Chapter 3.16 SALES TAX*

For the privilege of selling tangible personal property at retail a tax is hereby imposed upon all retailers at the rate of one percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in the city of Santa Cruz on or after July 1, 1956. The tax imposed by this chapter is in addition to any and all other taxes imposed by any other law or section of this code.

(Prior code § 2320).

3.16.020 TAX LEVIED IN SAME MANNER AS STATE TAX.

The tax hereby levied, except as otherwise herein provided, is levied in the same manner, to the same extent and under the same conditions as sales taxes are levied pursuant to Part 1 of Division 2 of the California Revenue and Taxation Code, known as the “Sales and Use Tax Law,” as amended and in force and effect on July 1, 1956.

(Prior code § 2321).

3.16.030 ADOPTION OF STATE SALES TAX LAW BY REFERENCE – EXCEPTIONS.

(a) All of the provisions of the “Sales and Use Tax Law,” as amended and in force and effect on July 1, 1956, except the provisions thereof pertaining solely to the “Use Tax” and Sections 6051, 6052, 6053, 6066, 6067, 6068, 6069, 6070, 6071, 6451, 7052, 7056, 7101, 7102, 7151, 7152, 7153, applicable to sales of property at retail, are hereby adopted and made a part of this chapter as though fully set forth herein, and all provisions of any other section of this code in conflict therewith are inapplicable to this chapter and the tax hereby imposed.

(b) “Gross receipts,” as used herein, does not include the amount of any tax imposed by the state of California upon or with respect to retail sales whether imposed upon the retailer or upon the consumer.

(c) “Sale” means and includes, in addition to the meanings contained in paragraph (a) of this section, the withdrawal by a retailer in this city of tangible personal property from a place in this city or from a place in California outside this city under the control of the retailer, or from a place in California outside this city at the order of the retailer for delivery in any manner at a point in California outside this city under such circumstances that the transaction of which the withdrawal is a part would have been considered a sale within the meaning of paragraph (a) of this section had the point of delivery been within this city. Provided, however, that withdrawals pursuant to a transaction in foreign or interstate commerce shall not be sales for the purpose of this section.

Charges made for the delivery of tangible personal property so withdrawn shall be included in the gross receipts by which the tax imposed under this section is measured unless such charges are separately stated and are imposed for transportation which occurs after the sale of the property to the purchaser.

(d) All of the provisions of the “Sales and Use Tax Law” hereby adopted, providing for the adoption of rules and regulations and for hearings on the part of the State Board of Equalization, shall be performed by the city council. All other provisions of the “Sales and Use Tax Law” hereby adopted, providing for the performances of official action on the part of the State Board of Equalization, shall be performed by the city clerk.

(e) The city of Santa Cruz shall be deemed substituted for the State of California whenever the state is referred to in said “Sales and Use Tax Law.”

(f) The city attorney shall be deemed substituted for the Attorney General whenever the Attorney General is referred to in said “Sales and Use Tax Law.”

(g) The city clerk shall be deemed substituted for the State Controller or State Board of Control whenever the State Controller or State Board of Control are referred to in said “Sales and Use Tax law.”

(h) The county of Santa Cruz shall be deemed substituted for the county of Sacramento whenever the county of Sacramento is referred to in said “Sales and Use Tax Law.”

(Prior code § 2322).

3.16.040A EXCLUSIONS AND EXEMPTIONS.*

* Section 3.16.040A shall be operative January 1, 1984.

(a) The amount subject to tax shall not include any sales or use tax imposed by the State of California upon a retailer or consumer.

(b) The storage, use, or other consumption of tangible personal property, the gross receipts from the sale of which have been subject to tax under a sales and use tax ordinance enacted in accordance with Part 1.5 of Division 2 of the Revenue and Taxation Code by any city and county, county, or city, in this state shall be exempt from the tax due under this ordinance.

(c) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(d) In addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempted from the use tax.

(Ord. 84-05 § 1, 1984: prior code § 2323).

