INTRODUCED BY COUNCILMEMBER.

ORDINANCE No._lllll_C. 1VI. S.

AUTHORIZING THE AMENDMENT OF CHAPTER 5, ARTICLE 1 OF THE OAKLAND
MUNICIPAL CODE PROVIDING FOR TAXATION OF BUSINESS, PROFESSIONS AND
TRADES WITHIN THE CITY OF OAKLAND

WHEREAS, The Council of the City of Oakland adopted Chapter 5, Article 1 of the
Oakland Municipal Code providing for taxation within the City of Oakland; and
WHEREAS, as a result of the express concerns of the business community the Council
wishes to establish a reduced late payment penalty for persons engaged in business within the City
of Oakland; and
WHEREAS, the findings set forth herein are intended to remove any ambiguity in its
provisions, and to clarify and declare the City Council's intent in enacting that ordinance;
NOW, THEREFORE, the Council of the City of Oakland does ordain as follows:
Section 1.

Section 5-1.08(b) is hereby added to read as follows:

SEC. S-1.08 ANNUAL CERTIFICATE

(b)
The Director of Finance may refuse to issue to anv person another certificate for the same
or any other business until such person has filed all declarations and paid all taxes in full.
Section 2.

This amendment becomes effective January 1,1993.

Section 3.

Section 5-1.10 (a) is hereby amended to read as follows:

Sec. 5-1.10(a)

NEW BUSINESS REGISTRATION/TAX ASSESSMENT.

Every person applying for a first certificate for a newly established business shall pay a regisffation
fee in the amount of $30 within thirty (30) days from the date of commencement of business
activity. The purpose of this fee is to offset a portion of the Administrative Costs. Failure to
register shall subject the taxpayer to penalty and interest as provided for by Sections 5-1.17 and 51.20, respectively.
Section 4.

This amendment becomes effective January 1,1993.

Section 5.

Section 5-1.10 (b) is hereby deleted:

600-245-005 (7/83)

Sec. 5 1.10(b) AMENDED TAX AND RENEWAL FOR NEW BUSINESS.

1.
If the business terminates on or before the end of the year in which the business
began, the taxpayer shall file an amended declaration within thirty (30) days of the cessation and
pay a first year tax less the $30 registration fee, based upon the tax base and rate applicable to the
business classification for the period that the business was in operation.
2.
If the business continues operation after December 31 of the year in which it began,
the taxpayer shall file an amended declaration and pay by March 1 an amended tax loss the $30
registration foe based upon the tax base and rate applicable to the business classification, for the
period that the business was in operation and shall also file a renewal tax declaration and pay a
second year tax by March 1 based upon the tax base and rate applicable to the business
classification.
Section 6.

This amendment becomes effective January 1,1993,

Section 7.

Section 5-1.10 (b) is hereby added to read as follows:

SEC. S.1.1Qflrt FIRST YEAR ESTIMATED TAX

Upon making application for the first certificate to be issued for a newly established business, an
applicant may furnish to the Director of Finance, for guidance in ascertaining the amount of tax to
be paid, a written statement, upon a form provided by the Director of Finance, setting forth such
information as may be required to properly determine the amount of the tax liability at the time of
the statement.
The applicant mav estimate gross receipts, gross payroll, average number of employees.value
added, manufacturing expense, number of permits or number of vehicles, (hereafter referred to as
"tax base"), for the period covered by the certificate to be issued. Such estimate, if accepted by the
Director of Finance as a reasonable one, shall be used in determining the amount of tax to be paid
bv the applicant: if such estimate is found to be unreasonable or if the applicant elects not to
estimate the tax base, the Director of Finance may use the average tax base for the industry. Said
Industry Code average is to be pro-rated on a l/12th basis for each month remaining in the calendar
year in which the newly established business commences. The estimated tax is determined by
multiplying the tax rate times the tax base applicable to the business classification.
The applicant mav either pay the full estimated tax at the time of registration or pav the amount of
estimated tax in quarterly increments with the^first quarterly payment due and payable at the time of
registration: or the taxpayer may elect to file and pay the first year tax on or before March 1 of the
second year.
If the business terminates on or before the end of the calendar year in which the business began,
the taxpayer shall file an amended declaration^ within thirty (30> davs of the cessation and pay a first
year tax based upon the tax base and rate applicable to the business classification for the period that
the business was in operation.
Section 8.

