Chapter 4.02 BUSINESS LICENSE TAX

There is established and imposed, commencing on the effective date of the ordinance codified in this chapter, a business license tax at the rates set forth in this chapter. [Ord. 4138 § 2, 1991].

4.02.030 Purpose of this chapter.

This chapter is enacted solely to raise revenue for the general governmental purposes of the County and not for purposes of regulation or of raising revenues for regulatory purposes. All of the proceeds from the tax imposed by this chapter shall be placed in the County’s general fund and used for the usual current expenses of the County. [Ord. 4138 § 2, 1991].

4.02.040 Effect on other ordinances.

Persons required to pay a license tax for transacting and carrying on any business under this chapter shall not be relieved from the payment of any license fee for the privilege of doing such business required under any other ordinance of the County and shall remain subject to the regulatory provisions of other ordinances. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.050 Definitions.

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

(A) “Apartment” means a room or suite of rooms which is designed to be occupied by one family for living or sleeping purposes in an apartment house.

(B) “Apartment house” means a building in which three or more families are living independently of each other.

(C) Average Number of Persons Employed. Whenever in this chapter the annual license tax is based upon the “average number of persons employed,” it shall mean the average number of employees engaged during the three-month period of maximum employment, excluding therefrom temporary seasonal employees not employed for a period in excess of two weeks.

(D) “Business” includes all professions, trades, occupations and callings carried on in the unincorporated area of the County of Santa Cruz for profit or livelihood, including every kind of commercial enterprise, and including the operation of games, machines or mechanical devices. “Business” shall not include the conduct of not to exceed two garage sales by any person during any fiscal year (July 1st through June 30th).

(E) “County” means the County of Santa Cruz.

(F) “Concessioner” means the person who rents or leases a portion of a premises for some specific use.

(G) “Construction contractor” means every person conducting or carrying on a business who is required to be licensed as a contractor by the State of California and who undertakes to, or offers to undertake to, or purports to have the capacity to undertake to, or submits bids to, or does themselves or by or through others construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, railroad, excavation, or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding, or other structures or works in connection therewith. The term “contractor” as used in this section also includes “subcontractor” and “specialty contractor.”

(H) “Contract construction business” means all business activities carried out by construction contractors.

(I) “Employee” means a person who works for an employer, where right or control exists with such employer, where directions on performance of work can be given by employer, and where breach of contract is not involved if work is halted by employer or employee; furthermore, if there is prima facie evidence that a person is included on the payroll deductions, such as Federal taxes and Social Security, the person may be considered to be an employee.

(J) “Engaging in business” means commencing, conducting or continuing in business, and also the exercise of corporate or franchise powers as well as liquidating a business when the liquidators thereof hold themselves out to the public as conducting such business.

(K) “Hotel” or “motel” means a building or series of buildings on one site, containing three or more units used for guest occupancy, and intended and designed to be used for occupancy by temporary guests, and having the usual characteristics of a hotel or motel.

(L) “Itinerant vendor” includes all persons, both principal and agent, who engage in a temporary and transient business in the unincorporated area of the County, selling articles of wearing apparel, dry goods, fancy goods, notions, jewelry, cutlery, groceries, harnesses, machinery, vehicles of all kinds, hardware, photography, tinware, mill products, or merchandise of any class or character with the intentions of continuing such business in such area of the County for a period of not more than 120 days, and who for the purpose of carrying on such business has no fixed place of business, or hires, leases or occupies any room, building or structure herein for the exhibition or sale of such merchandise or merchandise of any class or character, or from which room, building or structure the sales are to be made or business solicited by means of samples or delivery from house to house. Any such person or firm so engaged shall not be relieved from the provisions of this chapter by reason of associating temporarily with any local dealer, trader, merchant or auctioneer or by conducting such temporary or transient business in connection with, or as a part of, or in the name of any local dealer, merchant or auctioneer.

