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Ord 1401 - IMPOSING A SALES AND USE TAX ON CERTAIN TRANSACTIONSI ORDINANCE NO. 1401 AN ORDINANCE OF THE TOWN OF LOS GATOS IMPOSING A SALES AND USE TAX ON CERTAIN TRANSACTIONS THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: Sections 1. Short title. 2. Rate. 2.5. Lesser rate. 3. Operative date. 4. Purpose. 5. Administration, Rules and Regulations, and Joint Powers Agreement. 6. Sales tax. 7. Place of sale. 8. Use tax. 9. Adoption of provisions of state law. 10. Limitations on adoption of state law. 11. Permit not required. 12. Exclusions and exemptions. 13. Exclusions and exemptions. 14. Application of provisions relating to exclusions and exemptions. 15. Amendments. 16. Enjoining collection forbidden. 17. Penalties. 18. Severability. 19. Repeals. 20. Effective date. SECTION 1. Short Title This ordinance shall be known as the "Local Sales and Use Tax Ordinance ". SECTION 2. Rate The rate of sales tax and use tax imposed by this ordinance is one per cent of the gross receipts of the retailer from the sale of all tangible personal property sold at retail in the city on and -1- after the operative date of this ordinance. SECTION 2.5. Lesser Rate It is the intention of the Council in adopting this ordinance to tax the maximum rate up to the rate specified in Section 2. If for any reason it is judicially determined that the Town cannot tax at the full one per cent, it is the purpose of this ordinance to impose such lesser tax as is lawful. SECTION 3. Operative Date This ordinance shall be operative only when the Santa Clara County Uniform Local Sales and Use Tax Ordinance; DIVISION A30, CHAPTER II., SALES AND USE TAX, of the Santa Clara County Code, becomes inoperative, whether pursuant to Section A30 -19 of the Santa Clara County Code, or for any other reason. SECTION 4. Purpose This ordinance is adopted to achieve the following, among other, purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: (a) To adopt a sales and use tax ordinance which complies with the requirements and limitations contained in Government Code Section 37101; (b) To adopt a sales and use tax ordinance which incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are no.t inconsistent with the requirements and limitations contained in Government Code Section 37101; (c) To adopt a sales and use tax ordinance which can be W-49 administered in a manner that will, to the degree possible, be consistent with the provisions of Government Code section 37101, minimize the cost of collecting city sales and use taxes and at the same time minimize the burden of recordkeeping upon persons subject to taxation under the provisions of this ordinance. (d) To ensure that, if the Santa Clara County Uniform Local Sales and Use Tax Ordinance becomes inoperative, this city will continue to receive this essential source of revenue. (e) To use any authority provided to general law cities besides that provided by Government Code section 37101 and the Bradley -Burns Uniform Sales and Use Tax Law, if either is insufficient or becomes ineffective, to impose the taxes provided in this ordinance. SECTION 5. Administration, Rules and Regulations, Joint Powers Agreement The Town Tax and License Collector is responsible to collect the taxes imposed by, and to administer this ordinance. The Town Council may, in its discretion adopt by resolution regulations for the administration of this ordinance, and may enter a joint powers agreement with any governmental agency or group of governmental agencies to assist in or perform the administration of this ordinance. SECTION 6. Sales Tax For the privilege of selling tangible personal property at retail, a tax is imposed upon all retailers in the Town at the rate stated in Section 2 or Section 2.5 of the gross receipts of the retailer from the sale of all tangible personal property sold at retail in the Town on and after the operative date. -3- SECTION 7. Place of Sale For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out -of -state destination or to a common carrier for delivery to an out -of -state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization then in effect. SECTION 8. Use Tax Any excise tax is imposed on the storage, use or other consumption in the Town of tangible personal property purchased from any retailer on or after the operative date for storage, use or other consumption in the Town at the rate stated in Section 2 or Section 2.5 of the sales price of the property. The sales price includes delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. SECTION 9. .Adoption of Provisions of State Law Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.5 of Division 2 of the Revenue and Taxation Code or Section 4(e) of this ordinance, all of the provisions of Part l of Division 2 of the Revenue and Taxation Code are adopted and made a part of tb.i.s ordinance as though fully set forth herein. SECTION 10. Limitations on Adoption of State Law In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, wherever the State of California is named or referred to as the taxing agency, the name of the Town is substituted therefor. The substitution, however, is not made when the word "State" is used as part of the title of the State Controller, the State Treasurer, the State Board of Control, the State Board of Equalization, the State Treasury, or the Constitution of the State of California; the substitution