The city of San Jose may cut small businesses a few more breaks under a tax amnesty that sunsets this spring before doubling down on enforcement.
Since December, the city has extended a tax amnesty to businesses with income that falls twice below the federal poverty line. The deal—if moved on to the City Council’s March 5 meeting by the Rules and Open Government Committee on Wednesday—allows businesses to pay what’s past due through March 29 and, in exchange, the city will forgive any interest and penalties. The goal is to increase revenue by collecting from self-employed workers who might not otherwise pay. The revenue from the amnesty program could reach several millions.
The $38 cost to apply for the amnesty covers the administrative cost of processing income taxes dating back to 2009. Right now, 7,100 businesses qualify for that exemption, which adds up to $270,000 in fee revenues alone, according to the city’s Finance Department.
If the idea passes out of Rules and the City Council approves a few changes next month, residents whose business employs no one but a spouse or domestic partner can self-report income taxes when applying for the amnesty to waive the $38. The deadline to apply will then get extended to May 31 and $38 refunds would go to anyone who paid the fee since Jan. 1.
Apparently, a lot of sports referees and San Jose cops trying to make a buck on the side with private security gigs qualify for the tax amnesty and fee waiver, which prompted the city to reach out to them via public service announcements and newspaper advertisements.
The city has only a rough idea of how many people owe, because some businesses haven’t filed legal permits, says Julie Cooper, the city’s finance director. Under law, anyone doing business in city limits has to pay the business tax, which usually gets calculated based on number of employees. That includes commercial and residential landlords with three or more units, retailers, manufacturers, service companies, home-based businesses, contractors and wholesalers.
“This one-time amnesty program will allow businesses, landlords, and self-employed persons to pay their unpaid and delinquent business tax without penalties, interest or criminal prosecution,” the finance department says.
The amnesty applies to back taxes owed from January 2009 to December 2012.
Cooper says the city has notified about 40,000 small business and will follow up with anyone it didn’t’ hear back from after the amnesty period. Consider this fair warning, tax-evaders.
More of what caught our eye on the Rules and Open Government Committee agenda for February 13, 2013:
• Councilmember Xavier Campos wants to forge a sister city partnership with Guadalajara, Mexico. San Jose has seven other sister cities, which exchange delegates to learn about other cultures and form partnerships.
“The establishment of a sister city relationship with Guadalajara will only add to the existing economic and cultural exchanges occurring within our city and throughout the region,” he writes in his memo. “Many Jalisciense and their descendents have migrated and settle within the region while keeping relations with family in Jalisco, Mexico. These informal exchanges over the years have lead to the development of mom-and-pop businesses, the importing and exporting of goods, and the presents of a cultural identity in San Jose.”
Guadalajara shares more than familial ties with San Jose, Campos adds.
“Lastly, the City of San Jose and the City of Guadalajara both share in common the presence of a large technology industry,” he says. “The current size of Guadalajara technology industry has many people calling it the Silicon Valley of Mexico.”
• A letter submitted to the public record asks the city to redefine what constitutes a quorum for boards and commissions in its municipal code. City Manager Debra Figone brought up the same issue at a January City Council meeting, the letter says, adding that the definition needs to be changed “so that the quorum is based on filled seats, not unfilled ones.” The definition would apply only to advisory commissions to prevent a minority from making policy changes.
“The best that a handful of ‘minority renegade’ commissioners could accomplish would be to write a letter which has to go through [the rules committee],” writes Martha O’Connell. “Having attended over 100 rules meetings, I am certain that its members would not be intimidated or swayed by being pelted by a barrage of letters even if they were made into paper airplanes.”
• David S. Wall, indefatigable letter-writer and council critic, put more of his thoughts on the public record. He again slams the mayor and council for allowing a homeless camp to persist, wonders where the “residents of Camp Chuck Sam! dispose of their raw sewage” and encourages city leaders to attend a community theater production.
WHAT: San Jose Rules and Open Government Committee meeting
WHEN: 2pm Wednesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: Kathy Carillo, 408.535.1254