Each year the City spends millions of dollars contracting for the delivery of products and services from private sector Contractors. Many of these Contracts provide funds for the purchase and/or lease of Tangible Property within the City. The California State Board of Equalization allows business that have a California Seller or Consumer Use Tax Account Number to obtain a Permit for remitting use tax when certain conditions are met. The Permit allows purchasers and lessees of Tangible Property to self-assess and pay use taxes directly to the State Board of Equalization instead of paying use taxes to the vendor or lessor from whom the Tangible Property is purchased or leased. To qualify for a Permit, the Tangible Property purchased or leased must have a total value of $500,000 or more annually, and must be purchased from in-state retailers or leased from in-state or out-of-state lessors during the years preceding the application for the program. The Permit holder must allocate local use taxes to the local jurisdiction in which the Tangible Property acquired under the Permit is first functionally used.
It is in the City's interest to require that eligible Contractors obtain a Permit and properly designate use taxes to the City when the Tangible Property acquired under the Permit is first functionally used within the City. To that end, the City adopted Los Angeles Municipal Code Section 21.6.10 which establishes a Use Tax Direct Payment Permit incentive program to provide for a rebate of a certain percentage of any net use tax gain received by the City as a result of the use of a Permit by any qualified person or entity.
SECTION HISTORY
Added by Ord. No. 178,869, Eff. 7-24-07.