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Home My WebLink About1995-10-03; City Council; 13340; APPEAL OF BUSINESS LICENSE TAX LATE PENALTY PAYMENTa co N m I a 2 g -rl u -I 0 m 5 2 a 0) JJ PI a 0 (6 -I. .rl c) d 0 3 u z ,a 0 13 F: 0 '0 4 t! 0 z 2 0 0 'rr) -1 -\ I4 P "I CITY OF CARLSBAD - AGEND BILL u AB# /!d'&b DEPT. HD. & TITLE: APPEAL OF BUSINESS LICENSE MTG. 10/03/95 CITY MG ,a DEPT. FINANCE CITY ATTY. @ TAX LATE PENALTY PAYMENT RECOMMENDED ACTION: Adopt Resolution No. P=J<'denying the appeal by Floral Express of the penalties on Business License Tax for the tax years which began on November 1, 1993 and 1994. I ITEM EXPLANATION: The Carlsbad Municipal Code (Chapter 5.04) requires all businesses operating in the City of Carlsbad to obtain a business license from the City of Carlsbad and to pay the business license tax that is calculated on the estimated gross receipts for the ensuing twelve month tax period: There is also included in the Municipal Code a provision for the businesses that fail to obtain their business license in a timely fashion to be assessed late and delinquent penalties to be paid in addition to the business license tax for that respective period. Floral Express commenced business ,in the City of Carlsbad on October 31, 1993 without first obtaining a business license. During a field assignment on June 13, 1995, the City auditor observed Floral Express conducting business. The company was advised that a business license was required and an application was left in their possession. On July 7, Mr. Guy T. Harden, the company president, returned the application along with an initial remittance of $298.27. Because Mr. Harden had failed to reflect the date that the company.started business in the City, the auditor visited the premises of the company to obtain the missing data on the business license application. After completion of the auditor's report, Floral Express was notified that additional taxes in the amount of $305.00 and penalties in the amount of $301.64 were due and payable because of the continued delinquency since 1993. The company promptly paid the delinquent taxes and penalties. Mr. Harden is now appealing to the City Council for a dismissal of the late penalties. His written appeal (Exhibit 2) states the following: 1. The business moved to Carlsbad in good faith, complying with all building codes in the preparation of the premises, asking the permit department if there were any licenses or other requirements of the City and were told there were none. 2. When informed that the company needed to pay a business license tax, they immediately complied. 3. When informed that an additional amount for penalties in the amount of $301.64 were due, they immediately complied. Page 2 of Agenda Bi ? No. /fJ% 0 4. Since the company was advised that there are no provisions in the Code to administratively waive the penalties for delinquent business license taxes, they have submitted a written request to the Council for relief from City License tax penalties. Staff recommends that the appeal be denied. The code is clear on the issue of the assessment of late penalties. Similar penalties have been assessed to other businesses in the past under the same section of the code. Also, although the City does take steps to inform new businesses about the tax, it is the responsibility of the business to find out about the requirements of the jurisdiction in which they are operating. A business license tax is not an unusual requirement as most cities in California do impose a business license tax or fee. FISCAL IMPACT: Floral Express was assessed delinquent business license taxes in the amount of $603.27 and related late penalties of $301.64 for the tax periods during 1993-94 and 1994-95. The company initially remitted the business license tax for 1995-96 in the amount of $298.27 at the time of filing the application. The company also remitted the additional audit assessment, along with all penalties, in the amount of $606.64. If the appeal were granted, it would result in the loss of $301.64 in business license tax revenue for the fiscal year 1995-96. EXHIBITS: 1. Resolution No. 9r-2J9 denying the appeal of penalties on business license taxes. 