Finance Highlights 2006 1004 - Laserfiche WebLink

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Despite the City's efforts in publicizing the business license program, some property owners still claim ignorance of the program and filed a request for a penalty waiver. Although the City has the legal right to impose penalties.on a delinquent business license tax, staff has been following some administrative guidelines (for residential rental property) when reviewing such requests in order to mitigate the potential hardship of penalties and give the requesters the benefit of doubt. The following are the guidelines for reducing a residential rental property owner's request fora penalty reduction and/or tax waiver: Municipal Code exemption: · 2.2.705 Limited Gross Income - 50% discount of the license fee if a person can prove that the gross receipts from the business in the preceding year were less than $5,000. Administrative Practice: · 50% waiver on penalties if a requester is a senior citizen or is living outside the Bay Area. · 25% or $100, whichever is lower, waiver on penalties if a requester is living within the City. · 100% waiver on penalties if a requester is living outside the region, e.g., in southern California or in another state. CONCL USION Due to the discriminatory concerns and enforcement challenges that would result fi'om creating a family BLT exemption for RPRP's and the significant revenue loss the City would incur by exempting all single unit residential property rentals from the BLT, staff recommends that they continue with its current practice of reviewing customer request letters for a tax and penalty waiver and make appropriate reductions according to the administrative criteria. ATTACHMENTS 1. A memo from City Attorney, Jayne W. Williams, discussing business license tax exemption for related party residential property rentals. 2. Local Tax Compliance Activity Report Project to Date - period ending August 31, 2006 from MBIA.