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(Added by Ord. No. 178,101, Eff. 1/9/07.)
For every person engaged in the business of Promoting or Staging Sporting Events, Operating or Maintaining Vending Machines, Collection Agencies, Storage, Freight Forwarding/Steamship Agency, and Personal Property Rental, Tax Rate C, as set forth in Section 21.33(c), shall be applicable.
(a) SPORTING EVENT. Sporting Event means the business of promoting or staging any baseball, football, soccer, tennis, polo, swimming, boxing, wrestling, or similar exhibition, event or contest; provided, however, as used in this section, “gross receipts” shall not include any of the following:
1. Receipts from a trade, calling, occupation, vocation, profession or other means of livelihood, which this City is prohibited from taxing under the Constitution or laws of the United States, or under the Constitution or laws of the State of California;
2. Receipts of community chests, funds, foundations or corporations organized and operated for religious, hospital or charitable purposes, not conducted for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual;
3. Receipts of non-profit educational institutions of collegiate grade, defined here to mean institutions incorporated as colleges or seminaries under the laws of the State of California, which require for regular admission the completion of a four-year high school course, or its equivalent, and which confer upon their graduates at least one academic or professional degree, based on a course of at least four years in liberal arts and sciences, or on a course of at least three years in professional studies such as law, theology, education, medicine, pharmacy, architecture, fine arts, commerce or journalism; receipts of non-profit secondary schools which are duly accredited by the University of California; and receipts of non-profit elementary schools in which instruction is given to students in the pre-primary and primary grades in the several branches of studies required to be taught in the public schools of the State of California;
4. Receipts of Rotary, Kiwanis and Lions Clubs, non-profit automobile clubs, Chambers of Commerce, and other community service organizations; also receipts of trade associations such as Merchants Plumbers Association, Merchants and Manufacturers Association and labor organizations.
(b) VENDING MACHINES.
1. Vending Machine Operator means the business of operating, maintaining or letting the use of any coin-operated vending machine for the dispensing of goods, wares, merchandise or other tangible property.
2. Except as otherwise provided in this section, each coin-operated vending machine, which is operated, maintained or used within this City, shall have conspicuously stamped upon it or affixed on it for identification purposes, the name and address, Business Tax Registration Certificate number, and the telephone number, if any, of the owner or operator. The identification shall be provided by the owner or operator of the machine and at the owner’s or operator’s expense, notwithstanding the provisions of Section 21.06(b) to the contrary, and shall be removed from the machine by the owner or operator when the authority to use the machine is transferred to another person, whether by sale, lease, license or otherwise.
3. No business tax or identification shall be required for the maintenance or operation of:
(i) Any postage stamp machine;
(ii) Any machine dispensing sanitary or hygienic articles, or drinking cups, towels or medicine, which machine is entirely owned and supplied by the owner or operator of the premises where the machine is installed, and is maintained solely for the convenience of employees, visitors or customers and, not for profit to the owner or operator or to any other person;
(iii) Any machine, which is entirely owned, operated and supplied by the owner or operator of the premises where the machine is installed, and the owner or operator holds a valid registration certificate at that location to engage in a business taxed under the provisions of Section 21.42, Wholesale Sales or Section 21.44, Retail Sales, of this article, and the owner or operator includes the gross receipts from the sale of all goods, wares, merchandise or other tangible property dispensed by the machine in the measure of the applicable business tax paid under Section 21.42, Wholesale Sales or Section 21.44, Retail Sales, of this article;
(iv) Any machine dispensing newspapers or other printed matter.
(c) COLLECTION AGENCIES.
1. Collection agency means and includes all persons engaged directly or indirectly and as primary or secondary object, business or pursuit, in soliciting claims for collection or in the collection of claims owed or due or asserted to be owned or due to another, and any person, when engaged in collecting accounts for another, where the employment is for one or more persons, shall be deemed to be engaged in the collection business within the meaning of this section. Any person using a fictitious name in collecting the person’s own accounts receivable with the intention of conveying to the debtor that a third party has been employed, is a collection agency as contemplated by this section and shall be subject to these provisions. The term “collection agency” shall not include attorneys-at-law, individuals regularly employed on a regular wage or salary, in the capacity of creditors or in other similar capacity upon the staff of employees of any one person not engaged in the business of a collection agency, banks, abstract companies doing an escrow business, duly licensed real estate brokers or agents doing a real estate business, nor a merchant-owned non-profit credit association unless they are conducting a collection agency.