This amendment becomes effective January 1,1993.

Section 9.

Section 5-1.10 (c) is hereby added to read as follows:

SEC. 5-1.10fcl SECOND YEAR RENEWAL TAX

If the business continues operation after December 31 of the year in which it began, the taxpayer
shall file a renewal declaration and pay by March 1 the full amount of the renewal tax. The second
year renewal tax shall be based upon an estimate of or the actual tax base for a twelve (12~) month
period jtnd shall be determined by the rate applicable tQ theJbusjnesclajisi|icariotL If the taxpayer
elects not to estimate or if the estimate submitted is determined to be unreasonable, the average tax
base as set forth in Section 5-l.l(Kb) shall apply.
Section 10.

This amendment becomes effective January 1,1993.

Section 11.

Section 5-1.17 is hereby amended to read as follows:

SEC 5-1.17 PENALTY FOR NONPAYMENT OF ANNUAL BUSINESS TAX.

The following are declared delinquent:
1, Every annual Business Tax or portion thereof whieh that is not paid on or before March
1st of each year, and
2 Every registration fee and portion thereof ef for a and in the case of newly established
businesses, as defined in Section 5-1.02(i), that is not paid within thirty (30) days after
commencing business. The Business Tax Section Office of Finance shall add to said delinquent
Business Tax or registration foe a penalty of ten (10%) percent of the tax or fee so delinquent As
to a delinquent annual tax, an additional penalty of fifteen (15%) percent of the tax so delinquent
shall accrue if the tax remains unpaid on April 1 st May 1 st of the year in which the tax is due.: if
the tax amount still remains unpaid on May 1st of the year in which the tax is due, a further penalty
of twenty five (25%) percent of the tax so delinquent will accrue. In the case of a delinquent
annual tax, tho aggregate total of all penalties ore to be:
In the case of a delinquent annual tax liability incurred prior to January 1. 1993. the aggregate total
of all applicable penalties shall be:
March 2, - April 1 -10%
April 2, May 1,-25%
May 2, and thereafter - 50%
In the case of delinquent annual tax liability arising after January 1.1993. the aggregate total of all
applicable penalties shall be:
March 2. - Mav 1. 10%
May 2. and thereafter 25%
For newly established businesses, the aggregate total of all penalties ore to shall be:
1 day delinquent - 30 Q days delinquent - 10%
31 days delinquent60 days delinquent - 25%

61 days delinquent and thereafter - 50% 25%

Proof of payment of Business Tax or Registration fee.
If a dispute arises regarding the date a payment was received by the City, the burden of proof is on
the taxpayer. Only die following are considered proof of timely payments:
1.

Cash register receipt issued by the City's Business Tax Section Office of
finance issued to those taxpayers making payment in person at City Hall.

2.

Certificate of mailing issued by the U. S. Post Office,

3.

Certificate of registered or certified mail issued by the U. S. Post Office.

4.

Receipt of delivery to private mail services.

Section 12.

This amendment becomes effective January 1,1993.

Section 13.

Section 5-1.23 is hereby amended to read as follows:

Sec.

5-1.23 RETAIL SALES

(a)
Every person engaged in the business of selling any goods, wares or merchandise at retail,
and not otherwise specifically taxed by other Business Tax provisions of fee Jhis Article, shall pay
a an annual Business Tax of $60.00 per year or fractional part thereof for the first $50.000 or less
of gross receipts, plus $1.20 for each additional thousand dollars of gross receipts or fractional
part thereof in excess of $50.000.
Section 14.

This amendment becomes effective January 1,1993.

Section 15.