(M) “Manufacturing business” means and includes any business wherein persons are engaged in making materials, raw or partly finished, or assembling finished parts into articles suitable for use.

(N) “Person” includes all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, businesses, or common law trusts, societies, and individuals transacting and carrying on any business in the unincorporated area of the County, other than as an employee.

(O) “Professional” means any person engaged in business or activity characterized by or conforming to the technical or ethical standards of a profession, including, but not limited to, those listed below:

(1) Accountant;

(2) Appraiser;

(3) Architect;

(4) Assayer;

(5) Attorney;

(6) Chemist/pharmacist;

(7) Chiropractor;

(8) Consultant;

(9) Dentist;

(10) Dermatologist;

(11) Designer;

(12) Electrologist;

(13) Engineer:

(a) Chemical,

(b) Civil,

(d) Electrical,

(e) Hydraulic,

(f) Mechanical,

(g) Mining,

(h) Structural;

(14) Entomologist;

(15) Geologist;

(16) Insurance agent;

(17) Landscape architect;

(18) Optician;

(19) Optometrist;

(20) Osteopath;

(21) Physician;

(22) Physiotherapist;

(23) Podiatrist;

(24) Real estate broker;

(25) Roentgenologist;

(26) Stockbroker;

(27) Surgeon;

(28) Veterinarian.

Each person engaged in one of the above-entitled professions, and such other professions as may be defined by the Tax Administrator, shall be deemed to be conducting a separate business for purposes of the business license tax. When two or more professionals employ persons jointly, or by joint agreement or arrangement, each such professional shall be jointly and severally responsible for the payment of the business license tax based on employees.

(P) “Retail business” means every business conducted for the purpose of selling or offering for sale any goods, food, wares or merchandise other than as part of a “wholesale business.”

(Q) “Service business” means every business engaged in providing services for profit or livelihood other than as a professional, as defined in this section. “Service business” shall include but not be limited to businesses providing the services of barbers, hair stylists, repairs, advertising, printing, copying, employment agencies, collection agencies, travel agencies and funeral services.

(R) “Tax Administrator” means the County Auditor-Controller-Treasurer-Tax Collector or their designee.

(S) “Wholesale business” means every business conducted solely for the purpose of selling goods, food, wares or merchandise in whole lots for resale. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.060 Classifications and tax rates.

(A) Class A. Each retail, wholesale, contract, construction and manufacturing business, each business engaged in providing transportation, and each business for which no other classification is provided in this section, shall be treated as a Class A business. Each Class A business shall pay an annual basic license tax in an amount which is the total of a basic license tax of $127.00, as adjusted pursuant to SCCC 4.02.070, plus an additional license tax determined by multiplying the average number of persons employed by the rate of $2.20, as adjusted pursuant to SCCC 4.02.070.

(B) Class B. Each service business, hotel and motel, apartment house, each business engaged in the leasing or renting of commercial or industrial space, and each business engaged in providing recreation and entertainment services and facilities, shall be treated as a Class B business. Each Class B business shall pay an annual license tax in an amount which is the total of a basic license tax of $127.00, as adjusted pursuant to SCCC 4.02.070, plus an additional license tax determined by multiplying the average number of persons employed by the rate of $4.35, as adjusted pursuant to SCCC 4.02.070.

(C) Class C. Each professional shall be treated as a Class C business. Each Class C business shall pay an annual license tax in an amount which is the total of a basic license tax of $127.00, pursuant to SCCC 4.02.070 plus an additional license tax determined by multiplying the average number of persons employed by the rate of $6.50, as adjusted pursuant to SCCC 4.02.070.

(D) Class D. Each itinerant vendor shall be treated as a Class D business. Each Class D business shall pay a license tax in an amount which is the total of a basic license tax of $42.35 as adjusted pursuant to SCCC 4.02.070(B), plus an additional license tax determined by multiplying the average number of persons employed by the rate of $0.73, as adjusted pursuant to SCCC 4.02.070(B).