2. In computing the tax imposed by this section, there shall be deducted from gross receipts the amount received as the result of collections made outside of the State of California.
(d) STORAGE, FREIGHT FORWARDING.
1. Freight Forwarding means the business of preparing the documentation and otherwise arranging for the importation or exportation of goods, wares or merchandise, or of collecting or consolidating for shipment in carload lots or less, truck load lots or less, any goods, wares or merchandise, as agent or bailee for any person where a fee is charged for that service.
2. Steamship Agency means the business of soliciting, receiving or handling outbound or inbound freight aboard vessels attending to operational requirements of vessels while they are entering, within and departing from a port, and performing husbanding services, such as arranging for ships stores, bunker fuel, crew changes, vessel repairs and delivery or re-delivery of vessels pursuant to charter.
3. Storage or Warehousing means the business of storing goods, ware or merchandise of any kind.
(e) PERSONAL PROPERTY RENTAL.
1. Personal Property Rental means the business of leasing or renting any tangible personal property. For the purpose of this section, Tangible Personal Property means personal property that may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses.
2. Nothing in this section shall be construed to require the inclusion of the amount received for the leasing or renting of tangible personal property, the entire use of which is made wholly outside the State of California.
(Added by Ord. No. 178,101, Eff. 1/9/07.)
For every person engaged in the business of Commission Broker and Independent Telemarketing, Tax Rate D, as set forth in Section 21.33(d), shall be applicable.
(a) COMMISSION BROKERS. Commission Broker means any person engaged in the business of buying and selling of goods, wares or merchandise by a person to the extent that the person:
1. Does not engage in the business of manufacturing, refining, fabricating, milling, treating or other processing of the goods, wares or merchandise bought and sold and, does not cause the goods, wares or merchandise to be manufactured, refined, fabricated, milled, treated or otherwise processed;
2. Does not obtain or retain title to the goods, wares or merchandise, except while the goods, wares or merchandise may be in transit, or for short periods of time before transportation commences or after it ceases; and
3. Does not store or warehouse the goods, wares or merchandise, except while the goods, wares or merchandise are actually in transit, or for short periods of time before transportation commences or after it ceases.
(b) INDEPENDENT TELEMARKETING AGENCY. Independent Telemarketing Agency means any person who engages in the business of marketing services or goods, wares or merchandise on behalf of three or more clients continuously, none of which has any ownership interest in the person, by use of a telecommunications device at a call center. An Independent Telemarketing Agency shall not include a person who sells their own services or goods, wares or merchandise. A call center means a location in which 25 or more persons are continuously employed or utilized to make and/or receive telephone calls by means of a centralized telecommunications system.
(Added by Ord. No. 178,101, Eff. 1/9/07.)
(a) For every person engaged in business providing miscellaneous services as an Advertising Agency, Aircraft Support Contractor, Apparel Subcontractor, Bookbinder, Check Cashing Service, Drapery Subcontractor, Heat Treater, Mailing Service, Metal Plater, Music Teacher, Public Relations Agency, Refuse Contractor, Shoe Shining Stand, Parlor Operator, Silk Screen Apparel Subcontractor, Temporary Help Agency, Ticket Seller, Travel Agency, Typesetter or Wire Terminator, Tax Rate E, as set forth in Section 21.33(e), shall be applicable.
(b) For purposes of this section, the following terms are defined as follows:
Miscellaneous Services means any person engaged in business as an advertising agency, aircraft support contractor, apparel subcontractor, bookbinder, check cashing service, drapery subcontractor, heat treater, mailing service, metal plater, music teacher, public relations agency, refuse contractor, shoe shining stand or parlor operator, silk screen apparel subcontractor, temporary help agency, ticket seller, travel agency, typesetter or wire terminator.
Advertising Agency means any person who engages in the business of advertisement counseling, including the writing, composing, designing and placement of advertisements for clients, regardless of the advertising media employed; provided however that the extent the person employs the use of the person’s own media, the person shall not be considered an advertising agency with regard to either the promotion or placement of advertisements in that media.