3.16.040B EXCLUSIONS AND EXEMPTIONS.*

* Section 3.16.040B shall be operative on the operative date of any act of the Legislature of the State of California which amends Section 7202 of the Revenue and Taxation Code or which repeals and reenacts Section 7202 of the Revenue and Taxation Code to provide an exemption from city sales and use taxes for operators of waterborne vessels in the same, or substantially the same, language as that existing in subdivisions (i)(7) and (i)(8) of Section 7202 as those subdivisions read on October 1, 1983.

(a) The amount subject to tax shall not include any sales or use tax imposed by the state of California upon a retailer or consumer.

(b) The storage, use, or other consumption of tangible personal property, the gross receipts from the sale of which have been subject to tax under a sales and use tax ordinance enacted in accordance with Part 1.5 of Division 2 of the Revenue and Taxation Code by any city and county, county, or city in this state shall be exempt from the tax due under this ordinance.

(c) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of waterborne vessels to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the carriage of persons or property in such vessels for commercial purposes.

(d) The storage, use or other consumption of tangible personal property purchased by operators of waterborne vessels and used or consumed by such operators directly and exclusively in the carriage of persons or property of such vessels for commercial purposes is exempted from the use tax.

(e) There are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(f) In addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempted from the use tax.

(Ord. 84-05 § 2, 1984).

3.16.050 ADOPTION OF RULES AND REGULATIONS BY REFERENCE – INTERPRETATIONS.

The rules and regulations of the State Board of Equalization as amended and in force and effect July 1, 1956, pertaining to the interpretation, administration and enforcement of the “Sales and Use Tax Law,” insofar as applicable, except Rule No. 55 (Section 2015, Title 18, California Administrative Code, Sales and Use Tax) shall apply in the interpretation of this chapter until specifically abandoned by the rules and regulations adopted by the city council pursuant to this chapter. The word “city” shall be deemed substituted for the word “state” whenever the word “state” appears in said rules and regulations. In lieu of Rule No. 55, specifically excepted above, the following interpretations shall apply in the administration of this chapter:

(1) This sales tax does not apply to sales of property which is:

(A) Imported into this city from a foreign country and sold by the importer in the original package in which imported;

(B) Sold to foreign purchasers for shipment abroad and delivered to a ship, airplane, or other conveyance furnished by the purchaser for the purpose of carrying the property abroad and actually carried to a foreign destination, title and control of the property passing to the foreign purchaser upon delivery, and no portion of the property being used or consumed in the United States. Copies of U.S. Customs shippers’ export declarations filed with the Collector of Customs must be obtained and retained by retailers to support deductions taken upon this paragraph. The tax applies to the transaction if the property is diverted in transit or for any reason not actually delivered outside the city pursuant to the contract of sale or not shipped abroad by a foreign purchaser, regardless of documentary evidence held by the retailer of delivery of the property to a carrier for shipment outside the city, or to a foreign purchaser for shipment abroad;

(C) Mailed by the seller, pursuant to the contract of sale, to persons in the armed forces at points outside the continental United States, notwithstanding the property is addressed in care of the postmaster and forwarded by him to the addressee. When mail is addressed to Army Post Offices (A/P/O’s) in care of the postmaster or to naval forces addressed in care of the postmaster, it will be presumed that it is forwarded outside California. The seller must keep records showing the names and addresses as they appear on the mailed matter and should keep evidence that the mailing was done by him;

(D) Shipped to a point outside this city pursuant to the contract of sale when the property is marked for export and delivered by the retailer to the “contracting officer,” “officer in charge,” “port quartermaster,” or other officer of the United States for transportation and delivery to the purchaser at such a point.

(2) The sales tax does not apply to sales of airplanes, and parts and equipment for airplanes, transported to a point outside this city pursuant to the contract of sale when such property is delivered to the United States Air Corps or any other agency or instrumentality of the United States for transportation and delivery to the purchaser or someone designated by him at that point.

(3) The sales tax does not apply (either in interstate or intrastate commerce) to sales of property shipped from a point outside the city of Santa Cruz to a purchaser inside the city of Santa Cruz, or to the retailer’s agent in the city of Santa Cruz, for delivery to the purchaser, if none of the elements of sale, other than such delivery, takes place in the city of Santa Cruz.

