SEC. 6.17-3.1. PENALTIES FOR MISSTATEMENTS IN REGISTRATION, FAILURE TO TIMELY UPDATE REGISTRATION, FAILURE TO ALLOW INSPECTION OF RECORDS UPON REQUEST, AND FAILURE TO FILE A RETURN; SANCTION FOR FAILURE TO PRODUCE REQUESTED RECORDS.

(a) Any person who fails to pay, collect, or remit to the City any tax shown on a return or required to be shown on a return shall pay a penalty of 5% of the unpaid tax, if the failure is for not more than one month after the tax was due and unpaid, plus an additional 5% for each following month or fraction of a month during which such failure continues, up to 25% in the aggregate, until the date of payment.

(b) Any person who fails to pay, collect, or remit to the City any tax shown on a return or required to be shown on a return shall also pay interest on the unpaid tax at the rate of 1% per month, or fraction of a month, from the date the taxes were due and unpaid through the date the person pays in full the delinquent taxes, penalties, interest, and fees accrued to the date of payment.

(c) No penalties or interest imposed by this Section 6.17-1.1 shall apply to the failure to make any estimated tax payments of Gross Receipts Taxes, Early Care and Education Commercial Rents Taxes, Homelessness Gross Receipts Taxes, Cannabis Business Taxes, or Overpaid Executive Gross Receipts Taxes under Section 6.9-1(c)(3).

(d) This Section 6.17-1.1 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or after January 1, 2021, except as provided in subsections (d)(2) and (d)(3) of this Section 6.17-1.1;

(2) to all returns and payments for registration years ending on or after July 1, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(3) to all returns and payments for fiscal years ending on or after July 1, 2021 with respect to fees, assessments, and other charges subject to this Article 6 that are imposed on a fiscal year basis.

(e) For purposes of this Section 6.17-1.1, for registration years beginning on or after April 1, 2026, if the deadline for a person or combined group to file its Gross Receipts Tax return was extended under Section 6.9-4(b)(2) of this Article 6, the date the Business Registration Fee (Article 12) originally due on the same date as that Gross Receipts Tax return was due shall be November 30.

(Added by Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020; amended by Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Proposition M, 11/5/2024, Eff. 12/20/2024)

SEC. 6.17-2. PENALTIES FOR UNDERREPORTING OF TAX.

(a) Penalties for Negligence. If the Tax Collector determines that all or part of any tax required to be reported on any return was underreported and that such underreporting was attributable to negligence, the Tax Collector may impose a penalty in the amount of 5% of the amount of the underreported tax, in addition to the tax or amount of tax, if the negligence is for not more than 1 month, with an additional 5% for each month or fraction of a month during which such negligence continues, up to 20% in the aggregate.

(b) Penalties for Intentional Disregard of Rules, Fraud, or Intent to Evade Tax. When it is determined by the Tax Collector that all or part of any tax required to be reported on any return was underreported and such underreporting was attributable to fraud or an intent to evade the Business and Tax Regulations Code, the Tax Collector may impose a penalty in the amount of 50% of the amount of the underreported tax. The taxpayer or other person determined to be liable for penalties pursuant to this Section 6.17-2(b) is entitled to a notice of deficiency determination or jeopardy determination and to the appeal rights as to such determinations.

(1) For purposes of this Section 6.17-2(c), “substantial underreporting of tax” means the tax finally determined by the Tax Collector exceeds the amount of tax reported on a taxpayer’s original or amended return for a taxable period by 25% or more, or if no return is filed, the tax liability determined by the Tax Collector pursuant to Section 6.11-1 exceeds $5,000.

(2) If the Tax Collector determines that a taxpayer has made a substantial underreporting of tax for any taxable period, the Tax Collector may impose an additional penalty in an amount equal to 50% of the tax attributable to the substantially underreported amount. The penalty for substantial underreporting is in addition to any other penalty imposed under this Article 6.

(3) The additional penalty for substantial underreporting applies to all taxable periods ending on or after June 19, 2010.

