payable by such person may be apportioned by the director in accordance with administrative rules promulgated pursuant to Section 4.76.760.

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

Every natural person peddling any goods or wares made or produced solely by such person shall be exempt from the payment of any business tax on such peddling business imposed under the provisions of this chapter.

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

Artists and craftspersons who sell only their own designed, hand-produced goods and wares shall be exempt from payment of any business tax under the provisions of this chapter if either of the following is established by the person claiming the exemption to the satisfaction of the director:

A. Sale of goods and wares in the artist's or craftsperson's dwelling under San José Municipal Code Section 20.30.110 for a period of no more than four consecutive days twice in any calendar year; or

B. Continuous sale of goods and wares on an annual basis at only one location so long as the retail value of inventory at such location does not exceed two thousand dollars.

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

Every natural person of the age sixty-five years or over whose annual gross receipts, as defined in Section 4.76.345.B.2., from any and all business are six thousand six hundred dollars or less shall be exempt from payment of any business tax under the provisions in this chapter. The limits described in this section shall be changed concurrently with changes made by the Social Security Administration regulating allowable earnings not affecting payment of social security retirement benefits.

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

The provisions of this chapter shall not require the payment of a tax for the teaching of musical, artistic or educational subjects when the following conditions exist:

A. The teaching is done at the residence of the teacher or at the residence of the pupil; and

B. The teacher employs no assistants, does not display an advertising sign at the residence, and does not make a general practice of selling merchandise in connection with the teaching.

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

A. Any business that is conducted at the California Theatre, Center for the Performing Arts, San José Civic Auditorium, San José Convention Center, or other city owned convention or cultural facilities pursuant to authorization or permission (by contract, permit, or otherwise) by the city to use or occupy any of such facilities for the purpose of conducting such business therein shall, but only to the extent such business is conducted therein, be exempt from payment of any business tax on such business conducted therein. This exemption applies only to business conducted at such facilities, and to the extent that any business to which this exemption applies also involves or includes the conducting of business at locations in the city other than such facilities, the business conducted at such other locations shall remain subject to payment of the business tax imposed under this chapter. This exemption shall not apply to any business conducted at such facilities pursuant to a contract with the city having a term in excess of one year and providing for the conducting of such business at such facilities during the term of such contract.

B. The exemption provided for in this section shall not be deemed or construed to apply to construction, repair, custodial, or maintenance work done at such facilities. The provisions of Section 4.76.610 shall not apply with respect to the exemption provided for in this section.

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

The provisions of this chapter shall apply to any person conducting a business for profit while said person is participating in a crafts fair, exhibition, parade, celebration, dance, amusement, entertainment, or other event consisting of a collection of food, beverage, art, crafts, or souvenir sales by various individuals or persons, when said crafts fair, exhibition, parade, celebration, dance, amusement, entertainment, or other event is conducted by a nonprofit or charitable organization, association, or institution, unless otherwise exempted. Vendors shall be exempted from the payment of the business tax while participating in such specified events if they meet all of the requirements for an exemption established by the director, the city director of economic development, and the nonprofit or charitable organization conducting the event. This exemption shall be for the duration of the event only.

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

Every person operating a family day care home, as that term is defined in Article 1 of Chapter 3.4 of Division 2 of the California Health and Safety Code, having fourteen or fewer children under the age of eighteen years shall be exempt from the payment of any business tax imposed under the provisions of this chapter.

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

A. Any family member who receives compensation for providing care services to another family member who is ill and/or elderly shall be exempt from the payment of any business tax imposed under the provisions of this chapter as a result of receiving compensation for the provision of such care.

B. For purposes of this section, the following definitions apply:

1. "Care services" means assistance with one or more of the following: dressing, feeding, toileting, bathing, grooming, mobility, monitoring or supervising daily living activities and related tasks.

2. "Family member" means a spouse, domestic partner, parent, step-parent, aunt, uncle, sibling, child, the lineal ancestor or descendant of each of these, and legal guardian.

3. "Domestic partners" has the meaning defined in Section 4.76.115.

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

Any City of San José police officer or reserve police officer who, in conformance with California Penal Code Section 70 and the policies and procedures of the city and the San José Police Department, engages in secondary employment as a private security guard with a state agency, local agency, or a private employer in a police uniform shall be exempt from the payment of the business tax imposed under the provisions of this chapter.

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

A. A new tenant or new property owner shall be exempt from the payment of any business tax imposed under the provisions of this Chapter for two (2) years where:

1. The tenant executes a lease between January 1, 2025 - December 31, 2026, for space in the Downtown Business Improvement District where the primary use of the space is for office space for a minimum term of forty-eight (48) consecutive months, and commences occupancy prior to January 1, 2027; or

2. The property owner purchases a building between January 1, 2025 - December 31, 2026 in the Downtown Business Improvement District and engages in business in owner-occupied space where the primary use of the space is for office space and provides a statement satisfactory to the Director of owner's intention to occupy for a minimum of forty-eight (48) consecutive months, and commences occupancy prior to January 1, 2027.

B. For the purposes of this Section:

1. The term "office space" means space of not less than 2,500 square feet where the primary use is one of the following enumerated uses in Table 20-140 of Chapter 20.70 of the Code: research and development; offices, business and administrative; or financial services (excluding retail banking).

2. The term "Downtown Business Improvement District" means that business improvement district in the City established by Ordinance No. 22960, as may be amended, with boundaries as follows: I-280 at Fourth Street west along Reed Street to west side of Market Street to south side of Balbach Street to east side of Almaden Boulevard to continue on West Reed Street to Highway 87, Highway 87 north to West San Fernando Street, south side of West Fernando Street to CalTrain tracks, CalTrain tracks to West Julian Street, south side of West Julian Street east to Montgomery Street, west side of Montgomery Street south to south side of West St. John Street to the Guadalupe River, north along east side of the Guadalupe River to the western most set of Union Pacific Railroad tracks, north side of the Union Pacific Railroad tracks north to West Taylor Street, south side of West Taylor Street east to Coleman Avenue, southwest side of Coleman Avenue east to Highway 87, Highway 87 south to West Julian Street, both sides of West Julian Street east to First Street, south side of East Julian Street east to Fourth Street, both sides of Fourth Street south back to I-280 (but does not include the Almaden Neighborhood between Market Street and Almaden Boulevard).

3. The term "new tenant" means a tenant that is not currently leasing office space (or engaged in business in owner-occupied office space) in the Downtown Business Improvement District.

4. The term "new property owner" means a property owner that is not currently engaged in business in owner-occupied office space (or leasing office space) in the Downtown Business Improvement District.

(Ord. 31127.)