HomeMy Public PortalAbout13-033RESOLUTION NO. 13-033
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARSON, CALIFORNIA, SUPPORTING SENATE BILL 211 TO
REPEAL THE SUNSET DATE OF THE FRANCHISE TAX BOARD'S
CITY BUSINESS TAX PROGRAM
WHEREAS, Assembly Bill 63 (AB 63) and subsequently Senate Bill 1146 (SB 1146)
authorized the City Business Tax Program which has been a leading source of revenue to many
cities and the State of California since 2002; and
WHEREAS, AB 63/SB 1146 contained a provision which will sunset the Franchise Tax
Board (FTB) City Business Tax Program on December 31, 2013; and
WHEREAS, AB 63/SB 1146 authorized the California State Franchise Tax Board to
disclose certain income tax records related to business activities of residents, corporations, and
other entities to cities; and
WHEREAS, the City of Carson utilizes the FTB data to check existing business license
records and identify unregistered businesses with the City; and
WHEREAS, the City of Carson generates additional revenues from the FTB City
Business Tax Program.
NOW, THEREFORE, be it resolved by the City Council of the City of Carson,
California, that:
Section 1. The above recitals are true and correct and incorporated herein by this
reference.
Section 2. SB 211 will provide stability and reliability to the tax data -sharing
program in order to help the City locate businesses that have not paid business license taxes and
related fees.
Section 3. Based on the foregoing recitations and all evidence presented to and
considered by the City Council, it does hereby declare its support for SB 211 and urges the
California State Legislature and Governor to support SB 211.
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PASSED, APPROVED and ADOPTED this 16'h day of April, 2013.
Mayor Jim Dear
ATTEST:
City Clerk Donesia L. Gause, CMC
APPROVED AS TO FORM:
(ni y �kttornK 74'
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ) ss.
CITY OF CARSON
RESOLUTION NO. 13-033
Page 2 of 2
1, Donesia L. Gause, City Clerk of the City of Carson, California, do hereby certify that the whole
number of members of the City Council is five; that the foregoing resolution, being Resolution No.
13-033 was duly and regularly adopted by said Council at a regular meeting duly and regularly held
on the 16 th day of April, 2013, and that the same was passed and adopted by the following vote:
AYES:
COUNCIL MEMBERS:
Mayor Dear, Gipson, Davis -Holmes and Robles
NOES:
COUNCIL MEMBERS:
None
ABSTAIN:
COUNCIL MEMBERS:
None
ABSENT:
COUNCIL MEMBERS:
Santarina
City Clerk Donesia L. Gause, CMC
City of Carson
Report to Mayor and City Council
April 16, 2013
New Business Consent
SUB ECT: CONSIDER RESOLUTION NO. 13-033 SUPPORTING SENATE BILL 211 TO
REPEAL THE SUNSET DATE OF THE FRANCHISE TAX BOARD'S CITY
BUSINESS TAX PROGRAM
Anitted b acq el n Aco Approved by David C. Biggs
y y City Manager
S ed by acquelyn Aco
Director of Administrative S ices
SUMMARY
The City Council is asked to approve Resolution No. 13-033 (Exhibit No. 1) in
support of Senate Bill (SB) 211 (Price) (Exhibit No. 2) which would permanently
repeal the sunset date of the reciprocal sharing of tax information between the
Franchise Tax Board (FTB) and a city's tax officials.
RECOMMENDATION
1. WAIVE further reading and ADOPT Resolution No. 13-033, "A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARSON,
CALIFORNIA, SUPPORTING SB 211 TO REPEAL THE SUNSET DATE
OF THE FRANCHISE TAX BOARD'S CITY BUSINESS TAX
PROGRAM."
2. SEND executed copies of Resolution No. 13-033 to State Senators Ted Lieu,
Curren Price, Roderick Wright, and Ryan Eisberg; Assemblyman Isadore Hall,
III; Congresswoman Janice Hahn, and to members of the Senate Governance
and Finance Committee.
ALTERNATIVES
TAKE the following actions:
1. MODIFY and APPROVE Resolution No. 13-033 as the City Council may
require.