Section 5-1.24 is hereby amended to read as follows:

SEC. 5-1.24 GROCER

(a)
Every person engaged in business as a grocer shall pay a Business Tax of &JO.OQ per year
or fractional part thereof for the first $100.000 or less of gross receipts, plus $0.60 for each
additional thousand dollars of gross receipts or fractional part thereof in excess of $100.000.
Section 16.

This amendment becomes effective January 1,1993.

Section 17.

Section 5-1.25 is hereby amended to read as follows:

SEC. 5-1.25

AUTOMOBILE DEALERS

Every person engaged in the business of selling new or used motor vehicles at wholesale or retail
shall pay a Business Tax of $60.00 per ve^r or fractional part thereof for the first $50.000 or less
of gross receipts, plus $1.20 for each additional thousand dollars of gross receipts or fractional
part thereof in excess of $50.000.
Section 18.

This amendment becomes effective January 1,1993.

Section 19.

Section 5-1.26 is hereby amended to read as follows:

SEC. 5-1.26

WHOLESALE SALES.

(a)
Every person engaged in the business of selling any goods, wares or merchandise at
wholesale, and not otherwise specifically taxed by other Business Tax provisions of this Article,
shall pay on annual ^.Business Tax of $60.00 per year or fractional part thereof for the first
$50.000 or less of gross receipts.plus 1.20 for each additional thousand dollars of gross receipts
or fractional part thereof in excess of $50.000.
Section 20.

This amendment becomes effective January 1,1993.

Section 21.

Section 5-1.28 is hereby amended to read as follows:

SEC. 5-1.28

BUSINESS AND PERSONAL SERVICES.

(a)
Every person engaged in the business of providing business or personal services not
specifically taxed by other Business Tax provisions of this Article shall pay a Business Tax of
$60.00 per year or fractional part thereof for the first $33.335 or less of gross receipts, plus $1.80
for each additional thousand dollars of gross receipts or fractional part thereof in excess of
$33.335. for services performed within the City of Oakland.
(b)
"Business and personal services" means any business providing services, repairs or
improvements to or on real and personal property, renting or leasing personal property to
businesses or persons, or providing services to persons such as, but not limited to, electric, gas
and sanitary services, laundries, cleaning and dyeing, shoe repair, barber and beauty shops,
photographic studios, and parking lots and garages, title guarantee companies and sjevedoririg.
Section 22.

This amendment becomes effective January 1,1993.

Section 23.

Section 5-1.29 is hereby amended to read as follows:

SEC. 5-1.29
BUSINESS.

PROFESSIONAL - SEMI-PROFESSIONAL CONNECTED

(a)
Every person engaged in the business of providing professional services not specifically
taxed by other Business Tax provisions of this Article shall pay a Business Tax of $60.00 per year
or fractional part thereof for the first $16.600 or less of gross receipts, plus $3.60 for each
additional thousand dollars of gross receipts or fractional part thereof in excess of $16.600. for
services performed within the City of Oakland.
Section 24.

This amendment becomes effective January 1,1993.

Section 25.

Section 5-1.31 (a) is hereby amended to read as follows:

SEC. 5-1.31(a) REAL ESTATE DEVELOPER AND^EHABILITATION OF REAL

ESTATE.
Every person engaged in the business of developing or rehabilitating and selling real
property in which said person has an equity interest or title, and not specifically taxed by other
provisions of this Article, shall pay on annual a Business Tax of $60.00 for the first $33.335 or
less of gross receipts, plus Si.80 for each additional thousand dollars of gross receipts Q
fractional part thereof in excess of $33.335. A person shall be deemed to be engaged in the
business described in this section who:

(1)
Asa subdivider, as that term is defined in Section 11508 of the California B usiness
and Professions Code, has recorded a subdivision map respecting the property sold in accordance
with the Subdivision Map Act of California; provided, however, that a person filing or joining the
in filing of a subdivision map for the sole purpose of accomplishing a street vacation shall not be
considered a subdivider; or
(2)
Has, prior to sale, divided the property held pursuant to the "lot-split" regulations
of the Oakland Municipal Coder; or
(3)
Sells two or more pieces of real property within a calendar year and upon each of
which a building was constructed or caused to be constructed by the seller, provided such sales
were within three years of the recordation by anyone of a subdivision map respecting the property
sold pursuant to the Subdivision Map Act; or
(4)
Sells any real property upon which said person has constructed or caused to be
constructed an apartment house of commercial building; provided such sale is either prior to <or
within three years after the issuance of a Certificate of Occupancy or its equivalent respecting the
property sold.
Section 26.

