Sections:
2.37.010 Title.
2.37.020 Definitions.
2.37.030 Obligation to pay business tax.
2.37.040 Imposition of business tax.
2.37.045 Order of calculations.
2.37.050 Annual adjustment of tax rate and cap.
2.37.060 Disposition of tax revenue.
2.37.070 Exemptions from tax.
2.37.080 Business tax offsets.
2.37.090 Quarterly tax payments.
2.37.100 Business tax filing for a new business.
2.37.110 Quarterly tax returns.
2.37.120 Agreements for installment payments.
2.37.130 Businesses operating in the same location.
2.37.140 Delinquent taxes (penalties and interest).
2.37.150 Administrative procedure to assess or correct tax.
2.37.160 General administrative remedy.
2.37.170 Appeals.
2.37.180 Constitutional apportionment.
2.37.190 Refunds.
2.37.200 Audits.
2.37.210 Maintenance and review of records.
2.37.220 Confidentiality of records.
2.37.230 Action to collect delinquent taxes.
2.37.240 Errors not binding on the city.
2.37.250 Dates.
2.37.260 Rules and regulations.
2.37.270 City council amendments.
2.37.280 Severability.
2.37.290 Savings clause.
2.37.300 Sunset.
The definitions in this section apply to the words and phrases used in this chapter unless the context clearly indicates otherwise.
(a) “Business” means any commercial enterprise, trade, calling, art, vocation, profession, occupation, or means of livelihood, whether or not carried on for gain or profit.
(b) “Business operator” means a person who transacts, maintains, manages, operates, controls, engages in, conducts, carries on, or owns a business in the city. It does not include the employee of a business who is not an owner or proprietor of the business.
(c) “Calendar year” means the year beginning January 1 and ending December 31.
(d) “City” means the City of Palo Alto.
(e) “CPI Index” means the Consumer Price Index—All Urban Consumers for All Items for the San Francisco-Oakland-Hayward Area or any successor to that index designated by the Federal Bureau of Labor Statistics or the city council.
(f) Fiscal year” means the year beginning July 1 and ending June 30.
(g) “Fixed place of business” means a place of business located in the city boundaries and occupied for the particular purpose of operating a business.
(h) “Grocery store” means a business that exists for the primary purpose of selling a range of food items to consumers for consumption off site, such as canned foods; dry goods; fresh produce; fresh meats, fish, and poultry; and any area that is not separately owned within the store where food is prepared and served, including a bakery, deli, and meat and seafood departments, or as otherwise defined in 14 CCR section 18982(a)(3), provided that any store that combines grocery items with other retail products or services is a grocery store for the purpose of this chapter only if two-thirds or more of the occupied space is designated to the sale of grocery items as listed in this section.
(j) “Operate” means to conduct a business and includes all stages of conducting a business from initial planning to the wind-down of a business, whether or not a profit is being made.
(k) “Person” means any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, receiver, syndicate or other group or combination acting as a unit and includes the plural as well as the singular number.
(l) “Quarter” means the three-month quarter of the fiscal year. The “first quarter” is the months of July, August, and September; the “second quarter” is the months of October, November, and December; the “third quarter” is the months of January, February, and March; and the “fourth quarter” is the months of April, May, and June. The term “same quarter of the previous fiscal year” means the quarter of the same number in the previous fiscal year.
(m) “Square footage” means the rentable square footage used by a business as specified in a business’s lease or, if the business floor space is owned by the business, as calculated in the same manner as if the area was rented using commonly accepted standards of measurement for leasing purposes such as the Standard Methods of Measurement published by the Building Owners and Managers Association (BOMA). Any method of measurement used must meet the following minimum standards:
(1) It shall be computed by measuring to the inside finish of permanent outer building walls and shall include space used by columns and projections necessary to the building.
(2) It shall include both the area used by the business and a proportionate share of the building service areas such as lobbies, corridors and other common areas in a building unless assigned to another business for tax calculation purposes.
(3) It shall not include vertical penetrations through the building such as stairs, elevators, or heating, ventilation, air conditioning, utility, or telephone systems, except on the lowest floor of stairs and elevators.
(4) For the business of renting or leasing property, it shall include area used primarily for the business operator’s offices and operational facilities.
(5) It shall not include residential uses, including multiple-family use as defined in Section 18.04.030(102), two-family use as defined in Section 18.04.030(141), single-family residential use as defined in Section 18.04.030(86)(A)), mobile home park as defined in Section 18.04.030(97), residential care homes as defined in Section 18.04.030(124), supportive housing as defined in Section 18.04.030(135.5), transitional housing as defined in Section 18.04.030(138), emergency shelter as defined in Section 18.04.030(50), and any equivalent residential use defined by the city.
(7) Square footage for businesses with multiple locations will be measured and tax assessed will be calculated based on the aggregate square footage for the business for all locations in the city.
(n) “Tax administrator” means the director of administrative services, or successor position, or their designee.
(p) “Transitory business” means a business that operates in the city for less than 90 days in the course of one calendar year (such as seasonal sale lots, special events, concerts/performances/circuses, filming, and party rentals).
(q) “Vacant” means a severable portion of the physical location that a business is occupying, such as an entire floor, a building, or a portion of a floor with independent entrance and exit, that is free from any use, fixtures, furniture, and equipment, and is immediately available for use by a new tenant or owner.
(Ord. 5581 § 1 (part), 2022)
(a) It is unlawful for any business operator, either for themselves or for any other person, to operate in the city any business taxed under this chapter without paying all business tax required by this chapter.
(b) If a business has more than one business operator, then the payment of the business tax by one business operator excuses any other business operators from the obligation to pay the business tax for that period for which the tax has been paid.
(c) The requirement to pay business tax is in addition to and separate from the requirement to obtain a business registration certificate under Section 4.60.030.
(d) The payment of business tax does not authorize the doing of any act which the person or business paying the business tax is not otherwise entitled to do and does not excuse the business from complying with other applicable code requirements.
(Ord. 5581 § 1 (part), 2022)
Loading...