(4) The sales tax does apply (either in interstate or intrastate commerce) to sales of property shipped from a point outside of the city of Santa Cruz to a purchaser inside the city of Santa Cruz, or to the retailer’s agent in the city of Santa Cruz, for delivery to the purchaser where any element of the sale, in addition to such delivery, takes place in the city of Santa Cruz.

(5) “Element of sale” is hereby defined to include solicitation of an order, the acceptance of an order, the giving of an order, whether such order is given in person, by telephone or by mail, or the payment of the purchase price.

(6) The city clerk may approve the payment of the sales tax by retailers located outside the city in accordance with a formula if he finds that the formula will produce the same or approximately the same tax as if detailed accounting procedures had been followed. A retailer desiring to use such a formula shall furnish such information as may be required by the city clerk to enable him to make the required finding. The formula may be used by the retailer for such period of time, not to exceed one year, as may be authorized by the city clerk in writing, and is subject to renewal, upon application, for periods not to exceed one year.

Payment in full of sales taxes in accordance with an approved formula shall constitute full satisfaction of the retailer’s sales tax liability.

(Prior code § 2324).

3.16.060 VERBATIM EXCERPTS SHALL NOT EXCLUDE BALANCE.

The inclusion of any clause, portion or part of the “State Sales and Use Tax Law,” Part 1, Division 2, of the Revenue and Taxation Code of the State of California, or the rules and regulations of the State Board of Equalization, verbatim in this code shall not in or of itself be deemed to exclude any of the remaining provisions of the “Sales and Use Tax Law” or rules and regulations that are made a part hereof by reference only.

(Prior code § 2325).

3.16.070 APPLICATION FOR PERMIT.

Every person desiring to engage in or conduct business as a seller within the city of Santa Cruz shall file with the city clerk an application for a permit for each place of business from which taxable sales will be made. Every application for a permit shall be made upon a form prescribed by the city clerk and shall set forth the name under which the applicant transacts or intends to transact business, the location of his place or places of business, and such other information as the city clerk may require. The application shall be signed by the owner, if a natural person; in the case of a corporation, by an executive officer or some person specifically authorized by the corporation to sign the application, to which shall be attached the written evidence of his authority.

(Prior code § 2326).

3.16.080 ISSUANCE AND DISPLAY OF PERMIT.

After compliance with Section 3.16.070 by the applicant, the city clerk shall grant and issue to each applicant a separate permit for each place of business from which taxable sales will be made. A permit is not assignable and is valid only for the person in whose name it is issued and for the transaction of business at the place designated therein; provided, however, a change of location may be endorsed upon the permit by the city clerk. The permit shall at all times be conspicuously displayed at the place for which issued.

(Prior code § 2327).

3.16.090 PERMIT FEES.

At the time of making an application for a permit, and at the time a change of location is endorsed upon a permit, the applicant for a permit or for an endorsement of a change of location on a permit shall pay to the city clerk a fee of one dollar.

(Prior code § 2328).

3.16.100 REVOCATION OF PERMIT.

Whenever any person fails to comply with any of the provisions of this chapter or any rule or regulation adopted pursuant thereto, the city council, upon hearing, after giving the person ten days’ notice in writing specifying the time and place of hearing and requiring him to show cause why his permit or permits should not be revoked, may revoke or suspend any one or more of the permits held by the person. The notice may be served personally or by mail in the manner prescribed for the service of notice of a deficiency determination under the “Sales and Use Tax Law.” The city clerk shall not issue a new permit after the revocation of a permit unless the city council of the city of Santa Cruz is satisfied that the former holder of a permit will comply with the provisions of this chapter and the rules and regulations adopted pursuant hereto and directs the city clerk to issue such permit.

(Prior code § 2329).

3.16.110 RENEWAL OF PERMIT.

A seller whose permit has been previously suspended or revoked shall pay the city clerk a fee of one dollar for the renewal or issuance of a permit.

