HomeMy WebLinkAboutItem 15 - Authorization to examine Sales and Use Tax Records
Department Name: Finance
Cost Center: 2003
For Agenda of: May 18, 2021
Placement: Consent
Estimated Time: N/A
FROM: Brigitte Elke, Finance Director
Prepared By: Jacob Nunez, Financial Analyst- Revenue
SUBJECT: EXAMINATION OF SALES AND USE TAX RECORDS
RECOMMENDATION
Approve a Resolution authorizing the examination of Sales and Use Tax records (CDTFA
Identifier, Local Sales Tax Code 40023) (Attachment A).
DISCUSSION
Background
In 1957, the Council adopted Ordinance No. 0045 (1957 Series) (Attachment B) to introduce a
Sales and Use tax and incorporate provisions identical to those of the Sales and Use Tax law of
the State of California.
Sales and Use taxes are administered and collected by the California Department of Tax and Fee
Administration (CDTFA). Per Section 7056 of the California Revenue and Taxation Code,
positions designated to access CDTFA records, must be approved via resolution by the
governing body.
The San Luis Obispo City Council adopted such a Resolution via Resolution No. 6806 (1990
Series) (Attachment C), which granted the Mayor, Councilmembers, the City Administrative
Officer, and the Director of Finance access to the CDTFA Sales and Use tax records under Local
Sales Tax Code 40023.
In October 2020, CDTFA transitioned its Sales and Use tax records from its old platform, Secure
Automated File Exchange, to a secure portal, BOX, requiring a new sign-in for approved
positions. This prompted a review of the Resolution No. 6086, and the need to update the
authorized position titles within.
Authorization to Review Records
With the new resolution (Attachment A), staff recommends assigning the City Manager, the
Finance Director, the Deputy City Manager, and the Principal Budget Analyst access and review
rights to CDTFA records for the City of San Luis Obispo’s Sales and Use tax records. The City
Manager and the Finance Director can designate other positions to access and review on their
behalf. The updated resolution also provides for the City's Sales and Use tax consultant, HdL
Companies, to continue access to CDTFA data for analysis and auditing purposes.
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Previous Council Action
On December 8, 2020, the City Council approved Resolution No. 11197 (2020 Series), which
authorized all the positions recommended in this resolution to have access to CDTFA records for
the local Transaction and Use taxes (CDTFA Identifier, Jurisdiction Add-on Code 892).
Public Engagement
As this is an administrative item no additional public engagement was done. Members of the
public will have the opportunity to provide public comment or submit agenda correspondence at
the May 18, 2021 City Council meeting.
FISCAL IMPACT
Budgeted: No Budget Year: 2020-21
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund N/A
State
Federal
Fees
Other:
Total
There is no fiscal impact associated with the adoption of the resolution. However, the local Sales
and Use tax is the City’s third largest revenue source and the access to the information is
essential for analysis and forecasting of this important revenue stream.
ALTERNATIVES
The City Council could decide not to authorize the examination of Sales or Transaction and
Use tax records. This is not recommended as several senior management staff will not have
access to the information.
Attachments:
a - Draft Resolution
b - Ordinance No. 0045 (1957 Series)
c - Resolution No. 6806 (1990 Series)
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R ______
RESOLUTION NO._____ (2021 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING THE EXAMINATION OF
SALES AND USE TAX RECORDS
WHEREAS, pursuant to Ordinance Number 0045 of the City of San Luis Obispo, the
City of San Luis Obispo (hereinafter referred to as District) established the City’s local Sales and
Use tax; and
WHEREAS, the City authorized certain officers, employees and representatives of the
District to access and review the local Sales and Use tax information pursuant to Resolution No.
6806 (1990 Series); and
WHEREAS, pursuant to Revenue and Taxation Code section 7270, the District entered
into a contract with the CDTFA to perform all functions incident to the administration and
collection of Transactions and Use taxes via Ordinance No. 1495; and
WHEREAS, the City Council of the City of San Luis Obispo deems it desirable and
necessary for authorized officers, employees and representatives of the District to continue to
access confidential Sales and Use tax records of the CDTFA as contracted via Ordinance 0045;
and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain
requirements and conditions for the disclosure of CDTFA records, and Section 7056.5 of the
California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure
of information contained in, or derived from, the Sales, Transactions and Use tax records of the
CDTFA;
WHEREAS, upon review of Resolution No. 6806, (1990 Series), it was discovered that
the position titles authorized to review Sales and Use tax records have changed and are no longer
applicable.
