May 25, 2010 > Business License fee assessment stirs protests
Business License fee assessment stirs protests
By Shavon Walker
Property owners came out in force for the May 11, 2010 Council meeting in Union City to express their concern about past due fees on property tax, the way in which they were informed of them and business licenses.
The Union City Municipal Code states that "Every person engaged in the business of renting dwelling units located in the City for residential use, as an owner leasing to another person or as a lessee or sub-lessee subleasing to another person, shall pay an annual business license tax as established annually by City Council resolution." It also states that "the Clerk shall add a penalty of 10 percent of the license tax on the first day of delinquency, and shall add a further penalty of 10 percent of the license tax on the first day of every subsequent calendar month following the first day of delinquency, providing that the amount of such penalty to be added shall in no event exceed 50 percent of the license tax due." Additionally, "a separate license must be obtained for each branch establishment or location of the business transacted and carried on and for each separate type of business at the same location." In short, a landowner renting property, either as a landlord or business owner, must pay property tax and have a business license to do so.
The annual business license tax is $111 for up to four units, and then another $10 per additional unit, or $111 per unit for each unit in a different location. The city has been unable to claim these taxes efficiently, since many landlords did not take the homeowners' exemption or had their property tax papers sent to a different address. In April 2010, the city sent out over 2,000 notices to landlords who potentially owed up to three years of back taxes on their properties, as well as late fees. The city could collect more than $1M if all valid, listed property owners were to pay their taxes.
Although many property owners were aware of the tax and the need for a business license, as many were not. Many were upset they were not given more notice to clear their arrears and penalties, the due date having been stated as June 1.
"Even though we paid for our licenses, we were still double-billed and considered delinquent for the past three years. We were lucky we saved our canceled checks. I hoped to be notified in a timely manner so that we could pay our taxes on time." stated George Forrest Patterson.
"This is [my sister's] only source of income. Would anyone say we're in the real estate business? If you're worried about the people who have already paid, give them credit for future years" Jesse Martinez concurred.
Mayor Mark Green stated that the penalties should be waived, and at a later date, the taxes on commercial properties should also be discussed. Vice Mayor Richard Valle apologized to those who were surprised by the letter and stated that as far as property fees were concerned, Union City's are clearly the highest. If there was a need to revise the numbers, he was also in favor of reimbursing those who have paid penalties.
According to Councilmember Carol Dutra-Vernaci, Penalties are unfair for anyone who did not know the licensing fee existed. She expressed concern regarding the distribution of fees, wondering how those in Union City compare with other areas and pointed out that consideration, examination and discussion should be given context.
Councilmember Jim Navarro also agreed penalties should be waived and suggested fees should only be charged for the past year. He also cautioned the protesters, informing them of the city's looming budget deficit and advising them he did not want them attending Council meetings asking why services had been trimmed back.
"There are homeowners who own other properties but are not renting them - their folks live there. That's technically renting but they aren't charging rent; they shouldn't have to pay the licensing fee," stated Councilmember Fernandez; pointing out that some property owners with tenants were not necessarily landlords.
"To say that you're exempt because you didn't know...there were other people who did their homework," he added. Ignorance is not an excuse.
Council decided unanimously to eliminate the late fees, if taxes were paid by July 31, and to collect back taxes only for 2008-09 and 2009-10.