2. TAKE another action that the City Council deems appropriate.
IV. BACKGROUND
Previously AB 63 and SB 1146 authorized the FTB to enter into agreements with
local jurisdictions to share income tax information. FTB's program, known as the
City Business Tax Program, is scheduled to sunset on December 31, 2013. There
is no charge to participate in the program if information is transferred between the
City and FTB.
SB 211 repeals permanently the sunset of the City Business Tax Program that
authorizes the FTB to exchange tax information with city tax officials in order to
city of Carson Report to Mayor and City Council
April 16, 2013
identify businesses not satisfying both State and local business license tax
requirements. FTB data on local business-related income tax filers assists the City
in identifying thousands of unlicensed businesses and generates business license
revenue.
SB 211 is fully supported by the California Municipal Revenue & Taxation
Association (CMRTA), a statewide association of municipal revenue and taxation
officials. it is scheduled to be heard before the Senate Governance and Finance
Committee on April 24, 2013 and staff is requesting the City Council's support for
passage of this bill. If approved, copies of the adopted Resolution will be sent to
all local state representatives and other appropriate state representatives and
organizations.
V. FISCAL IMPACT
Approval of SB 211 will enable the City to receive its revenue stream of
approximately $1.7 million annually in business license and related fees from this
program.
V1. EXHIBITS
1. Resolution No. 13-033. (pgs. 3 - 4)
2. Senate Bill 211 Text. (pgs. 5 - 9)
Prepared by: Boris Sztorch, Revenue Manager
TO:RevO9-04-2012
Reviewed by: city Treasurer
EAdCity Clerk i
istr j
ministrative Services Public Works
Community Development Community Services
Date
Action taken by City Council
UATM
RESOLUTION NO. 13-033
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARSON, CALIFORNIA, SUPPORTING SENATE BILL 211 TO
REPEAL THE SUNSET DATE OF THE FRANCHISE TAX BOARD'S
CITY BUSINESS TAX PROGRAM
WHEREAS, Assembly Bill 63 (AB 63) and subsequently Senate Bill 1146 (SB 1146)
authorized the City Business Tax Program which has been a leading source of revenue to many
cities and the State of California since 2002; and
WHEREAS, AB 63/SB 1146 contained a provision which will sunset the Franchise Tax
Board (FTB) City Business Tax Program on December 31, 2013 - and
WHEREAS, AB 63/SB 1146 authorized the California State Franchise Tax Board to
disclose certain income tax records related to business activities of residents, corporations, and
other entities to cities; and
WHEREAS, the City of Carson utilizes the FTB data to check existing business license
records and identify unregistered businesses with the City; and
WHEREAS, the City of Carson generates additional revenues from the FTB City
Business Tax Program.
NOW, THEREFORE, be it resolved by the City Council of the City of Carson,
California, that:
Section 1. The above recitals are true and correct and incorporated herein by this
reference.
Section 2. SB 211 will provide stability and reliability to the tax data -sharing
program in order to help the City locate businesses that have not paid business license taxes and
related fees.
Section I Based on the foregoing recitations and all evidence presented to and
considered by the City Council, it does hereby declare its support for SB 211 and urges the
California State Legislature and Governor to support SB 211.
[MOREI
EXHIBIT NO. o i
/3
PASSED, APPROVED and ADOPTED this day of April, 2013
Mayor Jim Dear
ATTEST:
City Clerk Donesia L. Gause, CMC
APPROVED AS TO FORM:
City Attorney
RESOLUTION NO. 13-033
0
SB 211 Senate Bill — INTRODUCED
SENATE BILL
introduced by Senator Price
February 11, 2013
No. 211
An act to amend Sections 19551.1 and 19551.5 of, and to amend and repeal Section
19551 of, the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 211, as introduced, Price. Tax administration: disclosure of information: Franchise
Tax Board and cities. ecember 31, 2013, a city that has entered into a
Existing law authorizes, until D
reciprocal agreement, as defined, with the Franchise Tax Board, to exchange tax
information, as provided. Existing law limits the use of the tax data received from the
Franchise Tax Board for business tax administration purposes and provides that any
other use or disclosure of the information is punishable as a misdemeanor.