NOW, THEREFORE IT IS RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The City Manager, the Finance Director, the Deputy City Manager, and the
Principal Budget Analyst, or other officers or employees of the District designated in writing by
the City Manager, Finance Director, Deputy City Manager, or the Principal Budget Analyst to the
CDTFA are hereby appointed to represent the District with authority to examine Sales and Use tax
records of the CDTFA pertaining to Sales and Use taxes collected for the District by the CDTFA
pursuant to the contract between the District and the CDTFA.
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Resolution No. _____ (2021 Series) Page 2
R ______
SECTION 2. The information obtained by examination of CDTFA records shall be used
only for purposes related to the collection of District Sales and Use taxes by the CDTFA pursuant
to that contract, and for purposes related to the following governmental functions of the District:
a) Revenue management and budgeting;
b) Community and economic development;
c) City administration;
d) Business License and Tax administration.
The information obtained by examination of CDTFA records shall be used only for those
governmental functions of the District listed above.
SECTION 3. Hinterliter, De Llamas and Associates (HdL Companies) is hereby
designated to examine the Sales and Use tax records of the CDTFA pertaining to Sales and Use
taxes collected for the District by the CDTFA. The entity designated by this section meets all of
the following conditions, which are also included in the contract between the City and HdL
Companies and:
a) has an existing contract with the District to examine those Sales and Use tax
records;
b) is required by that contract to disclose information contained in, or derived from,
those Sales and Use tax records only to the officer or employee authorized under
Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer
during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived
from those Sales and Use tax records, after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of CDTFA
records shall be used only for purposes related to the collection of District’s Sales and Use taxes
by the CDTFA pursuant to the contract between the District and the CDTFA and for those purposes
relating to the governmental functions of the District listed in section 2 of this resolution.
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Resolution No. _____ (2021 Series) Page 3
R ______
SECTION 4. This resolution supercedes Resolution No. 6806 (1990 Series) of the City
Council of the City of San Luis Obispo adopted pursuant to subdivision (b) of Revenue and
Taxation Code section 7056.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2021.
__________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this _____________________________.
____________________________________
Teresa Purrington
City Clerk
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RESOLUTION NO. 6806 (1990 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SAN LUIS OBISPO AUTHORIZING CERTAIN
CITY OFFICIALS AND A CITY CONTRACTOR ACCESS TO
SALES AND USE TAX RECORDS PURSUANT TO
GOVERNMENT CODE SECTION 7056
THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO HEREBY RESOLVES AS
FOLLOWS:
Section 1. The following City officials are hereby authorized to receive and review sales and
use tax transactions, for the City of San Luis from the Board of Equalization:
Mayor and Councilmembers
City Administrative Officer
Director of Finance
Section 2. The following independent contractor for the City of San Luis Obispo is hereby
also authorized to receive and review sales and use tax transactions for the City
of San Luis Obispo.
Hinderliter, de Llamas & Associates: Robert Hinderliter, Principal, Lloyd de
Llamas, Principal.
Section 3. The City of San Luis Obispo hereby certifies that Hinderliter, de Llamas &
Associates:
A. Has an existing contract with the City of San Luis Obispo to receive sales
and use tax records; and
B. Is required by that to disclose information contained in, or derived from,
those sales and use tax records only to an officer or employee of the City
who is authorized by this resolution to examine the information; and
C. Is prohibited by that contract from performing consulting services for
a retailer during the term of that contract, and
D. Is prohibited by that contract from retaining the information contained
in, or derived from those sales tax records, after that contract has
expired.
Section 4. Information obtained by examination of the board of records shall be used only
for purposes related to the collection of local sales and use taxes by the board
pursuant to the contract, and for Municipal Revenue Forecasting.
Section 5. This resolution supersedes previous authorizations.
Section 6. The City Clerk shall certify to the adoption of this Resolution and send forward
a certified copy to the Board of Equalization.
R 6806
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Resolution No. 6806
Page 2 u
Upon motion of Councilwoman Rappa , seconded by Councilman. Roalman and
on the following roll call vote:
AYES: Councilmembers Rappa, Roalman, Pinard, Reiss, and Mayor Dunin
NOES: None
ABSENT: None
the foregoing resolution was adopted this 15th day of May 1990.
Mayor Ron Dunin
A TEST:
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Pa Voges, Ci
APPROVED
nn inistrative Officer
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