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Contra Costa County, CA November 4, 2008 Election
Measure L
Amending Business License Tax
City of Oakley

Majority Approval Required

Fail: 4384 / 42.56% Yes votes ...... 5917 / 57.44% No votes

See Also: Index of all Measures

Results as of Dec 2 8:18pm, 100.0% of Precincts Reporting (20/20)
Information shown below: Yes/No Meaning | Impartial Analysis | Arguments | Full Text

Shall the Business License Tax Ordinance, Title 3 of Chapter 5 of the Oakley Municipal Code, be amended as set forth in Ordinance No. 14-08, altering the manner of calculating business license taxes that are used to provide general City services such as police, parks, recreation, code enforcement, library hours, youth activities, senior programs and street maintenance?

Meaning of Voting Yes/No
A YES vote on this measure means:
approving and authorizing the changes to the City's business license taxes as set forth in Ordinance 14-08.

A NO vote on this measure means:
retaining the City's existing business license taxes.

Impartial Analysis from the City Attorney
The City Council of the City of Oakley placed Measure L on the November 4, 2008 ballot to ask voters to consider amending the Business License Tax within the City of Oakley. Measure L authorizes an amendment to a local general tax that will be collected and placed in the City's General Fund. The City may use this tax revenue for general purposes such as police protection, senior and youth programs, street repairs, park maintenance, library programs, code enforcement and other services.

For many years, the City of Oakley has imposed a business license tax on businesses that conduct business within the City. The current business license tax is calculated based on the number of employees involved in the business and the type of business being conducted. Most businesses with gross receipts in excess of $20,000 per year are required to pay a minimum tax of $100 plus $10 per full time equivalent employee. Some businesses pay a flat tax and other businesses are exempt from the tax. The City's current business license tax rates and list of businesses that are exempt from this tax are set forth in Sections 3.5.006(c) and 3.5.010 of the Oakley Municipal Code.

Measure L will enact Ordinance No. 14-08. A copy of Ordinance No. 14-08 is printed in the sample ballot. Measure L and the corresponding Ordinance amends the City's business license tax rates as follows:

  • Establishes a variable rate gross receipts tax for most businesses and eliminates the per employee based tax. The minimum annual tax is a flat fee of $25. The maximum annual tax is $125 plus $0.22 for every $1000 of gross receipts over $1,000,000.
  • Creates new business license tax rate categories for landlords, delivery businesses, taxis and limousine services and flat tax rates for these business activities.
  • Increases the flat tax rate for carnivals and circuses from $100 per year to $250 per day.
  • Changes the flat tax rate for peddlers and solicitors from $100 per entity per year to $25 per person per day. Eliminates exemptions for certain agricultural uses, landlords with less than four rental units, and businesses with annual gross receipts between $1,000 and $20,000.
  • Provides that all flat tax rates will be adjusted every third year based on changes in the Consumer Price Index. Voter approval is not required for the annual adjustments.

Some businesses will experience a tax decrease as a result of Measure L and some will experience an increase. Businesses having gross receipts of more than $1,000,000 per year will be most affected by Measure L. If approved by a majority of the qualified voters voting on this Measure, the changes to the business license tax will become effective January 1, 2009, unless otherwise specified.

A "YES" vote on this Measure is a vote to approve and authorize the changes to the City's business license taxes as set forth in Ordinance 14-08. A "NO" vote is a vote to retain the City's existing business license taxes.

Alison A. Barratt-Green
City Attorney
City of Oakley

 
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Arguments For Measure L Arguments Against Measure L
Measure L is not a new tax; it is just an adjustment of the existing Oakley business license tax. Currently, the amount collected by the 15 cities in the County who have a business license tax is approximately $15.19 per capita; Oakley's provides approximately $3.31 per capita. While part of why Oakley's revenues are lower is that we have fewer businesses, part is because our rates are lower (especially on larger businesses). In fact, Oakley's current rates are among the lowest in the State. While rates in Oakley and our neighboring cities are generally lower than in other areas of the County, Measure L brings Oakley's business license tax rates into closer alignment with East County rates overall, while remaining competitive for small and medium size businesses. For example, following the proposed adjusted tax structure, a medium size Oakley retailer will pay $235 per year while comparable businesses currently pay $350 in Brentwood and $1,350 in Antioch.