(E) Class E. Each operator of a merchandise or service faire, exposition, flea market or similar operation which rents or leases spaces to concessioners for less than a total of 180 days during any fiscal year (July 1st through June 30th) shall be treated as a Class E business. Each Class E business shall pay an annual license tax in an amount which is equal to a basic license tax of $127.00, as adjusted pursuant to SCCC 4.02.070, plus an additional license tax determined by multiplying the average number of persons employed by the rate of $2.20, as adjusted pursuant to SCCC 4.02.070. In addition, each operator shall charge each concessioner a license tax in the amount of $0.40, as adjusted pursuant to SCCC 4.02.070, per space for each day that the concessioner rents or leases space, and shall remit the license taxes collected from concessioners to the Tax Administrator on or before the last day of the month following the month during which these license taxes are collected by the operator. Any space for which a Class E business license tax has been paid may be used by a concessioner without the necessity to obtain a separate business license. (See SCCC 4.02.120). [Ord. 4138 § 2, 1991].

4.02.070 Adjustment of tax rates.

(A) Except for itinerant vendors, the license tax for a business shall be adjusted to the extent, if any, that it carries on or transacts business both within the unincorporated areas of the County and also within one or more incorporated cities or other counties. The amount of the license tax for such a business shall be computed based on the proportion of the gross receipts of the business which are derived from its business transactions within the unincorporated areas of the County; provided, that the minimum license tax for any such business shall be equal to 25 percent of the basic license tax and of the additional license tax rates otherwise applicable to the business. The situs of business transactions of a business with a fixed place of business at which customers purchase goods or merchandise shall be the location of the place of business regardless of the residence of the customers or the place of delivery of the goods or merchandise.

(B) Commencing on July 1, 1992, and every July 1st thereafter, the Tax Administrator shall annually adjust the amount of the basic license tax rates and of the additional tax rates for the average number of employees for each class of business specified in SCCC 4.02.060 by the annual change in the Consumer Price Index, All Urban Consumers, for the San Francisco-Oakland-San Jose Metropolitan Area published by the Bureau of Labor Statistics or any replacement index published by said Bureau (“Index”) for the preceding year as illustrated by the following formula:

NTR	=	T	(A)/(B)

NTR	=	New tax rate for the upcoming fiscal year
T	=	Current tax rate
A	=	The Index for April preceding the upcoming fiscal year
B	=	The Index for the previous April

For example, on July 1, 1992, the basic license tax rates and the additional license tax rates shall be adjusted by multiplying them by the April 1992 Index divided by the April 1991 Index. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.080 Review of classification.

(A) In any case where a licensee or an applicant for a license believes that the individual business of the licensee or applicant is not assigned to the proper classification under this chapter because of circumstances peculiar to it, as distinguished from other businesses of the same kind, the licensee or applicant may apply to the Tax Administrator for reclassification. Such application shall contain such information as the Tax Administrator may deem necessary and require in order to determine the applicant’s individual business is properly classified. The Tax Administrator shall then assign an individual business to a classification shown to be proper on the basis of such investigation. The proper classification is that which, in the opinion of the Tax Administrator, most nearly fits the applicant’s individual business.

(B) The reclassification shall not be retroactive but shall apply at the time of the next regularly ensuing calculation of the applicant’s tax, except where the applicant applies for reclassification within 30 days of their original classification, in which case the reclassification shall be retroactive.

(C) The Tax Administrator shall notify the applicant of the action taken on the application for reclassification. Such notice shall be given by personal service or by depositing it in the United States Post Office at Santa Cruz, California, postage prepaid, addressed to the applicant at their last known address. Such applicant may, within 15 days after the date of mailing or serving of such notice, make written request to the Clerk of the Board for a hearing on their application for reclassification. If such request is made within the time prescribed, the Clerk of the Board shall cause the matter to be set for hearing before the Board of Supervisors within 15 days. The Clerk of the Board shall give the applicant at least 10 days’ notice of the time and place of the hearing in the manner prescribed above for serving notice of the action taken on the application for reclassification. The Board of Supervisors shall consider all evidence adduced and its findings thereon shall be final. Written notice of such findings shall be served upon the applicant in the manner prescribed above for service of notice of the action taken on the application for reclassification, and a copy of the findings shall be forwarded to the Tax Administrator. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.090 Branch establishments.