2. Letter from Floral Express dated August 22, 1995. 3. Carlsbad Municipal Code section 5.04.020. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 0 RESOLUTION NO. 95-289 RESOLUTION OF THE CITY COUNCIL OF THE CIN OF CARLSBAD, CALIFORNIA, DENYING THE APPEAL OF PENALTIES ON BUSINESS LICENSE TAXES WHEREAS, the City has received a request to appeal the penatties on a business license issued by the City of Carlsbad; and WHEREAS, Chapter 5.04 of the Carlsbad Municipal code requires all businesses operating in the City to obtain a business license and provides for penatties to be assessed for any delinquent taxes; and WHEREAS, the business license taxes paid for the Floral Express business were delinquent for the tax years which began on November 1,1993 and 1994. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the following recitations are true and correct. 2. That the appeal of the penatties by Floral Express is denied. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 10th day of OCTOBER , 1995, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Kulchin, Finnila NOES: Council Member Hall ABSENT: None ATTEST: n ALETHA L dU?E (SEAL) - / - EXHIBIT 2 UJORlDWiD€ DISTRIBUTOR OF FR€SH FIOUJ€,S August 22, 1995 City Council City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008-1989 Ref: Request for Relief from City License tax penalty Dear Sir/Madam: I request that the city council cancel the business license tax penalty of $301.64 that was imposed on our company. 1. In good faith we moved our business to Carlsbad, complied with all building codes to set up our premises, and asked the permit department if there were any licenses or other requirements we need to deal with. We were told that there were none. 2. When informed several weeks ago that we needed to file a business license and pay tax, we complied and paid as required. 3. At this point we have now been sent a form showing tax paid, tax to be paid now for year ending October;1996 and penalties of $301.64 which we are asking to be cancelled. We were also told there were no previsions to waive penalties nor anyone other than the’city council to whom to appeal. That is why we are approaching you now. Floral Express has been in business for 10 years and has always been a good corporate citizen. We have not been late in paying anyone; we do not have a history of late payment with anyone, nor are we familiar with anyone charging us penalties for unavoidable errors. L It is bad enough that Carlsbad bases city licenses on a percentage of our gross revenue collected a year in advance. Irvine like most cities charged us $50 for a business license. Worse is that our penalty was caused due to faulty city information. I hereby request that the city of Carlsbad treat us as a good citizen, welcome us as a new business to the town and waive the tax penalty. Thanking you for your consideration, &x:L res dent GTH : hg cc: A1 Capuchino, Auditor 5895 Rvmida Encinos Suit@ I07 Carlsbad ; CR 92008 USfl (6 IO) 93 I -6600 FRY (6 19) 9? I 5050 7 0 0 EXHIBIT 3 5.04.0 11 Chapter 5.04 LICENSING BUSINESSES GENERALLY sections: s.04.010 Definitions. 5.04.020 License required. 5.04.030 Violations. 5.04.040 5.04.050 5.04.060 5.04.070 5.04.080 5.04.00s 5.04.090 5.04.100 5.04.1 10 5.04.120 License nontransferable except for changed location, Duplicate liceases. Separate license for each piace of basinem. pwtine and display of license. Exemtiom. constimtiolmi appsrtjonment. Appeals to cod. Unianfai operadm or nuisance. vested righa Rehd to issue to hazardous bas"Appeai. 5.04.130 Adjustments. 5.04.140 Rrmits or fipachises in lieu of . pnscribedlicenses. 