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HomeMy WebLinkAbout21 - NBMC 5.04 - Business LicensesTO: FROM: PREPARED BY: PHONE: TITLE: ABSTRACT: CITY OF NEWPORT BEACH City Council Staff Report March 24, 2015 Agenda Item No. 21 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Dan Matusiewicz, Finance Director— (949) 644 -3123, dmatusiewicz @newportbeachca.gov Evelyn Tseng, Revenue Manager (949) 644 -3153 Update to Newport Beach Municipal Code Chapter 5.04 — Business Licenses and Regulations, General Provisions Several months ago, real estate agents (versus brokers and brokerages) asked the Council to consider exempting them from the business license tax, arguing that the agents are in effect employees of a brokerage (which also pays the tax). This item amends Newport Beach Municipal Code ( "NBMC ") Chapter 5.04 to, among other things, exempt real estate agents from business license requirements, and reduce the business license tax for out -of -town contractors. RECOMMENDATION: a) Introduce Ordinance No. 2015 -6, An Ordinance of the City Council of the City of Newport Beach, California, Amending Newport Beach Municipal Code Chapter 5.04 — to Update Business License Provisions, and pass to second reading on April 14, 2015; and b) Adopt Resolution No. 2015 -22, A Resolution of the City Council of the City of Newport Beach to Reduce the Business License Tax Charged to Out -of -Town Licensed Contractors to be Equal to that of In- Town Licensed Contractors. FUNDING REQUIREMENTS: The change regarding exempting real estate agents affiliated with brokerages from separate business license taxes was estimated to reduce revenue by about $105,000 per year. This reduction has been included in the FY 14 -15 budget (as well as future budgets) given that the City administratively stopped collecting this tax from agents 10 months ago. DISCUSSION: The Newport Beach business license tax is an annual non - regulatory licensing fee levied upon businesses located or operating in Newport Beach. The business license tax revenues go into the General Fund and pay for Police, Fire and Safety expenses as well as other general operating costs of the City. The City collects about $4.1 million in business license taxes each year. NBMC Chapter 5.04 was enacted in 1906 21 -1 and has not been substantively reviewed and updated since 1993 In part at the request of real estate agents and the City Council, staff recommends updating NBMC Chapter 5.04 to: (1) exempt real estate agents; (2) provide for a structure supportive of a favorable business environment; (3) ensure that our practices conform with State law; and (4) make a number of non - substantive technical and definitional changes. Real Estate Agents Real estate agents are a unique class. Although they are considered independent contractors by the Internal Revenue Service and the Franchise Tax Board for taxation purposes, they share many similarities to employees. For example, real estate agents cannot earn compensation independent from a licensed broker; the money paid for services is paid directly to the broker; and agents are covered by Workers Compensation. Real estate agents are exempt from business license requirements in the cities of Huntington Beach, Long Beach, and Anaheim. Area real estate agents asked to be exempted from our business license tax several months ago, and we made that change administratively. This action would amend the change into the code. Current revenues indicate the amount of revenue affected is about $105,468.00, reflecting the reduction of payments from about 518 real estate agents affiliated with brokerages. Another proposed change relates to creating a more favorable business environment by allowing for, among other things, payment plans in cases of hardship, reducing the delinquent penalties and increasing the Artists Exemption threshold. These recommendations came about because staff recognized that some businesses experienced challenging circumstances after the recent economic downturn, and that other provisions were dated enough to update also in that same spirit. The proposed changes would: 1. Allow the Finance Director to establish payment plans in cases of hardship. There are currently no formal allowances for business license tax payment plans (NBMC Section 5.04.025). 2. Update the Minor's Exemption to mirror Internal Revenue Service regulations to increase the age from 16 years of age to 18 years of age and remove the eight hundred dollar ($800) cap that a minor can earn per year and now allow the earned income threshold that is allowed by the Internal Revenue Service (NBMC Section 5.04.090). Currently this threshold is $6,200.00 /year. 3. Update the Artists Exemption to increase the maximum exemption amount. Therefore, the amount excluded from taxation would go from $800 to $3,800. This accounts for changes in the consumer price index since 1977 (NBMC Section 5.04.100). 4. Update the Residential Unit Exemption such that multiple short term lodging owners need only obtain one (1) business license. It is common practice that the management of these properties occurs at only one location and /or through an agent (NBMC Section 5.04.105). 5. Codify the requirement that businesses who report payment of sales and use tax to the State obtain a California State Board of Equalization Permit and furnish the permit number on the business license tax application. (NBMC Section 5.04.125). 6. Reduce the penalty for business license delinquency from 100% to 50% (NBMC Section 5.04.260). 7. Clarify that private residences which have a home -based business will not be entered into without consent or court order (NBMC Section 5.04.290). Finally, the remaining proposed changes conform our code to State law. The proposed changes would 21 -2 1. Update the Veterans Exemption to mirror the California Business and Professions Code (NBMC Section 5.04.080). This change, in effect, exempts qualified veterans organizations and businesses from the tax. 2. California Government Code Section 37101.7 prohibits charging out -of -town contractors a fee greater than in -town contractors. Staff recommends reducing the business license tax imposed on out -of -town licensed contractors to the same amount that in -town contractors are assessed. ENVIRONMENTAL REVIEW: This action is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Sections 15060 (c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Description Attachment A - Ordinance Attachment B - Redline Version Attachment C - Resolution 21 -3 ATTACHMENT A ORDINANCE NO. 2015- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AMENDING NEWPORT BEACH MUNICIPAL CODE CHAPTER 5.04 TO UPDATE BUSINESS LICENSE PROVISIONS WHEREAS, Newport Beach Municipal Code ( "NBMC") Chapter 5.04 requires all businesses operating or conducting business within the City of Newport Beach ( "City ") to obtain a business license; WHEREAS, NBMC Chapter 5.04 was last comprehensively reviewed and updated in 1993; and WHEREAS, the City desires to revise NBMC Chapter 5.04 to add and update certain exemptions, clarify business license requirements, and reduce the penalty for delinquencies, among other revisions. NOW, THEREFORE, the City Council of the City of Newport Beach hereby ordains as follows: Section 1: NBMC Chapter 5.04 is hereby amended in its entirety to read as follows: Sections: Chapter 5.04 GENERAL PROVISIONS` 5.04.010 Definitions. 5.04.020 License and Tax Payment, and Fingerprinting Fee Requirements. 5.04.025 Hardship. 5.04.030 Branch Establishments and Separate Business. 5.04.040 Evidence of Doing Business. 5.04.050 Constitutional Apportionment. 5.04.060 Exemptions— Exempt by Federal or State Law. 5.04.070 Exemption — Charitable and Nonprofit Organizations. 5.04.080 Exemption— Veterans. 5.04.090 Minors Exemptions. 5.04.100 Exemption for Artists and Art Exhibits. 21 -4 Page 2 of 16 5.04.105 Exemption for Residential Units. 5.04.110 Exemption for Public Utilities. 5.04115 Exemption for Real Estate Agents. 5.04.120 Revenue Measure. 5.04.125 Sales Tax. 5.04.140 Application for Business License. 5.04.160 Processing of Application. 5.04.170 Issuance of License — Contents. 5.04.180 Error in Tax Nonprejudicial. 5.04.190 Error in Terms Voids License. 5.04.200 Duplicate License. 5.04.205 Business Closure. 5.04.210 License Nontransferable. 5.04.220 Posting and Keeping a License. 5.04.230 Payment, Term of License and Notice of Billings. 5.04.250 Unpaid Fees. 5.04.260 Penalties for Delinquency. 5.04.270 License Tax a Debt. 5.04.280 Refunds. 5.04.290 Enforcement —Right of Entry. 