Aircraft Support Contractor means any person who engages in the business of furnishing ground support services to airline carriers, including the providing of ramp services, baggage and freight handling services, ticket services, mechanical services, fueling services or other similar services normally performed at an airport.
Apparel Subcontractor means any person who engages in the business of cutting, sewing, or fabricating any clothing, wearing apparel, garment, or similar material belonging to an apparel manufacturer or pursuant to a contract with another apparel subcontractor.
Bookbinder means any person engaged in the business of binding books.
Check Cashing Service means any person engaged in the business of cashing payroll checks, for a fee or charge and for every person whose business consists in whole or in part of cashing checks for others for a fee or charge.
Drapery Subcontractor means any person who engages in the business of cutting, sewing, or fabricating any draperies, curtains, or similar material belonging to a drapery manufacturer, drapery jobber, or drapery seller, or pursuant to a contract with another drapery subcontractor.
Heat Treater means any person who engages in the business of changing the hardness and/or strength of metal materials of another by controlled heat process methods.
Mailing Service means any person who engages in the business of preparing printed matter for mailing (such as, by sorting, collating, tying, inserting, addressing, and metering), mailing the printed matter, or providing (without selling), advising as to, compiling, or maintaining lists of persons, businesses, or locations for use in mailing printed matter.
Metal Plater means any person who engages in the business of plating, anodizing or galvanizing metal articles of another electrolysis or any other plating process.
Music Teacher means any person who engages in the business of teaching music.
Public Relation Agency means any person who engages in the business of promoting rapport and goodwill between a person and other persons, special publics, or the community at large through the distribution of interpretative material, the development of neighborly interchange and the assessment of public reaction.
Refuse Contractor means any person who engages in the business of hauling refuse.
Shoe Shining Stand or Parlor Operator means any person who engages in the business of operating or maintaining a shoe shining stand or parlor.
Silk Screen Apparel Subcontractor means any person who engages in the business of performing silk screen printing work upon any clothing, wearing apparel, garment, or similar material belonging to an apparel manufacturer or pursuant to a contract with another silk screen apparel subcontractor.
Temporary-Help Agency means any person engaged in the business of supplying their employees to others on a temporary basis, provided however that this term does not include an agency for the brokerage of labor for a fee to be paid either by the applicant for employment or the prospective employer.
Ticket Seller means any person, who engages in the business of selling rights, evidenced by tickets, which entitle the purchaser to view, hear and/or attend a theatrical, cultural, sporting or similar event and who does not sponsor, promote, produce or contribute to the event. Ticket seller includes persons selling rights on their own account and persons selling rights as broker or agent for another person.
Travel Agency means any person who engages in business as a broker of travel services, and who arranges for transportation, tours, lodging facilities, food, entertainment, and other similar accommodations or related services.
Typesetter means any person who, as a typesetter, compositor, typographer, or type founder, engages in the business of setting type for another by hand, cold type process, hot metal process, photographic process, or any other similar mechanical or photochemical “type assembly” process.
Wire Terminator means any person who engages in the business of connecting components and circuits of electronic panels of another configured wiring by means of fully automatic equipment.
As used in this section, the term “gross receipts” includes all receipts included by the provisions of Subsection (a) of Section 21.00 of this article. In the case of persons acting as agents or brokers for another person, the term gross receipts includes and excludes, respectively, those receipts that are included and excluded under Subdivision 6. of Subsection (c) of Section 21.49, Professions and Occupations; provided, however, that with regard to a person engaged in business as a Travel Agency the cost of transportation, tours, lodging facilities, food, entertainment, and other similar accommodations or services shall be deemed to be the legal obligation of the recipient.
(Added by Ord. No. 178,101, Eff. 1/9/07.)
For every person engaged in business conducting Auto Parks, Health Maintenance Organizations, Any Trade, Calling, Occupation, Vocation, Profession or other means of livelihood, as an independent contractor and not an employee of another, and not specifically taxed by other provisions of this article, Tax Rate F, as set forth in Section 21.33(f), shall be applicable.
(a) AUTO PARK. Auto Park means engaged in the business of conducting any automobile parking place, storage lot or storage place where motor vehicles are parked or stored, and a charge is made directly or indirectly for the parking or storage.