(d) This Section 6.17-2 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or before December 31, 2020, except as provided in subsections (d)(2) and (d)(3) of this Section 6.17-2;

(2) to all returns and payments for registration years ending on or before June 30, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(3) to all returns and payments for fiscal years ending on or before June 30, 2021 with respect to fees, assessments, and other charges subject to this Article 6 that are imposed on a fiscal year basis.

(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 95-99, File No. 990305, App. 4/30/99; Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 102-10, File No. 100247, App. 5/21/2010; Ord. 291-10, File No. 101099, App. 11/18/2010; Ord. 5-13 , File No. 121064, App. 1/24/2013, Eff. 2/23/2013; Ord. 206-13 , File No. 130784, App. 10/11/2013, Eff. 11/10/2013; Ord. 271-13, File No. 131031, App. 11/27/2013, Eff. 12/27/2013, Oper. 1/1/2014; Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021)

SEC. 6.17-2.1. PENALTY FOR FRAUD OR INTENT TO EVADE TAX.

(a) If the failure to file any return, the failure to pay any tax, and/or the underreporting of any tax is due to fraud or an intent to evade the Business and Tax Regulations Code or the Tax Collector’s rules and regulations, a penalty of 50% of the amount required to be paid or required to be reported on a return that was not so paid or reported shall be assessed in addition to the penalties and interest imposed under Section 6.17-1.1 and any other penalties and interest. A person against whom a penalty under this Section 6.17-2.1 is assessed is entitled to a notice of such assessment to be issued in accordance with the provisions of Sections 6.11-2 et seq. and to the appeal rights set forth in Sections 6.13-1 et seq.

(b) This Section 6.17-2.1 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or after January 1, 2021, except as provided in subsections (b)(2) and (b)(3) of this Section 6.17-2.1;

(2) to all returns and payments for registration years ending on or after July 1, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(Added by Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020)

(a) For registration years commencing on or after July 1, 2017, any person who fails to register in a timely manner shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty assessed pursuant to Section 6.17-1. For registration years commencing prior to July 1, 2017, any person who fails to register in a timely manner shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty in an amount equal to either $100 or the penalty assessed pursuant to Section 6.17-1, whichever is greater.

(b) Any person who fails to amend a registration within seven days of a material change, or who makes a material misrepresentation in a registration, or who fails to comply with a rule or regulation promulgated by the Tax Collector in a timely manner, shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty in an amount equal to either $100 or the penalty assessed pursuant to Section 6.17-1, whichever is greater.

(c) The Tax Collector may impose a penalty upon any person who fails to file a return or returns required under this Article 6 on or before the date prescribed for filing up to $500 for each such failure. The penalty under this provision shall be in addition to any other liability that may be imposed under the provisions of this Article. Filing a return that the Tax Collector determines to be incomplete in any material aspect may be deemed failure to file a return in violation of this Section 6.17-3. Any return required to be filed on a combined basis, and which is not filed on that basis, is an incomplete return. In addition, any return required to report worldwide gross receipts and payroll of a person or combined group under Section 956.2, which does not report gross receipts and payroll on a worldwide basis, is an incomplete return.

(d) Any person who fails to allow a full inspection of records pursuant to a request made by the Tax Collector within the time prescribed by the Tax Collector shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty in the amount of $500 for each such failure.

(e) Unless the failure to allow inspection was due to reasonable cause and not willful neglect, any person who fails to provide records pursuant to a written request made by the Tax Collector may not contest the Tax Collector’s decision regarding the amount of such person’s liability for any taxes, administrative collection costs, interest, penalties, or other costs and charges imposed under the Business and Tax Regulations Code, or oppose the collection of such amount, in any subsequent administrative or judicial proceeding, on the basis of any record the Tax Collector previously requested in writing that such person failed to make available to the Tax Collector on or before the earliest to occur of the following:

(1) The conclusion of the hearing on a petition for redetermination held pursuant to Sections 6.12-5 or 6.13-2;

(2) The date the jeopardy determination became final under Section 6.12-5 if such person did not request hearing thereon;

(3) The date the deficiency determination became final under Section 6.13-4 if such person did not request a hearing thereon.