5.04.300 Examination of Books, Records, Witnesses, Information Confidential. 5.04.310 Declaration — Confidential Documents. 5.04.320 Extension of Time. 5.04.330 Appeal. * Taxicabs, ambulances and vehicles for hire —See Chapter 5.12. Special sales —See Chapter 5.16. Pawnbrokers, Secondhand and junk dealers —See Chapter 5.20. Private Patrols —See Chapter 5.24. Entertainment establishments —See Chapter 5.28. 21 -5 Page 3 of 16 Cafe dancers —See Chapter 5.32. 10 Definitions. A. 'Business' shall include all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade profession, occupation, vocation, calling or livelihood, including the rental of residential or commercial real estate, and every other kind of activity whether or not carried on for gain or profit, and whether or not engaged in as a principal or as an independent contractor, but shall not include the services rendered by an employee to his or her employer. B. "Employee" shall mean all individuals who are engaged in the operation or conduct of any business and whose consideration for services rendered is in the form of a regular salary or wage. C. "Employer' shall mean a person that employs one (1) or more employees. D. "Finance Director' shall mean the Finance Director of the City of Newport Beach or his or her designee. E. "Gross receipts" shall mean the total amounts actually received or receivable from sales and the total amounts actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in "gross receipts" shall be all receipts, cash, credits, and property of any kind or nature without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service cost, interest paid or payable, or losses or other expenses whatsoever. Excluded from "gross receipts" shall be the following: 1. Cash discounts allowed or taken on sales. 2. Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as "gross receipts." 21 -6 Page 4 of 16 3. Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser. 4. Such part of the sale price of property returned by purchasers upon rescission of a contract of sale as is refunded either in cash or by credit. 5. Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded. 6. Amounts collected for others where the business is acting as an agent or trustee to the extent that such amounts are paid to those for whom collected, provided the agent or trustee has furnished the Finance Director with the names and addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustee. 7. Cash value of sales, trades or transactions between departments or units of the same business. 8. Transactions between a partnership and its partners. 9. Receipts from services or sales in transactions between affiliated corporations. An affiliated corporation is a corporation: L Devoting a nonvoting stock of which is owned at least eighty (80) percent by such other corporation with which such transaction is had; or ii. Which owns at least eighty (80) percent of the voting and nonvoting stock of such other corporation; or iii. At least eighty (80) percent of the voting and non - voting stock of which is owned by a common parent corporation which also has such ownership of the corporation with which transaction is had. 10. Receipts from investments where the holder of the investment receives only interest and /or dividends. 21 -7 Page 5 of 16 11. Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the licensee in the regular course of the licensee's business. F. "Operate" shall mean and include manage, control or carry on. G. "Person" shall mean and include all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, Massachusetts Trust, business or common law trusts, societies, and individuals transacting and carrying on any business in the City other than as an employee. H. "Rental unit" shall mean and include all residential units except one which is the part-time or full -time residence of the owner, and no part thereof is offered or available for rent at any time during the license year. I. "Sale" shall include the transfer, in any manner or by any means whatsoever, of title to property for a consideration; the serving, supplying or furnishing for a consideration of any property; and a transaction whereby the possession of property is transferred and the seller retains the title as security for the payment of the price shall likewise be deemed a sale. The foregoing definition shall not be deemed to exclude any transaction which is or which, in effect, results in a sale within the contemplation of law. J. "Sworn statement" shall mean an affidavit sworn to before a person authorized to take oaths, or a declaration or certification made under penalty of perjury. 5.,04. 020 License and Tax Payment, and Fingerprinting Fee Requirements. No person, either for himself /herself or any other person, shall operate any business specified in this title in the City without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title. The carrying on of any such business without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title, shall constitute a separate violation of this title for each and every day that such business is so carried on. Where fingerprinting is required as a condition of obtaining a license to operate any such business, in addition to any other fees 21 -8 Page 6 of 16 imposed pursuant to this title, a fee equal to that currently charged to the City by the State of California will be charged for each person required to be so fingerprinted. 5._04.025 H. ards hi. p; ............._....... . ........ - ....... _ ..................... ...................................... _ .... .... _....................................................................................................................................... In the case of financial, medical or other hardship, the Finance Director may establish a payment plan allowing additional time for repayment of any tax or penalty due. A Person's failure to comply with the payment plan may result in all amounts, and any penalties, immediately due and payable to the City. The City Manager may, in his or her discretion in cases of hardship, waive the tax and /or penalty payment requirements of this Chapter. 5.04.030 Branch Establishments and Separate Business. .............. ................................_...................................................................... ............................................................................... ...... _...__._. ........................ .......................... .... ................. _................................. A separate business license must be obtained for each branch establishment or location of the business. A separate business license must be obtained for each separate legal entity and each type of business at the same location. The licensee shall only transact and operate the business at the location or for the legal entity or type of business as designated in the business license. 5.04.040 Evidence of Doina Business. When any person shall by use of digital media, signs, circulars, cards, telephone book, newspapers, or other format, advertise, hold out, or represent that he or she is in business in the City, or when any person holds an active license or permit issued by a governmental agency indicating that he or she is in business in the City, and such person fails to deny by a sworn statement given to the Finance Director that he or she is not conducting a business in the City, after being requested to do so by the Finance Director, then these facts shall be considered prima facie evidence that he or she is conducting a business in the City. 5.04.050 Constitutional Apportionment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . None of the license taxes provided for by this title shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the equal protection and due process clauses of the Constitutions of the United States and the State of California. 21 -9 Page 7 of 16 In any case where a license tax is believed by a licensee or applicant for a license to place an undue burden upon interstate commerce or be violative of such constitutional clauses, he or she may apply to the Finance Director for an adjustment of the tax. Such application may be made before, at, or within six (6) months after payment of the prescribed license tax. The applicant shall, by sworn statement and supporting testimony, provide any information as the Finance Director may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Finance Director shall then conduct an investigation, and, after having first obtained the written approval of the City Attorney, shall fix as the license tax for the applicant an amount that is reasonable and nondiscriminatory, or if the license tax has already been paid, shall order a refund of the amount over and above the license tax so fixed. The Finance Director is hereby authorized to adopt such reasonable rules and regulations as may be necessary to guide him or her in determining proper apportionment of the business license tax hereunder so as to not place an undue burden on interstate commerce or be violative of such constitutional clauses. 