(b) HEALTH MAINTENANCE ORGANIZATIONS. Health Maintenance Organization means engaged in business arranging for the provision of health care services to subscribers or enrollees, or to pay for or to reimburse any part of the cost for those services, in return for a prepaid or periodic charge paid by or on behalf of the subscribers or enrollees.
1. For the purposes of this section, gross receipts of a Health Maintenance Organization, which are attributable to a place of business within the City, shall be apportioned by using the total cost method to determine the amount of gross receipts that are subject to tax. The total cost method uses a ratio to derive a percentage that is multiplied by the total gross receipts. The numerator of the ratio is the total in-City costs. The denominator of the ratio is the sum of the total in-City costs and the total out-of-City costs. The percentage derived by dividing the numerator by the denominator is multiplied by the total gross receipts to determine the amount of gross receipts that are subject to tax. Total costs shall include a Health Maintenance Organization’s payroll and related costs, property and related costs, and contract health care provider costs, incurred within and without the City.
2. The apportionment formula set forth in Subdivision 1. shall be applicable to all tax years not barred by the statute of limitations on January 1, 1998. Notwithstanding the foregoing, no person shall be entitled to a refund for any tax year prior to 1998, due to the application of the apportionment formula set forth in Subdivision 1. In computing any person’s tax liability due for tax years prior to 1998, offsets of applicable credits not barred by the statute of limitations shall be allowed before determining the total tax due.
3. The Director of Finance shall levy an assessment pursuant to Section 21.16 of this article in the amount of the underpayment against any person who has underpaid tax for any tax year prior to 1998, to which the apportionment formula set forth in Subdivision 1. is applicable.
4. Notwithstanding the provisions of Section 21.05 of this Code, no penalty shall apply, and interest shall accrue at the rate equal to the annualized rate of return on the general pool earned by the City Treasurer for the calendar year prior to the tax year involved, on any underpayment described in Subdivision 3.
5. No interest described in Subdivision 4. shall accrue during the period commencing on January 1, 1997, and ending on June 30, 1998.
6. Notwithstanding the provisions of Section 21.05 of this Code, the tax under this section for the 1998 tax year shall not be delinquent until July 1, 1998, and prior to that date, no penalty shall apply and no interest shall accrue.
(c) PROFESSIONS AND OCCUPATIONS.
1. Professions and Occupations means a person engaged in any trade, calling, occupation, vocation, profession or other means of livelihood, as an independent contractor and not as an employee of another, and not specifically taxed by other provisions of this article.
2. A person engaged in more than one trade, calling, occupation, vocation, profession or other means of livelihood embraced within this section shall consolidate all gross receipts and shall be issued one registration certificate covering all these activities. Any person engaged in any activities embraced within this section, in addition to activities covered by any other section of this article, shall obtain separate registration certificates for the activities covered by those other sections.
3. As used in this section, the term “gross receipts” does not include:
(i) Receipts from a trade, calling, occupation, vocation, profession or other means of livelihood, which this City is prohibited from taxing under the Constitution or laws of the United States, or under the Constitution or laws of the State of California;
(ii) Receipts of community chests, funds, foundations or corporations organized and operated for religious, hospital or charitable purposes, not conducted for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual;
(iii) Receipts of non-profit educational institutions of collegiate grade, defined here to mean institutions incorporated as colleges or seminaries under the laws of the State of California, which require for regular admission, the completion of a four-year high school course, or its equivalent, and which confer upon their graduates at least one academic or professional degree, based on a course of at least four years in liberal arts and sciences, or on a course of at least three years in professional studies such as law, theology, education, medicine, pharmacy, architecture, fine arts, commerce or journalism; receipts of non-profit secondary schools which are duly accredited by the University of California; and receipts of non-profit elementary schools in which instruction is given to students in the pre- primary and primary grades in the several branches of studies required to be taught in the public schools of the State of California;
(iv) Receipts of Rotary, Kiwanis and Lions Clubs, non-profit automobile clubs, Chambers of Commerce, and other community service organizations; also receipts of trade associations such as Merchants Plumbers Association, Merchants and Manufacturers Association and labor organizations;
(v) Receipts of:
a. Railroad companies including street railways, defined here to include interurban electric railways;
b. Sleeping car, dining car, drawing-room car, and palace car companies, refrigerator, oil, stock, fruit and other car-loaning and other car companies operating upon railroads in this City;
c. Companies doing express business on any railroad, steamboat, vessel in this City;
d. Telegraph and telephone companies;
e. Companies engaged in the transmission or sale of gas or electricity.
