AGENDA TITLE:
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Receive Information Introducing Proposed New Business Registration Program (FIN)
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MEETING DATE:
February 13, 2024
PREPARED BY:
Melissa Munoz, Accounting Manager
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RECOMMENDED ACTION:
Receive information introducing proposed new Business Registration Program.
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BACKGROUND INFORMATION:
In September 2023, the City announced the suspension of the Business License Tax in Lodi Municipal Code Chapter 3.01(“Business License Tax”). The Business License Tax was adopted in March 1995, which caused it to be subject to the retroactivity clause of Proposition 218 as adopted in 1996 (“Prop 218”). Therefore, the Business License Tax should have gone back for voter approval to continue collecting the tax provisions. Since the Business License Tax was not taken back to the voters by 1998, under the terms of Prop 218, it was immediately invalidated.
Upon discovery of Prop 218’s retroactive application and the invalidation of the Business License Tax, the City suspended all collection under this ordinance and issued refunds to those businesses that paid Business License Taxes within the 12 months prior in accordance with the Government Claims Act statute of limitations.
The City now desires to continue monitoring business operations within the jurisdiction and to implement a Business License Registration Program (“Registration Program”) to replace the invalidated Business License Tax. The Registration Program will work similarly to the Business License Tax, except it will only charge a registration fee to recover the administrative and processing costs to register businesses. The Registration Program will not include any type of tax mechanism to raise revenue for the City.
It is critical for the City to have information on businesses and business types for economic development strategic planning. This information is also useful to other business groups in the region. Local licensing is also required of some business types by regulatory agencies and may also be requested in private transactions for insurance or financing purposes by third parties.
STRATEGIC VISION:
2A. Economic Development: Develop long-term economic development strategy.
FISCAL IMPACT:
Not applicable.
FUNDING AVAILABLE:
Not applicable.
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Melissa Munoz
Accounting Manager
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Andrew C. Keys
Interim City Manager