5.04.060 Exemption — Exempt by Federal ................................................. ral or State Law. _... . . .................... ............................... .............. Nothing in this chapter shall be deemed or construed to apply to any person transacting and carrying on any business exempt by virtue of the Constitution or applicable statutes of the United States or of the State of California from the payment of such taxes as are herein prescribed. Any person claiming an exemption pursuant to this section shall file a sworn statement with the Finance Director stating the facts upon which exemptions are claimed, and in the absence of such statement substantiating the claim, such person shall be liable for the payment of the taxes imposed by this title. The Finance Director shall, upon a proper showing contained in the sworn statement, issue a license to such person claiming exemption under this section without payment to the City of the license tax required by this title. The Finance Director, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided herein. PIED] Page 8 of 16 5.04.070 Exemption - Charitable and Nonprofit Organizations. The provisions of this title shall not be deemed or construed to require the payment of a license tax to conduct, manage, or carry on any business, occupation, event, or activity, from any institution or organization which is conducted, managed or carried on for the benefit of religious, charitable, philanthropic, political, or education purposes pursuant to Internal Revenue Code Section 501(c)(3), or any successor statute.. This section shall not be deemed to exempt any such institution or organization from complying with any other provisions of this Code requiring a permit from the City. 5.04.080 Exemptio . . ....................................- ...................................................................................._......................................................................................... ............................_.. Every honorably discharged soldier, sailor, marine, or airman of the United States, and who is a resident of the State of California, shall have the right to hawk, peddle and vend any goods, wares, or merchandise owned by him or her, except spirituous, malt, vinous or other intoxicating beverages, without the payment of a license fee, subject, however, to the restrictions, limitations, regulations and conditions hereinafter set forth. A. Every applicant must furnish a certificate of honorable discharge from the United States' armed forces. B. A license when issued under this exemption is nontransferable and for the exclusive use of the licensee named. Any intentional misuse of the license, by the licensee or by a person authorized by the licensee, may subject the license to immediate cancellation and a one (1) year ban on the issuance of a new license to the licensee under this exemption. C. It shall be unlawful for any person, other than the licensee named, to use any license issued pursuant to the provisions of this section. D. No person shall purchase or transfer any license issued pursuant to the provisions of this section, or transfer or convey the certificates mentioned above, to any other person for the purpose of securing a license as herein provided for. 5. . ............................................................................................................................................................................................... Any person defined as a minor pursuant to Internal Revenue Service regulations, whose annual gross receipts from any business done within the City is within the earned 21 -11 Page 9 of 16 income threshold pursuant to Internal Revenue Service regulations, shall be exempt from the requirements of this chapter. 5.04.100 Exemption for Artists and Art Exhibits. .......................................................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............ . . . . . . . . . . . . .............. _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................................... A business license shall not be required of individual artists for the exhibition or display of paintings, sculpture, photographs, handmade jewelry or other fine arts. Any artist shall be exempt from the requirements of this title if the sales of his or her art work within the City do not result in annual gross receipts in excess of three thousand eight hundred dollars ($3,800.00), as adjusted annually by the Consumer Price Index. 5.04.105 Exemption for Residential Units. 11 ...................... ............................... .. . .. ........_.... ....................._-- ....... No business license shall be required for the business of renting two (2) or less residential rental units at the same or different locations. The exemption for residential rent units shall not apply to rental of units for short term lodging purposes and defined in Chapter 5.95 of the Municipal Code, or any successor chapter. However, only one (1) business license shall be required for the business of renting multiple short term lodging units. 5.04.110 Exemption for Public Utilities. A business license shall not be required for any public utility operating under a franchise granted by the City and paying a franchise tax thereunder, except a business license shall be required for any retail sales or service conducted by such utility in the City of Newport Beach. 5.04.115 Exemption for Real Estate Agents. Persons licensed by the California Department of Real Estate and working under the supervision and control of a broker licensed by the California Department of Real Estate, as required by State law, shall not be subject to taxation under this title if their broker includes the real estate agent as one of its employees and pays the tax in accordance with the provisions of this title and Council resolution. 21 -12 Page 10 of 16 5.04.120 Revenue This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation. 5.04.125 Sales Tax. Any business that transacts or carries any business activity, contracts, sells or delivers any goods, wares or merchandise in this City for which sales or use tax is payable and is required to report any payment of sales and use tax to the State shall obtain a California State Board of Equalization license and must furnish the sales tax number on the business license application. 5.04.140 Application for Business License. ........................................................................................................................................................................................ ............................... Before any business license is issued to any person, such person shall make an application to the Finance Director. Applicant must state the name of the party to whom the license is to be issued; the nature of the trade or business to be pursued; the place where such business will be conducted and such other information as may be necessary for the enforcement of the provisions of this title. A business license application may be denied if the Finance Director determines that the applicant failed to complete all portions of the license application or has failed to comply with one (1) or more of the provisions of this chapter. 5.04.160 Processing of Application. ........ ............................ ............................... .. _..... Upon application and tender of the required license fee, the Finance Director shall process the application. Applications for new businesses, or as may be deemed necessary by the Finance Director, may be submitted to other departments as necessary, including the Health Officer if health and sanitation may be affected, to determine whether the business and premises to be occupied meet the requirements of applicable law. 5.04.170 Issuance of License — Contents. Upon processing the application and receipt of the appropriate license fee, the Finance Director shall prepare and issue the license showing upon the face of each license the following: 21 -13 Page 11 of 16 A. name of business and location; B. business license number; C. type of business by code; D. date of issuance; E. date of expiration; and F. term of license. 