A separate license must be obtained for each branch establishment or location of the business transacted and carried on and for each separate business at the same location; provided, that warehouses and distributing plants used in connection with or incidental to a business license under the provisions of this chapter shall not be deemed to be separate places of business or branch establishments. [Ord. 4138 § 2, 1991].

4.02.100 Exemptions.

No tax prescribed in this chapter shall be deemed or construed to apply to any of the following persons who are exempted from payment thereof:

(A) Agricultural. Persons selling or otherwise disposing of livestock, poultry or agricultural products raised by the seller only;

(B) Charitable and Nonprofit Organizations. Any church, school, charitable, benevolent or social organizations conducting any exhibition, show or performance for the exclusive benefit of such church, school, charitable, benevolent or social organization. Also, any bona fide church, bona fide school, bona fide veterans organization or bona fide charity conducting any sale or business for the exclusive benefit of such church, school, veterans organization or charity, provided such church, school, veterans organization or charity is located within the unincorporated area of the County. This exemption shall not apply to any person operating any business, show, sale, exhibition or enterprise for profit who shares such profit with any church, school, veterans organization, charity, or charitable, benevolent or social organization;

(C) Specific Religious Exemptions. Any individual or organization identified as eligible for an exemption under California Revenue and Taxation Code Section 7284.1, as may be amended;

(D) Conflict with Federal and State Law. Any person conducting any business exempt by virtue of the Constitution or applicable statutes of the United States or of the State of California from the payment to counties of such taxes as are herein prescribed;

(E) Day Care Facilities. Day care homes and day care centers shall be exempt from license taxes;

(F) Disabled Veterans. Any person honorably discharged or honorably relieved from the military, naval or air services of the United States of America, who is unable to earn a livelihood by manual labor, and who hawks, peddles or vends any kind of goods, wares or merchandise in the unincorporated area of the County; provided, that such person shall have obtained, in advance, a written permit issued by a veterans’ service officer of the County of Santa Cruz without cost;

(G) Employees. No person who is an employee or who is the direct representative of a licensee shall be required to pay a license tax for doing any part of the work of such licensee;

(H) Nurses. Registered nurses, licensed vocational nurses and home care providers;

(I) Roominghouses. Roominghouses with two rental rooms or less;

(J) Teachers. Teachers or instructors, including, but not limited to, teachers or instructors of the fine arts, such as painting, vocal and instrumental music, drawing, sculpture, ceramics, pottery, dancing, dramatics and arrangements; providing that all of the following conditions exist:

(1) The instruction is given only in the homes of the teacher or instructor, or student,

(2) The teacher or instructor has no employee or employees,

(3) The teacher or instructor is not required to hold a sales tax permit;

(K) Vending Machines. Persons operating vending machines used for the sale of food, gum, tobacco, drinks or other merchandise, where operated in connection with a regularly licensed business and in the same premises. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.110 License required.

No person shall conduct any business in the unincorporated areas of the County after the delinquency date for obtaining a license under this chapter without having an unrevoked license from the County to do so, valid and in effect at the time, and without complying with any and all regulations of such business contained within this chapter. [Ord. 4138 § 2, 1991].

4.02.120 Concessioner.

Every person who operates any business, whether upon a cost, rental or commission basis as a concession or upon rented floor space in or upon the premises of any person licensed under any provision of this chapter, is required to obtain a separate and independent license pursuant to the appropriate provisions hereof, and shall be subject to all provisions of this chapter, except that any concessioner renting or leasing a space for which a Class E business license tax has been paid pursuant to SCCC 4.02.060(E) for the current year shall not be required to obtain a separate business license for that year. [Ord. 4138 § 2, 1991].

