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Home My WebLink AboutE-05 Staff Report - Update Sales Tax Disclosure ResolutionSCHEDULED ITEM E-5 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: TALIKA M. JOHNSON, DIRECTOR OF FINANCE DATE: APRIL 16, 2018 SUBJECT: ADOPTION OF A RESOLUTION UPDATING THE SALES, USE AND TRANSACTIONS TAXES DISCLOSURE AUTHORIZATION LIST BACKGROUND: The City has an agreement with an independent contractor, Hinderliter, De Llamas & Associates (HDL), to provide sales and use tax transactions statistical data to certain City officials as authorized by resolution. The proposed action requests adoption of an updated resolution to change specific City positions to job functions and to revise the name of the independent contractor as legally changed. RECOMMENDATION: Staff recommends the City Council take the following action: 1) Adopt Resolution No. 2018-C32. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSAAUTHORIZING CERTAIN CITY OFFICIALS AND A CITY CONTRACTORACCESS TO SALES AND USE TAX RECORDS PURSUANT TOGOVERNMENT CODE 7056 ANALYSIS: In 1986, the City adopted Resolution 8092, authorizing certain City officials/positions and its independent contractor to receive and review sales and use tax transactions for the City. Sales tax data is required to be kept confidential by Revenue and Taxation Code Section 7056. Thus, it is unlawful for any person who obtains access to sales and use tax records, to make known in any manner the information disclosed on any [tax] return, including any abstract thereof. Accordingly, a local agency may not disclose the amounts of tax paid, whether the tax amounts have increased or decreased from a prior period, or any other information that would reveal the business affairs or operations of a business. APPROVED CITY COUNCIL 4/16/2018 Update Sales and Use Tax Disclosure Resolution April 16, 2018 Page 2 Though confidential by law, sales and use tax information can be used by local government officials if the use is “related to collection of local sales and use taxes” or “related to other governmental functions of the county, city and county, or city.” Permit administrators, finance or revenue managers, economic development staff, redevelopment and community development personnel, and business license officials can benefit from access to local sales and use tax allocation information. However, only those positions or individuals authorized by resolution of the City Council may have access to confidential data and each person so authorized is required to abide by the provisions of Revenue and Taxation Code Section 7056. When Resolution 8092 was adopted, the independent contractor hired by the City to provide sales and use tax transactions statistical data was Robert Hinderliter & Associates. The firm’s name has since been changed to Hinderliter, De Llamas & Associates. While the City currently has a resolution in place, certain City positions and the name of the contractor needs updating. The proposed action requests adoption of an updated resolution, removing specific City positions and replacing them with generic job functions and updating the name of the independent contractor whose business name has legally changed. The updated resolution containing job functions rather than titles, provides more flexibility when position titles are revised or when positions need to be added or omitted from the information disclosure list. Authorization for specific positions must still be provided to the independent contractor, but can be done via a letter from the City Manager, rather than updating the resolution every time changes are needed. FISCAL IMPACT: There is no fiscal impact associated with the proposed action. Prepared by: Reviewed and Approved: Talika M. Johnson Louie F. Lacasella Director of Finance Senior Management Analyst Reviewed and Approved: Sergio Gonzalez City Manager Attachment: 1) Resolution No. 2018-C32 RESOLUTION NO. 2018-C32 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA AUTHORIZING CERTAIN CITY OFFICIALS AND A CITY CONTRACTOR ACCESS TO SALES AND USE TAX RECORDS PURSUANT TO GOVERNMENT CODE 7056 WHEREAS, the City Council of the City of Azusa deems it desirable and necessary for authorized representatives of the City to examine confidential sales, use and transactions tax records from the Department of Tax and Fee Administration (Including the State Board of Equalization, California Department of Tax and Fee Administration, and the Office of Tax Appeals) pertaining to sales, use and transactions taxes collected by the Department of Tax and Fee Administration for the City’s review and analysis; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department of Tax and Fee Administration records, and establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales, use and transactions tax records of the Department. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Azusa does hereby finds, determines and declares as follows: SECTION 1. That the City Manager, or other officer or employee of the City designated in writing by the City Manager to the Department of Tax and fee Administration (hereafter referred to as Department), is hereby appointed to represent the City of Azusa with authority to examine sales, use and transactions tax records of the Department pertaining to sales, use and transactions taxes collected for the City by the Department pursuant to the contract between the City and the Department. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales, use and transactions taxes by the Department pursuant to that contract. SECTION 2. That the City Manager, or other officer or employee of the City designated in writing by the City Manager to the Department, is hereby appointed to represent the City with authority to examine those sales, use and transactions tax records of the Department, for purposes related to the following governmental functions of the City: (a)City administration (b)Revenue management and budgeting (c)Community and economic development (d)Business license tax administration The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above. Attachment 1 SECTION 3. The City of Azusa hereby certifies that Hinderliter, De Llamas & Associates: A. Has an existing contract with the City to Azusa to receive sales and use tax records; and B. Is required by that contract to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee of the City who is authorized under Sections 1 of this resolution to examine the information; and C. Is prohibited by that contract from performing consulting services for a retailer during the term of that contract; and D. Is prohibited by that contract from retaining the information contained in, or derived from those sales tax records, after that contract has expired. The information obtained by examination of the Department of Tax and Fee Administration (Including the State Board of Equalization, California Department of Tax and Fee Administration, and the Office of Tax Appeals) records shall be used only for purposes related to the collection of City sales, use and transactions taxes by the Department of Tax and Fee Administration pursuant to the contract between the City and the Department and for purposes relating to the governmental functions of the City listed in section 2 of this resolution. SECTION 4. The resolution supersedes all previous resolutions including resolution 8072. PASSED, APPROVED AND ADOPTED this 16th day of April 2018. ____________________________________ Joseph Romero Rocha Mayor ATTEST: ____________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF AZUSA ) I HEREBY CERTIFY that the foregoing Resolution No. 2018-C32 was duly adopted by the City Council of the City of Azusa at a special meeting thereof, held on the 16th day of April 2018, by the following vote of the Council: AYES: COUNCILMEMBERS: TBD NOES: COUNCILMEMBERS: TBD ABSENT: COUNCILMEMBERS: TBD ___________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk APPROVED AS TO FORM: ___________________________________ Best Best & Krieger, LLP City Attorney