5.04.180... Error in Tax ... Nonprejudicial ......................................................................... ............_...._............. . . . . . . . . . . . . . . . . . . . . . . . . ................................................... In no case shall any mistake by any officer or employee of the City in stating the amount of a license tax prevent or prejudice the collection by the City of what should be actually due from any person carrying on a business subject to a business license under the provisions of this title. 5.04.190 Error in Terms Voids License. The payment of any license tax required by this title, its acceptance by the City, and the issuance of such license to any person shall not entitle the holder to carry on any business called for by the license unless he has complied with all requirements of this Code, or to carry on any business at any location contrary to the City's zoning regulations. 5.04.200 Duplicate License. The Finance Director shall charge a fee as set forth by resolution of the City Council for each duplicate license issued to replace any license issued under the provisions of this title, which has been lost or destroyed, upon reasonable proof thereof. 5.04.205 Business Closure. Any business which has ceased operating and conducting business in this City shall inform the Finance Director in writing of the date the business has ceased conducting business, and having done such, the license shall be closed and no further license taxes or penalties shall accrue. In the event of any such closure, there shall be no 21 -14 Page 12 of 16 rebate of any portion of the tax or fee paid by such licensee and, in any application for a new license, there shall be no proration of the required tax or fee. 0 License Nontransferable. Each license granted or issued under any provisions of this title shall authorize the licensee to transact or carry on the business therein named, at the place therein designated and at no other place and the license shall not be assignable or transferable. A change of location shall be allowed to the holder of the license upon the payment, set forth by resolution of the City Council, to the Finance Director within thirty (30) days of such change taking place. 5.04.220 Posting and Keeping a License. ........ ............................... ........... ......... .... ..... ..... ..................... A. Any licensee transacting and carrying on business at a non - residential fixed place of business in the City shall keep the license posted in a conspicuous place upon the premises where such business is carried on. B. Any licensee transacting and carrying on business but not operating at a fixed place of business in the City shall keep the license upon his or her person at all times while transacting and carrying on the business for which it was issued. C. Whenever identifying stickers, tags, plates or symbols have been issued for each vehicle, device, machine or other piece of equipment included in the measure of a license tax, the person to whom such stickers, tags, plates or symbols have been issued shall keep firmly affixed upon each vehicle, device, machine, or other piece of equipment the identifying sticker, tag plate to symbol which has been issued therefor at such locations as are designated by the Finance Director. Such sticker, tag, plate or symbol shall not be removed from any vehicle, device, machine, or piece of equipment kept in use, during the period for which the sticker, tag, plate or symbol is issued. 5.04.230 Payment, Term of License and Notice of Billings. . ............................... .............................................._...................................................... ............................... A. All business licenses shall be issued on an annual basis. The period covered by each license shall be from the date of issuance to twelve (12) months from such date. B. The Finance Director is not required to send a notice or a bill to any business subject to the provisions of this chapter and the failure to send or receive such notice or bill 21 -15 Page 13 of 16 shall not affect the validity of any tax or penalty due or the duty of such business to pay the required tax or penalty due. 5.04.250 Unpaid Fees. .. ............................... _....................................................................................................................................... ............................... ...... -.. _................ ................................................................................ ............... No license for any succeeding, current or unexpired license period shall knowingly be issued to any person who, at the time of making application for any license, is indebted to the City for any unpaid license fee. 5.04.260 Penalties for Delinquen For failure to pay a license tax when due, unless Finance Director has provided a payment plan pursuant to NBMC Section 5.04.025, the Finance Director shall add a penalty of twenty -five (25) percent of said license tax on the last day of each month after the due date thereof, providing that the amount of such penalty to be added shall in no event exceed fifty (50) percent of the amount of the license tax due. 5.04.270 License Tax a Debt. The amount of any license tax and penalty imposed by the provisions of this title shall be deemed a debt to the City and any person carrying on any business without first having procured a license from the City shall be liable to an action in the name of the City in any court of competent jurisdiction, for the amount of license tax and penalties imposed on such business. 5.04.280 Refunds. The Finance Director may refund any license fee, tax or penalty which he or she determines was erroneously collected, but no license fee, tax or penalty shall be refunded if, prior to his or her application for a license, the applicant has engaged in the business for which the license is sought. 5.04.290 Enforcement..Right of Entry ........................................................................._..._................................................................. ............................... A. Enforcement. It shall be the duty of the Finance Director to enforce each and all of the provisions of this title, and the Chief of Police shall render such assistance in its enforcement as may from time to time be required by the Finance Director. 21 -16 Page 14 of 16 B. Right of Entry. The Finance Director and each and all of his designees and any police officer or City employee whose job includes the inspection of the business license, shall have the power and authority to enter, free of charge, and at any reasonable time, any place of business required to be licensed and demand an exhibition of its license certificate. Any person having such license certificate theretofore issued in his possession or under his control, who willfully fails to exhibit the same on demand shall be guilty of a misdemeanor and subject to the penalties provided for by the provisions of this title. C. Entry of Personal Residence. A private residence will not be entered without consent or without a legal court order. 5.04.300 Examination of Books, Records, Witnesses, Information Confidential. .................... . ......... _.. ........... ..... ..........._......................... ............... _........................_. .......................................... .................... .................... ............... _ ............ _.......... ............. ................................ _ ...... ...... _. The Finance Director, or any authorized employee, is hereby authorized to examine the books, papers and records of any person subject to this ordinance, who has made the election to pay a gross receipts tax, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title. Every licensee or supposed licensee is hereby directed and required to furnish to the Finance Director the means, facilities and opportunity for making such examination and investigation as are hereby authorized. The Finance Director is hereby authorized to examine any person, under oath, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title, and for this purpose may compel the production of books, papers and records and the attendance of all persons before him or her, whether as parties or witnesses, whenever he or she believes such persons have knowledge of such matters. The refusal of such examination by any employer or person subject or presumed to be subject to the license fees shall be deemed a violation of this ordinance and a misdemeanor. All information obtained by the Finance Director under this section shall be confidential, as provided in Section 5.04.310 of this title. 