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Committee approves amendment to business and tax code changes to align penalties and filing dates
Summary
The committee moved an ordinance forward amending the Business and Tax Regulations Code to streamline collection after Proposition E: reestablishing a May 31 business registration due date, changing late penalties to a $100 minimum plus staged percent increases, eliminating a roofer vehicle tag in favor of carrying registration, and harmonizing delinquent-interest rules.
The Budget & Finance Committee voted to advance an ordinance making administrative changes to the Business and Tax Regulations Code intended to align collection practices created by Proposition E and other code updates. Chair Mark Farrell moved approval of an amendment and to forward the ordinance as amended; the motion carried "without opposition."
Greg Cotto of the Office of the Treasurer and Tax Collector summarized the package as largely administrative, aimed at simplifying tax collection and enforcement after the city enacted a new gross-receipts tax under Proposition E. He told the committee the ordinance would reestablish the prior business registration due date of May 31 and remove an existing requirement that roofers purchase and post a $30 vehicle tag while working on-site; instead, roofers would be required to carry a copy of their business registration certificate in their vehicle.
Cotto said the current failure-to-file penalty for business registration—previously a doubling of the fee—could produce disproportionate outcomes under the new fee schedule, in which registration fees under Proposition E could reach as high as $35,000 for a day-late filing. The ordinance therefore sets a minimum penalty of $100 and adopts a staged-percent penalty structure consistent with other delinquent taxes: 5% for the first 30 days, an additional 5% for 30–60 days, a further 5% for 60–90 days and an additional 25% after 90 days.
Other changes Cotto described include harmonizing methods for applying interest to penalties and fees; expanding a 50% enhanced penalty for significant underreporting to taxpayers who fail to file returns when liability exceeds $5,000 (as discovered on audit or investigation); requiring transient-occupancy and parking operators to file and remit taxes monthly rather than file quarterly reconciliations; changing the annual revenue-control-equipment fee due date from January 31 to December 31 to align with certificate-of-authority timing; and amending bonding language so small parking operators maintain an existing bond while operating rather than posting new security each year.
The Budget and Legislative Analyst concurred that any fiscal impacts are minor and recommended approval. No members of the public requested to speak on this item. The committee approved the clerk-circulated amendment and moved the underlying ordinance forward to the full Board of Supervisors for consideration.