This bill would delete the repeal date of the provisions relating to the reciprocal
agreements between the Franchise Tax Board and cities, thus indefinitely extending the
duration for these provisions.
Because this bill would continue the operation of the reciprocal agreement tax
information agreement, and the unauthorized use of such information would be a
crime, it would impose a state -mandated local program.
The California Constitution requires the state to reimburse local agencies and school
districts for certain costs mandated by the state. Statutory provisions establish
procedures for making that reimbursement. ired by this act for a specified
This bill would provide that no reimbursement is requ
reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local
program: yes.
The people of the State of California do enact as follows:
P2 1 SECTION 1. Section 19551 of the Revenue and Taxation Code,
2 as amended by Section 1 of Chapter 345 of the Statutes of 2008,
3 is amended to read:
4 19551. (a) The Franchise Tax Board may permit the
5 Commissioner of Internal Revenue of the United States, other tax
6 officials of this state, the Multistate Tax commission, the proper
7 officer of any state imposing an income tax or a tax measured by
8 income or the authorized representative of that officer, or the tax
9 officials of Mexico, if a reciprocal agreement exists, to inspect the
10 income tax returns of any taxpayer, or may furnish to the
11 commission, or the officer or the authorized representative thereof
12 an abstract of the return or supply thereto information concerning
13 any item of income contained in any return or disclosed by the
14 report of any investigation of the income or return. The information
15 shall be furnished to the Multistate Tax Commission, the federal
16 or state officer or his or her representative, or the officials of
17 Mexico for tax purposes only. Except when furnished pursuant to
18 a written agreement, information furnished pursuant to this sectior
19 shall be furnished only if the request is in the form of an affidavit
EXHIBIT NO. 0 2
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SB211 Senate Bill — tNTRODUCED
20 under penalty of perjury stating that the purpose for the request
21 relates to an investigation of the tax specified in the request and
22 that the information will be used in the ordinary performance of
23 the applicant's official duties. otherwise
24 (b) Notwithstanding subdivision (a) and except as
25 provided in Section 19551.1, tax officials of political subdivisions
26 of this state shall request information from the Franchise Tax Board
27 by affidavit only. At the time a tax official makes the request, he
28 or she shall provide the affected person with a copy of the affidavit
29 and, upon request, make the information obtained available to that
30 person.
31 (c) For purposes of this section, "reciprocal agreement" means
32 a formal agreement to exchange information between national
33 taxing officials of Mexico and taxing authorities of the State Board
34 of Equalization, the Franchise Tax Board, and the Employment
35 Development Department. Furthermore, the reciprocal agreement
36 shall be limited to the exchange of information that is essential for
37 tax administration purposes only. Taxing authorities of the State
38 of California shall be granted tax information only on California
P3 1 residents. Taxing authorities of Mexico shall be granted tax
2 information only on Mexican nationals.
3 (d) This seetion shall rermain in effeet thfeut-h���
4 Deee nber 31, 2GI3, and sh ill be rle����, 2014.
5 SEC. 2. Section 19551 of the Revenue and Taxation Code, as
6 added by Section 2 of Chapter 345 of the Statutes of 2008, is
7 repealed.
6 19551. "a' The Franeh Tax Board iiinay pefff4t-�
k )
9 eern iissioner of internal Revefttte-af the-IJI::liI::J;;;,Jil
offieer: of a iy state ifn 2)asing an ineeme ta x a - a ta ii� rn e a stlfe4-b�-
+-2- or the atitheriped repre -e���
+3 of Mexiee, if a reeipreeal agre fnent exists, -t -o
+4 ineeme tax i-eturns of I- rnish to the
+-5 c-angfflissiam, or t te-eff+eel or ih� authorized repre entative ther i ecif
+6 an abstraet of the return or stipply thereto infer iation eane - I II—J
+-7 any item of rt4tiflil-01, di, 1, !)sed 5y the
repart of an ehirm. The infefntatieft-
Ef)mmts-s�, the fedi
1-9 shall De fitirnished to f I &at+ve-,-or the offleia
2-a or state off' when ftjrnis4te4-ptlf-����
furnished Pdr9dant tO this-3eetierff-
-a writteit-agfeeffteftt-,-tftf,,,I"�lI
-273 shall be furnishei only if the requ �st is in the ferfn of an affidavit
-24 tinder penalty of I - , . - itEiii::: the request
-275 relates to an investigation of the tax and
276 that the information wH4-be used in the or 4ftaf-����
-1 VP I
z-7 the applieant's offleial duties.