Measure L:

  • Will not increase anyone's property or sales tax.

  • Establishes a tax that is easy for the business community to understand and competitive with other cities.

  • Provides equity for the basis and rate of the business license tax while ensuring that all business activities are required to pay a fair business tax.

    o Differentiates between small and large businesses and revises the tax rates so that large businesses pay proportionately more and small businesses pay less.

    o Removes exemptions from landlords by recognizing rentals as a business.

Business license tax revenues supplement Oakley's general fund. They support police, parks, recreation, library, senior services, and street maintenance, making Oakley an even better place to live, work, play and do business.

Please join us in voting YES on MEASURE L. It's better for business, and better for Oakley.

Bruce Connelley, Mayor

Kevin Romick, Council Member

Brad Nix, Council Member

Pat Anderson, Council Member

Carol Rios, Council Member

NO ARGUMENT AGAINST WAS SUBMITTED

Full Text of Measure L
ORDINANCE NO. 14-08


AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF OAKLEY


AMENDING SECTIONS 3.5.006 AND 3.5.010 OF CHAPTER 5 OF TITLE 3 OF THE OAKLEY MUNICIPAL CODE, AND ADDING SECTION 3.5.008 TO CHAPTER 5 OF TITLE 3 OF THE OAKLEY MUNICIPAL CODE, REGARDING THE CITY'S BUSINESS LICENSE TAX

The City Council of the City of Oakley does ordain as follows:

Section 1. Section 3.5.006 of Chapter 5 of Title 3 of the Oakley Municipal Code is hereby amended to read as follows:

"3.5.006 Definition and License Requirements.

  a. Definitions. For purposes of this chapter, the following words and phrases shall have the following meanings:

1) "Amusement and itinerant businesses" includes only those businesses which are (1) not operated or carried on regularly throughout the year in the unincorporated area of the City, such as circuses, carnivals, and other exhibitions or entertainments on an occasional basis and not otherwise licensed and (2) involve the operation of a temporary place of sale, and itinerant vendors, peddlers, hawkers and solicitors.

2) "Business" includes all professions, trades vocations, rentals, leases, enterprises, establishments, and occupations and all and every kind of calling, any of which is conducted for the purpose of earning in whole, or in part, a profit or livelihood, whether or not a profit or a livelihood actually is earned thereby, whether paid in money, goods, labor, or otherwise, and whether or not the business has a fixed place of business in the city; although it does not include the services rendered by an employee to his or her employer.

3) "Employee" means every person engaged in the operation or conduct of any business whether as an owner, any member of owner's family, partner, associate, agent, manager or solicitor, and any and all other persons engaged in such business. In addition, an "employee" means any person who works for or receives a salary for work in the City, from which Federal Withholding Tax or Federal Insurance Compensation Act (FICA) funds have been withheld.

4) "Engaging in business" means commencing, conducting or continuing in business, and also the exercise of corporate or franchise powers, as well as liquidating a business when the liquidators thereof themselves hold themselves out to the public as conducting such business.

5) "Finance Director" shall mean the Finance Director of the City of Oakley.

6) "Gross Receipts" shall mean and include the total amounts actually received or receivable from sales, services, rentals, or leases in the total amounts 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 a credit allowed, whether or not such act or service is done as a part of, or in connection with, the sale or rental of materials, property (real or personal), goods, wares, or merchandise. Included in "gross receipts" shall be receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, rented or leased, the cost of the materials used, labor and service costs, interest paid or payable, or losses or other expenses whatsoever.

Excluded from "gross receipts" shall be the following:

       1. Cash discounts allowed and taken on sales;

       2. Credit allowed on property accepted as a part of the purchase price in which property may later be sold;

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

       4. Such part of the sales price of property returned by purchasers upon the rescission of the sales contract as is refunded, either in cash or by credit;

       5. Amounts collected from others where the business is action as an agent or trustee to the extent that such amounts are repaid to those for whom the amounts were collected;

        6. Receipts of refundable deposits, except that refundable deposits forfeited and taken into the income of the business shall not be excluded;

       7. As to a real estate transaction, the sales price of the real estate sold for the account of others, except that portion which represents commission or other income;

       8. Income from businesses which perform the function of agent or broker, except that portion of income which represents commission or other income to the agent or broker;

       9. As to a retail gasoline dealer, a portion of the receipts of the dealer from the sales of motor vehicle fuels equal to the amount of motor vehicle fuel license tax imposed ;

       10. As to a retail gasoline dealer, any special motor fuel taxes if paid by the dealer or collected by the dealer from the consumer or purchaser.

