Loading...
HomeMy WebLinkAbout1757 - Fixing the Rate of TaxationC • L ORDINANCE NO. 1757 AN ORDINANCE OF THE CITY OF NEWPORT BEACH AMENDING CHAPTER•5.04; SECTIONS 5.08.010 AND 5.08.020; AND ADDING SECTIONS 5.08.022 AND 5.08.024 TO THE NEWPORT BEACH MUNICIPAL CODE TO PROVIDE FOR THE COLLECTION OF A GROSS RECEIPTS TAX, ESTABLISHING A MINIMUM TAX AND OPTIONAL METHOD OF DETERMINING TAX; TO BECOME EFFECTIVE UPON ITS DATE OF ADOPTION AS AN ORDINANCE FIXING THE RATE OF TAXATION The City Council of the City of Newport Beach DOES ORDAIN as follows: SECTION 1. Chapter 5.04 of the Newport Beach Municipal Code is amended in its entirety to read as follows: Sections: 5.04.010 5. 04.020 5.04.025 5.04.030 5.04.040 5.04.050 5.04.060 5.04. 070 5.04. 080 5.04.090 5.04.100 5.04.105 5.04.110 5. 04.120 5.04.130 5.04.140 5. 04.150 5. 04.160 5.04.170 5.04.180 5.04.190 5.04.200 5.04.210 5.04.220 5. 04.230 5.04.240 5.04.250 5. 04.260 5.04.270 5.04.280 5..04.290 5.04.300 5.04.310 5.04.320 5.04. 330 "CHAPTER 5.04 GENERAL PROVISIONS Definitions License and Tax Payment, and Fingerprinting Fee Requirements Waiver Branch Establishments and Separate Businesses Evidence of Doing Business Constitutional Apportionment Exemptions Exemption - Charitable and Nonprofit Organizations Exemption - Disabled Veterans Minor's Exemption Exemption for Artists and Art Exhibits Exemption for Residential Rental Units Exemption for Public Utilities Revenue Measure Alternative Tax Application for License Application .for First License Processing of Application Issuance of License - Contents Error in Fee Nonprejudicial Error in Terms Voids License Duplicate License License Nontransferable Posting and Keeping a License Payment and Terms of License - Transition Period Statement for Renewal of Licenses Unpaid Fees Penalties for Delinquency License Fee a Debt Refunds Enforcement - Right of Entry Examination of Books, Records, Witnesses, Information Confidential Declaration - Confidential Documents Extension of Time Appeal 5.04.010 Definitions (a) "Business" shall mean arts, professions, trades • and occupations in all and every kind of calling, whether or not carried on for profit. (b) "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 -2- r • • 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: (i) devoting a non - voting stock of which is owned at least eighty percent (80 %) by such other corporation with which such transaction is had; or (ii) which owns at least eighty percent (80 %) of the voting and non - voting stock of such other corporation; or (iii) at least eighty percent (80 %) 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. (c) "Operate" shall mean and include manage, control or carry on. (d) "Person" shall mean and include all domestic and foreign corporations, associations, syndicates, joint -3- • • • stock corporations, partnerships of every kind, clubs, N,assachusetts Trust, business or common law trusts, societies, and individuals transacting and carrying on any business in the city other than as an employee. (e) "Sale" shall include the transfer, in any manner or by any means whatsoever, of title to property for a considera- tion; 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. (f) "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. Except when operating under a permit issued pursuant to Chapter 5.16, no person, either for himself 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; and 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. -4- 5.04.015 Waiver. The City Council may in its discretion in cases of hardship waive the requirements of Section 5.04.020 of this Code. • 5.04.030 Branch Establishments and Separate Businesses. A separate license must be obtained for each branch establishment or location of the business transacted and carried on and for each separate type of business at the same location, and each license shall authorize the licensee to transact and carry on only the business licensed thereby at the location or in the manner designated in such license. 5.04.040 Evidence of Doing Business. When any person shall by use of signs, circulars, cards, telephone book, or newspapers, advertise, hold out, or represent that he is in business in the City, or when any person holds an active license or permit issued by a governmental agency indicating that he is in business in the City, and such person fails to deny by a • sworn statement given to the License Supervisor that he is not conducting a business in the City, after being requested to do so by the License Supervisor, then these facts shall be considered prima facie evidence that he 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. 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 may apply to the Finance Director for an adjustment isof 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, -5- show his method of business and the gross volume or estimated gross volume of business and such other 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 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 consti- tutional clauses. 5.04.060 Exemptions. 