(Prior code § 2330).

3.16.120 UNLAWFUL ACTS.

A person who engages in business as a seller in the city of Santa Cruz without a permit or permits, or after a permit has been suspended or revoked and before the renewal or issuance of a permit, and each officer of any corporation which so engages in business, is guilty of a misdemeanor.

(Prior code § 2331).

3.16.130 DUE DATE.

The taxes imposed by this chapter are due and payable to the city clerk on or before the last day of the month next succeeding each quarterly period, the first quarterly payment to be due and payable under this chapter on the thirty-first of July, 1956. The city clerk may require returns and payment of the amount of taxes for quarterly periods other than calendar quarters depending upon the principal place of or the nature of this business of the seller or retailer or may require returns and payment of the amount of taxes for other than quarterly periods.

(Prior code § 2332).

3.16.140 REIMBURSEMENT.

The tax hereby imposed shall be collected by the retailer from the consumer insofar as it can be done.

(Prior code § 2333).

3.16.150 UNLAWFUL ADVERTISING.

It is unlawful for any retailer to advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the retailer or that it will not be added to the selling price of the property sold or that, if added, it or any part thereof will be refunded. Any person violating any provision of this section is guilty of a misdemeanor.

(Prior code § 2334).

3.16.160 SUIT FOR TAX.

All taxes hereby levied shall be payable to the city clerk and any civil suit for the collection thereof may be filed in any court of competent jurisdiction in the state of California, and the city attorney shall prosecute the action.

(Prior code § 2335).

3.16.170 RESALE CERTIFICATE.

The city clerk may at his option accept a state of California Resale Certificate as evidence that any sale is not a sale at retail, or he may in his discretion require an affidavit from the seller selling forth such information respecting such sale as he deems necessary to determine the nature of such sale.

(Prior code § 2336).

3.16.180 EXTENSION OF TIME – WAIVER OR COMPROMISE.

The city clerk shall have power, for good cause shown, to extend for a period of not to exceed thirty days the time for making any return or paying any amount required to be paid under this chapter, when requested to do so in writing, before the same becomes delinquent. The city clerk may, with the written approval of the city attorney, waive or compromise any penalty or interest that would otherwise accrue under the provisions of this chapter. The city clerk shall make and transmit to the city council quarterly a detailed report of any sums so waived or compromised with the reasons therefor.

(Prior code § 2337).

3.16.190 DISPOSITION OF PROCEEDS.

All moneys collected under and pursuant to the provisions of this chapter shall be deposited and paid into the general fund of the city.

(Prior code § 2338).

3.16.200 DIVULGING OF INFORMATION FORBIDDEN.

It is unlawful for any officer or employee of the city having an administrative duty under this chapter to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of records and equipment of any retailer or any other person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any return, or to permit any return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person. However, the city council may, by resolution, authorize examination of the returns by federal or state officers or employees or by the tax officers of this or any other city if a reciprocal arrangement exists, or by an independent contractor retained by the city in accordance with California Revenue and Taxation Code Section 7056 to assist the city in the collection of the sales tax or in the performance of other governmental functions for which information in the returns is necessary to obtain. Successors, receivers, trustees, executors, administrators, assignees, and guarantors, if directly interested, may be given information as to the items included in the measure and amounts of any unpaid tax or amounts of tax required to be collected, interest and penalties.

(Ord. 94-17 §1, 1994: prior code § 2339).

3.16.210 FALSE OR FRAUDULENT RETURNS.

Any person required to make, render, sign or verify any report under the provisions of this chapter, who makes any false or fraudulent return, with intent to defeat or evade the determination of an amount due and required to be paid hereunder, is guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than $500.00 or by imprisonment in the city or county jail for a period of not more than six months, or by both such fine and imprisonment.

(Prior code § 2340).

3.16.220 PENALTY FOR VIOLATIONS.

Any person, firm or corporation violating any of the terms of this chapter shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than $500.00 or by imprisonment in the city or county jail for a period of not more than six months, or by both such fine and imprisonment.

(Prior code § 2341).