This amendment becomes effective January 1,1993.

Section 27.

Section 5-1.31 (b) is hereby added to read as follows:

SEC. S-1.31fb) REHABILITATION OF REAL ESTATE.

Every person engaged in the business of rehabilitating and selling real estate in which said
person has an equity interest or title, and not specifically taxed bv other provisions of this Article.
shall pay on annual a Business Tax of $60.00 per year or fractional part thereof for the first
S33.335 or less of gross receiots.plus $1.80 for each additional thousand dollars of gross receipts
or fractional part thereof in excess of $33.335. A person who sells real property on which said
seller performed the rehabilitation or had rehabilitation performed by another person, shall be
deemed to be engaged in business described in this section.
Section 28.

This amendment becomes effective January 1,1993.

Section 29.

Section 5-1.32 is hereby amended to read as follows:

SEC.

5-1.32

RECREATION AND ENTERTAINMENT

(a)
Every person engaged in the business of providing entertainment, recreation or amusement,
and not otherwise specifically taxed by other provisions of this ordinance, shall pay a Business
Tax of $60.00 per year or fractional part thereof for the first $13.335 or less of gross receipts, plus
$4.50 for each additional thousand dollars of gross receipts or fractional part thereof in excess of
$13.335.
Section 30.

This amendment becomes effective January 1,1993.

Section 31.

Section 5-1.33 is hereby amended to read as follows:

SEC. 5-1.33

CONSTRUCTION

CONTRACTORS.

(a)
Every person conducting, carrying on a business who is 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 himself or by or through others, construct,

alter, repair, add to, subtract from, improve, move, wreck, or demolish any building, highway,
road, 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, is defined as a contractor. The term contractor as used in this Section also includes
subcontractor and specialty contractor. Every contractor shall pay an annual a Business Tax of
$60.00 per year or fractional part thereof for the first $33.335 or less of gross receipts, plus: $1.80
for each additional thousand dollars of gross receipts or fractional part thereof in excess of
$33.335. for work engaged in at sites within the City of Oakland.
Section 32.

This amendment becomes effective January 1 1993.

Section 33.

Section 5-1.34 is hereby amended to read as follows:

SEC. 5-1.34

MANUFACTURING

(a)
Every person manufacturing or processing in Oakland and selling at retail and/or wholesale
any goods, wares, merchandise, article or commodity shall pay an annual Business Tax of $60.00
per year or fractional part thereof for the first $50.000 or less of gross receipts less the value of
raw materials, plus $1.20 for each additional thousand dollars of gross receipts less the value of
raw materials or fractional pan thereof in excess of $50.000. or the value of the partially completed
product at the time it enters the manufacturing process within the City of Oakland.
(b)
Whenever the manufacturing process does not result in a finished product, or it results in a
finished product, but does not result in gross receipts, the following alternate method of calculating
Business Tax under this Section shall be used:
Each person taxed under Section 5-1.34(b) shall pay on annual fl Business Tax of $60.00 per year
or fractional part thereof for the first $50.000 or less of all expenses incurred in the manufacturing
process at the business location within the City, plus $1.20 for each additional thousand dollars or
fractional part thereof in excess of $50.000. on the total of all expenses incurred in the
manufacturing process at the business location within the City, including, but not limited to
payroll, utilities, depreciation, and rent.
Section 34.

This amendment becomes effective January 1,1993.

Section 35.