5.04.310 Declaration — Confidential Documents. ................................................................... .... . ................... .. ............................................................................................................................................. ............................... 21 -17 Page 15 of 16 Any statement or information filed or gathered pursuant to this title shall be deemed to be confidential in character and shall not be subject to public inspection and shall be kept so that the contents thereof shall not become known except to persons charged with the administration of this title. The foregoing prohibition shall not apply to the following information contained in the business license application: business name, business telephone, business address, the exact nature of the business for which the license is required, owner's name and the name of the principals, if the business is a partnership or corporation. 5.04.320 Extension of Time. In addition to all other power conferred upon him or her, the Finance Director shall have the power, for good cause shown to extend the time for filing any required sworn statement or application for a period not to exceed thirty (30) days and in such case, to waive any penalty that would otherwise have accrued. 5.04.330 Any person aggrieved by any decision of the Finance Director with respect to the issuance or refusal to issue such license may appeal to the City Manager by filing a notice of appeal with the City Clerk. The City Manager shall thereupon fix a time and place for hearing such appeal. The City Clerk shall give notice to such person of the time and place for hearing by serving it personally or by depositing it in the United States mail at Newport Beach, California, postage prepaid, addressed to such person at his or her last known address. The City Manager shall have authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this chapter. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or PJAM i Page 16 of 16 more sections, subsections, sentences, clauses or phrases be declared unconstitutional. Section 4: The City Council finds that the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Section 15060(c)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3 because the activity is not a project as defined in Section 15378 and has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Section 6: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance to be published pursuant to City Charter Section 414, and it shall be effective thirty (30) days after its adoption. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 24th of March, 2015, and adopted on the 14th day of April, 2015, by the following vote to wit: AYES, COUNCILMEMB NOES, COUNCILMEMBE ABSENT COUNCILMEMB Edward D. Selich Mayor ATTEST: Leilani I. Brown City Clerk APPROVED AS TO FORM: The C ,& "tg Att (�ey's Office Aaror-6-11arp City Attorney 21 -19 ATTACHMENT B Chapter 5.04 GENERAL PROVISIONS* Sections: 5.04.010 Definitions. 5.04.020 License and Tax Payment, and Fingerprinting Fee Requirements. 5.04.025 Hardshi . 5.04.030 Branch Establishments and Separate Business. 5.04.040 Evidence of Doing Business. 5.04.050 Constitutional Apportionment. 5.04.060 Exemptions— Exempt by Federal or State Law. 5.04.070 Exemption — Charitable and Nonprofit Organizations. 5.04.080 Exemption Disabled Veterans. 5.04.090 Minor's Exemptions. 5.04.100 Exemption for Artists and Art Exhibits. 5.04.105 Exemption for Residential Units. 5.04.110 Exemption for Public Utilities. 5.04.115 Exemption for Real Estate Agents. 5.04.120 Revenue Measure. 5.04.125 Sales Tax. 5.04.140 Application for Business License. 5.04.160 Processing of Application. 5.04.170 Issuance of License — Contents. 5.04.180 Error in Tax e . Nonprejudicial. 5.04.190 Error in Terms Voids License. 5.04.200 Duplicate License. 5.04.205 Business Closure. 5.04.210 License Nontransferable. 5.04.220 Posting and Keeping a License. 5.04.230 Payment, Term of License and Notice of Billingsm PPFied. 5.04.250 Unpaid Fees. 5.04.260 Penalties for Delinquency. 5.04.270 License Taxee a Debt. 21 -20 5.04.280 Refunds. 5.04.290 Enforcement —Right of Entry. 5.04.300 Examination of Books, Records, Witnesses, Information Confidential. 5.04.310 Declaration — Confidential Documents. 5.04.320 Extension of Time. 5.04.330 Appeal. Taxicabs, ambulances and vehicles for hire —See Chapter 5.12. Special sales —See Chapter 5.16. Pawnbrokers, Secondhand and junk dealers —See Chapter 5.20. Private Patrols —See Chapter 5.24. Entertainment establishments —See Chapter 5.28. Cafe dancers —See Chapter 5.32. 5.04.010 Definitions. A. "s-Osiness" shall m a4s Fef000iGRG trades and n patieno iR all and every kiRd of Gallia, y.ghethnr nr not ied „n far nrefa . "Business" shall include all activities engaged in or caused to be engaged in within the City, including any commercial or industrial enterprise, trade profession, occupation, vocation, calling or livelihood, including the rental of residential or commercial real estate, and every other kind of activity whether or not carried on for gain or profit, and whether or not engaged in as a principal or as an independent contractor, but shall not include the services rendered by an employee to his or her employer. B. "Employee" shall mean all individuals who are engaged in the operation or conduct of any business and whose consideration for services rendered is in the form of a regular salary or wage. C. "Employer" shall mean a person that employs one (1) or more employees. 21 -21 D. "Finance Director' shall mean the Finance Director of the City of Newport Beach or his or her designee. ES. "Gross receipts" shall mean the total amounts actually received or receivable from sales and the total amounts actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise.. -. Included in "gross receipts" shall be all receipts, cash, credits, and property of any kind or nature without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service cost, interest paid or payable, or losses or other expenses whatsoever. Excluded from "gross receipts" shall be the following: 1. Cash discounts allowed or taken on sales. 2. Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as "gross receipts." 3. Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser. 4. Such part of the sale price of property returned by purchasers upon rescission of a contract of sale as is refunded either in cash or by credit. 5. Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded. 6. Amounts collected for others where the business is acting as an agent or trustee to the extent that such amounts are paid to those for whom collected, provided the agent or trustee has furnished the Finance Director with the names and addresses of the others and the amounts paid to them. This exclusion shall not apply to any fees, percentages, or other payments retained by the agent or trustee. 21 -22 7. Cash value of sales, trades or transactions between departments or units of the same business. 8. Transactions between a partnership and its partners. 9. Receipts from services or sales in transactions between affiliated corporations. An affiliated corporation is a corporation: L Devoting a nonvoting stock of which is owned at least eighty (80) percent by such other corporation with which such transaction is had; or ii. Which owns at least eighty (80) percent of the voting and nonvoting stock of such other corporation; or iii. At least eighty (80) percent of the voting and non - voting stock of which is owned by a common parent corporation which also has such ownership of the corporation with which transaction is had. 10. Receipts from investments where the holder of the investment receives only interest and /or dividends. 11. Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the licensee in the regular course of the licensee's business. FG. "Operate" shall mean and include manage, control or carry on. G9. "Person" shall mean and include all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, Massachusetts Trust, business or common law trusts, societies, and individuals transacting and carrying on any business in the Ceity other than as an employee. H. "Rental unit" shall mean and include all residential units except one which is the part-time or full -time residence of the owner, and no part thereof is offered or available for rent at any time during the license year. 21 -23 I €. "Sale" shall include the transfer, in any manner or by any means whatsoever, of title to property for a consideration; the serving, supplying or furnishing for a consideration of any property; and a transaction whereby the possession of property is transferred and the seller retains the title as security for the payment of the price shall likewise be deemed a sale. The foregoing definition shall not be deemed to exclude any transaction which is or which, in effect, results in a sale within the contemplation of law. J €. "Sworn statement" shall mean an affidavit sworn to before a person authorized to take oaths, or a declaration or certification made under penalty of perjury 5.04.020 License and Tax Payment, and Fingerprinting Fee Requirements. ....... ....... ........... ......... No person, either for himself /herself or any other person, shall operate any business specified in this title in the City without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title. The carrying on of any such business without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title, shall constitute a separate violation of this title for each and every day that such business is so carried on. Where fingerprinting is required as a condition of obtaining a license to operate any such business, in addition to any other fees imposed pursuant to this title, a fee equal to that currently charged to the City by the State of California will be charged for each person required to be so fingerprinted. 5.04.025 WaiveF.Hardship In the case of financial, medical or other hardshi , the NE� Finance Director, er his designee may establish a - payment plan ^fie taxpayer's :oc-s:al- -Reeds ;n,- mind, =allowing additional time for repayment of any tax or Penalty due. —A Person's failure to comply with the payment plan may result in all amounts, and any penalties, immediately due and payable to the City. ^ taxigaver m of r of With the o 8d ^ of nl ^n fRo"Ur^ to PIA c .dll 21 -24 The G+ty- Se4pe+-City Manager may, in his -its or her discretion in cases of hardship, waive the tax and /or penalty payment requirements of c^ ^+l^^ q nn 029 9f this ChapterCede. 5.04.030 Branch Establishments and Separate Business. A separate business license must be obtained for each branch establishment or location of the business +r^^sa -ete' a-Rd ^^rpm^' ^^ A separate business license must be obtained -afld-for each separate legal entity and #e-F-each type of business at the same location;, and T°^ ^h I'^^^^^ shall auth^•'-,^ the licensee shall only to -transact and safry GRoperate 94y -the business _;ieensed 'a thereby at the location or for the legal entity or type of business as designated in the # is /her business license. iR 'h^ ^, ^^^^• C'^^i^^ated h I'. .rte ll..e FatieR eF shE)Ft to FF, le d. iRg Ries as .defiRed iR Gh-,pteF 5.95 of this Code is • •• 5.04.040 Evidence of Doing Business. I When any person shall by use of digital media, signs, circulars, cards, telephone book, of newspapers, or other format, advertise, hold out, or represent that he or she is in business in the City, or when any person holds an active license or permit issued by a governmental agency indicating that he or she is in business in the City, and such person fails to deny by a sworn statement given to the Finance Director? + d � I J^°^°° &upeP ^°^r that he or she is not conducting a business in the City, after being requested to do so by the Finance Director, er h1s 'd^ °' ^ ^ ^^ I i^^ ^°^ SuperviseK, then these facts shall be considered prima facie evidence that he or she is conducting a business in the City. 5.04.050 Constitutional Apportionment. None of the license taxes provided for by this title shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the equal protection and due process clauses of the Constitutions of the United States and the State of California. 21 -25 In any case where a license tax is believed by a licensee or applicant for a license to place an undue burden upon interstate commerce or be violative of such constitutional clauses, the or she may apply to the Finance Director for an adjustment of the tax. Such application may be made before, at, or within six months after payment of the prescribed license tax. The applicant shall, by sworn statement and supporting testimony, show his ethed of business and the ,.l,,m estimated gFOSS of �,, �� ... d 'Gh ..thGF ; t t; orovide any information as the Finance Director may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Finance Director shall then conduct an investigation, and, after having first obtained the written approval of the City Attorney, shall fix as the license tax for the applicant an amount that is reasonable and nondiscriminatory, or if the license tax has already been paid, shall order a refund of the amount over and above the license tax so fixed. The Finance Director is hereby authorized to adopt such reasonable rules and regulations as may be necessary to guide him or her in determining proper apportionment of the business license tax hereunder so as to not place an undue burden on interstate commerce or be violative of such constitutional clauses. 5..04.060 Exemption — Exempt by Federal or State Laws Nothing in this chapter shall be deemed or construed to apply to any person transacting and carrying on any business exempt by virtue of the Constitution or applicable statutes of the United States or of the State of California from the payment of such--taxes as are herein prescribed. Any person claiming an exemption pursuant to this section al--shall file a sworn statement with the Finance Director stating the facts upon which exemptions are claimed, and in the absence of such statement substantiating the claim, such person shall be liable for the payment of the taxes imposed by this title. The Finance Director shall, upon a proper showing contained in the sworn statement, issue a license to such person claiming exemption under this section without payment to the City of the license tax required by this title. 21 -26 The Finance Director, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided herein. 5.04.070 Exemption, — Charitable and Nonprofit Organizations. The provisions of this title shall not be deemed or construed to require the payment of a license tax to conduct, manage, or carry on any business, occupation, event, or activity, from any institution or organization which is conducted, managed or carried on for the benefit of religious, charitable, philanthropic, political, or education purposes pursuant to Internal Revenue Code Section 501(c)(3), or any successor statute. as eoveFed uRdef rh.,pteF 5.41 of this WIP. This section shall not be deemed to exempt any such institution or organization from complying with any other provisions of this Code requiring a permit from the City. 5.04.080 Exemption�;.a,b.'ed Veterans. Every honorably discharged soldier, sailor, marine, or airman of the United States, w146 is phys Gaily unable to obtain his livelihood by Fneans of manual Iab0F and who is a residentg4a4fied -ueteF of the State of California, shall have the right to hawk, peddle and vend any goods, wares, or merchandise owned by him or her, except spirituous, malt, vinous or other intoxicating beverages, without the payment of a license fee, subject, however, to the restrictions, limitations, regulations and conditions hereinafter set forth. ,Every applicant must ,.,,.,..,I„ with the fell,,,.'Rg requirements hof„re A IiGense may - -- --ind-er the PFGVdSiGRG ef this - -- ...al,,�----L�urnish a certificate of honorable Army, States'armed forces. ♦ 1 1 1 21 -27 B. A license when issued under this exemption is . it is nontransferable and for the exclusive use of the licensee named. Any intentional misuse of the license, by the licensee or by a person authorized by the licensee, may subject the license to immediate cancellation and a one (1) year ban on the issuance of a new license to the licensee under this exemption. e�.rr ..rar.