A Comparison of Business License and Transient Occupancy Tax Policies

All nine counties reviewed collect TOT and have similar collection policies and results. TOT varied from 8% to 10.5% in the counties surveyed. Response: Santa Cruz County Board of Supervisors CANNOT RESPOND. The County has not conducted a survey of other Counties, and therefore can only confirm that the Transient Occupancy Tax Rate (TOT) for the County of Santa Cruz is currently 10%. A Comparison of Business License and Transient - 3

Policies on Business Licenses vary considerably from county to county. For example, no Business License is required in Santa Cruz County or Monterey County; a nominal “regulatory” Business License fee of $15 per year is charged in San Luis Obispo, while a sophisticated revenue-raising tax in Marin County has a schedule determined by the type of business and annual sales. Response: Santa Cruz County Board of Supervisors NEITHER AGREES NOR DISAGREES. The County has not conducted a survey of policies on Business Licenses.

Merced County recently initiated a Business License. The supervisors of Merced County determined that a regulatory license would better enable the county to keep track of businesses in its unincorporated area. Through the use of data obtained from the administration of a regulatory business license, the county can offer marketing and promotional information to its businesses. Response: Santa Cruz County Board of Supervisors CANNOT RESPOND. The County has no information on the Merced County business license.

A county’s decision to implement a TOT or a Business License fee is influenced by the population and business density of unincorporated areas. Many California counties have their dense urban populations located almost entirely within the boundaries of incorporated cities and have no significant urban or commercial areas within their unincorporated area. Response: Santa Cruz County Board of Supervisors NEITHER AGREES NOR DISAGREES.

Santa Cruz County has several dense or suburban population centers in its unincorporated areas with a significant number of businesses ranging from retail, services, industrial to home-based. Aptos, Ben Lomond, Boulder Creek, Felton, Live Oak and Soquel are examples of such unincorporated areas of the county. It is not unusual to find similar kinds of businesses where one must pay for a Business License in a city and another, a few blocks away, does not because it is in an unincorporated area. Response: Santa Cruz County Board of Supervisors AGREES. - 4 A Comparison of Business License and Transient

A significant percentage of Santa Cruz County businesses are outside incorporated city boundaries. This information is based largely on membership addresses obtained from business associations established to serve local neighborhoods or countywide businesses. Response: Santa Cruz County Board of Supervisors AGREES.

Most business associations in the county view any new tax or fee on local businesses with caution. Some businesses are struggling to survive. Data indicates that the new growth of businesses is expected to be largely in the unincorporated areas as opposed to incorporated cities. Response: Santa Cruz County Board of Supervisors NEITHER AGREES NOR DISAGREES. The County has not surveyed business associations in the county.

Presently Santa Cruz County administrators get much of the business data for planning purposes from the State Employment Development Department. It regularly publishes information about California’s labor market. This includes economic development and planning information, industry and occupational characteristics, trends and wage information. Specific county information is consolidated without separating unincorporated areas. The county issues land use permits whose limits are determined by the particular zoning restrictions. Other sources of data include United Way’s Community Assessment Project, Small Business Administration and private sources such as Dunn and Bradstreet. Response: Santa Cruz County Board of Supervisors AGREES. In addition, the County receives information from firms which conduct tracking and audits of sales tax trends and receipts, as well as information collected as part of the County’s CareerWorks programs, and other workforce related programs directed by the County’s Workforce Investment Board. Other information is also collected from additional sources as needed.

The comparison of nine counties is summarized in approximations in the following table. A Comparison of Business License and Transient - 5 Comparison of Nine Counties TOT and Business Licenses in Unincorporated Areas County # Annual Business # Annual Population TOT of TOT License of Business (total) Bus. Revenues Licenses License Revenues Butte regulatory 20 (208,800) 9.2% 21 $36,800 $49 $980 Marin $15 to revenue 6,300 (248,900) 10% 100 $1,579,000 $4,500 $981,494 $55-$175 regulatory 1200- Merced Number of $250,000 1500 est. (216,400) 10% 6 $629,681 employees est. No general Monterey business NA NA (408,000) 10.5% 75 $13,475,750 license Placer $107 -- $127 Revenue 7,600 (261,500) 8% 378 $8,200,000 $16 renewal $249,000 San Luis Regulatory Obispo 3,800 (252,000) 9% 160 $4,600,000 $15/yearl $57,000 Type of Regulatory Business Santa & Gross Barbara Receipts 850 (405,700) 10% 30 $5,145,000 $25-$1,200+ $80,000 Santa No General Cruz Business NA NA (258,500) 10% 113 $3,889,000 License No General Regulatory License: Tulare Special 63 (375,800) 10% 46 $878,271 Licenses $6,400 Response: Santa Cruz County Board of Supervisors NEITHER AGREES NOR DISAGREES. The County has not surveyed the counties. - 6 A Comparison of Business License and Transient

Marin County uses Business Licenses to cross reference TOT rolls and its sales tax accounts. Response: Santa Cruz County Board of Supervisors AGREES. The County agrees with the finding that the County of Marin has a Business License Tax Ordinance in effect, but cannot comment on how the County of Marin uses the confidential information collected on each business.

The Midcounty Post reported on August 25, 2003 an example of a business in Capitola that was several years delinquent in paying its TOT obligation. Capitola had previously filed a lien against the property. When Capitola withheld the Business Permit/License it was successful in collecting the delinquent TOT. Response: Santa Cruz County Board of Supervisors CANNOT RESPOND. The County cannot comment on the Transient Occupancy Tax collection procedures utilized by the City of Capitola.

Existing Santa Cruz County Ordinance No. 4138 and County Code Chapter 4.02 do not allow for collection of business related information and regulation. Response: Santa Cruz County Board of Supervisors DISAGREES. The County’s ordinance does not prohibit the County’s collection of business- related information.

Santa Cruz County cannot put into effect the existing revenue-raising Business License under Chapter 4.02 without voter approval. Response: Santa Cruz County Board of Supervisors AGREES.

Santa Cruz County has restrictions and requires special permits for selected special businesses in the unincorporated area. The most common businesses that require permits from county departments include ambulance service, card rooms, day care, hazardous materials/waste, kennels, nursing homes and public pools/spas/camps. These permits are generally obtained at initiation of the business one time and are not renewed annually.

Santa Cruz County issues use authorizations or permits in accordance with regulation of a zone district. Approval is required for certain uses including agriculture, residential, industrial and commercial. Generally the Planning A Comparison of Business License and Transient - 7 Department issues approval permits as part of applications to construct buildings such as a barn, or residence or commercial building. Permits are issued once without requiring annual renewal. Fees are charged on an hourly basis if the site is previously not permitted. Otherwise user approvals for existing master occupancy permit locations or new businesses replacing an existing similar business may be renewed over the counter for a nominal fee and are required once in the life of the business.

Several communities throughout the U.S. require the completion of a recycling plan as a requirement of the annual Business License.