(f) This Section 6.17-3 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or before December 31, 2020, except as provided in subsections (f)(2) and (f)(3) of this Section 6.17-3;

(2) to all returns and payments for registration years ending on or before June 30, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 94-99, File No. 990304, App. 4/30/99; Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 291-10, File No. 101099, App. 11/18/2010; Ord. 206-13 , File No. 130784, App. 10/11/2013, Eff. 11/10/2013; Ord. 271-13, File No. 131031, App. 11/27/2013, Eff. 12/27/2013, Oper. 1/1/2014; Ord. 36-17, File No. 161225, App. 2/17/2017, Eff. 3/19/2017; Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020)

(a) Any person who fails to amend a registration within seven days of a material change, or who makes a material misrepresentation in a registration, or who fails to comply with a rule or regulation promulgated by the Tax Collector in a timely manner, shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty in an amount equal to either $100 or the penalty assessed pursuant to Section 6.17-1.1, whichever is greater.

(b) The Tax Collector may impose a penalty upon any person who fails to file a return or returns required under this Article 6 on or before the date prescribed for filing, up to $500 for each such failure. The penalty under this provision shall be in addition to any other liability that may be imposed under the provisions of this Article. Filing a return that the Tax Collector determines to be incomplete in any material aspect may be deemed failure to file a return in violation of this Section 6.17-3.1. Any return required to be filed on a combined basis, and which is not filed on that basis, is an incomplete return. In addition, any return required to report worldwide gross receipts and payroll of a person or combined group under Section 956.2, which does not report gross receipts and payroll on a worldwide basis, is an incomplete return. For the 2022 and 2023 tax years, the penalty in this Section 6.17-3.1(b) shall not apply to the failure to file the Vacancy Tax returns required by Sections 6.9-1(j)(1) and (2) on or before the dates prescribed by those Sections.

(c) Any person who fails to allow a full inspection of records pursuant to a request made by the Tax Collector within the time prescribed by the Tax Collector shall pay, in addition to any other liability that may be imposed under the provisions of this Article 6, a penalty in the amount of $500 for each such failure.

(d) Any person who fails to provide records pursuant to a written request made by the Tax Collector may not contest the Tax Collector’s decision regarding the amount of such person’s liability for any taxes, administrative collection costs, interest, penalties, or other costs and charges imposed under the Business and Tax Regulations Code, or oppose the collection of such amount, in any subsequent administrative or judicial proceeding, on the basis of any record the Tax Collector previously requested in writing that such person failed to make available to the Tax Collector on or before the earliest to occur of the following:

(1) The conclusion of the hearing on a petition for redetermination held pursuant to Sections 6.12-5 or 6.13-2;

(2) The date the jeopardy determination became final under Section 6.12-5 if such person did not request a hearing thereon;

(3) The date the deficiency determination became final under Section 6.13-4 if such person did not request a hearing thereon.

(e) This Section 6.17-3.1 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or after January 1, 2021, except as provided in subsections (e)(2) and (e)(3) of this Section 6.17-3.1;

(2) to all returns and payments for registration years ending on or after July 1, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(Added by Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020; amended by Ord. 188-22, File No. 220756, App. 8/4/2022, Eff. 9/4/2022)

SEC. 6.17-4. WAIVER OF PENALTIES.

Any penalty or interest assessed under Sections 6.17-1, 6.17-2, or 6.17-3 may be waived by the Tax Collector, in whole or in part, upon a finding of any of the following:

(a) Failure to make timely payment or report of tax liability or otherwise comply with the provisions of the Business and Tax Regulations Code occurred notwithstanding the exercise of ordinary care by the taxpayer and in the absence of wilful neglect;

(b) The taxpayer made an inadvertent error in the amount of payment made, provided any deficiency is cured by payment in full to the Tax Collector within 10 days after notice of the deficiency is mailed to the taxpayer by the Tax Collector; or

(d) This Section 6.17-4 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or before December 31, 2020, except as provided in subsections (d)(2) and (d)(3) of this Section 6.17-4;

(2) to all returns and payments for registration years ending on or before June 30, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 291-10, File No. 101099, App. 11/18/2010; Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020)

SEC. 6.17-4.1. WAIVER OF PENALTIES.

