2.37.140 Delinquent taxes (penalties and interest).

   (a)   When a tax becomes delinquent, a penalty of 10% of the amount of the delinquent tax will be added to the amount of tax due. If the tax remains unpaid sixty (60) days after becoming delinquent, an additional penalty of 25% of the amount of the delinquent tax (excluding accrued interest and the initial penalty) will be added to the amount of tax due.

   (b)   On the first of each month that a tax is delinquent, interest in the amount of 1.5% of the delinquent amount, excluding penalties and interest, will be added to the amount of tax due.

   (c)   A business operator may apply to the tax administrator for a reduction or waiver of any accrued penalties or interest, and the tax administrator may reduce or waive any accrued penalties or interest upon a finding of good cause.

(Ord. 5581 § 1 (part), 2022)

2.37.150 Administrative procedure to assess or correct tax.

   (a)   If the tax administrator determines that a business operator has incorrectly reported any information to the city or has not paid all or any of the tax, penalties, or interest that are due, the tax administrator may, using any information available to the tax administrator, issue an initial determination stating what the tax administrator believes to be the correct information and, if new or additional tax, penalties, or interest are due, how much tax, penalties, or interest are due. An initial determination must be issued within five (5) years of the last day of the quarter to which the initial determination applies, except in the case of an audit conducted under Section 2.37.200, in which case it must be issued within ninety (90) days of the completion of the audit and can apply to any of the quarters that were subject to the audit. The initial determination shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the tax administrator’s records. Service is effective upon deposit of the initial determination in the U.S. mail.

   (b)   A business operator affected by an initial determination may within thirty (30) days of service of an initial determination contest the initial determination and request a hearing before the tax administrator by filing with the tax administrator a written request for a hearing. The further accrual of penalties and interest shall be tolled upon the filing of a request for a hearing. If a business operator does not contest an initial determination and request a hearing with the tax administrator within thirty (30) days of service of the initial determination, the initial determination shall become final and cannot be appealed.

   (c)   If a business operator timely contests an initial determination and requests a hearing, the tax administrator shall set a hearing within sixty (60) days of the filing of the request for a hearing. Notice of the hearing shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the tax administrator’s records.

   (d)   At the hearing the business operator may present evidence and argument regarding the initial determination to show why the initial determination is incorrect and to show what the determination of the tax administrator should be. Within sixty (60) day after the close of the hearing, the tax administrator shall serve a final determination, setting forth the tax administrator’s determination of the facts and issues that were the subject of the initial determination. The final determination shall be served on the business operator either personally or by U.S. mail to the most recent address for the business operator in the tax administrator’s records. Service is effective upon deposit of the final determination in the U.S. mail. Unless an appeal of a final determination is filed under Section 2.37.170, any penalties or interest tolled under subdivision (b) of this section will resume accruing ten (10) days after the service of the final determination.

(Ord. 5581 § 1 (part), 2022: Ord. 5607 § 5, 2024)

2.37.160 General administrative remedy.

   (a)   Any person affected by a decision of the tax administrator (“the challenger”), except for decisions under Section 2.37.150, may challenge that decision by filing a written objection to the decision with the tax administrator. The objection must be filed within thirty (30) days of the issuance of the decision being challenged. If the tax administrator was required to provide notice of the decision, then the time to file an objection to the decision begins to run from the date of service of the notice of the decision. The tax administrator shall serve a written response to the objection within thirty (30) days of the filing of the objection, which period can be extended by the tax administrator for an additional thirty (30) days. The tax administrator’s response to the objection shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the tax administrator’s records.

   (b)   The challenger may request a hearing on the tax administrator’s response to the objection by filing a request for a hearing with the tax administrator within thirty (30) days of service of the response to the objection. If a timely request for a hearing on a response to the objection is filed with the tax administrator, the tax administrator shall set a hearing within sixty (60) days of the filing of the request for a hearing. Notice of the hearing shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the tax administrator’s records.

   (c)   At the hearing the challenger may present evidence and argument regarding the decision being challenged to show why the decision is incorrect and to show what it should be. Within sixty (60) days after the close of the hearing, which the tax administrator may extend for an additional sixty (60) days, the tax administrator shall serve a final determination on the decision, setting forth the tax administrator’s determination of the decision that was challenged. The final determination shall be served on the challenger either personally or by U.S. mail to the most recent address for the challenger in the tax administrator’s records. Service is effective upon deposit of the final determination in the U.S. mail.

(Ord. 5581 § 1 (part), 2022)

2.37.170 Appeals.

   (a)   A final determination of the tax administrator under Section 2.37.150, subdivision (d), or Section 2.37.160, subdivision (c), can be appealed to the city manager by filing a written notice of appeal with the city manager within thirty (30) days of service of the notice of the final determination being appealed.

   (b)   Only a business operator who files a timely request for a hearing on an initial determination under Section 2.37.150 and participates in the hearing or a challenger who files an objection to a decision and files a request for a hearing on the response to the objection under Section 2.37.160 and participates in the hearing can file an appeal under this section.

   (c)   If a timely appeal is filed with the city manager, the city manager, or the city manager’s designee, shall set a hearing within sixty (60) days of the filing of the appeal, which may be extended by the city manager for an additional thirty (30) days. Notice of the hearing shall be served on the appellant either personally or by U.S. mail to the most recent address for the challenger in the tax administrator’s records. The tolling of the accrual of penalties or interest under Section 2.37.150, subdivision (b), shall continue upon the timely filing of an appeal under this section.