�rrssx�E�sn:� .. C. It shall be unlawful for any person, other than the licensee named, to use Ar have in his PeSSeSS 9any license issued pursuant to the provisions of this section. D. No person shall purchase or transfer any license issued pursuant to the provisions of this section, or transfer or convey the certificates mentioned OR paragraph (A`O) above, to any other person for the purpose of securing a license as herein provided for. 5.04.090 Minor's Any person defined as a minor pursuant to Internal Revenue Service regulations, ap e-F SiXt88^ (164) eaf- ^' ° ^° whose annual gross receipts from any business done within 21 -28 the City is within the earned income threshold pursuant to Internal Revenue Service regulations, less +haR eight hHREIFed del!aFSf'Ve +h.,,,sand delta iecnnnsnn n m Shall be exempt from the requirements of this chapter. 5.04.100 Exemption for Artists and Art Exhibits. A business license shall not be required of individual artists for the exhibition or display of paintings, sculpture, photographs, handmade iewelry or other fine arts. On Elie ..tat to the business + the d ;�y� Hie c^ i- rtrn-- cv-- n- rc- ^pr'rmrn"- ��ovSiiiC'S,TC'c^ -c � ^ter- c��c- ^prcir.:Se�T,- �' -ficrT yr Any artist shall be exempt from the requirements of this title if the sales of his or her art work within the City do not result in annual gross receipts in excess of three thousand eight hundred dollars ($3,800.00), as adjusted annually by the Consumer Price Index.^^ a-me,uRt as established h„ . ,.i „tier ef. the „ +h,,, sand seveR h, RdFPFi dollars ($1 nnn 00 7nnm 5.04.105 Exemption for Residential Units. No business license shall be required for the business of renting twos or less residential rental units at the same or different locations. A "Yent ^l unit” sh ^II ...^^^ and The exemption for residential rent units shall not apply to rental of units for short term lodging purposes and defined in Chapter 5.95 of the Municipal Code, or any successor chapter. However, only one (1) business license shall be required for the business of renting multiple short term lodging units. 5.04.110 Exemption for Public Utilities. A business license shall not be required for any public utility operating under a franchise granted by 4the City and paying a franchise tax thereunder, except a business license shall be required for any retail sales or service conducted by such utility in the City of Newport Beach. 5.04.115 Exemption for Real Estate Agents.: 21 -29 Persons licensed by the California Department of Real Estate and workina under the supervision and control of haV'RQ `he'• "GeRs^ ^'^^^d A#h a broker licensed by the California Department of Real Estate , as required by Sstate law, shall not be subject to taxation under this title if their broker includes the real estate agent as one of its employees and pays the tax in accordance with the provisions of this title and ^^'u ides the real estate aEleRt as Of its em levees for auraeses of anv eemautatien of the Council resolution. 5.04.120 Revenue Measure. This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation. 5.04.125 Sales Tax. Anv business that transacts or carries anv business activitv. contracts. sells or delivers any goods, wares or merchandise in this City for which sales or use tax is payable and is required to report any payment of sales and use tax to the Sstate shall obtain a California State Board of Eaualization license and must furnish the sales tax number on the business license application 5.04.140 Application for Business License. Before any business license is issued to any person, such person shall make an application therefeF -to the Finance Director ^• histhe desi9R ^^ Applicant must state the name of the party to whom the license is to be issued; the nature of the trade or business to be pursued; the place ^rwhere such business will be conducted and such other information as may be necessary for the enforcement of the provisions of this title. A business license application may be denied if the Finance Director.�;s -eF de&kWre,— determines that the applicant failed• to complete all portions of the license application or has failed to comply with one (1) or more of the speei#iEprovisions of this chapter. 5.04.160 Processina of Application. Upon application and tender of the required license fee, the Finance Director shall process the application. Applications for new businesses, or as may be deemed 21 -30 necessary by the Finance Director, may be submitted to other departments as necessary, including the Health Officer if health and sanitation may be affected, to determine whether the business and premises to be occupied meet the requirements of .•• M. '9115AMMM 5.04.170 Issuance of License — Contents. Upon processing the application and receipt of the appropriate license fee, the Finance Director #+e—shall prepare and issue the license showing upon the face of each license the following: A. name of business and location; B. business license number; C. type of business by code; D. dfate of issuance; E. date of expiration; and F. term of license.. =a 5.04.180 Error in TaxF-ee Nonpreiudicial. In no case shall any mistake by any officer or employee of the City in stating the amount of a license taxfee prevent or prejudice the collection by the City of what should be actually due from any person carrying on a business subject to a business license under the provisions of this title. 5.04.190 Error in Terms Voids License. The payment of any license taxfee required by this title, its acceptance by the City, and the issuance of such license to any person shall not entitle the holder thereef to carry on any business called for by the license unless he has complied with all requirements of this Code, or to carry on any business at any location contrary to the City's zoning regulations. 21 -31 5.04.200 Duplicate License. The Finance Director shall charge a fee as set forth by resolution of the City Council for each duplicate license issued to replace any license issued under the provisions of this title, which has been lost or destroyed, upon reasonable proof thereof 5.04.205''1^°^^ a Business L GeRse Business Closure Anv business which has ceased operatina and conductina business in this Citv shall inform the Finance DirectorQty in writing of the date the business has ceased conducting business, and having done such, the license shall be closed and no further license taxes or penalties shall accrue. In the event of any such closure, there shall be no rebate of any portion of the tax or fee paid by such licensee and, in any application for a new license. there shall be no proration of the reauired tax or fee. 5.04.210 License Nontransferable. Each license granted or issued under any provisions of this title shall authorize the licensee to transact or carry on the business therein named, at the place therein designated and at no other place and the license shall not be assignable or transferable. A change of location shall be allowed to the holder of the license upon the payment, set forth by resolution of the City Council, to the Finance Director within thirty (30) days of such change taking place. If 11nenOee foils to apply far the nhan„e of evniratien of a license thorn shall hen rebate of a onion of the tax er foe paid bTy si nh linnnsnn and OR aRy nlinatien far a nP-Vi ❑nensn there shall he n preratieR-Gf- the FequiFed tax Ar fpp 5.04.220 Posting and Keeping a License. 11 A. Any licensee transacting and carrying on business at a non- residentialserr*tef" fixed place of business in the City shall keep the license posted in a conspicuous place upon the premises where such business is carried on. B. Any licensee transacting and carrying on business but not operating at a fixed place of business in the City shall keep the license upon his or her person at all times while transacting and carrying on the business for which it was issued. 21 -32 C. Whenever identifying stickers, tags, plates or symbols have been issued for each vehicle, device, machine or other piece of equipment included in the measure of a license tax, the person to whom such stickers, tags, plates or symbols have been issued shall keep firmly affixed upon each vehicle, device, machine, or other piece of equipment the identifying sticker, tag plate to symbol which has been issued therefor at such locations as are designated by the Finance Director. Such sticker, tag, plate or symbol shall not be removed from any vehicle, device, machine, or piece of equipment kept in use, during the period for which the sticker, tag, plate or symbol is issued. 