is not made in those sections, including, but not necessarily limited to, sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the state under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or to impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under such provisions of the Revenue and Taxation Code; the substitution is not made in Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797, or 6828 of the Revenue and Taxation Code, and the substitution is not made for the word "State" in the phrase "retailer engaged in -5- business in this State" in Section 6203 or in the definition of that phrase in Section 6203. SECTION 11. Permit Not Required If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional seller's permit is not required by this ordinance. SECTION 12. Exclusions and Exemptions There is excluded from the measure of tax: (a) The amount of 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 has been subject to sales tax under a sales and use tax ordinance enacted by any city and county, county, or city in this state; (c) The gross receipts from sales to, and the storage, use or other consumption of property purchased by, operators of common carriers and waterborne vessels to be used or consumed in the operation of such common carriers or waterborne vessels principally outside the Town; (d) The storage or use of tangible personal property in the transportation or transmission of persons, property or communications, or in the generation, transmission or distribution of electricity or in the manufacture, transmission or distribution of gas in intrastate, interstate or foreign commerce by public utilities which are regulated by the Public Utilities Commission of the State of California. SECTION 13. Exclusions and Exemptions (a) The amount subject to tax does 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 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. -7- M 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. SECTION 14. Application of Provisions Relating to Exclusions and Exemptions (a) Section 13 of this ordinance shall become operative on January lst of the year following the year in which the State Board of Equalization adopts an assessment ratio for state- assessed property which is identical to the ratio which is required for local assessments by Section 401 of the Revenue and Taxation Code, at which time Section 11 of this ordinance shall become inoperative. (b) In the event that Section 13 of this ordinance becomes operative and the State Board of Equalization subsequently adopts an assessment ratio for the state - assessed property which is higher than the ratio which is required for local assessments by Section 401 of the Revenue and Taxation Code, at which time Section 13 shall again become operative and Section 11 shall become inoperative. SECTION 15. Amendments All subsequent amendments of the Revenue and Taxation Code which relate to the sales and use tax and which are not inconsistent with Part 1.5 of Division 2 of the Revenue and Taxation Code, so far as -: applicable, shall automatically become a part of this ordinance. SECTION 16. Enjoining Collection Forbidden No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the state or the Town, or against any officer of the state or the Town, to prevent or enjoin the collection under this ordinance, or Part 1.5 of Division 2 of the Revenue and Taxation Code, so far as applicable, of any tax or any amount of tax required to be collected. SECTION 17. Penalties Any person violating any of the provisions of this ordinance is guilty of a misdemeanor, and upon conviction thereof shall be punishable by a fine of not more than five hundred dollars or by imprisonment for a period of not more than six months, or by both such fine and imprisonment. SECTION 18. Severability If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of this ordinance and the application of such provision to other persons or circumstances shall not be affected thereby. SECTION 19. Repeals Sections 28 -7.1 through 28 -7.18 of the Town Code shall be repealed on the operative date of this ordinance. However, the repealed sections as they previously existed shall remain applicable for the purposes of the administration of said provisions and the imposition of and the collection of tax with respect to the sales of, and the storage, use, or other consumption of tangible personal property prior to the operative date of this ordinance, the making of refunds, effecting credits, the disposition of moneys collected, and for the commencement or continuance of any action or proceeding under said provisions. SECTION 20. Effective Date This ordinance relates to taxes for the usual and current expenses of the Town. It is effective immediately on adoption. Within 15 days after this ordinance is adopted, the Town Clerk shall cause it to be published once in a newspaper of general circulation published and circulated in the Town. This ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on June 19, 1978, and adopted by the following vote as an ordinance of the Town of Los Gatos at an adjourned regular meeting of the Town Council on June 26, 1978. AYES: COUNCIL MEMBERS Ruth Cannon, Thomas J. Ferrito, John B. Lochner, Peter W. Siemens and Mardi Gualtieri. NOES: COUNCIL MEMBERS None ABSTAIN: COUNCIL MEMBERS None ABSENT: COUNCIL MEMBERS None SIGNED: �dff �� OF LOS GATOS ATTEST: ()�6 CLERK 0 THE T OF LOS GATOS —10—