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 is 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 chapter 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 chapter. 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. -6- 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 or educational purposes; provided that convincing evidence is furnished to the Finance Director which establishes that not less than seventy -five percent of the gross receipts derived from any such business, occupation, event or activity will be devoted to religious, charitable, philanthropic or educational purposes. 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 - Disabled Veterans. Every honorably dischared soldier, sailor, marine, or airman of the • United States, who is physically unable to obtain his livelihood by means of manual labor and who is a qualified voter of the State of California, shall have the right to hawk, peddle and vend any goods, wares, or merchandise owned by him, 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 comply with the following requirements before a license may be issued under the provisions of this section: 1. Every applicant must furnish a certificate of physical disability executed by a qualified surgeon of the United States Army, Navy, or Air Force, a • certificate of honorable discharge from the United States Army, Navy, Marines, or Air Force, and a written recommendation from the representatives of the local posts of the American Legion and the Veterans of Foreign Wars. -7- 2. Every applicant must furnish two identifica- tion photographs, one to be attached to the license issued to said applicant, and the other to be attached • to the copy retained by the License Supervisor. -he applicant must also sign both copies of said license at the time of the issuance thereof. (b) A license when issued is subject to the follow- ing conditions: 1. It is non - transferable and for the exclusive use of the licensee named. 2. Applicant's identification photograph must be attached to said license at all times, and failure to comply herewith is grounds for revocation of said license and for refusing its renewal or the issuance of a new license thereafter. 3. Should a license be found in the possession of one other than the licensee named, it shall be • surrendered up to the License Supervisor and cancelled, and neither the licensee named nor the holder thereof shall thereafter be entitled to hold a license under the provisions of this section. 4. The licensee named must identify himself by his signature whenever required to do so by the police officers, license inspector, or License Supervisor of the City. 5. Whenever the licensee uses any wagon, cart, tray, basket or other vehicle or receptacle in vending any such goods, wares, or merchandise, said license shall be carried in a license holder attached to said vehicle or receptacle and in plain view. • (c) It shall be unlawful for any person, other than the licensee named, to use or have in his possession 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 LI'le certificates mentioned in.paragraph (a)1, above, to any other person for the purpose of securing a license as herein provided for. 5.04. 090 • years of age whose within the City is shall be exempt fr 5.04.100 A business license Minor's Exemption. Any person under sixteen annual gross receipts from any business done less than Eight Hundred Dollars ($800.00) Dm the requirements of this Chapter. Exemption for Artists and Art Exhibits. shall not be required of individual artists for the exhibition or display of paintings, sculpture, photo- graphs or other fine arts in public buildings, art galleries, or in any business establishment if the exhibition or display is incidental to the primary business conducted on the premises, and is primarily for cultural and educational purposes. Any artist shall be exempt from the requirements of this title if the sales of his art work within the City do not result in annual gross receipts in excess of One Thousand Dollars ($1,000). 5.04.105 Exemption for Residential Rental Units. No • business license shall be required for the business of renting two or less residential rental units at the same or different locations. A "rental unit" shall mean and include all residential units except one which is the part or full time residence of the owner, and no part thereof is offered or available for rent at any time during the license year. 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. 5.04.120 Revenue • solely to raise revenue for for regulation. 5.04.130 Alterna obtain a license under this Measure. This Chapter is enacted municipal purposes and is not intended Live Tax. All persons required to chapter shall make an annual election -9- as to the method of payment of the tax hereunder. The election may be.to pay a gross receipts form of tax as set forth in Section 5.08.010, 5.08.022, 5.08.024 or the optional method of • determining tax as set forth in Section 5.08.020.. The election of the method of taxation by a licensee for any annual tax period shall be irrevocable for that period and no change or alteration of that election is permissible. 