2016-199 Transactions and Use Tax_measure DD ORDINANCE NO. 2016-199
AN ORDINANCE OF THE PEOPLE OF THE CITY OF MENIFEE, CALIFORNIA,
ESTABLISHING A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY
THE STATE BOARD OF EQUALIZATION BY ADDING CHAPTER 3.26 TO
THE MENIFEE MUNICIPAL CODE
THE PEOPLE OF THE CITY OF MENIFEE ORDAIN AS FOLLOWS:
Section 1. The Menifee Municipal Code is hereby amended by the addition of a new
Chapter 3.26 to read in its entirety as follows:
Chapter 3.26
Transactions and Use Tax
Sections:
3.26.010 Title
3.26.020 Operative Date
3.26.030 Purpose
3.26.040 Contract With State
3.26.050 Transaction Tax Rate
3.26.060 Place of Sale
3.26.070 Use Tax Rate
3.26.080 Adoption of Provisions of State Law
3.26.090 Limitations on Adoption of State Law and Collection of Use Taxes
3.26.100 Permit Not Required
3.26.110 Exemptions and Exclusions
3.26.120 Amendments
3.26.130 Enjoining Collection Forbidden
3.26.140 Use Tax Proceeds
3.26.150 Annual Audit
3.26.160 Termination Date
3.26.010 Title. This Chapter shall be known as the Menifee Transactions and Use Tax
Ordinance. The City of Menifee hereinafter shall be called "City." This Chapter shall be
applicable in the incorporated territory of the City.
3.26.020 Operative Date. "Operative Date" means the first day of the first calendar quarter
commencing more than 110 days after the adoption of this ordinance, the date of such adoption
being as set forth below.
3.26.030 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 retail transactions and use tax in accordance with the provisions of
Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and
Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance
Ordinance No. 2016-199
Establishing Transactions and Use Tax
which shall be operative if a majority of the electors voting on the measure vote to approve the
imposition of the tax at an election called for that purpose;
B. To adopt a retail transactions and use tax ordinance that incorporates provisions
identical to those of the Sales and Use Tax Law of the State of California insofar as those
provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of
Division 2 of the Revenue and Taxation Code;
C. To adopt a retail transactions and use tax ordinance that imposes a tax and
provides a measure therefore that can be administered and collected by the State Board of
Equalization in a manner that adapts itself as fully as practicable to, and requires the least
possible deviation from, the existing statutory and administrative procedures followed by the
State Board of Equalization in administering and collecting the California State Sales and Use
Taxes;
D. To adopt a retail transactions and use tax ordinance that can be administered in
a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6
of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions
and use taxes, and at the same time, minimize the burden of record keeping upon persons
subject to taxation under the provisions of this ordinance.
3.26.040 Contract With State. Prior to the operative date, the City shall contract with the State
Board of Equalization to perform all functions incident to the administration and operation of this
transaction and use tax ordinance; provided, that if the City shall not have contracted with the
State Board of Equalization prior to the operative data, it shall nevertheless so contract and in
such a case the operative date shall be the first day of the first calendar quarter following the
execution of such a contract.
3.26.050 Transaction Tax Rate. For the privilege of selling tangible personal property at
retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the
rate of 1% of the gross receipts of any retailer from the sale of all tangible personal property
sold at retail in said territory on and after the operative date of this ordinance.
3.26.060 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.
3.26.070 Use Tax Rate. An excise tax is hereby imposed on the storage, use or other
consumption in the incorporated territory of the City of tangible personal property purchased
from any retailer on and after the operative date of this ordinance for storage, use or other
consumption in said territory at the rate of 1% of the sales price of the property. The sales price
shall include delivery charges when such charges are subject to state sales or use tax regardless
of the place to which delivery is made.
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3.26.080 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 1.6 of Division 2 of the
Revenue and Taxation Code, all of the provisions of Part 1(commencing with Section 6001) of
Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this
ordinance as though fully set forth herein.