(vi) Receipts of persons acting as agents or brokers for other persons to be paid over to those other persons, or to pay for those other persons’ legal obligations, or as reimbursements for sums advanced by the agent for those other persons’ legal obligations, or to be invested on behalf of those other persons. Notwithstanding the foregoing, however, the term “gross receipts” includes but is not limited to:
Receipts of any person received as commissions or fees earned, or charges of any character made or compensation of any character received, for the performance of any service by that person or any of that person’s employees;
Receipts of any person received as partial or full compensation or reimbursement for salaries, payroll taxes, free benefits and any and all similar expenses for persons who are employees of that person under the criteria set forth in Division 4, Part 1, Chapter 2, Article 2 of the Labor Code of the State of California as effective on July 1, 1976.
Receipts of any person received as partial or full compensation or reimbursement for equipment, supplies, utilities, or other items or services acquired by that person in that person’s name and used or consumed in the performance of services subject to tax under this section.
Provided, further, that any agent or broker dealing in stocks or other similar written instruments evidencing the right to participate in the assets of any business, or dealing in bonds or other evidences of indebtedness, who also deals in that property as a principal, shall include the gross receipts by which the tax is measured the amount of the agent’s or broker’s trading profits resulting from these dealings. No deduction from receipts attributable to trading as a principal shall be made unless the deduction is provided for under Subsection (a) of Section 21.00 of this article.
(vii) Receipts from the publication and sale of newspapers, magazines and other periodicals regularly issued at average intervals not exceeding three months. The exclusion contained in this paragraph shall apply only to business tax periods commencing on or after January 1, 1984.
(viii) Receipts derived by a radio or television studio, station or network business from the production or broadcasting of local or network radio or television programs or advertising materials, including but not limited to the furnishing of services, program elements or facilities in connection with the production or broadcasting; provided, however, that nothing in this paragraph shall exempt any person from the tax imposed under Section 21.109 or exclude from the measure of the tax any receipts derived by any person from the operation of a television system where the viewing audience pays a fee to view the broadcast; provided, further, that nothing in this paragraph shall be construed as entitling any studio, station or network business to engage in a business subject to tax under Section 21.42, Wholesale Sales, or Section 21.47, Retail Sales, or Section 21.46, Personal Property Rental, without paying the tax required in those sections. The exclusion contained in this paragraph shall apply only to business tax periods commencing on or after January 1, 1984.
(ix) Receipts of a person acting as a real estate salesperson as that term is defined in Section 10016 of the California Business and Professions Code.
(x) Receipts (whether considered in total or measured by cost of operations in the City or any other proxy) of a mutual fund that is registered under the Investment Company Act of 1940, as amended (15 U.S.C. § 80a-1 to 80b-2), as an open-end management investment company provided that it qualifies as a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (26 U.S.C. § 851) (the “IRC”). However, Receipts of a mutual fund that fails to qualify under Subchapter M or of a mutual fund that receives more than ten percent of its gross income from other than qualifying sources as described in section 851(b)(2) of the IRC shall not be excluded under this paragraph. The exemption for qualified mutual funds contained in this paragraph shall apply in full only to business tax periods commencing on or after January 1, 2014, and shall be phased in as follows: For business tax periods commencing on or after January 1, 2012, and before January 1, 2013, said Receipts shall be taxed at 2/3 of the rate set forth in Section 21.33(f), and for business tax periods commencing on or after January 1, 2013, and before January 1, 2014, said Receipts shall be taxed at 1/3 of the rate set forth in Section 21.33(f). (Added by Ord. No. 181,951, Eff. 1/8/12.)
4. When the gross receipts are derived from or attributable to activities engaged in within and without the City, gross receipts shall be allocated in a manner that is fairly calculated to determine the amount of gross receipts derived from or attributable to engaging in business in the City. This allocation shall be made on the basis of payroll, value and situs of tangible property, general expense, or by reference to any of these or other factors, or by another method of allocation that will fairly determine the amount of gross receipts derived from or attributable to engaging in business in the City. Gross receipts derived from isolated or occasional transactions at places outside the City but within the State of California, where the registrant is not regularly engaged in a course of business transactions shall be deemed to be gross receipts derived from engaging in business in the City. Gross receipts derived from or attributable to sources within this City include: (a) gross receipts from tangible or intangible property located or having situs in this City; and (b), when not contrary to law, gross receipts from any activities carried on in this City regardless of whether carried on in interstate, intrastate or foreign commerce.