5.04.140 Application for License. Before any license is issued to any person, such person shall make application there- for 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 or places where such business will be conducted and such other information as may be necessary for the enforcement of the provisions of this title. 5.04.150 Application for First License. In addition to filling out the application as set forth in Section 5.04.140 • when a person makes an application for the first issuance of a business license, the person shall make an election between payment of the optional method of determining tax or gross receipts tax and furnish the written election to the Finance Director. Persons electing to pay the optional method of determining tax shall pay that fee upon the issuance of the first license. Persons electing to pay a tax based upon gross receipts shall pay the minimum tax upon issuance of the first license, as provided in Section 5.08.010, 5.08.022 or 5.08.024; provided that the tax during the period from the first issuance of the license to the end of the licensee's fiscal year shall not be less than 1/12th of the annual minimum tax for each month during the period from initial.issuance to the end of the fiscal year of the licensee the exact gross receipts of such business during the period of such -lil- and thereafter the license shall be on an annual basis as provided • in Section 5.04.230. At the end of the period of the first year of the license, the licensee shall within thirty days of the expiration period of said license furniish to the Finance Director a statement, upon a form furnished by the Finance Director, showing the exact gross receipts of such business during the period of such -lil- • • is license and the license fees for such period shall be finally ascertained and paid to the Finance Director. The Finance Director shall not issue any such person another license for the same or any other business until such person shall have furnished to the Finance Director a written statement and pay the license fee as hereinabove required. All statements required to be filed under this section shall include a declaration in the same form as required for statements filed in connection with the statement for renewal for licenses. 9.04.150 Processing of Application. Upon application being made as provided in Section 5.04.130, and when the applicant has tendered the license fee required, the Finance Director shall process the application. If it is an application for a license for a new business or if he.deems it necessary, he shall submit it 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 state law and City ordinances. 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: (a) name of business and location' (b) business license number; (c) type of business by code; (d) date of issuance; (e) date of expiration; (f) term of license; and (g) business mailing address. 5.04.180 Error in Fee Nonprejudicial. In no case shall any mistake by any officer or employee of the City in stating the amount of a license fee prevent or prejudice the collection by the City of what should be actually due from any person carrying on a business subject to a license under the provisions of this title. 5.04.190 Error in Terms voids License. The payment of any license fee required by this title, its acceptance by the City, and the issuance of such license to any person shall not -11- entitle the holder thereof 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 of Two Dollars ($2.00) 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. 5.04.210 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 to the Finance Director of the sum of Ten Dollars ($10.00) within thirty (30) days of such change taking place. If licensee fails to apply for change of address within thirty (30) days of such • change taking place, his license shall terminate and expire at midnight of the thirtieth (30th) day. In the event of any such termination and expiration of a license, 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 required tax or fee. 5.04.220. Posting and Keeping a License. (a) Any licensee transacting and carrying on business at a 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 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 -12- 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, • devise, machine, or piece of equipment the identifying sticker, tag, plate or 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 and Term of License - Transition Period. All business licenses shallbe issued on an annual basis. The period covered by each license shall be from the date of issuance to twelve months from such date; provided, however, for businesses electing to pay a gross receipts tax, as herein provided, the license shall. expire at the end of the business • fiscal year of the licensee. During the "transition period" for existing businesses who elect to pay a gross receipts tax, transitioning from the optional method of determining tax or from the taxing system existing prior to the effective date of adoption of this chapter, to the gross receipts tax, a licensee shall pay a gross receipts tax based upon the gross receipts of the licensee from the date of issuance of the business license to the end of the business fiscal year of the licensee at the rate set forth in Section 5.08.010, 5.08.022 or 5.08.024, provided that the tax paid during the transition period shall not be less than one - twelfth (1 /12th) of the annual minimum tax for each month during the transition period. 