(a) Any penalty assessed under Sections 6.17-1.1, 6.17-2.1, or 6.17-3.1 may be waived by the Tax Collector, in whole or in part, upon a finding of any of the following:

(1) The failure to timely pay, remit, collect, or report the tax liability, the failure to file a return, or the failure to otherwise comply with the provisions of the Business and Tax Regulations Code is due to reasonable cause and circumstances beyond the taxpayer’s control, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect;

(2) There was an inadvertent error in the amount of payment made by the taxpayer, provided any deficiency is cured by payment in full to the Tax Collector within 10 days after notice of the deficiency is mailed by the Tax Collector; or

(3) Waiver of the penalty was ordered by a court of competent jurisdiction.

(b) This Section 6.17-4.1 shall apply as follows:

(1) to all returns and payments for tax periods ending and taxable events occurring on or after January 1, 2021, except as provided in subsections (b)(2) and (b)(3) of this Section 6.17-4.1;

(2) to all returns and payments for registration years ending on or after July 1, 2021 with respect to the registration fee imposed under Section 855 of Article 12; and

(Added by Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020)

SEC. 6.17-5. COSTS.

In addition to the penalties imposed by Sections 6.17-1, 6.17-1.1, 6.17-2, 6.17-2.1, 6.17-3, and 6.17-3.1, as applicable, the Tax Collector may recover the actual costs of collection incurred by the City up to the time any amount owed is finally paid, including reasonable attorney’s fees and costs.

(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 207-20, File No. 200759, App. 10/9/2020, Eff. 11/9/2020)

SEC. 6.18-1. SUMMARY JUDGMENT; NOTICE; CERTIFICATE.

If any tax imposed pursuant to the Business and Tax Regulations Code is not paid by the last day of the month after the delinquency date, or after any jeopardy determination or deficiency determination of the Tax Collector becomes final pursuant to Sections 6.12-1 et seq. or 6.13-1 et seq., the Tax Collector may file, no sooner than 20 days after the mailing of the notice required in subsection (b), in the office of the Clerk of the Court, without fee, a certificate specifying as follows:

(a) That a notice of intent to file the certificate has been sent, by certified mail, to the operator, taxpayer, or other person determined to be liable for the tax at the person’s last known address, not less than 20 days prior to the date of the certificate;

(b) That the notice required in subsection (a) set forth the following information:

(1) The name of the operator, taxpayer, or other person determined to be liable for the tax,

(2) The description of the operator’s, taxpayer’s, or other person’s business or activity against which the tax has been assessed,

(3) The location and/or address of the business or activity,

(4) That judgment will be sought in the amount of the tax, penalty, and interest remaining unpaid at the time of the filing of the certificate, and costs as permitted by law,

(5) That, upon issuance and recordation of the judgment, additional interest will continue to accrue at the rate prescribed by the Enforcement of Judgments Law (Title 9 of Part 2 of the California Code of Civil Procedure), and that any bond premium posted or other costs to enforce the judgment shall be an added charge, and

(6) That a recording fee in the amount set forth in Section 27361.3 of the California Government Code will be required to be paid for the purpose of the recordation of any release of the judgment lien;

(d) The amount for which judgment is to be entered;

(e) That the City has complied with all provisions of the Business and Tax Regulations Code in the computation and the levy of the tax, penalty, or interest; and

(f) That a request is therein made for issuance and entry of judgment against the operator, taxpayer, or other person determined to be liable for the tax.

(Added by Ord. 18-98, App. 1/16/98; amended by Ord. 177-01, File No. 010826, App. 8/17/2001; Ord. 26-04, File No. 031990, App. 2/19/2004; Ord. 291-10, File No. 101099, App. 11/18/2010; Ord. 5-13 , File No. 121064, App. 1/24/2013, Eff. 2/23/2013; Ord. 152-21, File No. 210828, App. 9/29/2021, Eff. 10/30/2021; Ord. 224-23, File No. 230898, App. 11/3/2023, Eff. 12/4/2023)

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