Section 5-1.35 is hereby amended to read as follows:

SEC

5-1.35

ADMINISTRATIVE

HEADQUARTERS

(a)
Every person conducting or carrying on the operation of an Administrative headquarters
shall pay a Business Tax of $60.00 per year or fractional part thereof for the first $50.000 or less
of gross payroll, plus $1.20 for each additional thousand dollars of gross payroll or fractional part
thereof in excess of $50.000. of all persons employed by the business at such administrative
headquarters.
Section 36.

This amendment becomes effective January 1,1993.

Section 37.
SEC.

Section 5-1.37 is hereby amended to read as follows:

5-1.37

RENTAL OF RESIDENTIAL PROPERTY

(a)
Every person engaged in the business of conducting or operating an apartment house,
lodging house, and every person engaged in the business of renting or letting rooms and/or any
building structure, for dwelling, sleeping or lodging, including, and limited to a single-family
house, duplex, townhouse, condominium or co-operatives, shall pay a an annual Business Tax of
$13.95 or each thousand dollars of gross receipts or fractional part thereof
(b)
Every person engaged in the business of conducting or operating a hotel or motel shall pay
a. on annual Business Tax of $60.00 per year or fractional part thereof for the first $33.335 or less
of gross receipts, plus $1.80 for each additional thousand dollars of gross receipts or fractional
pan thereof in excess of $33.335. received from rentals to transients as defined in Sec. 5-20.02(d)
of the Oakland Municipal Code. For all other residential rental hotel and motel owners shall be
taxed under the provisions of Sec. 5-l,37(a).
Section 38.

This amendment becomes effective January 1,1993.

Section 39.

Section 5-.1.38 (a) is hereby amended to read as follows:

SEC, 5-1.38(ft)- RENTAL OF COMMERCIAL/INDUSTRIAL

PROPERTY

(a)
Every person engaged in the business of renting or letting a building, structure, or other
property for commercial/industrial purposes, or a portion of such building, structure or property
within the City for a purpose other than dwelling, sleeping, or lodging to a tenant shall pay a *m
annual-Business Tax of $ 13.95 for each thousand dollars of gross receipts or fractional part thereof
Section 40.

This amendment becomes effective January 1,1993.

Section 41.

Section 5-1.38(d)(2) is hereby amended to read as follows:

SEC.

5-1.38(d)(2)

FIVE YEAR EXEMPTION.

A lessor that qualifies for this exemption shall pay an annual a Business Tax of $60.00 per year or
fractional pan thereof for the first $33.335 or less of gross receipts, plus $1.80 for each additional
thousand dollars of gross receipts or fractional part thereof in excess of $33.335. during the fiveyear exemption period.
Section 42.

This amendment becomes effective January 1,1993.

Section 43.

Section 5-1.40(a) is hereby amended to read as follows:

SEC.

5-1.40(a)

PUBLIC UTILITY

Every person engaged in the business of conducting or operating a public utility shall pay a
Business Tax of $60.00 per year or fractional part thereof for the first $60.000 or less of gross
receipts, plus $1.00 for each additional thousand dollars of gross receipts or fractional part thereof
in excess of $60.000.
Section 44.

This amendment becomes effective January 1,1993.

Section 45.

Section 5-1.41 is hereby amended to read as follows:

SEC. 5-1.41

MEDIA FIRMS

(a)
Every person engaged in the business of conducting or operating a media business shall
pay, in January, 1990 a Business Tax of $60.00 per year or fractional part thereof for the first
$60.000 or less of gross receipts, plus $1.00 for each additional thousand dollars of gross receipts;
in January, 1991 a Business Tax of $60.00 per year or fractional part thereof for the first $50.000
or less of gross receipts, plus $ 1.20 for each additional thousand dollars of gross receipts pj;
fractional part thereof in excess of $50.000.
Section 46.

This amendment becomes effective January 1,1993.

Section 47.

Section 5-1.48 is hereby amended to read as follows:

SEC 5-1.48 MISCELLANEOUS

BUSINESS.