7) "Gross Receipts subject to the business license tax" shall be that portion of gross receipts relating to business conducted within the City. For businesses with their headquarters located within the City of Oakley, their total gross receipts shall be deemed to be related to business conducted within the City unless an apportionment of gross receipts is requested by the business pursuant to Section 3.5.010 a (2) of this chapter. Further, gross receipts subject to the business license tax shall only include receipts related to sales transacted in, services performed in, and, when a transaction crosses a City boundary, only those transactions that originate in the City of Oakley.

8) "Person" shall mean and include all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, Massachusetts trust, business, and other common law trusts, societies, and individuals transacting and carrying on any business in the city other than an employee.

  b. License required. It is unlawful to engage in business in the City without first procuring a business license unless an exemption is granted.

  c. Exemptions. Exemptions must be requested and acceptable proof must be presented to the Finance Director that shows the business meets one or more of the following criteria:

1) Nonprofit organizations as defined in Section 501 (c)(1), (2) or (3) of the Internal Revenue Code, as it currently exists or is hereafter amended;

2) Businesses exempt from local taxation by of the Constitution or applicable statutes of the United States or the State of California;

3) Any public utility which pays a franchise tax the City based on gross receipts. The exemption applies only to the business conducted under the franchise agreement;

4) Every peddler, solicitor or other person entitled to exemption from the payment of any license provided for in this chapter upon the ground that such license casts an unreasonable burden upon his/her 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.

  d. License Fee A Tax + The issuance of a business license does not permit a business otherwise prohibited. "License," as used in this chapter, does not mean a permit. Any other permits or licenses which are required other than by this chapter remain in effect and are not superseded by this chapter. The fees prescribed by this chapter constitute a tax for revenue purposes, and are not regulatory permit fees. The payment of a license tax required by the provisions of this chapter, and its acceptance by the City, and the issuance of a business license to any person, shall not entitle the holder thereof to carry on any business unless he/she has complied with all of the requirements of this chapter and all other applicable laws, nor to carry on any business in any building or on any premises designated in such license 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.

  e. Contents of License. After the submission of a business license application and payment of the prescribed fee to the Finance Director, the Finance Director shall issue a license which shall contain the following:

1) The name of the person to whom the license is issued;

2) Identification of the business licensed;

3) The place where such business is to be carried on;

4) The date of the expiration of such license; and

5) Such other information as the Finance Director determines.

  f. Annual License.

1) All licenses except daily licenses, and the first license issued, except daily licenses, and the first license issued to a new business, shall be issued and due for renewal effective July 1st and shall expire on the subsequent June 30th.

2) All daily licenses are due in advance no later than the day prior to the start of the business activity for which the license is necessary.

3) All daily licenses are due in advance no later than the day prior to the start of the business activity for which the license is necessary.

  g. The proceeds deriving from the provisions of this chapter shall be a "general tax," the revenue from which shall be placed into the City's General Fund and be available for any and all municipal purposes." Section 2. Section 3.5.008 of Chapter 5 of Title 3 of the Oakley Municipal Code is hereby added to read as follows:

"3.5.008 Tax Rates.

  a. Class A: All businesses not defined as amusements or itinerant businesses, Delivery Businesses, Landlords, Taxis and Limousine Services:

For Gross Receipts Totaling:    The Tax Shall Be:
$0-$1,000    $0
$1,001 - $25,000    $25.00
$25,001 - $1,000,000    $125.00
Over $1,000,000    $125.00 + $0.22/$1000 in receipts over $1,000,000

(1) The amount of the business tax to be paid by the applicant is to be measured by gross receipts from the preceding calendar or fiscal year. For a new business which has no gross receipts history and no reasonable basis for estimating gross receipts, the applicant is required to pay the $25 tax.