5. Allocation formulae designed to carry into effect the purpose of this subsection shall be adopted by the Director of Finance by rules and regulations. The Director of Finance is hereby authorized, in the application to individual cases of the rules and regulations and the formulae they contain, to make any modifications in formulae that may be necessary to carry out the intent of this subsection. If the Director of Finance reallocates gross receipts upon the Director’s examination of any return, the Director of Finance shall, upon the written request of the registrant, disclose to the registrant the basis upon which the reallocation has been made.
(Added by Ord. No. 181,638, Eff. 4/18/11.)
(a) No registration certificate or permit issued under the provisions of Article 1 or Article 1.5 of Chapter 2 of this Code, or the payment of any tax required under the provisions of Article 1 or Article 1.5 of Chapter 2 of this Code shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this section implies or authorizes that any activity connected with the distribution or possession of cannabis is legal unless otherwise authorized and allowed by California and federal law. Nothing in this Section shall be applied or construed as authorizing the sale of marijuana.
(b) Every person engaged in operating or otherwise conducting a medical marijuana collective that attests under penalty of law to compliance with Proposition D and not otherwise specifically taxed by other business tax provisions of this Chapter, shall pay a business tax of $60.00 for each $1,000.00 of gross receipts or fractional part thereof. No new business tax registration certificates shall be issued for any medical marijuana collective business activity. Any medical marijuana collective that does not attest to compliance with Proposition D shall not be taxed under any Section of this Article for any medical marijuana collective business activity for tax year 2016 and forward. It shall be the burden of the medical marijuana collective to determine and accurately represent to the Office of Finance whether it complies with Proposition D. (Amended by Ord. No. 184,135, Eff. 1/22/16.)
(c) For purposes of this section, a “medical marijuana collective” means any activity regulated or permitted by Article 5.1 of this Code or Health and Safety Code sections 11362.5 et seq., that involves planting, cultivating, harvesting, transporting, dispensing, delivering, providing, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing any part of the marijuana plant for medical purposes.
(d) For purposes of this section, “gross receipts” includes all amounts that would be considered gross receipts under section 21.00, including without limitation:
(i) Membership dues;
(ii) The value of in-kind contributions;
(iii) Reimbursements provided by members, regardless of form; and
(iv) Anything else of value obtained by a medical marijuana collective.
(e) All taxpayers subject to this section must pay the full tax imposed by this section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Municipal Code, except as required by California or Federal Law. No provision in the Municipal Code can lower the tax rate set forth in this section or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.
(f) The City Council may impose the tax authorized by this section at a lower rate and may establish exemptions, incentives, or other reductions as otherwise allowed by the Charter and California law. No action by the Council under this paragraph shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction and restoring the maximum tax specified in this section.
(g) Every medical marijuana collective taxed by this section shall remit with its annual renewal of business taxes an affidavit in a form approved by the Director of Finance attesting to its compliance with Proposition D and such affidavit shall be subject to public disclosure. Any person who makes a false statement or representation in the affidavit is guilty of a misdemeanor. An updated business tax registration certificate in a form approved by the Director of Finance, further clarifying that such certificate is not a permit to operate a business, shall be issued to all medical marijuana collectives subject to tax as set forth in Section 21.50
(b). All medical marijuana collective business tax registration certificates in their current form shall be invalid effective March 31, 2016. A medical marijuana collective that remitted its annual payment of business taxes in 2016, before the effective date of this ordinance shall, before March 31, 2016, complete the affidavit attesting to its compliance with Proposition D. (Added by Ord. No. 184,135, Eff. 1/22/16.)
(h) It shall be a misdemeanor for any person operating a medical marijuana collective as defined by Section 21.50(c) to maintain or display a business tax registration certificate for any classification other than that set forth in Section 21.50(b) for medical marijuana collective business activity or to maintain or display an expired, suspended or otherwise invalid business tax registration certificate. (Added by Ord. No. 184,135, Eff. 1/22/16.)
