ORDINANCE 1142ORDINANCE NO. 1142
AN ORDINANCE OF THE CITY OF EL SEGUNDO,
CALIFORNIA, AMENDING TITLE 5 (BUSINESS
REGULATIONS AND LICENSING) OF THE EL SEGUNDO
MUNICIPAL CODE TO DELETE AND AMEND CERTAIN
SECTIONS OF CHAPTERS 5.04 AND 5.08 AND ADDING
NEW SECTIONS 5.04.265, 5.04.270 AND 5.08.018 REGARDING
BUSINESS LICENSE TAXES AND DELETING THE SUNSET
CLAUSE ESTABLISHED BY ORDINANCE NO. 1116.
WHEREAS, continuing development in the City has created a greatly increased
demand upon City services. In particular, traffic, police, and fire protection are required
to deal with the influx of daytime employees and proliferation of extensive physical plants
and facilities; and
WHEREAS, because of these increased demands upon services, City revenues have
proven inadequate to continue to support a level of service which the City Council
considers minimal for the protection of public health, safety and welfare; and
WHEREAS, it is appropriate that the revenues necessary for the City to adequately
respond to the growing demand for City services and increased costs resulting therefrom
should be contributed by the sector of the City benefitting most from these services.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EL SEGUNDO
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Section 5.04.220 shall be amended in its entirety to read as follows:
5.04.220 PENALTIES AND INTEREST. A license for a business from other
than a fixed place of business within the City is due and payable upon the first day of
business activity and delinquent thereafter.
A license for a new business with a fixed place of business within the City is due
and payable upon the first day of business activity and delinquent five days thereafter.
A license for a business previously licensed is due and payable the first day of
January and delinquent the first day of February.
(a) Interest. Any person who fails to pay any tax required to be paid by this Title
shall pay interest at the rate of one per cent (1 %) per month, or fraction thereof,
on the amounts of the tax, exclusive of penalties, from the date on which the tax
first became delinquent until paid. Interest shall run during any period of time for
which an extension of time has been granted by the City for payment of the tax.
Interest required by any of the provisions of this Title shall not be subject to waiver
or compromise except as the City Council may direct.
(b) Penalties. All taxes imposed by this Title shall be subject to the following
penalties.
(1) Delinquency. Any person who fails to pay any tax or any fraction
thereof required to be paid by this Title within the time required shall pay
a penalty of twenty per cent (20 %) per month of the amount of the unpaid
tax in addition to the tax and interest thereon. This penalty shall accrue on
the first day of each month for which the tax remains unpaid.
(2) Failure To File Return. If any tax return or statement required by
this Title is not filed with the City by the time specified herein, there shall
be imposed a penalty of one hundred dollars ($100) for each day the return
is late and no extension has been granted.
(3) Negligence. If the duly authorized city official administering any tax
hereunder determines that the non - payment of any tax imposed hereunder
is due to the negligence or willful disregard of the provisions of this Title,
a penalty of forty per cent (40 %) of the amount of the tax shall be added
thereto in addition to all other penalties set forth in this Section.
Negligence shall include, but not be limited to, the taxpayers' failure to keep
-1- JOA•81589.CA
accurate records (including records of the number of subcontractors'
employees subject to tax) necessary for accurate calculation of the tax.
(4) Fraud. If the city official administering the tax, after notice to taxpayer
and hearing determines that the nonpayment of any tax due under this
Chapter is due to fraud, a penalty of ninety per cent (90 %) of the amount
of the unpaid tax shall be added thereto in addition to the penalties set forth
in this Section. Where, after notice and hearing to the taxpayer, the City
determines that a corporate director, officer or shareholder is responsible for
the fraud resulting in the nonpayment of the tax of a corporation, the City
may designate the tax, interest and penalties unpaid, including the penalty
provided for in this Subsection due to said fraud as a personal debt of said
director, officer or shareholder.
(5) Merger of Interest and Penalties. Such interest as accrued and
every penalty imposed under the provisions of this Section shall become a
part of the tax required to be paid under this Title.
SECTION 2. A new Section 5.04.265 and a new Section 5.04.270 shall be added
to Chapter 5.04 of Title 5 of the El Segundo Municipal Code, as follows:
5.04.265 CONFIDENTIALITY OF TAX RECORDS. The City shall retain as
confidential all tax statements, returns and receipts submitted or provided under this
Title, any records required to be submitted by a taxpayer hereunder and any business data
disclosed to the City as a result of any tax audit hereunder.
5.04.270 RECORD KEEPING AND AUDITS. Each person subject to any tax
in this Title shall retain records documenting the information upon which any applicable
tax is calculated and which shall support the calculation of tax reflected on that person's
return. Said records shall include records of the taxpayer's subcontractors. The taxpayer
shall be held responsible for the failure of any of its subcontractors to maintain records
necessary to calculate any tax under this Title. Said records shall be kept for three (3)
years from the date upon which the tax to which the records relate is due. Where no
records are available or those available are insufficient to calculate the tax due hereunder,
the City shall have the authority to determine the tax due. Upon five (5) working days
notice, a taxpayer or any business which the City contends should pay tax, must make
available to the City at City Hall in El Segundo all records requested by the City relating
to said tax. Failure to do so may result in a fine of two hundred dollars ($200) for every
day, beyond the notice period, for which the person fails to comply.