-2�B (h) liletwithsta iding subdivision (a), it ix off
z ag
sitibdivi5ions of tai st Ae sha+Pfecltte7FyiHniferrmation4rom
-3-e Franehise Tax B(5,at:d by a fifida iv+� � ::!,,nll tiline a to-)t-offieial
-3+ n9akes the -request, he or she shall pmvade the -affeeted-pefsoft-wMi`i
I �! :!,F:!!;i;�—,n=i the inforntatioit-
-3-2- a eapy of the affidatil: :ll:iiilJ; 1:1 Pf:1 1:1
-3-3 obtained available-t&-t��-
-34 (e) For purposes of
-3-5 a formal agreement to exeha national-
% taxing offleialg )f Mexieo and taxing authorities of the State -Boa -rd-
-3-7 of Eqtializati0iiii the Franehil5e Tax Baard—,and-We���
-3-B Development Department. Furthermore, the reeipraea4-agfeeffteiiii
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SB211 Senate Bill —INTRODUCED
-3,9, shall fte+f�to of information that is
of the
i:19:19HI )1!::!! 1
1 2 1:)
lav&"t�7
-3 infor �! Itis f) :11 11;;11 :11 J 51_r�,
4 �dH
5 SEC. 3. Section 19551.1 of the Revenue and Taxation Code
6 is amended to read:
7 19551.1. (a) (1) The Franchise Tax . Board may permit the tax
8 officials of any city to enter into a reciprocal agreement with the
9 Franchise Tax Board to obtain tax information from the Franchise
lo Tax Board, as specified in subdivision (b). ment" means
11 (2) For purposes of this section, "reciprocal agree
12 a formal agreement to exchange information for tax administration
13 purposes between tax officials of a city and the Franchise Tax
14 Board.
15 (b) The information furnished to tax officials of a city under
16 this section shall be limited as follows:
17 (1) The tax officials of a city are authorized to receive
18 information only with respect to taxpayers with an address as
19 reflected on the Franchise Tax Board's records within the
20 jurisdictional boundaries of the city who report income from a
21 trade or business to the Franchise Tax Board.
22 (2) The tax information that may be provided by the Franchise
23 Tax Board to a city is limited to a taxpayer's name, address, social
24 security or taxpayer identification number, and business activity
25 code. vided to the taxing authority of a city
26 (3) Tax information pro
27 may not be furnished to, or used by, any person other than an
28 employee or agent of that taxing authority. by
29 (4) The information provided to the tax officials of the city
30 the Franchise Tax Board under this section is subject to Section
31 19542, and may not be used for any purpose other than the city's
32 tax enforcement, or as otherwise authorized by state or federal
33 law. plies to this section.
34 (5) Section 19542.1 ap ot provide any information
35 (c) The Franchise Tax Board may n
36 pursuant to this section until all of the following have occurred:
37 (1) An agreement has been executed between a city and the
38 Franchise Tax Board, that provides that an amount equal to all
39 first year costs necessary to furnish the city information pursuant
40 to this section shall be received by the Franchise Tax Board before
P5 1 the Franchise Tax Board incurs any costs associated with the.
2 activity permitted by this section. For purposes of this section, first
3 year costs include costs associated with, but not limited to, the
4 purchasing of equipment, the development of processes, and labor.