   (d)   At the hearing the appellant and the tax administrator may present evidence and argument regarding the decision being appealed to show why the decision is correct or incorrect and to show what it should be. Within sixty (60) days after the close of The hearing, which the city manager or the city manager’s designee may extend for an additional sixty (60) days, the city manager or the city manager’s designee shall serve a written decision, setting forth the resolution of the appeal. The decision shall be served on the appellant either personally or by U.S. mail to the most recent address for the appellant in the city manager’s records. Service is effective upon deposit of the decision in the U.S. mail. Any penalties and interest that were tolled under Section 2.37.150, subdivision (b), shall resume accruing ten (10) days after the service of the decision.

   (e)   A decision of the city manager, or the city manager’s designee, served under subdivision (d) of this section is subject to judicial review under Sections 1094.5 and 1094.6 of the Code of Civil Procedure with a writ petition filed in the appropriate court within ninety (90) days of the service of the written decision. Any tax, penalties, or interest determined by the decision to be owed to the city by the appellant must be paid to the city as a precondition to filing a writ petition challenging the decision, but a claim for a refund under Section 2.37.190 does not have to be filed before filing a writ petition.

(Ord. 5581 § 1 (part), 2022)

2.37.180 Constitutional apportionment.

   (a)   No tax imposed by this chapter shall be applied to a business operator so as to constitute an undue burden on interstate commerce or intercity commerce or be violative of the equal protection or due process clauses of the United States or California constitutions.

   (b)   A business operator who contends that the application of a tax imposed by this chapter on the business operator constitutes an undue burden on interstate commerce or intercity commerce or violates the equal protection or due process clauses of the United States or California constitutions may apply to the tax administrator for an apportionment of the tax imposed on the business operator that would remove the constitutional violation by filing a written request with the tax administrator that explains the factual and legal basis for the claimed constitutional violation and proposes a method of apportionment that would resolve the alleged constitutional violations. The application for apportionment shall be filed in advance or within one year of the date the quarterly return was due.

   (c)   The tax administrator, in consultation with city attorney, shall review the application and within sixty (60) days of the filing of the application, which deadline may be extended for an additional sixty (60) days, issue a decision on the application. The decision on the application shall be served on the business operator either personally or by U.S. mail to the most recent address for the challenger in the tax administrator’s records. The decision can be challenged under Section 2.37.160.

(Ord. 5581 § 1 (part), 2022: Ord. 5607 § 6, 2024)

2.37.190 Refunds.

   (a)   A business operator who believes that any tax, penalty, or interest has been illegally, erroneously, or mistakenly paid to, collected by, or otherwise received by the city may file a claim for a refund of the amount of tax, penalty, or interest claimed to have been improperly received by the city.

   (b)   The claim must be filed with the tax administrator and signed under penalty of perjury by the business operator. The claim must state:

      (1)   The legal and factual basis for the refund claim;

      (2)   The amount of tax, penalty, or interest allegedly improperly received by the city;

      (3)   The date or dates that the improper payments were made to the city; and

      (4)   The address of the claimant.

   (c)   The claim must be filed with the tax administrator within two (2) years of the date of the allegedly improper payment to the city.

   (d)   The tax administrator shall provide a written decision on the claim within thirty (30) days of the filing of the claim by serving the decision on the claimant either personally or by U.S. mail to the address provided in the claim. Service is effective upon deposit of the response in the U.S. mail.

   (e)   A claimant may challenge the tax administrator’s decision on a refund claim under Section 2.37.160.

   (f)   This section does not apply to:

      (1)   A claim for a refund arising out of a decision of the tax administrator, city manager, or city manager’s designee under Sections 2.37.150, 2.37.160, 2.37.170, or 2.37.190; or

      (2)   A claim that could have been asserted by the claimant, but was not, under Sections 2.37.150, 2.37.160, 2.37.170, or 2.37.180.

(Ord. 5581 § 1 (part), 2022; Ord. 5607 § 7, 2024)

2.37.200 Audits.

   (a)   The tax administrator may conduct an audit of any business operator to ensure proper compliance with the requirements of this chapter.

   (b)   To initiate an audit the tax administrator shall provide written notice to the business operator that is the subject of the audit of the initiation of the audit by serving the notice personally or by U.S. mail to the most recent address for the business operator in the tax administrator’s records. The notice shall state the period of time subject to the audit.

   (c)   Notice of the initiation of an audit for a quarter for which either a business tax filing for a new business or quarterly tax return was submitted under Section 2.37.100 or Section 2.37.110 must be served within three (3) years of the last day of the quarter to which the filing or return applied.

   (d)   Notice of the initiation of an audit for a quarter for which neither a business tax filing for a new business nor a quarterly tax return was submitted under Section 2.37.100 or Section 2.37.110, but for which the business was registered as a business under Section 4.60.030, must be served within five (5) years of the last day of the quarter for which the filing or return should have been filed.

   (e)   Notice of the initiation of an audit for a quarter for which neither a business tax filing for a new business nor a quarterly tax return was submitted under Section 2.37.100 or Section 2.37.110, and for which the business was not registered as a business under Section 4.60.030, must be served within seven (7) years of the last day of the quarter for which the filing or return should have been filed.

   (f)   Upon completion of an audit, the tax administrator may make an initial determination under subdivision (a) of Section 2.37.150 of any taxes, penalties, and interest determined to be owed and not paid for the audit period. The initial determination must be issued within ninety (90) days of the completion of the audit. If a business operator subject to audit is unable or unwilling to provide sufficient records to enable the tax administrator to verify compliance with this chapter, the tax administrator is authorized to make a reasonable estimate of the amount of tax due and the reasonable estimate shall be entitled to a rebuttable presumption of correctness.

(Ord. 5581 § 1 (part), 2022)