5.04.010 Definitions. *i As used in this tide the foliowing words and mtipt~ shall aljo indude all receipts from coi operated vending. machines. Excluded fro1 grossrecciptss~becashdiscou.ntsailowedan talcen on sales, any tax required by law to t included in' or added to the purchase price an coliectcd from the customer or purchaser, SUE part of the sale price -of property .returned t purchasers upon recision of the connact of sa as is rehded either in cash or by credit: an amounts collected for others when the busine: is acting as an *nt or.'trustec to the extent th; such amounts ace paid to those for whom ca lected (Ord. 6049 Q 1,1973: ord 6040 0 6,1967 5.06.020 Liceme required. Then are imposed upon persons engaged i the specified businks in this title, within tl city limits, license~taxes in the amounts her inafterpnxribed The license tax shail be'd~ and payable before' the commencement of ax new business ad deiinquent on and after tl thirty-&. day after'commencement of a ne business. Fbr all prkviody licensed business the License tax shall be due .and payable annual in advance on the m'day ofthe month in WIUC the business was originaily'cstablished and deli quent on the tenth day of the foilowing month, phrirses shall have the foIlowing meanings the .event any Penon -fails to pay License t; " " (1) "Business" includes professions, trades, . before it becomes deiinqwnt, his tax sW thc whether or not carried on for profig twenty-five pemnt of the license taxand the1 occupations and all and every kind of ding .automatidly be increased by a penalty (2) "Gross receipts" includes the total &erincrcasedoneperccnt perday foreachadc amount of the sale price of all sales and the total ' tional delinquent daz provided however, th amount charged or received fot the performance thc amount of slch-automatic increase over t: of any act or service. of whatever Mtwe it may be, for which a charge is made or credit allowed, whether or not such act or service is done as part of or in connection with' the sale of materiais, goods, wareS or mercixmdise. Included in gross receipts shall be ail 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 the materials used, labor or sentice c6i interest paid or payable, or losses or other expenses whatsoever. Gross usual tax shall in no event exceed fifty percent the amount of the usual license tax due. Xothi contained in this section shall be consvued permitting the operation of a business which intended to be operated for only a limited peril of time and.0~ a nonpermanent basis. such athletic events, carnivals, etc., without haw fm obtained a business license so to do. Ea such license shall show the number of su license, the period of time covered thereby. I name of the paon to whom issued. and 1 113 I \ FILE No. 353 1#/03 '95 14:' U:l-LUKRL tXPKtSS "(y 619 w PHtit 1 '' E 2 - REPLY '' FAX MESSAGE UO~lDl.lJlE DfST~l8UI'oR QF GESkt fioU€RS TO : Ms. Lee Rautenkranz/ City Clerk City of Carlsbad, Carlsbad, CA Fax #: 1-619-720-9461 October 3, 1995 FROM: Guy TI Harden/ President P- 1/ 1 Dear Ms. Rautenkranz: Ref: Request to Continue Appeal of Floral Express Business Tax Penalty Please would you take us off the City Council agenda this evening (last item under the Finance Dept) and continue our Appeal of our nusineas. License Tax Penalty to a subsequent week (as an early "Consent" Item). It is impossible for me to remain in Carlsbad that late this evening; I was only informed of being the last agenda item at lunch the. My residence is more than an hour's drive away in central Orange county. Thank you for your assistance. ""-"""""~"-~"""""""-~"""""""~""~""~""""- -'a &; ------wm~wm~-------ru~~~~~~---~~~~aa~~~~~~ -- .CIII" Please reply below then fax back at you ea iest co """"~""""""~"""""""""-"~ "" "- I ""~"""""""""""-"""""-"~""""~"" QI& """" Send Your Reply back to: (619) 931-5959 """""""""""""--"""""""""~~""""""""~""- I S825 Rwnido €mms Su~tcz I07 Corkbud C,4 92008 US6 (6 I Y') 93 1-6600 Ff3X (6 i 0) 93 1-5959 e a City of Carlsbad October 16, 1995 Mr. Guy T. Harden President, Floral Express 5825 Avenida Encinas, Suite 107 Carlsbad, CA 92008 Re: Denial of Appeal The Carlsbad City Council, at its meeting of October 10, 1995, adopted Resolution No. 95-289, denying the appeal of penalties on Business License taxes. As a courtesy, enclosed is a copy of Resolution No. 95-289 for your records. x-, CMC Assistant C' Clerk - KRK: ijp Enclosure 1200 Carlsbad Village Drive - Carlsbad, California 92008-1 989 0. (61 9) 434-2808