HomeMy WebLinkAboutItem 4.19 - 3292 CDTFA Authorization (2)
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STAFF REPORT
CITY COUNCIL
DATE: June 16, 2020
TO: Honorable Mayor and City Councilmembers
FROM:
Linda Smith, City Manager
SUBJECT:
Resolution Authorizing Examination of Sales and Use Tax Records
Prepared by: Jay Baksa, Assistant Administrative Services Director
EXECUTIVE SUMMARY:
The City Council will consider adopting a resolution authorizing examination of Sales
and Use Tax records, which will allow the City to continue to use an independent
contractor to audit sales and use tax reports.
STAFF RECOMMENDATION:
Adopt the Resolution Authorizing Examination of Sales and Use Tax Records.
FINANCIAL IMPACT:
Utilizing an independent contractor to audit sales and use tax reports may result in the
recovery of sales tax revenue. Approval of the resolution is required to continue to
utilize an independent contractor for audit services.
DESCRIPTION:
On June 2, 2020, the City Council approved a resolution extending the agreement with
Hinderliter, de Llamas and Associates (HdL) an additional two years for the provision of
Sales Tax Analysis and Audit Services.
Due to the confidential nature of tax returns filed by retailers, the release of certain
information must be in strict accordance with requirements in State law. Upon execution
of the agreement extension, HdL contacted the California Department of Tax and Fee
Administration (CDTFA), with the updated agreement documentation to ensure they
would continue to receive the City’s sales and use tax data. CDTFA informed HdL that
the City would need to reestablish the authorization of designated representatives with
HdL in order to comply with the current requirements of Section 7056 of the California
Revenue and Taxation Code which sets forth the conditions for the disclosure of
CDTFA records.
Approval of the attached resolution will reestablish the required authorization of HdL to
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examine the City’s sales tax records, thus allowing HdL to continue to provide sales tax
analysis and audit services.
STRATEGIC PLAN INITIATIVE:
None.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Resolution Authorizing Examination of Sales and Use Tax Records
RESOLUTION NO. XX-20
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*********
AUTHORIZING EXAMINATION OF SALES AND USE TAX RECORDS
WHEREAS, pursuant to Ordinance No. 8-82, the City of Dublin (“City”) entered into a
contract with the State Board of Equalization (“SBOE”) to perform all functions relating to the
administration and collection of local sales and use taxes; and
WHEREAS, in 1982, the City Council adopted Resolution 27-82, which authorized the
City Manager and designated employees with the authorization to examine confidential sales
tax records; and
WHEREAS, in 1989, the City Council amended Resolution 27-82 by adopting Resolution
No. 93-89, which also authorized the firm of Hinderliter de Llamas and Associates (“HdL”) to
represent the City of Dublin in matters related to the investigation of SBOE records and reports;
and
WHEREAS, on August 14, 1989, the City Council entered into an agreement with HdL
for the investigation and review of sales and use tax transactions and collections for the City,
contained in the records of the State Board of Equalization; and
WHEREAS, in 1997, the City Council adopted Resolution No. 144-97 reestablishing the
authorization of designated representatives, including HdL, to examine on behalf of the City
confidential sales and use tax records of the State Board of Equalization pertaining to sales and
use taxes collected by SBOE for the City pursuant to its contract; and
WHEREAS, on June 20, 2017, the City Council adopted Resolution No. 79-17
Amending and Restating Consulting Services Agreement Between the City of Dublin and HdL,
which updated the terms of the agreement and extended the duration of services through June
30, 2020; and
WHEREAS, on June 2, 2020, the City Council adopted Resolution No. 47-20 approving
Amendment #1 to the amended and restated agreement with HdL, which extended the duration
of the agreement through June 20, 2022; and
WHEREAS, the City Council now desires to again reestablish the authorization of
designated representatives, including HdL, to examine on behalf of the City confidential sales
and use tax records of the State Board of Equalization pertaining to sales and use taxes
collected by SBOE for the City pursuant to its contract; and
WHEREAS, the Taxpayer Transparency and Fairness Act was adopted and signed into
law in 2017, which established, among other things, the California Department of Tax and Fee
Administration (“CDTFA”) and transferred to such agency certain duties, powers, and
responsibilities of the SBOE relating to the administration of various taxes and fees; and
WHEREAS, pursuant to Government Code Section 15570.24, the contract entered into
by the City with the SBOE is deemed to now apply to the CDTFA; and
WHEREAS, the City Council deems it desirable and necessary for authorized
representatives of the City to examine confidential sales and use tax records of the State Board
of Equalization pertaining to sales and use taxes collected by the CDTFA for the City pursuant
to its contract; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth
certain requirements and conditions for the disclosure of CDTFA records, and establishes
criminal penalties for the unlawful disclosure of information contained in, or derived from, the
sales and use tax records of the Board; and
WHEREAS, the format of this resolution shall meet the requirements of the CDTFA and
shall consolidate actions taken in previous resolutions.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dublin 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 Dublin with authority to
examine transactions tax records of the Department pertaining to transactions taxes, including
sales and use 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 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 transactions tax records of the Department, including sales and use
tax records, 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.
Section 3. That Hinderliter, de Llamas & Associates is hereby designated to
examine the transactions tax records of the Department pertaining to transactions taxes,
including sales and use taxes, collected for the City by the Department.
The person or entity designated by this section meets all of the following conditions:
(a) has an existing contract with the City to examine those transactions tax records;
(b) is required by that contract to disclose information contained in, or derived from,
those transactions tax records only to the officer or employee authorized under Sections 1 or 2
of this resolution to examine the information.
(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 transactions tax records, after that contract has expired.
The information obtained by examination of Department records shall be used only for purposes
related to the collection of City transactions taxes by the Department 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. Severability. If any section, subsection, sentence, clause or phrase of
this Resolution is for any reason held by a court of competent jurisdiction to be invalid or
unconstitutional, such decision shall not affect the validity of the remaining portions of the
Resolution. The City Council hereby declares that it would have passed this Resolution and
each section, subsection, sentence, clause and phrase thereof irrespective of the fact that one
or more sections, subsections, sentences, clauses or phrases may be held invalid or
unconstitutional.
Section 5. Supersession and Repeal. Any and all other resolutions and parts
thereof in conflict with the provisions of this Resolution are superseded and repealed, effective
on the effective date of this Resolution.
Section 6. Effective Date. This resolution shall become effective immediately upon
its passage and adoption.
PASSED, APPROVED AND ADOPTED this 16th day of June, 2020, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
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