07 - Laserfiche WebLink

THE CITY OF 7 "' CITY COUNCIL AGENDA REPORT pLEASANTON. December 3, 2013 Business License Division Economic Development TITLE: INTRODUCE AN ORDINANCE TO AMEND MUNICIPAL CODE SECTION 5.24.020 (DELINQUENT TAXES – PENALTIES) TO RESTRUCTURE THE TIMING OF DELINQUENT BUSINESS LICENSE TAX PENALTIES WHILE MAINTAINING THE CURRENT MAXIMUM AMOUNT SUMMARY While Business License taxes are due by January 1 of each calendar year, a 5% penalty for late payment is not assessed until February 1, thereby allowing a 30-day grace period. The municipal code currently provides for a 5% cumulative penalty for each month unpaid, to a maximum of 50% if unpaid for 10 months. With the most common business license tax amount at $25.00 (for a business with $0—$24,999 in gross receipts), the 5% penalty is $1.25, and the maximum 50% penalty is $12.50. The proposed municipal code amendment would better align the delinquent penalty structure with the issuance of renewal notices, encourage timely renewals, and reduce administrative costs for multiple overdue notices. The City Council is asked to consider an amendment to the municipal code to change the penalty structure to 25% of the business license tax due with the first delinquency penalty on February 1 and 50% with the second delinquency penalty on March 1. RECOMMENDATION Approve an amendment to the municipal code to change the business license tax penalty structure to 25% and 50% consecutively in the first and second months of delinquency, allowing the alignment with the current noticing for proper collection efforts on delinquent license taxes, and reducing administrative costs for repeated notices. FINANCIAL STATEMENT There is no significant financial impact to the City's General Fund as this would change the timing of the penalties but retains the existing maximum penalty amount. There are expected to be savings in reduced multiple mailings.