(Added by Ord. No. 184,841, Eff. 4/4/17.)
Editor's note: Section enacted pursuant to Proposition M, adopted by the voters at the election on March 7, 2017.
Nothing in this Section shall be construed as requiring the City to allow, permit, license, authorize, or otherwise regulate cannabis, cannabis products or any business related to cannabis and/or cannabis products.
(a) For the purpose of this Section, the following words and phrases shall be defined as follows:
1. “Cannabis” shall means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, resin, separated resin, the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination, or industrial hemp, as defined by Section 11018.5 of the Health and Safety Code.
2. “Cannabis products” shall mean any product that includes cannabis that has undergone a process whereby the plant material has been transformed into a concentrate or such other form in order to enhance or deliver the cannabinoid active ingredient.
3. “Cultivating” shall mean to plant, grow, harvest, dry, cure, grade, or trim cannabis.
4. “Gross receipts” shall have the same meaning as set forth in Section 21.00(a) of this Article and shall include without limitation, membership dues, value of in kind contributions, reimbursements, the amount of any tax imposed by the state, county or rapid transit district whether imposed upon the retailer or the consumer, and any other property received by the business in its ordinary course.
5. “License” shall consist of (i) a state license issued under Division 10 of the California Business and Professions Code, Chapter 3.5 of Division 8 of the California Business and Professions Code, or such other applicable cannabis related provisions under state law, and (ii) any such other applicable City authorization, permit, or license (not including a business tax registration certificate which shall not be construed as a permit in any way).
6. “Manufacturing” shall mean to compound, blend, extract, infuse, or otherwise make, process, or prepare cannabis or cannabis products.
7. “Testing” shall mean to perform a test of cannabis and/or cannabis products in a testing laboratory that is accredited by an accrediting body that is independent from all other persons involved in commercial or medical cannabis, and registered with the State Department of Public Health.
8. “Testing laboratory” shall mean a facility, entity, or site in the City of Los Angeles that offers or performs testing.
9. “Transporting” shall mean to transfer cannabis and/or cannabis products from the location of one person with a license to the location of another person with a license.
(b) For purposes of this Section, the business tax to be imposed shall be as follows:
1. Every person with a license that is engaged in business of conducting the sale of cannabis and/or cannabis products shall pay a business tax of $100.00 for each $1,000.00 of gross receipts or fractional part thereof. The sale of medical cannabis shall be taxed as provided under Section 21.52 of this Article.
2. Every person with a license that is engaged in business of transporting cannabis and/or cannabis products shall pay a business tax of $10.00 for each $1,000.00 of gross receipts or fractional part thereof.
3. Every person with a license that is engaged in business of testing cannabis and/or cannabis products shall pay a business tax of $10.00 for each $1,000.00 of gross receipts or fractional part thereof.
4. Every person with a license that is engaged in business of researching cannabis and/or cannabis products shall pay a business tax of $10.00 for each $1,000.00 of gross receipts or fractional part thereof.
5. Every person with a license that is engaged in business of manufacturing or cultivating cannabis and/or cannabis products shall pay a business tax of $20.00 for each $1,000.00 of gross receipts or fractional part thereof.
6. Every person with a license that is engaged in business relating to the commercialization of cannabis and/or cannabis products not specifically taxed under this Section shall pay a business tax of $20.00 for each $1,000.00 of gross receipts or fractional part thereof.
(c) The Office of Finance shall file quarterly reports summarizing the amount of business taxes collected from the persons described in subsection (b) of this Section with the City Council, Mayor, Controller, and City Administrative Officer beginning April 1, 2018.
(e) The Office of Finance shall prescribe and implement a reasonable process, including set times and secure conditions, whereby every person subject to business tax under this Section is allowed to pay, in cash, the amount of business tax reported on their written statement, as prescribed under Section 21.14 of this Article.
(f) The Director of Finance may prescribe such additional requirements or conditions, as provided under Section 21.15(h) of this Article, when granting a business tax registration certificate under Section 21.08 of this Article with respect to a person subject to this Section, which may include an affidavit of compliance and/or proof of license. Any person who makes a false statement or misrepresentation in any required affidavit under this Section is guilty of a misdemeanor.
