City of Santa Monica, CA Six-Week Tax Amnesty Program

The City of Santa Monica (“the city”) will be conducting a six-week tax amnesty program intended to bring unlicensed businesses into compliance with the city’s business license taxes. The program applies to all tax periods prior to May 1, 2019, and provides relief from penalties that have not been previously identified. The Santa Monica Tax Amnesty program will run from May 27, 2019, through July 12, 2019.

Highlights

Any person or entity either considered to be “doing business” in, or whose business is based in, the city must register and pay the annual registration fee. The city put forth the following requirements and fees associated with the city business license:

• Business license shall be renew annually.
• The fiscal year to renew or register starts on July 1 and ends on June 30.
• The applicable grace period is 60 days before penalties are assessed.
• The penalties for late filing can range from 20%-100% in addition to assessments, fees due, and all taxes, depending upon the length of the delinquency.
• Business license taxes are $75 plus an additional percentage of gross receipts over $60,000 assigned to the city.
• Business license taxes are based on the tax rate associated with the business classification and are similar to the business activity code reported on federal income tax returns.
• Rates range from 0.125% to 0.5% of gross receipts assigned to the city.

Marcum Observation

This type of local tax amnesty program presents a great opportunity for a taxpayer to come into compliance with the City of Santa Monica tax law. Unlicensed businesses that voluntary register for a business license during the allotted period will receive a 90% reduction of any penalties due, regardless of the reason for non-compliance.

If you have any questions about this program or the need to register, contact your Marcum LLP State and Local tax specialist.