Tracy Municipal Code Art. 2 Taxes

(a) Every person who engages in business within the City shall pay a business tax based upon Gross receipts at the specified category rates listed in this section.

(b) A flat rate of Fifty and no/100ths ($50.00) Dollars will be applied to the base Gross receipts, as defined by section 6.04.010, regardless of which category the business falls under. If the business makes less than the base Gross receipts but more than $1.00, the business will only pay Fifty and no/100ths ($50.00) Dollars in business tax. Any dollar amount in excess of the base Gross receipts, will be calculated by the rates below.

For example, if a business has a Gross receipt of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 1 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base gross receipt]) + Two Hundred and no/100ths ($200.00) Dolars ([$700,000-$500,000] x .001) for a total of Two Hundred Fifty and no/100ths ($250.00) Dollars in business tax.

(c) If a business has no Gross receipts, then the business shall be deemed to produce Gross receipts in an amount at least equal to the cost of maintaining such operations for such business. The cost of operations shall include, but not be limited to, rent and/or depreciation, salaries and wages, fixed charges, and other expenses.

(d) Categories of businesses:

(1) CATEGORY 1: General Business including Retail, Restaurants, Hotels, and Tour operators and any business not otherwise classified (.0005 x Gross receipts in excess of the base Gross receipts), subject to a maximum of Sixty-Five Thousand ($65,000.00) Dollars in business tax:

For example, if a business has a Gross receipt of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 1 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five Hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipt]) +$100 ([$700,000-$500,000] x .0005) for a total of One Hundred Fifty ($150.00) Dollars in business tax.

(A) This Category includes any establishment or Business that conducts "Retail" (the sale of goods to ultimate consumers, usually in small quantities, but excludes gasoline, automobile dealerships or cannabis sales), or "Restaurant" (an establishment where meals, prepared food, and/or beverages are served to customers).

(B) "Tour operator" means a business that provides tours in the City for compensation.

(2) CATEGORY 2: Manufacturing, warehousing and wholesaling (.0009 x Gross receipts in excess of the base Gross receipts), subject to a maximum fee of Sixty-Five Thousand ($65,000.00) Dollars in business tax:

For example, if a business has a Gross receipt of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 2 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipt]) + One Hundred and Eighty and no/100ths ($180.00) Dollars ([$700,000-$500,000] x .0009) for a total of Three Hundred Fifty and no/100ths ($230.00) Dollars in business tax.

(A) "Manufacturing" includes every person conducting or carrying on a business consisting of manufacturing, packing, or processing any goods, wares, merchandise, or commodities at a fixed place of business within the City or conducting or carrying on a business of cold storage or refrigeration.

(B) "Warehousing" means every Business conducted solely for the purpose of maintaining or renting space for the storage of any kind of property.

(C) "Wholesaling" means every Business conducted solely for the purpose of selling goods, wares, or merchandise in wholesale lots for resale.

(3) CATEGORY 3: Contractors and Services (.001 x Gross receipts in excess of the base Gross receipts), subject to a maximum fee of Sixty Five Thousand Dollars in business tax:

For example, if a business has a Gross receipts of seven hundred thousand and no/100ths ($700,000.00) Dollars and is a Category 3 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipt]) + Two Hundred and no/100ths ($400.00) Dollars([$700,000-$500,000] x .001) for a total of Two Hundred Fifty and no/100ths ($250.00) Dollars in business tax.

(A) "Contractors" means every person, firm, or corporation conducting, managing, or carrying on the business of a contractor, subcontractor, or builder; or engaging in the construction or repair of any buildings; or engaged in any engineering, construction, operating, or advertising as such, or representing himself as such, and regularly employing help for building construction, sewer construction, plumbing construction or general construction.

(B) "Services" means any Professional services, as that term is ordinarily and commonly used and understood, wherein individuals are engaged in the business of offering services for compensation, and not specifically covered under any other part, chapter, or section of this chapter, and shall include those professions that may require a licensure, but not be limited to the services rendered by a person engaged in the practice or profession such as hairstylist, beautician or cosmetologist, aesthetician, or art instructor.