3.26.090 Limitations on Adoption of State law and Collection of Use Taxes. In adopting
the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:
A. Wherever the State of California is named or referred to as the taxing agency,
the name of the City shall be substituted therefor. However, the substitution,
however, shall not be made when:
1. 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;
2. The result of that substitution would require action to be taken by or against
the City or any agency, officer, or employee thereof rather than by or against
the State Board of Equalization, in performing the functions incident to the
administration or operation of this ordinance;
3. 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:
a. 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;
b. 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 the said provisions of that Code;
4. In Sections 6701, 6702 (expect in the last sentence thereof), 6711, 6715,
6737, 6797 or 6828 of the Revenue and Taxation Code.
B. The word "City" shall substituted for the word "State" in the phrase "retailer
engaged in business in this State" in Section 6203 or in the definition of that
phrase in Section 6203.
3.26.100 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 transactor's permit shall not be
required by this ordinance.
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3.26.110 Exemptions and Exclusions.
A. There shall be excluded from the measure of the transactions tax and the use tax
the amount of any sales or use tax imposed by the State of California or by any
city, city and county, or county pursuant to the Bradley-Burns Uniform Local
Sales and Use Tax Law or the amount of any state-administered transactions or
use tax.
B. There are exempted from the computation of the amount of transactions tax the
gross receipts from:
1. Sales of tangible personal property, other than fuel or petroleum products,
to the operators of aircraft to be used or consumed principally outside the
county 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.
2. Sales of property to be used outside the City which is shipped to a point
outside the City, pursuant to the contract of sale, by delivery to such point
by the retailer or his agent, or by delivery by the retailer to a carrier for
shipment to a consignee at such point. For the purposes of this paragraph,
delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles)
subject to registration pursuant to Chapter 1 (commencing with
Section 4000) of Division 3 of the Vehicle Code, aircraft licensed
in compliance with Section 21411 of the Public Utilities Code,
and undocumented vessels registered under Division 3.5
(commencing with Section 9840) of the Vehicle Code by
registration to an out-of-City address and by a declaration under
penalty of perjury, signed by the buyer, stating that such address
is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place
of business out-of-City and declaration under penalty of perjury,
signed by the buyer, that the vehicle will be operated from that
address.
3. The sale of tangible personal property if the seller is obligated to furnish
the property for a fixed price pursuant to a contract entered into prior to
the operative date of this ordinance.
4. A lease of tangible personal property which is a continuing sale of such
property, for any period of time for which the lessor is obligated to lease
the property for an amount fixed by the lease prior to the operative date of
this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, the sale or
lease of tangible personal property shall be deemed not to be obligated
pursuant to a contract or lease for any period of time for which any party
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to the contract or lease has the unconditional right to terminate the contract
or lease upon notice, whether or not such right is exercised.
C. There are exempted from the use tax imposed by this ordinance, the storage, use
or other consumption in the City of tangible personal property:
1. The gross receipts from the sale of which have been subject to a
transactions tax under any state-administered transactions and use tax
ordinance.
2. Other than fuel or petroleum products 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. This exemption is in addition to the exemptions provided in
Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State
of California.
3. If the purchaser is obligated to purchase the property for a fixed price
pursuant to a contract entered into prior to the operative date of this
ordinance.
4. If the possession of, or the exercise of any right or power over, the
tangible personal property arises under a lease which is a continuing
purchase of such property for any period of time for which the lessee is
obligated to lease the property for an amount fixed by a lease prior to the
operative date of this ordinance.
5. For the purposes of subparagraphs (3) and (4) of this section, storage,
use, or other consumption, or possession of, or exercise of any right or
power over, tangible personal property shall be deemed not to be
obligated pursuant to a contract or lease for any period of time for which
any party to the contract or lease has the unconditional right to terminate
the contract or lease upon notice, whether or not such right is exercised.
