(Amended by Ord. No. 175,029*, Eff. 2/5/03, Oper. 2/1/03.)
(a) (Amended by Ord. No. 182,275, Eff. 11/20/12.) A business that establishes a new fixed location within the City and is not owned, in whole or in part, by a person that was engaged in business in an existing fixed location in the City in the immediately preceding tax year, is a “New Business” that shall be exempt from the applicable minimum tax for its first tax year of operation. This business shall also be exempt from any other tax imposed under this Article for up to its first two tax years of operation, or its first three tax years of operation if the business first commenced operations between January 1, 2010, and December 31, 2015, as follows:
1. For its first two tax years of operation, a New Business that has less than $500,000.00 of total taxable yearly gross receipts shall be exempt from any additional tax imposed pursuant to this article for any tax year in which it has less than $500,000 in total taxable gross receipts. However, if a New Business first commences operations between January 1, 2010, and December 31, 2015, a New Business shall be exempt from any minimum or additional tax imposed pursuant to this Article for its first three tax years of operation, regardless of how much tax would be imposed absent this exemption. A business qualifying for exemption under this subdivision for its first tax year of operation shall also be exempt from the applicable minimum tax for its second tax year of operation, or its second and third tax years of operation if it first commences operations between January 1, 2010, and December 31, 2015.
(i) The exemption for tax in the second tax year of business operation is extended to December 31, 2017. The exemptions for tax for the second and third tax years of business operations are subject to review and may result in a suspension under any of the following circumstances as determined by the Council, subject to the approval of the Mayor:
(A) The City experiences a major natural or human-made disaster including, but not limited to, earthquakes, fires, or terrorist incident, for which the response and recovery require expenditure of more than one percent of General Fund revenues (i.e., $40,000,000 in 2006-07); or
(B) An economic downturn resulting in a greater than one percent overall actual decline in all General Fund revenue for the fiscal year ended June 30th of that year (i.e., $40,000,000 in 2006-07); or
(C) The City is legislatively, legally or otherwise precluded from levying and collecting General Fund revenue that results in a greater than one percent total decline in budgeted General Fund revenue for the fiscal year (i.e., $40,000,000 in 2006-07); or
(D) The City receives a legal judgment for which either an option for legal appeal does not exist, or the City Council and Mayor decline to pursue that legal appeal, and the judgment exceeds ten percent of the Reserve Fund (i.e., $18,500,000 in 2006-07); or
(E) There is a non-discretionary occurrence requiring expenditure of funds from the Emergency Reserve Account of the Reserve Fund.
(ii) To implement a suspension of the exemption in a given calendar year, action by the Council, subject to the approval of the Mayor, must be made by September 30th of the preceding calendar year.
(iii) The exemption period shall be in effect for ten years unless the Council takes one of the following actions: (a) before September 30th of the fifth year the Council takes an affirmative action not to extend the exemption period for a second consecutive five year period; or (b) prior to September 30th of the tenth year of the exemption period, the Council extends the exemption period beyond ten years. A suspension of the tax exemption will result in an equivalent period being added to the original ten-year exemption period, or five-year exemption period if the Council takes action not to extend the exemption period for the second five-year period. This would result in the sunset clause of the ordinance expiring at the end of ten years, or the number of years the exemption was in effect plus any suspension period, whichever is greater, but in no event would the actual number of years of second year tax exemption exceed ten, unless the Council takes an affirmative action to extend the exemption period beyond ten years, or if the council takes an action not to extend the exemption period for a second five-year period, the sunset clause of the ordinance would expire at the end of the fifth year, or the number of years the exemption was in effect plus any suspension period, whichever is greater, but in no event would the actual number of years of second year tax exemption exceed five.
(iv) Reinstatement of the tax exemption shall require approval of the Council, subject to the approval of the Mayor.
2. A new business shall not include a construction business involved in the following activities: single-family housing construction (as defined by the 1997 NAICS Industry Code 233210); multi-family housing construction (as defined by the 1997 NAICS Industry Code 233220); manufacturing and industrial building construction (as defined by the 1997 NAICS Industry Code 233310); commercial and institutional building construction (as defined by the 1997 NAICS Industry Code 233320); highway and street construction (as defined by the 1997 NAICS Industry Code 234110); bridge and tunnel construction (as defined by the 1997 NAICS Industry Code 234120); water, sewer and pipeline construction (as defined by the 1997 NAICS Industry Code 234910); power and communication transmission line construction (as defined by the 1997 NAICS Industry Code 234920); plumbing, heating, and air-conditioning contractors (as defined by the 1997 NAICS Industry Code 235110); painting and wall covering contractors (as defined by the 1997 NAICS Industry Code 235210); electrical contractors (as defined by the 1997 NAICS Industry Code 235310); masonry and stone contractors (as defined by the 1997 NAICS Industry Code 235410); drywall, plastering, acoustical, and insulation contractors (as defined by the 1997 NAICS Industry Code 235420); carpentry contractors (as defined by the 1997 NAICS Industry Code 235510); floor laying and other floor contractors (as defined by the 1997 NAICS Industry Code 235520); roofing, siding and sheet metal contractors (as defined by the 1997 NAICS Industry Code 235610); water well drilling contractors (as defined by the 1997 NAICS Industry Code 235810); structural steel erection contractors (as defined by the 1997 NAICS Industry Code 235910); glass and glazing contractors (as defined by the 1997 NAICS Industry Code 235920); excavation contractors (as defined by the 1997 NAICS Industry code 235930); security systems services (except locksmiths) (as defined by the NAICS Industry Code 561621); or a film producer (as defined in Section 21.109 of this Code or the applicable industry code).
(b) Any new business that is exempt from tax under Subsection (a) above shall be required to obtain a Tax Registration Certificate and an exemption letter from the Director of Finance. Failure to obtain these documents prior to the taxes becoming delinquent pursuant to Section 21.05 of this Code, shall render inapplicable the exemption provided in Subsection (a) and subject the business to the tax that would otherwise be payable and to any interest and penalty applicable pursuant to Section 21.05 of this Code.
* Section 3 of Ord. No. 175,029 provides that “[t]his section is repealed effective December 31, 2006.”