HomeMy WebLinkAbout2024-018 - CDTFA Administration Agreement, partially executedAGREEMENT FOR STATE ADMINISTRATIONOF CITY TRANSACTIONS AND USE TAXESThe City Council of the City of Atascadero has adopted, and the voters of the City ofAtascadero (hereafter called "City" or "District") have approved by the required majority vote, the Cityof Atascadero Transactions and Use Tax Ordinance (hereafter called "Ordinance"), a copy of which isattached hereto. To carry out the provisions of Part 1.6 of Division 2 of the Revenue and TaxationCode and the Ordinance, the California State Department of Tax and Fee Administration, (hereinaftercalled the "Department") and the City do agree as follows:ARTICLE IDEFINITIONSUnless the context requires otherwise, wherever the following terms appear in the Agreement,they shall be interpreted to mean the following:1. "District taxes" shall mean the transactions and use taxes, penalties, and interest imposedunder an ordinance specifically authorized by Revenue and Taxation code Section 7285.9, and incompliance with Part 1.6, Division 2 of the Revenue and Taxation Code.2. "City Ordinance" shall mean the City's Transactions and Use Tax Ordinance referred toabove and attached hereto. Ordinance No. 672, as amended from time to time, or as deemed to beamended from time to time pursuant to Revenue and Taxation Code Section 7262.2.ARTICLE IIADMWISTRATION AND COLLECTIONOF CITY TAXESA. Administration. The Department and City agree that the Department shall performexclusively all functions incident to the administration and operation of the City Ordinance.Resolution 2024-066Exhibit B1(Rev. 7/24)
B. Other Applicable Laws. City agrees that all provisions of law applicable to theadministration and operation of the Department Sales and Use Tax Law which are not inconsistentwith Part 1.6 of Division 2 of the Revenue and Taxation Code shall be applicable to the administrationand operation of the City Ordinance. City agrees that money collected pursuant to the City Ordinancemay be deposited into the State Treasury to the credit of the Retail Sales Tax Fund and may be drawnfrom that Fund for any authorized purpose, including making refunds, compensating and reimbursingthe Department pursuant to Article IV of this Agreement, and transmitting to City the amount to whichCity is entitled.C. Transmittal of money.1. For the period during which the tax is in effect, and except as otherwise provided herein, alldistrict taxes collected under the provisions of the City Ordinance shall be transmitted to Cityperiodically as promptly as feasible, but not less often than twice in each calendar quarter.2. For periods subsequent to the expiration date of the tax whether by City's self-imposedlimits or by final judgment of any court of the State of California holding that City's ordinance isinvalid or void, all district taxes collected under the provisions of the City Ordinance shall betransmitted to City not less than once in each calendar quarter.3. Transmittals may be made by mail or electronic funds transfer to an account of the Citydesignated and authorized by the City. A statement shall be furnished at least quarterly indicating theamounts withheld pursuant to Article IV of this Agreement.D. Rules. The Department shall prescribe and adopt such rules and regulations as in itsjudgment are necessary or desirable for the administration and operation of the City Ordinance and thedistribution of the district taxes collected thereunder.E. Preference. Unless the payor instructs otherwise, and except as otherwise provided in thisAgreement, the Department shall give no preference in applying money received for state sales and usetaxes, state-administered local sales and use taxes, and district transactions and use taxes owed by ataxpayer, but shall apply moneys collected to the satisfaction of the claims of the State, cities, counties,cities and counties, redevelopment agencies, other districts, and City as their interests appear.Resolution 2024-066Exhibit B2(Rev. 7/24)
F. Security. The Department agrees that any security which it hereafter requires to befurnished by taxpayers under the State Sales and Use Tax Law will be upon such terms that it also willbe available for the payment of the claims of City for district taxes owing to it as its interest appears.The Department shall not be required to change the terms of any security now held by it, and City shallnot participate in any security now held by the Department.G. Records of the Department.When requested by resolution of the legislative body of the City under section 7056 of theRevenue and Taxation Code, the Department agrees to permit authorized personnel of the City toexamine the records of the Department, including the name, address, and account number of eachseller holding a seller's permit with a registered business location in the City, pertaining to theascertainment of transactions and use taxes collected for the City. Information obtained by the Cityfrom examination of the Department's records shall be used by the City only for purposes related to thecollection of transactions and use taxes by the Department pursuant to this Agreement.H. Annexation. City agrees that the Department shall not be required to give effect to anannexation, for the purpose of collecting, allocating, and distributing District transactions and usetaxes, earlier than the first day of the calendar quarter which commences not less than two months afternotice to the Department. The notice shall include the name of the county or counties annexed to theextended City boundary. In the event the City shall annex an area, the boundaries of which are notcoterminous with a county or counties, the notice shall include a description of the area annexed andtwo maps of the City showing the area annexed and the location address of the property nearest to theextended City boundary on each side of every street or road crossing the boundary.ARTICLE IIIALLOCATION OF TAXA. Allocation. In the administration of the Department's contracts with all districts thatimpose transactions and use taxes imposed under ordinances, which comply with Part 1.6 of Division 2of the Revenue and Taxation Code:Resolution 2024-066Exhibit B3(Rev. 7/24)
