HomeMy WebLinkAbout2021-05-11; City Council; Resolution 2021-105RESOLUTION NO. 2021-105
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, GRANTING IN PART THE BUSINESS LICENSE TAX APPEAL OF
TAYLOR MADE GOLF COMPANY, INC.
WHEREAS, on Jan. 16, 2019, the city manager signed Administrative Order No. 81 — Business
License Tax Procedures; and
WHEREAS, Administrative Order No. 81 adopted an apportionment formula based on three
factors: sales, payroll, and property (apportionment formula); and
WHEREAS, the apportionment formula calculates the percentage of a business's sales in
Carlsbad, the percentage of the business's payroll in Carlsbad, and the percentage of the business's
property in Carlsbad, then adds these percentages together and divides them by three to determine
an apportionment percentage, which represents the business's activity in Carlsbad; and
WHEREAS, the apportionment formula's apportionment percentage is applied to the business's
gross receipts to determine the portion of gross receipts taxable in Carlsbad; and
WHEREAS, the apportionment formula is derived from the Uniform Division of Income for Tax
Purposes Act formula, which the United States Supreme Court and the California Supreme Court have
determined is constitutional (Container Corporation of America v. Franchise Tax Board (1983) 463 U.S.
159, 170, 183-184; Microsoft Corporation v. Franchise Tax Board (2006) 39 Ca1.4th 750, 756); and
WHEREAS, on Dec. 2, 2019, following an audit, the license collector issued an Initial
Determination finding TaylorMade Golf Company, Inc. (TaylorMade) owed unpaid business license
taxes and penalties of $350,332 for tax years ending 2016 through 2020; and
WHEREAS, on Dec. 11, 2019, TaylorMade requested a hearing on the Initial Determination; and
WHEREAS, on Feb. 27, 2020, the license collector conducted a hearing on the Initial
Determination, at which TaylorMade presented information and arguments in support of its position;
and
WHEREAS, on March 20, 2020, TaylorMade submitted supplemental information for the license
collector's consideration; and
WHEREAS, on July 20, 2020, the license collector issued a Final Determination abating the Initial
Determination as to business license taxes and penalties owed for tax years ending 2016 through 2017
and finding Taylor Made owed unpaid business license taxes and penalties of $218,211 for tax years
ending 2018 through 2020; and
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WHEREAS, on Sept. 16, 2020, TaylorMade filed a notice with the City Clerk's Office appealing
the license collector's Final Determination to the City Council; and
WHEREAS, on May 4, 2021, the City Council conducted a public hearing on TaylorMade's appeal
and heard evidence and arguments from TaylorMade and the license collector; and
WHEREAS, the City Council determined the apportionment formula in Administrative Order
No. 81 should only apply prospectively from Jam 16, 2019, and any penalties for taxes owed by
TaylorMade prior to the then should be abated; and
WHEREAS, based on the City Council's determination, the license collector has recalculated the
business license taxes and penalties owed by TaylorMade to be $147,135 through the period ending
Oct. 31, 2020.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.The above recitations are true and correct.
2.The apportionment formula in Administrative Order No. 81 is valid and constitutional.
3.The apportionment formula in Administrative Order No. 81 applies prospectively from
Jan. 16, 2019.
4.The penalties for taxes owed by TaylorMade before Jan. 16, 2019 are abated_
5.The business license taxes and penalties owed by TaylorMade through the period ending
Oct. 31, 2020 are $147,135.
6.The time within which judicial review of this decision must be sought is governed by
Code of Civil Procedure, Section 1094.6, which has been made applicable in the City of
Carlsbad by Carlsbad Municipal Code Chapter 1.16. Any petition or other paper seeking
judicial review must be filed in the appropriate court not later than the 90th day
following the date on which this decision becomes final; however, if within 10 days after
the decision becomes final a request for the record of the proceedings accompanied by
the required deposit in an amount sufficient to cover the estimated cost of preparation
of such record is filed with the City Clerk's Office, the time within which such petition
may be filed in court is extended to not later than the 30th day following the date on
which the record is either personally delivered or mailed to the party, or the party's
attorney of record, if the party has one.
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MATT HALL, Mayor
75Ac-
BARBARA ENGLESON, City Clerk
N-17,51-1-1-1).° 1724;'
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 11th day of May, 2021, by the following vote, to wit:
AYES: Blackburn, Acosta, Bhat-Patel, Schumacher.
NAYS: Hall.
ABSENT: None.
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