5.04.240 Statement for Renewal of Licenses. (a) For all persons having elected to pay gross receipts tax under this • chapter, the person subject to the business tax shall submit to the Finance Director, within thirty days after the close of the license period, a sworn statement setting forth the gross receipts -13- for the preceding year and such person shall pay the license fee as provided in Section 5.08.010, 5.08.022, or 5.08.024. (b) The sworn statement shall be made on forms prescribed by the Finance Director and shall include a declaration substantially as follows: "I declare under penalty of perjury that I am authorized to make this statement and to the best of my knowledge and belief the statement is true, correct and a complete statement made in good faith for the period therein stated, in compliance with the provisions of the Newport Beach Municipal Code." (c) Persons electing to pay the optional method of determining tax shall pay the tax for the following year upon renewal and no sworn statement shall be required for renewal. 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, the Finance Director shall add a penalty of 25% 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 1000 of the amount of the license tax due. 5.04.270 License Fee a Debt. The amount of any license fee and penalty imposed by the provisions of this title shall be deemed a debt to the City of Newport Beach and any person • carrying on any business without first having procured a license from the City so to do shall be liable to an action in the name of the City in any court of competent jurisdiction, for the amount of license fee and penalties imposed on such business. -14- 0 • • 5.04.280 Refunds. The License Supervisor, with the approval of the Finance Director, may refund any license fee or penalty which he determines was erroneously collected, but no license fee shall be refunded if, prior to his 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) Enforce- ment. 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, 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. 5.04.300 Examination of Books, Records, Witnesses, Information Confidential. The Finance Director, or any authorized employee, is hereby authorized to examine the books, rapers and records of any person subject to this ordinance, who has made the election to pay a gross receipts tax, for the -15- purpose of verifying the accuracy of any return made, or,, if directed and required to furnish to the Finance Director, or 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, whether as parties or witnesses, whenever he 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 5.04.320 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. 5.04. 320 Extension of Time. In addition to all other power conferred upon him, 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, except that 1% simple interest -16 -- 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, or 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, whether as parties or witnesses, whenever he 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 5.04.320 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. 5.04. 320 Extension of Time. In addition to all other power conferred upon him, 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, except that 1% simple interest -16 -- shall be added to any tax determined to be payable. 5.04.330 Appeal. 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 Council by filing is a notice of appeal with the City Clerk. The City Council 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 last known address. The Council shall have authority to determine all,questions raised on such appeal. No such determination shall conflict with any substantive provision of this ordinance." SECTION 2. Section 5.08.010 of the Newport Beach Municipal Code is amended to read as follows: "5.08.010 Gross Receipts Tax - Minimum License Fee. Except as provided in Section 5.08.022 and Section 5.08.024, every person carrying on any business within this City who elects to pay a gross receipts tax shall pay an annual license.fee of Thirty Cents ($.30) for each thousand dollars of gross receipts; provided, however, each licensee shall pay a minimum tax of Forty Five Dollars ($45.00) per year, regardless of the gross receipts of such business derived from business activity carried on within the City of Newport Beach." SECTION 3. Section 5.08.020 of the Newport Beach Municipal Code is amended to read as follows: QyC 115.08.020 Optional Method of Determining Tax. For every person carrying on any business within the City who elects not to pay