6. Except as provided in subparagraph (7), a retailer engaged in business
in the City shall not be required to collect use tax from the purchaser of
tangible personal property, unless the retailer ships or delivers the
property into the City or participates within the City in making the sale of
the property, including, but not limited to, soliciting or receiving the order,
either directly or indirectly, at a place of business of the retailer in the City
or through any representative, agent, canvasser, solicitor, subsidiary, or
person in the City under the authority of the retailer.
7. "A retailer engaged in business in the City" shall also include any retailer
of any of the following: vehicles subject to registration pursuant to Chapter
1 (commencing with Section 4000) of Division 3 of the Vehicle Code,
aircraft licensed in compliance with Section 21411 of the Public Utilities
Code, or undocumented vessels registered under Division 3.5
(commencing with Section 9840) of the Vehicle Code. That retailer shall
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be required to collect use tax from any purchaser who registers or
licenses the vehicle, vessel, or aircraft at an address in the City.
D. Any person subject to use tax under this ordinance may credit against that tax
any transactions tax or reimbursement for transactions tax paid to a district
imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division
2 of the Revenue and Taxation Code with respect to the sale to the person of
the property the storage, use or other consumption of which is subject to the
use tax.
3.26.120 Amendments. All amendments subsequent to the effective date of this ordinance to
Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which
are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code,
and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code,
shall automatically become a part of this ordinance, provided however, that no such amendment
shall operate so as to affect the rate of tax imposed by this ordinance.
3.26.130 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 City, or against any officer of the State or the City, to prevent or enjoin the collection under
this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any
amount of tax required to be collected.
3.26.140 Use of Tax Proceeds. All proceeds of the tax levied and imposed under this chapter
shall be paid into the General Fund for use by the City of Menifee.
3.26.150 Annual Audit. By no later than December 315' of each year, the City's independent
auditors shall complete a financial audit report to include the revenue raised and expended by
this tax to be reflected in the City's budget. The audit shall review whether the tax revenues
collected pursuant to this chapter are collected, managed and expended in accordance with the
adopting ordinance.
3.26.160 Termination Date. The authority to levy the tax imposed by this chapter shall expire
when ended by voters.
Section 2. If any section, subsection, sentence or clause of this ordinance is, for any
reason, held to be invalid or unconstitutional by a court of competent jurisdiction, such decision
shall not affect the validity of the remaining portions of this ordinance.
Section 3. The adoption of this ordinance is not a "project" subject to the requirements of
the California Environmental Quality Act (CEQA). Pursuant to CEQA Guidelines section
15378(b)(4)the tax is not a project within the meaning of CEQA because it creates a government
funding mechanism that does not involve any commitment to any specific project that may result
in a potentially significant impact on the environment and therefore CEQA review is not required.
Section 4. This ordinance relates to the levying and collecting of the City's transactions
and use taxes and shall take effect immediately upon approval by the majority of voters voting at
the general municipal election on November 8, 2016.
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Section 5. The City Clerk shall certify the passage of this ordinance and forward a copy of
the adopted ordinance to the State Board of Equalization.
PASSED, APPROVED AND ADOPTED by the People of the City of Menifee, California, at the
general election held on November 8, 2016.
Neil R. Winter, Mayor
Attest:
6rah A. Manwa ing, City CI
Approved as to Form:
J1 y Melching, CitAt ney
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NIF
STATE OF CALIFORNIA )
Neil R. Winter COUNTY OF RIVERSIDE ) ss
Mayor CITY OF MENIFEE )
Matthew Liesemeyer
Mayor Pro Tem
1, Sarah A. Manwaring, City Clerk of the City of Menifee, do hereby certify that the
Greg August foregoing Ordinance No. 2016-199 was duly adopted by the City Council of the City of
Councilmember Menifee at a meeting thereof held on the 7"' of December, 2016 by the following vote:
Lesa A.Sobek Ayes: August, Denver, Liesemeyer, Sobek
Councilmember Noes: None
Absent: None
John V. Denver Abstain: None
Councilmember
1
Sar A. Manwarmg, City Clerk
I
29714 Haun Road
Menifee,CA 92586
Phone 951.672.6777
Fax 951.69.3843
ww.cityofinenifee.us