SECTION 3. A new Section 5.08.018 shall be added to Chapter 5.08 of Title 5 of
the El Segundo Municipal Code, as follows:
5.08.018 INDEXING. Every tax imposed by this Chapter shall be automatically
increased each year by a percentage which shall be equal to the percentage increase of the
Consumer Price Index as shall be reflected in the most recent report of consumer prices
for the Los Angeles /Long Beach Standard Metropolitan Statistical Area using September
1989 as the base year. The annual rate increase shall be calculated by dividing the
consumer price index for September of each current year by the base year with the
resulting figure representing the percentage increase for the tax due the following
January. The formula shall be as follows:
A = current year CPI
B = base year CPI
C = base year tax rate
D = current year tax rate
A= B x C= D
SECTION 4. Section 5.08.020 of Chapter 5.08, Title 5 of the El Segundo
Municipal Code is hereby amended in its entirety to read as follows:
5.08.020 BUSINESSES GENERALLY. Every person engaged in a business not
specifically mentioned or classified in this Chapter shall pay a license fee in accordance
with the following schedule:
(a) A basic fee of fifty dollars ($50) per year, which shall cover the first ten (10)
employees and one hundred twenty dollars ($120) per year for each employee in excess of
ten employees; and
-2- JOA:81589.CA
(b) In addition, each such person shall pay a fee of $0.20 per square foot of floor
area occupied for the business purpose in excess of 5,000 square feet. This fee shall also
be imposed on vacant space available for rent or lease for business purposes, said fee to be
payable by the person with the right to possession of the property; and
(c) In addition, each such person shall pay $10.00 per year for each additional
business location within the City.
(d) Notwithstanding the foregoing, effective January 1, 1991 a credit shall be
granted against the tax imposed by this Section whenever a business subject to the tax
imposed by this Chapter generates sales tax in the year immediately preceding the year
in which the tax is due. The credit shall be applied to the business registration tax due
for the following year. The credit shall be equal to thirty per cent (30 %) of the portion
of the sales tax generated which was awarded to the City of El Segundo during the twelve
month period ending on the June 30th preceding the date the tax is due. However, the
amount of said credit shall under no circumstances be calculated to be greater than the
total amount of tax due.
For the purpose of this Section, the term "employee" shall mean any person
employed by the business; and shall include an independent contractor and persons
employed by the independent contractor, unless the independent contractor and /or persons
employed by the independent contractor has a valid City of El Segundo business license
as prescribed in Chapters 5.04 and 5.08 of the El Segundo Municipal Code.
The total number of employees for each business for purposes of this Section shall
be determined by averaging the total number of employees employed by each business
during each of the four calendar quarters preceding the date the tax is paid.
For the purpose of this Section, "floor area" means the total floor space in terms of
square footage occupied by an owner, lessee or renter in a building except:
(1) Elevator shafts;
(2) Stairwell;
(3) Courts or atriums, uncovered and open to the sky;
(4) Rooms exclusively housing building operating equipment; and
(5) Parking areas.
SECTION 5. Section 5.08.195 of Chapter 5.08, Title 5 of the El Segundo
Municipal Code shall be amended in its entirety to read as follows:
5.08.195 CHEMICAL, PETROLEUM, CEMENT OR CRYOGENIC
PRODUCTS; SMELTERS OR REFINERIES. Every person owning or operating a
business engaged in the processing or manufacturing of chemical, petroleum, cement or
cryogenic products; and every person owning or operating a business engaged in smelting
or refining shall pay a business license fee in accordance with the following schedule:
(a) A basic fee of fifty dollars ($50) per year which shall cover the first ten (10)
employees;
(b) $120 per year for each employee in excess of ten (10) employees;
(c) $500 per year per square acre of space owned, leased or rented for the purpose
of producing, manufacturing or processing chemical, petroleum, cement or cryogenic
products; or for the purpose of smelting or refining;
(d) $36 per year for each vehicle in excess of six thousand pounds (gross vehicle
weight) owned or operated in the conduct of the business;
(e) $10 per year for each additional business location within the City.
(f) Notwithstanding the foregoing, effective January 1, 1991 a credit shall be
granted against the tax imposed by this Section whenever a business subject to the tax
imposed by this Chapter generates sales tax in the year immediately preceding the year
in which the tax is due. The credit shall be applied to the business registration tax due
for the following year. The credit shall be equal to thirty per cent (30 %) of the portion
-3- JOA•81589.CA
of the sales tax generated which was awarded to the City of El Segundo during the twelve
month period ending on the June 30th preceding the date the tax is due. However, the
amount of said credit shall under no circumstances be calculated to be greater than the
total amount of tax due.