5 (2) An agreement has been executed between a city and the
6 Franchise Tax Board, that provides that the annual costs incurred
7 by the Franchise Tax Board, as a result of the activity permitted
8 by this section, shall be reimbursed by the city to the Franchise
9 Tax Board. scribed in paragraph (1), the
10 (3) Pursuant to the agreement de
11 Franchise Tax Board has received an amount equal to the first year
12 costs. he type of tax information
13 (d) Any information, other than t
14 specified in subdivision (b), may be requested by the tax officials
15 of a city from the Franchise Tax Board by affidavit. At the time a
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1-77
SB211 Senate Bill —INTRODUCED
16 tax official makes the request, he or she shall provide the person
17 whose information is the subject of the request, with a copy of the
18 affidavit and, upon request, make the information obtained
19 available to that person. t invalidate any other law. This section
20 (e) This section does no from obtaining information
21 does not preclude any city or county
22 about individual taxpayers, including those taxpayers not subject
23 to this section, by any other means permitted by state or federal
24 law. on shall be construed to affect any
25 (f) Nothing in this secti
26 obligations, rights, or remedies regarding personal information
27 provided under state or federal law.
28 (g) Notwithstanding subdivision (c) , the Franchise Tax Board
29 shall waive a city's reimbursement of the Franchise Tax Board's
30 cost if a city enters into a reciprocal agreement as defined in
31 paragraph (2) of subdivision (a). The reciprocal agreement shall
32 specify that each party shall bear its own costs to furnish the data
33 involved in the exchange authorized by this section and Section
34 19551.5, and a city shall be precluded from obtaining
35 reimbursement as specified under Section 5 of the act adding this
36 subdivision. and ineludin
3-7 �h) This seetion shall remain in effeet+�rr� 9__
-3-B Beeember-B!, 23!3, and shall be - :1,14:11J 11:1
39 SEC. 4. Section 19551.5 of the Revenue and Taxation Code
40 is amended to read:
P6 1 19551.5. (a) Notwithstanding any other law, each city that
2 assesses a city business tax or requires a city business license shall,
3 upon the request of the Franchise Tax Board, annually submit to
4 the Franchise Tax Board the information that is collected in the
5 course of administration of the city's business tax program, as
6 described in subdivision (b). . f the
7 (b) Information, collected in the course of administration o
8 city's business tax program, shall be limited to the following:
9 (1) Name of the business, if the business is a corporation,
10 partnership, or limited liability company, or the owner's name if
11 the business is a sole proprietorship.
12 (2) Business mailing address.
13 (3) Federal employer identification number, if applicable, or
14 the business owner's social security number.
15 (4) Standard Industrial Classification (SIC) Code or North
16 American Industry Classification System (NAICS) Code.
17 (5) Business start date.
18 (6) Business cease date.
19 (7) City number.
20 (8) Ownership type. is section shall be filed on
21 (c) The reports required under th
22 magnetic media such as tapes or compact discs, through a secure
23 electronic process, or in other machine- readable form, according
24 to standards prescribed by regulations promulgated by the
25 Franchise Tax Board.
26 (d) Cities that receive a request from the Franchise Tax Board
27 shall begin providing to the Franchise Tax Board the information
28 required by this section as soon as economically feasible, but no
29 later than December 31, 2009. The information shall be furnished
30 annually at a time and in the form that the Franchise Tax Board
31 may prescribe by regulation. ax Board under
32 (e) The city data provided to the Franchise T
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SB 211 Senate Bill — [NTRODUCED
this section is subject to Section 19542, and may not be used for
any purpose other than state tax enforcement or as otherwise
authorized by law. reciprocal agreement with the Franchise
(f) if a city enters into a
Tax Board pursuant to subdivision (a) of Section 19551.1, the city
shall also waive reimbursement for costs incurred to provide
information required under this section and shall be precluded
from obtaining reimbursement as specified under Section 5 of
Chapter 345 of the Statutes of 2008. The reciprocal agreement
shall specify that each party shall bear its own costs to furnish the
data involved in the exchange authorized by Section 19551.1 and
this section, and the Franchise Tax Board shall be precluded from
obtaining reimbursement as specified under subdivision (c) of
Section 19551-1. quired to provide information to the
(g) A city shall not be re
Franchise Tax Board pursuant to this section if the Franchise Tax
Board fails to provide tax information to the city pursuant to a
reciprocal agreement entered into pursuant to subdivision (a) of
Section 19551 . 1 for reasons other than concerns related to
confidentiality of tax information provided to the city.
i n--effeII::::J::
Ell J::I! 11! ta*-be-fepe;
SEC. 5. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.
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40
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