Any person engaged in a business not specifically taxed by other Business Tax provisions of this
Article and not otherwise exempted shall pay on annual a. Business Tax of $60.00 per year or
fractional part thereof for the first $50.000 or less of gross payroll plus $1.20 for each additional
thousand dollars of gross payroll or fractional pan thereof in excess of $50.000.
Section 48.

This amendment becomes effective January 1,1993.

Section 49.

Section 5-1,50 is hereby deleted:

SEC. 5-1.50 MINIMUM TAX REGISTRATION FEE

(a)
Except as otherwise provided in this Section, every person doing business within the City
of Oakland and having gross receipts or payroll within the City of Oakland and in excess of
$5,000.00 per year shall pay a minimum annual tax of $60.00.
(b)
All other persons engaged in business within the City of Oakland not subject to the
minimum tax imposed by Subsection (a) shall pay any annual registration fee of $30.00 provided,
however, tho registration fee shall be in lieu of the tax otherwise imposed by this Article for
persons having less than $5,000.00 of gross receipts otherwise taxed on the basis of gross receipts
or having groGS payroll less than $5,000.00 and taxed on the basis of gross payroll. The purpose
of this Section is-te-effset-a portion the Business Tax administrative costs.
Section 50.

This amendment becomes effective January 1,1993.

Section 51.

Section 5-1.57 is hereby amended to read as follows:

SEC. 5-1.57(b)

RESULTS OF AUDIT.

If an audit results in reclassification not made necessary by earlier misclassification based

upon incorrect and/or incomplete information supplied by a taxpayer to the Department of Finance.
the reclassification shall be effective in the current year only and shall not be retroactive. The
taxpayer shall have twenty (20) days from notification of audit results to pay any additional tax
liability resulting from the reclassification. If full payment is not received within the twenty (20)
day period, the unpaid amount is deemed to be delinquent. Interest pursuant to Section 5-1.20
shall begin accruing upon delinquent amounts and penalties shall be assessed upon delinquent
amount as follows:

1 day delinquent - 6Q3Q days delinquent -10%

31 days delinquent 60 days delinquent - 25%
61 days delinquent and thereafter - 50% 25%
If an audit results in reclassification made necessary by an earlier misclassification based
upon incorrect and/or incomplete information supplied by a taxpayer to the Department of Finance,
penalties and interest pursuant to Sections 5-1.17 and 5-1.20 shall be retroactively assessed upon
amounts underpaid from the date the correct taxes would have been due.
Any person upon whom an audit is performed has twenty (20) days after
notification of audit results to file a petition to question such audit. The Director of Finance
in individual cases may, in the exercise of reasonable discretion in administering the
provisions of this Article, enlarge the twenty (20) day period.
Audit results become final at the end of the twenty (20) day period unless a petition
to question audit has been filed:
(1) within the twenty (20) days; or
(2) within the extension period granted by the Director of Finance.
The Director of Finance shall provide taxpayer with notice
of:
(4 i) audit results;
(3 ul

decisions on applications for extensions of time in

which to file petitions to question audit results; and

(3 iji) decisions on petitions to question audit results in the

manner provided in Section 5-1.64(d).
The taxpayer shall be given twenty 20 days to pay the additional tax liability,
resulting from the reclassification. If payment in full is not received within the twenty 20
day period, appropriate penalties and interest shall be assessed from notification date of
additional assessment until the total liabilities are paid in full.
Section 52.

This amendment becomes effective January 1,1993.

IN COUNCIL, OAKLAND, CALIFORNIA,

IAN 1i 2*-1993
<mn
IM

PASSED BY THE FOLLOWING VOTE:

WOODS-JCNES, BAYTON, JORDAN

1Q

DE LA FUENTE
; SPEES, and PRESIDENT HARRIS/

MILEY,
NOES NONE
ABSENT OGAWA, - 1
ABSTENTION NONE
ATTEST:

eoo-243 a/91)

ARREOe^JAMESON
City Clerk and Clerk of the Council
of the City of Oakland, California