(2) A business having branch operations in Oakley of a nature that does not lend itself to a gross receipts calculation for the amount of business conducted in the City of Oakley may propose another basis for determining the amount of the tax to the City's Finance Director. The Finance Director shall determine if an alternate means is appropriate and if so, shall determine the most appropriate means for calculating the tax. In fixing the business license tax to be charged, the Finance Director shall have the power to base the business tax upon a percentage of gross receipts, operating expenses, floor space, payroll, number of employees, business taxes paid to other cities, or any other measure which will assure that the business license tax assessed shall be uniform with the amount of business done in the City of Oakley, or of businesses of a like nature, so long as the amount assessed does not exceed the business license tax set forth in this section."

  b. Class B: Amusements and Itinerant Businesses, Delivery Businesses, Landlords, Taxis and Limousine Services:

Landlords - $200 per unit for properties having up to four dwelling units on a parcel

Apartment complexes (rental properties with more than four dwelling units on a parcel) - $250 for the first four units + $50 for each additional unit over four units

  • There will be a 50% discount on all Apartment complexes or units that are income-restricted for low and very-low income persons and subject to an affordable housing covenant

Carnivals, Circus and amusements - $250 per day

Peddlers/Solicitors - $25 per person per day

Taxis - $40 per vehicle per year

Delivery trucks - $25 per truck per year

Rates included under "Class B" above shall be adjusted every third year for changes in the Consumer Price Index that have occurred since the most recent rate adjustment."

Section 3. Section 3.5.010 of Chapter 5 of Title 3 of the Oakley Municipal Code is hereby amended to read as follows:

"3.5.010 Penalties and Fees.

  a. Penalties and Interest. If a business tax remains unpaid the Finance Director shall:

1) Impose 25% penalty for an annual license tax which is not paid within 30 days of the due date;

2) Impose a 25% for a daily license tax which is not paid by the close of the day when it was due; and

3) In addition to the penalties imposed, any person who fails to pay any license fee within 30 days of the due date shall pay interest at the rate of 1.5% per month or fraction thereof, on the amount of the fee and penalties from the date on which the license fee is delinquent, until paid.

  b. Fees. All businesses which are required to obtain a business license shall be subject to the following fees, and such other fees as the City Council may adopt by resolution from time to time:

Transfer of license or location $10

Lost license/duplicate license $10

These fees shall be adjusted every third year for changes in the Consumer Price Index that have occurred since the most recent rate adjustment.

  c. License A Debt. The amount of any fee penalty, and interest imposed by the provisions of this chapter shall be deemed a debt to the City; and any person carrying on any business without first having procured a license from the City to do so shall be liable to action in the name of the City in any court of competent jurisdiction, for the amount of license and penalties and interest imposed on such business. The City may collect debt through any legal means including attachment and seizure of business property."

Section 4. Amendments. The City Council may amend Chapter 5 of Title 3 and this ordinance without a vote of the people, unless such amendment would increase a tax and therefore require a vote under Sections 53722 or 53723 of the Government Code, Articles 13A or 13C of the California Constitution, or any other applicable provision of law.

Section 5. Severability. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this ordinance are severable. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases may be held unconstitutional, invalid or unenforceable.

Section 6. California Environmental Quality Act (CEQA) Finding. The City Council finds that this ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to 15061 (b)(3) and 15060 (c)(3) the activity is not a project (as defined in 15378) of the CEQA Guidelines (Title 14, Chapter 3 of the California Code of Regulations) because it has no potential for resulting in physical change to the environment, directly or indirectly. This action is further exempt under the definition of Project in Section 15378(b)(3) in that it concerns general policy and procedure making, and Section 15378(b)(4) in that it concerns a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.

Section 7. Effective Date, Operative Date and Posting. This ordinance shall be adopted as provided by law, if approved by a majority of the voters voting on the measure to this ordinance, at an election to be held November 4, 2008, and shall go into effect January 1, 2009, after the City Council has by resolution declared that the ballot measure was approved by a majority of voters voting thereon. The City Clerk of the City of Oakley shall cause this ordinance to be posted and published in accordance with the law.


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