SECTION 6. The following Sections shall be deleted in their entirety from
Chapters 5.04 and 5.08 of Title 5 of the El Segundo Municipal Code: 5.04.105; 5.08.275;
5.08.520; 5.08.570; 5.08.585; and 5.08.670.
SECTION 7. The sunset date of July 1, 1991 contained in Section 4 of Ordinance
No. 1116 which provided that the utility users tax imposed by Chapter 3.24 of Title 3 of
the El Segundo Municipal Code shall terminate on that date is hereby deleted and said
Chapter 3.24 of the El Segundo Municipal Code shall continue in full force and effect
beyond that date until such time as it shall be rescinded by the City Council.
SECTION S. SEVERABILITY. If any section, subsection, subdivision, paragraph,
sentence, clause, or phrase of this ordinance is for any reason held to be invalid or
unconstitutional by a decision of any court of competent jurisdiction, such decision shall
not affect the validity of the remaining portions of the Ordinance or any part thereof.
The El Segundo City Council hereby declares that it would have passed each and every
section, subsection, subdivision, paragraph, sentence, clause, or phrase, irrespective of the
fact that any one or more sections, subsections, subdivisions, paragraphs, sentences,
clauses, phrases be declared invalid or unconstitutional. Provided, however, that if the
effect of any such decision is to effectively invalidate the business registration tax imposed
by this ordinance, then the business license tax which was in effect prior to the passage
of this ordinance shall be reinstated in its entirety effective as of the effective date of this
ordinance.
SECTION 9. City Council action of November 21, 1988 relating to the
introduction and 1st reading of two ordinances is hereby rescinded. The title of said
ordinances are as follows: (1) "Ordinance of the City Council of the City of El Segundo
California, Adding a New Chapter 3.24 to Title 3 of the El Segundo Municipal Code and
Deleting the Present Chapter 3.24, Which Said Chapter Establishes a Utility Users Tax;"
and, (2) "Ordinance of the City Council of the City of El Segundo California, Amending the
El Segundo Municipal Code by Adding Chapter 3.28, Title 3 of that Code, which Chapter
Relates to an Excise Tax on the Use of Real Property Imposed for the Purpose of Raising
Revenue to Pay for the Cost of Municipal Services."
SECTION 10. This Ordinance shall become effective immediately upon the final
passage and adoption hereof, however, City Council reserves its right to review and adjust
the rates, percentages and amounts set forth herein at any time after the operative date.
SECTION 11. The City Clerk shall certify to the passage and adoption of this
ordinance; shall cause the same to be entered in the book of original ordinances of said
city; shall make a minute of the passage and adoption thereof in the records of the
meeting at which the same is passed and adopted; and shall within fifteen days after the
passage and adoption thereof, cause the same to be published once in the El Segundo
Herald, a weekly newspaper of general circulation, published and circulated within said
City of El Segundo and which is hereby designated for that purpose.
PASSED, APPROVED and ADOPTED this 15
r
A T:
1 Clerk
-4- JOA•81589. CA
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ) SS
CITY OF EL SEGUNDO
I, Ronald L. Hart, City Clerk of the City of El Segundo, California, DO HEREBY
CERTIFY that the whole number of members of the City Council of the said City is five;
that the foregoing ordinance, being Ordinance No. 1142 is a full, true correct original of
Ordinance No. 1142 of the said City of El Segundo, California, entitled:
AN ORDINANCE OF THE CITY OF EL SEGUNDO, CALIFORNIA,
AMENDING TITLE 5 (BUSINESS REGULATIONS AND LICENSING)
OF THE EL SEGUNDO MUNICIPAL CODE TO DELETE AND AMEND
CERTAIN SECTIONS OF CHAPTERS 5.04 AND 5.08 AND ADDING NEW
SECTIONS 5.04.265, 5.04.270 AND 5.08.018 REGARDING BUSINESS
LICENSE TAXES AND DELETING THE SUNSET CLAUSE
ESTABLISHED BY ORDINANCE NO. 1116.
which was duly passed and adopted by the said City Council, approved and signed by the
Mayor or said City, and attested by the City Clerk of said City, all at a regular meeting
of the said Council held on the 15th day of August, 1989 and the same was so passed and
adopted by the following vote:
AYES: Councilmembers Anderson, West,
and Mayor Jacobson
NOES: Councilmembers Dannen and Clutter
ABSENT: None
I do hereby further certify that pursuant to the provisions of Section 36933 of the
Government Code of the State of California, that the foregoing Ordinance No. 1142 was
duly and regularly published according to law and the order of the City Council of said
City of El Segundo Herald, a weekly newspaper of general circulation, printed, published
and circulated within said City and that the same was so published therein on the
following day, to wit:
Ronald L. Hart -
City Clerk of the
City of El Segundo, California
(SEAL)