a gross receipts tax as provided hereinabove, such flat rate annual tax of Seventy Five Dollars person shall pay a ($75.00) per year, unless a different fee is specified in QyC this title for that particular business." SECTION 4. Section 5.08.022 is hereby added to the Newport Beach Municipal Code to read as follows: "5.08.022 Tax On Manufacturing. (a) Every persona who elects not to pay the optional method of determining tax, pursuant to Section 5.08.020, who is engaged in the business of manufacturing or processing any goods, wares, merchandise, articles, substance or commodity at a fixed place of business within the City of Newport Beach shall pay an annual license fee of thirty cents ($.30) for each thousand dollars of gross receipts, less the value of raw materials or the value of the partially completed product at the time it enters the manufacturing process within the City. (b) Whenever (1) there are no gross receipts because the manufacturing process within the City of Newport Beach does not result in a finished product, (2) where it is shown to the satisfaction of the Finance Director that the licensee's present method of accounting, using generally accepted principles of accounting consistently applied, does not permit it to determine gross receipts (3) where the cost of raw materials cannot be determined, or (4) the final product consists principally of raw materials or component parts manufactured elsewhere by the licensee, the following alternate method of calculating gross receipts under this section shall be used: The total of all expenses incurred in the manufacturing process at the business location within the City of Newport Beach for payroll, utilities and rent. (c) The business tax under this section shall not be considered either a retailer or wholesaler with respect to the sale of goods manufactured by such business within the City of Newport Beach. (d) Any person electing to pay the tax under this section shall pay a minimum tax of Forty Five Dollars ($45.00) on M. 0 per year." SECTION 5. Section 5.08.024 is hereby added to the Newport Beach Municipal Code. "5.08.024 Tax on Administrative Headquarters. (a) Every person who elects not to pay the optional method of determining tax, pursuant to Section 5.08.020, who is conducting or carrying on the operations of an administrative headquarters shall pay a license fee of thirty cents ($.30) for each thousand dollars of gross payroll of all persons employed at the business at such administrative headquarters. (b) Administrative headquarters shall mean a location where the principal business transacted consists of providing administrative or management related services such as,. but not limited to, record keeping, data processing, research, advertising, public relations, personnel administration, legal and corporate headquarters services, to other locations where the operations of the same business are conducted which lead more directly to the production of gross receipts. (c) A business shall be taxed as an administrative headquarters if the number of employees engaged in managing the business activities exceeds the total number of employees engaged in activities at the same location which would be otherwise taxable under this ordinance. The gross payroll on which the license fee is to be computed shall include those employees engaged in those activities otherwise taxable under this ordinance. (d) "Gross payroll" shall mean and include the total gross amount of all salaries, wages, commissions, bonuses, or other money payment of any kind which a person received from or is entitled to receive from or be given credit for by his employer for any work done or personal service rendered in any trade, occupation or profession, including any kind of deductions before "take home" pay is received; but shall not mean or include amounts paid to traveling salesmen or other workers as I O e allowance or reimbursement for traveling or other expenses incurred in the business of the employer, except to the extent of the excess of such amounts over such expenses actually incurred and accounted for by the employee to the employer. (e) Any person electing to pay under this section shall pay the minimum tax of Forty -Five Dollars ($45.00) per year." SECTION 6. This Ordinance shall be published once in the official newspaper of the City and shall be effective . immediately upon its adoption, pursuant to Section 416 of the Charter of the City of Newport Beach, being an ordinance fixing the rate of taxation. This Ordinance shall apply to business licenses as existing licenses are renewed and shall apply to new applications as of the date of application. This Ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 14th day of November , 1977, and was adopted on the 28th day of November 1977 by the following vote, to wit: ATTEST: City Clerk CERTIFir'D AS Ti 15 OR;- Z34NAL AND CE,T1 ,1-D AS TO U"LiCA) IOC! DATE P . 1977 J d1TY CLERK OF TH_ CITY OF " P07T BCACH AYES, COUNCILMEN: Dostal, Barrett, Kuehn, McInnis, Rogers, Ryckoff, Williams NOES, COUNCILMEN: None ABSENT None -20- HRC:yz 10/19/7 10/27/7 11 /15/71