1. Any payment not identified as being in payment of liability owing to a designateddistrict or districts may be apportioned among the districts as their interest appear, or, in the discretionof the Department, to all districts with which the Department has contracted using ratios reflected bythe distribution of district taxes collected from all taxpayers.2. All district taxes collected as a result of determinations or billings made by theDepartment, and all amounts refunded or credited may be distributed or charged to the respectivedistricts in the same ratio as the taxpayer's self-declared district taxes for the period for which thedetermination, billing, refund or credit applies.B. Vehicles, Vessels, and Aircraft. For the purpose of allocating use tax with respect tovehicles, vessels, or aircraft, the address of the registered owner appearing on the application forregistration or on the certificate of ownership may be used by the Department in determining the placeof use.ARTICLE IVCOMPENSATIONThe City agrees to pay to the Department as the State's cost of administering the CityOrdinance such amount as is provided for by law. Such amounts shall be deducted from the taxescollected by the Department for the City.ARTICLE VMISCELLANEOUS PROVISIONSA. Communications. Communications and notices may be sent by first class United Statesmail to the addresses listed below, or to such other addresses as the parties may from time to timedesignate or through email at jservices@cdtfa.ca.gov. If and when communications and notices mayinclude confidential information, communications and notices must be sent through encrypted email atjservices@cdtfa.ca.gov or by mail.Resolution 2024-066Exhibit B4(Rev. 7/24)
Communications and notices to be sent to the Department shall be addressed to:California State Department of Tax and Fee AdministrationP.O. Box 942879Sacramento, California 94279-0027Attention: AdministratorLocal Revenue BranchCommunications and notices to be sent to the City shall be addressed to:City ofAtascadero6500 Palma AvenueAtascadero, California 93422Attention: DirectorAdministrative Services DepartmentUnless otherwise directed, transmittals of payment of District transactions and use taxeswill be sent to the address above.B. Term. The date of this Agreement is the date on which it is approved by the Department ofGeneral Services. The Agreement shall take effect on April 1, 2027. This Agreement shall continueuntil December 31 next following the expiration date of the City Ordinance, and shall thereafter berenewed automatically from year to year until the Department completes all work necessary to theadministration of the City Ordinance and has received and disbursed all payments due under thatOrdinance.C. Notice of Repeal of Ordinance. City shall give the Department written notice of therepeal of the City Ordinance not less than 110 days prior to the operative date of the repeal.Resolution 2024-066Exhibit B5(Rev. 7/24)
ARTICLE VIADMENISTRATION OF TAXES IF THEORDINANCE IS CHALLENGED AS BEING INVALIDA. Impoundment of funds.1. When a legal action is begun challenging the validity of the imposition of the tax, theCity shall deposit in an interest-bearing escrow account, any proceeds transmitted to it underArticle II. C., until a court of competent jurisdiction renders a final and non-appealable judgment thatthe tax is valid.2. If the tax is determined to be unconstitutional or otherwise invalid, the City shalltransmit to the Department the moneys retained in escrow, including any accumulated interest, withinten days of the judgment of the trial court in the litigation awarding costs and fees becoming final andnon-appealable.B. Costs of administration. Should a final judgment be entered in any court of the State ofCalifornia, holding that City's Ordinance is invalid or void, and requiring a rebate or refund totaxpayers of any taxes collected under the terms of this Agreement, the parties mutually agree that:1. Department may retain all payments made by City to Department to prepare toadminister the City Ordinance.2. City will pay to Department and allow Department to retain Department's cost ofadministering the City Ordinance in the amounts set forth in Article IV of this Agreement.3. City will pay to Department or to the State of California the amount of any taxes plusinterest and penalties, if any, that Department or the State of California may be required to rebate orrefund to taxpayers.4. City will pay to Department its costs for rebating or refunding such taxes, interest, orpenalties. Department's costs shall include its additional cost for developing procedures for processingResolution 2024-066 6 (Rev. 7/24)Exhibit B
the rebates or refunds, its costs of actually making these refunds, designing and printing forms, anddeveloping instructions for Department's staff for use in making these rebates or refunds and any othercosts incurred by Department which are reasonably appropriate or necessary to make those rebates orrefunds. These costs shall include Department's direct and indirect costs as specified by Section 11256of the Government Code.5. Costs may be accounted for in a manner, which conforms to the internal accounting,and personnel records currently maintained by the Department. The billings for such costs may bepresented in summary form. Detailed records will be retained for audit and verification by City.6. Any dispute as to the amount of costs incurred by Department in refunding taxes shallbe referred to the State Director of Finance for resolution and the Director's decision shall be final.7. Costs incurred by Department in connection with such refunds shall be billed byDepartment on or before the 25th day of the second month following the month in which the judgmentof a court of the State of California holding City's Ordinance invalid or void becomes final. ThereafterDepartment shall bill City on or before the 25th of each month for all costs incurred by Department forthe preceding calendar month. City shall pay to Department the amount of such costs on or before thelast day of the succeeding month and shall pay to Department the total amount of taxes, interest, andpenalties refunded or paid to taxpayers, together with Department costs incurred in making thoserefunds.CITY OF ATASCADEROy^/\ -.James ^HlfewisCity ManagerDate: /2--(^--2.4CALIFORNIA STATE DEPARTMENT OFTAX AND FEE ADMINISTRATIONAdministratorLocal Revenue BranchDate:Resolution 2024-066Exhibit B7(Rev. 7/24)