4.02.130 Violations.

(A) Business Violating Law. The issuance of a license under this chapter shall not entitle the licensee to engage in any business which for any reason is in violation of any law or ordinance.

(B) Separate Violation. The conducting of business in the unincorporated area of the County, after the delinquency date for obtaining a license under this chapter, without having an unrevoked license from the County to do so, or without complying with any and all regulations of such business contained in this code shall be a separate violation hereof for each and every day that such business is so carried on.

(C) Penalty for Violations. Any person violating any of the provisions of this chapter or knowingly or intentionally misrepresenting to any officer or employee of the County any material fact in procuring a license under this chapter shall be subject to the penalties provided in Chapter 1.12 SCCC. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.140 License nontransferable.

No license hereunder shall be transferred or assigned. [Ord. 4138 § 2, 1991].

4.02.150 License tax—How payable.

The license tax shall be paid to and collected by the Tax Administrator, who shall sign all licenses issued by the County and shall number and keep a record thereof. The record shall show the license numbers, the name of the person licensed, the type of business licensed, the location thereof, the number of employees, the date of issuance, the time of expiration and the amount of license tax owed and/or paid. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.160 License application—Contents.

Before any license is issued, a written application by the applicant shall be made upon a form prescribed by the Tax Administrator. The applicant shall supply any information which the Tax Administrator may require to enable the Tax Administrator to issue the type of license applied for. The application shall be signed by the owner, if a natural person, or, in the case of a corporation, by an executive officer or some person specifically authorized by resolution of the corporation to sign the application. The Tax Administrator may require such information as may be necessary in order to issue a license or renew an existing license; provided, however, that if there is a change of ownership or operation of any business, the new owner or operator shall immediately notify the Tax Administrator and obtain a new license. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.170 License tax—When payable.

All licenses issued pursuant to this chapter shall be paid for in advance of the date of delinquency, shall be dated on the day of issuance, and shall, where an annual license is issued, expire at 12:00 midnight on the thirtieth of June next ensuing. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.180 Terms of license.

The license term shall, except as otherwise provided in this chapter for itinerant vendors, be for a term of one year, commencing with the first of July, and ending on the thirtieth of June of the following calendar year. Except as hereinafter otherwise provided, a full year’s license tax shall be paid, regardless of the time of the year in which the license shall be issued, and all license taxes shall be paid prior to the date of delinquency. For an annual license first issued in the second half of the fiscal year for a new business, one-half of the applicable license tax shall be paid. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.190 Penalties for delinquencies.

(A) The tax for the initial license required under this chapter for an existing business shall be delinquent if not paid within 30 days of the date of mailing by the Tax Administrator of a license application packet to the business, or if the business is for any reason not mailed such a license application packet, the tax shall be delinquent if not paid within 60 days of the date of publication of a display advertisement in a newspaper of general circulation in the area of the requirement for a business license under this chapter. If the initial license for a business is not applied for on or before the delinquency date, a penalty of 10 percent shall be added to the cost of such licenses; and if not applied for on or before 30 days after the delinquency date, a total penalty of 20 percent shall be added to the cost of such license.

(B) The tax for the initial license required under this chapter for a new business shall be delinquent if not paid within 60 days after the date of publication of a display advertisement in a newspaper of general circulation in the area of the requirement for a business license under this chapter or within 30 days after the starting date of the business, whichever occurs later. If the license required under this chapter for a new business is not applied for on or before the delinquency date, a penalty of 10 percent shall be added to the cost of such license; and if not applied for on or before 30 days after the delinquency date a total penalty of 20 percent shall be added to the cost of such license.

(C) If a license is not renewed within 30 days after the beginning of the next fiscal year, a 10 percent penalty shall be added to the cost of the license, and if not renewed within 60 days after the beginning of the fiscal year, a total penalty of 20 percent shall be added to the cost of the license.

