Oakland Municipal Code Ch. 4.12 Cigarette Tax

This chapter shall be known as the cigarette tax ordinance of the city.

(Prior code § 5-22.01)

Except where the context otherwise requires, the following definitions govern the construction of this Chapter:

"Cigarette" means any roll for smoking, made wholly or in part of tobacco, irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated, or mixed with any other ingredient, where such roll has a wrapper or cover made of paper of any other material, except where such wrapper is wholly or in the greater part made of tobacco, and such roll weighs over three pounds per thousand.

"City" means the city of Oakland.

"Distribute" or "distributing" means the act, by a distributor, of transporting cigarettes to which he has title, or causing or allowing such cigarettes to be transported, to a retail outlet in the city.

"Distributor" means a person who, having title to cigarettes, transports them, or causes or allows them to be transported, to a retail outlet in the city.

"Person" means any domestic or foreign corporation, firm, association, syndicate, joint-stock company, partnership of any kind, joint venture, club, Massachusetts business or common-law trust, society, or individual.

"Retail outlet" means any place or premises in the city (including, without limiting the generality of the foregoing, every kind of store, business establishment, and club in the city) where cigarettes are transferred to the possession of the ultimate consumer thereof, irrespective of how such transfer is consummated, whether through a natural person, by means of a vending machine or other mechanical device, or otherwise.

"Tax Administrator" means the Treasurer of the city of Oakland.

"Ultimate consumer" means and includes any person who acquires possession of cigarettes for his or her own use or consumption.

"Untaxed cigarette" means any cigarette which has not yet been distributed in such manner as to result in tax liability under this Chapter.

"Use or consumption" means and includes the exercise of any right or power over cigarettes incident to the ownership thereof, other than the sale of the cigarettes or the receiving, handling, or holding thereof for the purpose of sale.

(Prior code §§ 5-22.02—5-22.12)

An excise tax, at the rate of one mill ($0.001) per cigarette, is imposed upon the privilege of distributing cigarettes to retail outlets in the city. Any cigarette with respect to which a tax has once been imposed under this Chapter shall not be subject upon a subsequent distribution to the tax imposed by this Chapter. Unless the contrary is established it shall be presumed that all cigarettes distributed in the city are untaxed cigarettes. It is unlawful knowingly to sell, transfer, distribute, or give away untaxed cigarettes in the city. Sample packets of five or less cigarettes each, given free of charge, are exempt from this tax.

(Prior code § 5-22.13)

Within thirty (30) days after the effective date of the ordinance codified in this Chapter, within thirty (30) days after commencing business, or within thirty (30) days after a change in ownership of a business registered under this Chapter, whichever is later, each distributor of cigarettes shall register with the Tax Administrator on a form provided by him or her.

(Prior code § 5-22.14)

Every distributor shall keep a complete and accurate record of all cigarettes distributed by him or her in the city. Such records shall, with respect to each separate distribution, include a written statement containing the name and address of the retail outlet to which distribution is made and to whom title or possession of the distributed cigarettes is transferred, the date of delivery, the quantity of cigarettes, the amount of tax imposed under this Chapter, and such other information as the Tax Administrator may reasonably require. All statements and records required by this Section shall be in a form satisfactory to the Tax Administrator. They shall be preserved for a period of three years and shall be offered for inspection at any time upon oral or written demand by the Tax Administrator or his authorized agent.

The Tax Administrator is authorized and directed to offset and deduct from the total amount of tax moneys which may become owing and payable by a distributor to the city under the provisions of this Chapter an amount of money equal to two percent of such total amount of tax moneys owing and payable by such distribution to the city for such month, if such distributor has complied with and done all things required of him by the provisions of this Section to the satisfaction of the Tax Administrator. Such offset and deduction shall be deemed reimbursement to the distributor for costs and expenses incurred by him or her in complying with and doing all things required of him or her by this Section.

(Prior code § 5-22.15)

The tax imposed under this Chapter shall be due and payable monthly on or before the last day of the calendar month following the calendar month in which the distribution of cigarettes occurs.

Each distributor shall make a return to the Tax Administrator on forms provided by said Administrator, of the total number of cigarettes distributed to retail outlets in the city by the distributor during each calendar month and the amount of tax due thereon. Each such return shall be filed with the Tax Administrator on or before the last day of the calendar month following the close of the calendar month for which the return is made.