(g) It shall be a misdemeanor for any person operating a non-medical cannabis business to maintain or display a business tax registration certificate for any classification other than that set forth herein for non-medical cannabis business activity or to maintain or display an expired, suspended or otherwise invalid business tax registration certificate.
(h) No business tax registration certificate issued for purposes of this Section or the payment of any tax required under this Section shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this Section implies or authorizes that any activity in connection with cannabis and/or cannabis products is legal unless otherwise authorized by federal and any other applicable law.
(i) Every person subject to this Section must pay the full tax imposed by this Section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Municipal Code, except as required by state or federal law. No provision in the Municipal Code shall lower the tax rate set forth in this Section or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.
(j) The City Council may impose the tax authorized by this Section at a lower rate and may establish exemptions, incentives or other reductions as otherwise allowed by the Charter and state law. No action by the Council under this paragraph shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction and restoring up to the maximum tax specified in this Section.
(k) The provisions of this Section shall be effective January 1, 2018.
(Added by Ord. No. 184,841, Eff. 4/4/17.)
[Editor's note: Section enacted pursuant to Proposition M, adopted by the voters at the election on March 7, 2017.]
Nothing in this Section shall be construed as requiring the City to allow, permit, license, authorize, or otherwise regulate medical cannabis or any business related to medical cannabis.
(a) For the purpose of this Section, the following words and phrases shall be defined as follows:
2. “Cannabis products” shall have the same meaning as set forth in Section 21.51(a)(2) of this Article.
3. “Gross receipts” shall have the same meaning as set forth in Section 21.51(a)(4) of this Article.
5. “Medical cannabis” shall mean a product containing cannabis or cannabis products sold for use by medical cannabis patients in California pursuant to the Compassionate Use Act of 1996, found at Section 11362.5 of the California Health and Safety Code.
(b) For purposes of this Section, the business tax to be imposed shall be as follows:
1. Every person with a license engaged in business of conducting the sale of medical cannabis shall pay a business tax of $50.00 for each $1,000.00 of gross receipts or fractional part thereof.
(c) The Office of Finance shall file quarterly reports summarizing the amount of business taxes collected from the persons described in subsection (b) of this Section with the City Council, Mayor, Controller, and City Administrative Officer beginning April 1, 2018.
(e) The Office of Finance shall prescribe and implement a reasonable process, including set times and secure conditions, whereby every person subject to business tax under this Section is allowed to pay, in cash, the amount of business tax reported on their written statement, as prescribed under Section 21.04 of this Article.
(f) The Director of Finance may prescribe such additional requirements or conditions, as provided under Section 21.15(h), as may be necessary when granting a business tax registration certificate under Section 21.08 of this Article with respect to a business subject to this Section, which may include an affidavit of compliance and proof of License. Any person who makes a false statement or misrepresentation in any required affidavit under this Section is guilty of a misdemeanor.
(g) It shall be a misdemeanor for any person operating a medical cannabis business to maintain or display a business tax registration certificate for any classification other than that set forth herein for medical cannabis business activity or to maintain or display an expired, suspended or otherwise invalid business tax registration certificate.
(h) No business tax registration certificate issued for purposes of this Section or the payment of any tax required under this Section shall be construed as authorizing the conduct or continuance of any illegal business or of a legal business in an illegal manner. Nothing in this Section implies or authorizes that any activity in connection with cannabis and/or cannabis products is legal unless otherwise authorized by federal and any other applicable law.
(i) Every person subject to this Section must pay the full tax imposed by this Section regardless of any rebate, exemption, incentive, or other reduction set forth elsewhere in the Municipal Code, except as required by state or federal law. No provision in the Municipal Code shall lower the tax rate set forth in this Section or otherwise reduce the amount of taxes paid hereunder unless the provision specifically states that the reduction applies.
(j) The City Council may impose the tax authorized by this Section at a lower rate and may establish exemptions, incentives or other reductions as otherwise allowed by the Charter and state law. No action by the Council under this paragraph shall prevent it from later increasing the tax or removing any exemption, incentive, or reduction and restoring up to the maximum tax specified in this Section.
(k) The provisions of this Section shall be effective January 1, 2018, at which time the language of this Section shall govern in the event of any conflict between this Section and Section 21.50 regarding taxation of medical marijuana collectives.
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