(D) The remittance of business license taxes collected by the operator of a Class E business from concessioners shall be delinquent if not made to the Tax Administrator on or before the last day of the month following the month during which the business license taxes are collected by the operator from concessioners. If those business taxes are not remitted to the Tax Administrator on or before the delinquency date, a penalty of 10 percent shall be assessed against the operator, and if not made on or before 30 days after the delinquency date, a total penalty of 20 percent shall be assessed against the operator.

(E) In addition to the penalties imposed, any person who fails to pay any tax imposed by this chapter shall pay interest at the rate of one and one-half percent per month or fraction thereof on the amount of the tax exclusive of penalties, from the date of delinquency. [Ord. 4138 § 2, 1991].

4.02.200 License tax—Debt to County.

The amount of any license tax imposed under this chapter shall constitute a debt to the County, and any person conducting business within the unincorporated area of the County without having a license from the Tax Administrator to do so shall be subject to an action in the name of the County, in any court of competent jurisdiction, for the collection of the amount of the license tax imposed by this chapter, including applicable penalties and attorneys’ fees and costs. [Ord. 4138 § 2, 1991].

4.02.210 Conviction—Effect on debt.

The conviction and punishment of any person having conducted business without a license shall not excuse or exempt such person from the payment of any license tax due or unpaid at the time of such conviction, and nothing in this chapter shall prevent criminal prosecution for any violation of any provisions of this chapter. [Ord. 4138 § 2, 1991].

4.02.220 Exhibition of license.

Every person having a license under the provisions of this chapter for conducting business at a fixed place shall keep such license posted for exhibition while in force in some conspicuous part of the place of business. Every person having such a license, and not having a fixed place of business, shall carry such license with them at all times while carrying on the business for which the same was granted. Every person having a license shall procure and exhibit the same, when applying for a renewal thereof, and whenever requested to do so by any police officer, or by any person authorized to issue or inspect licenses or collect license taxes. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.230 Enforcement.

(A) It shall be the duty of the Tax Administrator to enforce all of the provisions of this chapter and the Sheriff shall render such assistance as required for enforcement.

(B) The Tax Administrator in the exercise of the duties imposed hereunder, and acting through deputies or duly authorized assistants, may examine or cause to be examined all places of businesses in the unincorporated area of the County to ascertain compliance with the provisions of this chapter.

(C) The Tax Administrator and all deputies and any peace officers shall have the power and authority to enter, free of charge, and at any reasonable time during business hours, any place of business required to be licensed herein, and demand an exhibition of its license. Any person having such license theretofore issued, in their possession or under their control, shall exhibit the same on demand.

(D) Any tax required to be paid by any person under the provisions of this chapter shall be a debt owed by the person to the County. Any person owing money to the County under the provisions of this chapter shall be liable to an action brought in the name of the County for the recovery of such amount including applicable penalties and attorneys’ fees and costs. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.240 Refunds.

No refund of an overpayment of taxes imposed by this chapter shall be allowed in whole or in part unless a claim for refund is filed with the Tax Administrator within a period of three years from the last day of the calendar month following the period for which the overpayment was made, and all such claims for refund of the amount of the overpayment must be filed with the Tax Administrator on forms furnished by, and in the manner prescribed by, the Tax Administrator. Upon the filing of such claim and when determining that an overpayment has been made, the Tax Administrator shall authorize a refund by the Auditor-Controller. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.250 Rules and regulations.

The Board of Supervisors may make rules and regulations not inconsistent with the provisions of this chapter as may be necessary or desirable to aid in the enforcement of the provisions of this chapter. The County Administrative Officer may determine billing and payment schedules for the taxes imposed by this chapter which are not inconsistent with its provisions. [Ord. 5298 § 11, 2019; Ord. 4138 § 2, 1991].

4.02.260 Severability.

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter or any part thereof. The Board of Supervisors hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional. [Ord. 4138 § 2, 1991].