(4) CATEGORY 4: Professionals and Rental units (Commercial and Residential) (.0015 x Gross receipts in excess of the base Gross receipts), subject to a maximum of Sixty Five Thousand ($65,000.00) Dollars in business tax:

For example, if a business has a Gross receipt of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 4 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipt]) +Three Hundred and no/100ths ($300.00) Dollars ([$700,000-$500,000] x .003) for a total of Three Hundred Fifty and no/100ths ($350.00) Dollars in business tax.

(A) "Professionals" means services, as that term is ordinarily and commonly used and understood, provided by individuals engaged in the business of offering to the public professional or semiprofessional services for compensation, and not specifically covered under any other part, chapter or section of this chapter, and shall include those professions generally requiring governmental certification or a professional degree, but not be limited to the serves rendered by a person engaged in the practice or profession of law, medicine, surgery, dentistry, ophthalmologist, optometry, chiropractic, osteopathy, chiropody, dental technician, laboratory technician, physical therapist, mortician, undertaker, psychologist, psychotherapy, radiologist, speech therapist, veterinary, licensed financial planner, licensed investment counselor, real estate agent, real estate broker, stock/bond or security agent or broker, civil, mechanical, electrical, industrial, or other class of engineer, surveyor, geologist, appraiser, architect, accountant, real estate management, property management, income tax preparers, bookkeepers, income tax consultants, developer, or marriage counselors.

(B) "Rental units" means any unit, whether commercial, residential or industrial, offered by any business, individual, or entity that leases, rents, or otherwise provides property to another individual or entity for compensation.

(5) CATEGORY 5: Gasoline sales (0.0005 x Gross receipts in excess of the base Gross receipts), with the maximum fee of Fifty ($50.00) Dollars in business tax:

For example, if a business has a Gross receipts of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 5 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipt]) +$100 ([$700,000-$500,000] x .0005) for a total of One Hundred Fifty ($150.00). Since this category has a maximum fee cap of Fifty and no/100ths ($50.00) Dollars, the total would be Fifty and no/100ths ($50.00) Dollars in business tax.

(A) "Gasoline" means sale of "Motor Vehicle Fuel" as defined under California Code of Regulations Title 18, section 1101 and includes aviation gasoline, gasohol, finished gasoline, gasoline, gasoline blendstocks, and blended motor vehicle fuel.

(B) Any person or entity with both Gasoline and Retail sales shall provide separate accounting of Gross receipts and shall pay the applicable business tax rate for each such Category.

(6) CATEGORY 6: Cannabis (0.0005 x Gross receipts in excess of the base Gross receipts), subject to a maximum fee of Fifty ($50.00) Dollars in business tax:

For example, if a business has a Gross receipts of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 5 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipts]) +$100 ([$700,000-$500,000] x .0005) for a total of One Hundred Fifty ($150.00). Since this category has a maximum fee cap of Fifty and no/100ths ($50.00) Dollars, the total would be Fifty and no/100ths ($50.00) Dollars in business tax.

(A) "Cannabis" means sales at any business engaged in commercial cannabis activity, including the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products as provided for in this chapter 6.36.

(7) CATEGORY 7: Automobile dealership sales (0.0005 x Gross receipts in excess of the Base Gross receipts), subject to a maximum fee of Twenty Five Hundred ($2500.00) Dollars in business tax:

For example, if a business has a Gross receipts of Seven Hundred Thousand and no/100ths ($700,000.00) Dollars and is a Category 5 Business, the total amount of tax the business would pay would be a Fifty and no/100ths ($50.00) Dollars (for the first Five hundred Thousand and no/100ths ($500,000.00) Dollars [base Gross receipts]) +$100 ([$700,000 - $500,000] x .0005) for a total of One Hundred Fifty ($150.00) Dollars in business tax.

(A) "Automobile dealership" is a Business that is a non-Manufacturing establishment and is engaged in the business of buying, selling, offering to buy, offering to sell, consigned to be sold, or otherwise dealing in Motor Vehicles sales, as the term "Motor Vehicle" is defined in the California Vehicle Code.

(Res. No. 2022-106, § 7(Exh. A), 7-12-22; Ord. No. 1339, § 2, 6-27-2023; Ord. No. 1340, § 2, 8-15-2023; Ord. No. 1348, § 3(Exh. 1), 9-17-2024; Ord. No. 1350, § 2(Exh. 1), 10-1-2024)