At the time the return is filed, the full amount of the tax imposed by this Chapter shall be remitted to the Tax Administrator. The Tax Administrator may establish a shorter reporting period for any distributor if he or she deems it necessary in order to insure collection of the tax. Returns and payments are due immediately upon cessation of business for any reason. All returns and payments submitted by each distributor shall be treated as confidential by the Tax Administrator and shall not be released by him or her except by order of a court of competent jurisdiction or to an official or agent of the United States, the state of California, the county of Alameda, or the city of Oakland for official use only.

(Prior code § 5-22.16)

A. Original Delinquency Period. Any distributor who fails to remit any tax imposed by this Chapter within the time required shall pay a penalty of ten percent of the amount of the tax in addition to the amount of the tax.

B. Continued Delinquency. Any distributor who fails to remit any delinquent remittance within one month following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the tax in addition to the amount of the tax and the ten percent penalty first imposed.

C. Fraud. If the Tax Administrator determines that the nonpayment of any remittance due under this Chapter is due to fraud, a payment of twenty-five (25) percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections A and B of this Section.

D. Interest. In addition to the penalties imposed, any distributor who fails to remit any tax imposed by this Chapter shall pay interest at the rate of one-half of one (0.5) percent per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

E. Penalties Merged with Tax. Every penalty imposed and such interest as accrues under the provisions of this Section shall become a part of the tax herein required to be paid.

F. Penalties during Pendency of Hearing or Appeal. No penalty provided under the terms of this Chapter shall be imposed during the pendency of any hearing which is provided for in Section 4.12.080, nor during the pendency of any appeal to the City Council which is provided for in Section 4.12.090.

(Prior code § 5-22.17)

If any distributor shall fail or refuse, within the time provided for in this Chapter, to make any report and remittance of said tax or any portion thereof required by this Chapter, the Tax Administrator shall proceed to obtain facts and information on which to base his or her estimate of the tax due. As soon as the Tax Administrator shall procure such facts and information as he or she is able to obtain upon which to base the assessment of any tax imposed by this Chapter and payable by any distributor who has failed or refused to make such report and remittance, he or she shall proceed to determine and assess against such distributor the tax, interest, and penalties provided for by this Chapter. In case such determination is made, the Tax Administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the distributor so assessed, at his or her last-known place of address. Such distributor may within ten days after the service or mailing of such notice make application in writing to the Tax Administrator for a hearing on such amount assessed. If application by the distributor for a hearing is not made within the time prescribed, the tax, interest, and penalties, if any, determined by the Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five days' written notice in the manner prescribed herein to the distributor to show cause at a time and place fixed in said notice why said amount specified therein should not be fixed for such tax, interest, and penalties. At such hearing, the distributor may appear and offer evidence why such specified tax, interest, and penalties should not be so fixed. After such hearing, the Tax Administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the distributor in the manner prescribed herein of such determination and the amount of such tax, interest, and penalties. The amount determined to be due shall be payable after fifteen (15) days, unless an appeal is taken as provided in Section 4.12.090.

(Prior code § 5-22.18)

Any distributor aggrieved by any decision of the Tax Administrator with respect to the amount of such tax, interest, and penalties, if any, may appeal to the Council by filing a notice of appeal with the City Clerk within fifteen (15) days of the serving or mailing of the determination of tax due. The Council shall fix a time and place for hearing such appeal, and the City Clerk shall give notice in writing to such distributor at his or her last-known place of address. The findings of the Council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above in the service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Prior code § 5-22.19)

A. Whenever the amount of any tax, interest, or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this Chapter, it may be refunded as provided in subsection B of this Section, provided a claim in writing therefor, stating under penalty of perjury the specific ground upon which the claim is founded, is filed with the Tax Administrator within three years of the date of payment. The claim shall be on forms furnished by the Tax Administrator.

B. A distributor may claim a refund or take as credit against taxes due but never remitted the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established in a manner prescribed by the Tax Administrator that the amount claimed has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city.

C. No refund shall be paid under the provisions of this Section unless the claimant establishes by written records entitlement thereto.

(Prior code § 5-22.20)

Any tax required to be paid by a distributor under the provisions of this Chapter shall be deemed a debt owed to the city. Any person owing taxes under the provisions of this Chapter shall be liable to an action brought in the name of the city for the recovery of such amount.

(Prior code § 5-22.21)

Any person violating any provision of this Chapter shall be guilty of an infraction.

Any distributor who fails or refuses to register as required herein, or to furnish any return required to be made, or who fails to furnish or refuses to furnish other data required by the Tax Administrator, or who renders a false or fraudulent return or claim, is guilty of an infraction. Any person required to make, render, sign, or verify any report or claim who makes a false or fraudulent report or claim with intent to defeat or evade the determination is guilty of an infraction.

(Prior code § 5-22.22)