California Surveyors Forums

I have been approached by several cities that claim I have to pay the full business license fee if I have perfromed work within their juristiction during the year. I work in about 15 different cities over the course of a year and at $300+ per city, these fees can add up.

Such taxes need to be apportioned in a manner by which the measure of tax fairly reflects that proportion of the taxed activity which is actually carried on within the taxing jurisdiction. In otherwords, if 5% of my work is peformed in their city, the business license fee needs to reflect that 5% proportion.

They are not accepting my claim....

Here is the state law from:
"HTTP://LEGINFO.LEGISLATURE.CA.GOV/FACES ... NNUM=16000

BUSINESS AND PROFESSIONS CODE - BPC
DIVISION 7. GENERAL BUSINESS REGULATIONS [16000 - 18001]
( Division 7 added by Stats. 1941, Ch. 61. )

PART 1. LICENSING FOR REVENUE AND REGULATION [16000 - 16545]
( Part 1 added by Stats. 1941, Ch. 61. )

CHAPTER 1. Licensing by Cities [16000 - 16004]
( Chapter 1 added by Stats. 1941, Ch. 61. )

16000.
(a) The legislative body of an incorporated city may, in the exercise of its police power, and for the purpose of regulation, as herein provided, and not otherwise, license any kind of business not prohibited by law transacted and carried on within the limits of its jurisdiction, including all shows, exhibitions and lawful games, and may fix the rates of the license fee and provide for its collection by suit or otherwise. Any legislative body, including the legislative body of a charter city, that fixes the rate of license fees pursuant to this subdivision upon a business operating both within and outside the legislative body’s taxing jurisdiction, shall levy the license fee so that the measure of the fee fairly reflects that proportion of the activity actually carried on within the taxing jurisdiction.


Is anyone else experiencing this problem????????????????????

I've attached a copy of the state law and a copy of the case that changed the law in 1982 for reference if anyone is interested.

Michael Stanton, PLS

Very interesting Mike.

Your citation is close to my neck of the woods, being a Santa Clara County (City of San Jose) case.

I rarely work down there, but in San Mateo County I have only been asked to pay the license (outside of my office location) to Half Moon Bay. With the small size of my company the fee is around 180 bucks. If all the cities in San Mateo County do this it would definitely add up.

When we first started getting nailed with this we were rarely in Half Moon Bay, and it was very annoying, since there were two other firms that worked down there more routinely. Lately, we are in that area a lot more with their retirement.

I would be curious to see if I can reduce the fee accordingly, in case the other cities start catching up to this.

I think I'd send a check in the amount of the pro-rated tax along with a copy of the court cases and put the ball in the city's court.

In my experience its the building department asking the general contractor for a list of subs, then they see if you have a business license or not.
When I contract directly with the owner this does'nt happen

PipeSetter wrote:In my experience its the building department asking the general contractor for a list of subs, then they see if you have a business license or not.
When I contract directly with the owner this does'nt happen

Yep.

The only city that has raised that issue is Santa Monica. It's been a while since they tried to pull it though. The fee was $ 35.00 and each time the issue arose it was paid by the contractor. He volunteered to do it in each case.

Even 5% may be too high. The only "activity" you would be performing within their jurisdiction is the actual field work. The rest is done in your office in another city.

Govt greed.
El Segundo made Psomas have a BL for every truck of theirs that worked in the city on the lite rail.
City of Anaheim wanted almost as much as I was getting for staking a small church parking lot - contractor took care of it, but it amounted to a per professional fee, per employee fee, per vehicle fee, almost $2k.
You shouldn't have to pay a business license fee to start with. Why should you? What does the city do to deserve a cut of your hard work?
You already pay:
Property taxes either directly or thru your rent.
Vehicle license fees
Professional license fee
sales taxes
gas taxes
isn't that enough?

I've written the City a 2 page letter explaining my position. I've calculated the revenue from that city as compared to all revenue and the percentage ranges from 1.8% to 6.2% of our total work dating back to 2010. The prorated business license fee for the fiscal year 2013-2014 amounts to only $4.14.

I can see a city setting a reasonable minimum to cover the cost of processing the application and issuing the license, but I can't see that going much over $50. Then there's the gross receipts tax; in my home city it's $18 per $10k.

Maybe if you send in a check for $55 they'll stop pestering you.

If they didn't require a BL then there would not be a $50 fee and the person processing BLs could do more productive work.

I have found that 90% of letters such as the one you sent MB end up in some clerks hand and never get to someone like the city atty that has the knowledge to determine they are violating the law. But then govt violate their own laws daily without reproach.

Here is a prime example of how the govt works. A local woman's SUV was stolen. The next morning another woman sees a strange vehicle in front of her house and checks it out, the glove box is open and stuff laying all over the seats and floor so she calls the local PD. 2 days later a parking enforcement officer puts a parking ticket on the stolen SUV. The woman whose house it's parked in front of tells the parking officer she thinks it's stolen. 3 days later the woman who owns the SUV decides to take her daily walk in a different area and finds her SUV. She calls the PD. The PD has it towed. To get the vehicle out she had to pay the parking ticket even though the parking ticket was issued when it was in a stolen state (she had a copy of the police report). It took her 3 trips to the PD and the chief of police to refund the parking ticket money she paid.

We try to obtained business Licenses in the City's we work
however, I never have been forced to.


Brian

If they didn't require a BL then there would not be a $50 fee and the person processing BLs could do more productive work.

And they'd lose out on the gross receipts tax, which dwarfs the processing fee for most businesses.

Jim Frame wrote:And they'd lose out on the gross receipts tax, which dwarfs the processing fee for most businesses.

gee that's too bad. they already get a portion of the sales tax and other taxes.