1996 AGN AUG 06 I22 - Laserfiche WebLink

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AWWL CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF AUGUST 6, 1996 W W TO: Honorable M4ment nci7l APPROVAL: ik D. Frenag FROM: a Community tor SUBJECT: New Tax Classification D -- Motor Vehicle Dealers DATE: July 22, 1996 BACKGROUND: Title 5 - Business Licenses and Regulations of the Municipal Code for the City of Colton was first adopted in November, 1975. The reason for enacting a Business License Tax Ordinance was to generate revenue to provide for municipal purposes and was not intended for the regulation of business. There have been various amendments over the years, resulting in some fee changes and minor tax schedule adjustments. In a letter dated April 19, 1996, the owners of L.J. Snow Ford expressed concern that the existing Business License Tax Classification "A" is unfair and punitive to automobile dealers as sellers of "Big Ticket Items." Their position is that the volume of sales does not correctly reflect the bottomline profit margin. They have requested that the City review the option of creating a specialized Tax Classification with a cap for "Big Ticket Item" sellers, specifically, dealers of motor vehicles sales. The current existing Tax Classification "A" that applies to vehicle dealers is Classification "A" -Retail Sales/Manufacturing, as listed below, is not related to profit. Business License Taxes imposed by this Ordinance are not based on profit, either Gross Receipts or Flat Rate. Gross Receipts Ranges Up to $ 25,000 $ 25,001-$ 50,000 $ 50,001-$ 100,000 $ 100,00141,000,000 $1,000,001 & over Classification Base Tax Rate Per A Amounts Thousands $ 65.00 $ 0.00 $ 95.00 $ .90 $ 185.00 $ .70 $ 250.00 $ .45 $ 600.00 $ .30 ITEM NO. 22