5.04.230 Payment,,,,a+x�Term of License and Notice of Billings A. All business licenses shall be issued on an annual basis. The period covered by each license shall be from the date of issuance to twelve (12) months from such date. B. The Finance Director,, ^� is not required to send a notice or a bill to any business subject to the provisions of this chapter and the failure to send or receive such notice or bill shall not affect the validity of any tax or penalty due or the duty of such business to pay the required tax or penalty due. 5.04.250 Unpaid Fees. No license for any succeeding, current or unexpired license period shall knowingly be issued to any person who, at the time of making application for any license, is indebted to the City for any unpaid license fee. 5.04.260 Penalties for Delinquency For failure to pay a license tax when due, unless Finance Director has provided a payment plan pursuant to NBMC Section 5.04.025, the Finance Director shall add a penalty of twenty -five (25) percent of said license tax on the last day of each month after the due date thereof, providing that the amount of such penalty to be added shall in no event exceed fifty (50) percent of the amount of the license tax due. 5.04.270 License €Tax a Debt. .................................................... ............................... ........................ The amount of any license fee -tax and penalty imposed by the provisions of this title shall be deemed a debt to the City of "'ewpeFt BeaGh and any person carrying on any 21 -33 business without first having procured a license from the City se to de shall be liable to an action in the name of the City in any court of competent jurisdiction, for the amount of license taxfee and penalties imposed on such business 5.04.280 Refunds. The i „ c,,.,eryisor, with the appFeval of the Finance Director, ^• h0^ ' ^^ ^ ^^ may refund any license fee -, tax or penalty which he or she determines was erroneously collected, but no license fee, — tax or penalty shall be refunded if, prior to his or her application for a license, the applicant has engaged in the business for which the license is sought. 5.04.290 Enforcement... -Right of Entry................................................................................................................................................. ............................... A. Enforcement. It shall be the duty of the Finance Director to enforce each and all of the provisions of this title, and the Chief of Police shall render such assistance in its enforcement as may from time to time be required by the Finance Director. B. Right of Entry. The Finance Director and each and all of his assistants designees and any police officer or City employee whose job includes the inspection of the business license, shall have the power and authority to enter, free of charge, and at any reasonable time, any place of business required to be licensed and demand an exhibition of its license certificate. Any person having such license certificate theretofore issued in his possession or under his control, who willfully fails to exhibit the same on demand shall be guilty of a misdemeanor and subject to the penalties provided for by the provisions of this title. C. Entry of Personal Residence.-. A private residence will not be entered without consent or without a leaal court order 5.04.300 Examination of Books, Records, Witnesses, Information Confidential. ........................................................................................................................................................................................................................................................................................................ ............................... The Finance Director, or any authorized employee, is hereby authorized to examine the books, papers and records of any person subject to this ordinance, who has made the election to pay a gross receipts tax, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title. Every licensee or supposed licensee is hereby directed and required to furnish to the 21 -34 Finance Director, OF his duly authorized employee the means, facilities and opportunity for making such examination and investigation as are hereby authorized. The Finance Director is hereby authorized to examine any person, under oath, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title, and for this purpose may compel the production of books, papers and records and the attendance of all persons before him or her, whether as parties or witnesses, whenever he or she believes such persons have knowledge of such matters. The refusal of such examination by any employer or person subject or presumed to be subject to the license fees shall be deemed a violation of this ordinance and a misdemeanor. All information obtained by the Finance Director under this section shall be confidential, as provided in Section 5.04.32810 of this title. 5.04.310 Declaration — Confidential Documents. Any statement or information filed or gathered pursuant to this title shall be deemed to be confidential in character and shall not be subject to public inspection and shall be kept so that the contents thereof shall not become known except to persons charged with the administration of this title. The foregoing prohibition shall not apply to the following information contained in the business license application: business name, business telephone, business_ mailing and str ° °* address, the exact nature of the business for which the license is required, owner's name and the name of the principals, if the business is a partnership or corporation. 5.04.320 Extension of Time. In addition to all other power conferred upon him or her, the Finance Director shall have the power, for good cause shown to extend the time for filing any required sworn statement or application for a period not to exceed thirty (30) days and in such case, to waive any penalty that would otherwise have accrued„ eXGept that „n„ n„r,., Rt simple n+ °r °o4 droll h° added too any tax rl°+°rm'npd to h° payable. 5.04.330 Appeal. 21 -35 Any person aggrieved by any decision of the Finance Director with respect to the issuance or refusal to issue such license may appeal to the City Manager by filing a notice of appeal with the City Clerk. The City Manager shall thereupon fix a time and place for hearing such appeal. The City Clerk shall give notice to such person of the time and place for hearing by serving it personally or by depositing it in the United States mail at Newport Beach, California, postage prepaid, addressed to such person at his or her last known address. The City Manager shall have authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this chapter. 21 -36 ATTACHMENT C RESOLUTION NO. 2015- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, TO REDUCE THE BUSINESS LICENSE TAX CHARGED TO OUT -OF -TOWN LICENSED CONTRACTORS TO BE EQUAL TO THAT OF IN -TOWN LICENSED CONTRACTORS WHEREAS, the City of Newport Beach ( "City ") requires all businesses operating or conducting business within the City to obtain a business license pursuant to Newport Beach Municipal Code ( "NBMC ") Section 5.04.020; WHEREAS, NBMC Chapter 5.08 provides that businesses shall pay an annual business tax as established by resolution of the City Council; WHEREAS, California Constitution Article 13C, Section 2(b) provides, in part, that no local government may impose, extend, or increase any general tax without voter approval, however, the reduction of a tax does not trigger voter approval; WHEREAS, California Government Code Section 37101.7 provides, in part, that public entities should tax out -of -town licensed contractors the same as in -town contractors; and WHEREAS, the City desires to reduce the business license tax charged to out - of -town contractors to the same level as in -town contractors. NOW, THEREFORE, the City Council of the City of Newport Beach hereby resolves as follows: Section 1: The City Council hereby amends Resolution No. 93 -34, in part to reduce the business license tax charged to out -of -town contractors to the same level charged to in -town contractors. All other portions of Resolution No. 93 -34 shall remain intact and unchanged. Section 2: The recitals provided in this resolution are true and correct and are hereby incorporated into the substantive portion of this resolution. Section 3: The City Council finds that the adoption of this resolution is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Section 15060(c)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3 because the activity is not a project as defined in Section 15378 and has no potential for resulting in physical change to the environment, directly or indirectly. Section 4: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 24`h day of March, 2015. 21 -37 Edward D. Selich Mayor ATTEST: Leilani I. Brown City Clerk 21 -38