Except as provided in Subsection (b) of this Section, an organization having a formally recognized exemption from income tax pursuant to Sections 501(c) or 501(d) or 401(a) of the Internal Revenue Code of 1986, as amended, as qualified by Sections 502, 503 and 504 of the Internal Revenue Code of 1986, as amended, shall be exempt from taxation under this Article.
Except for an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, an organization otherwise exempt from taxation under Subsection (a) of this Section that is directly engaged within the City in an unrelated trade or business within the meaning of Section 513(a) of the Internal Revenue Code of 1986, as amended, and has, from its own operations, unrelated business taxable income within the meaning of Section 512(a)(1) of the Internal Revenue Code of 1986, as amended, shall pay the Payroll Expense Tax equal to the amount calculated by multiplying the tax which would have been due under this Article if the organization were not an exempt organization by the percentage which its unrelated business receipts bear to its total receipts. If it is impracticable, unreasonable or improper to allocate such organization’s payroll expense as aforesaid either because of the particular nature of the organization’s unrelated trade or business or the particular nature of the services provided to the organization in connection therewith by its employees, or on account of the unusual basis of compensation, or for any other reason, then the amount of such payroll expense reasonably attributable to work performed or services rendered in the City shall be determined on the basis of all relevant facts and circumstances of the particular case, in accordance with any rulings or regulations issued or promulgated by the Tax Collector for the purpose.
Blind persons licensed under the provisions of Chapter 6A of Title 12 of the United States Code (“Vending Stands for Blind in Federal Buildings”) and Article 5 of Chapter 6 of Part 2 of Division 10 of the Welfare and Institutions Code of the State of California (“Business Enterprises for the Blind”) need not include in the computation of payroll expense the first $15,000 of payroll expense in any one year which is attributable to their licensed operations within the City.
Skilled Nursing Facilities licensed under the provisions of Title 22, California Administrative Code, Division 5 (“Licensing and Certification of Health Facilities and Referral Agencies”) Chapter 3 (“Skilled Nursing Facilities”), shall be exempt from taxation under this Article.
For only so long as and to the extent that the City is prohibited from imposing the tax under this Article, the following persons shall be exempt from the Payroll Expense Tax:
Banks and financial corporations exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code Section 23182;
Insurance companies exempt from local taxation under Article XIII, Section 28 of the California Constitution;
Persons engaging in business as a for-hire motor carrier of property under Revenue and Taxation Code Section 7233;
Persons engaging in intercity transportation as a household goods carrier under Public Utilities Code Section 5327;
Charter-party carriers operating limousines that are neither domiciled nor maintain a business office with the City under Public Utilities Code Section 5371.4;
Any person upon whom the City is prohibited under the Constitution or statute of the state of California from imposing the Payroll Expense Tax.
To the extent that any taxpayer has paid a substantially similar tax to any other taxing jurisdiction on any payroll expense taxed under this Article, the tax paid to such taxing jurisdiction shall be credited against the tax due under this Article.
Nothing in this Article shall be construed as requiring the payment of any tax for engaging in a business or the doing of an act when such payment would be in violation of the Constitution or a statute of the United States or of the Constitution or a statute of the State of California.
(Added by Ord. 275-70, 9/2/70; amended by Ord. 118-80, App. 3/28/80; Ord. 395-84, App. 9/20/84; Ord. 357-88, App. 8/4/88; Ord. 423-91, App. 12/19/91; Ord. 26-04, File No. 031990, App. 2/19/2004)