City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Shay Narayan, Director of Finance |
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Prepared by: |
Matthew Boring, Assistant Director of Finance |
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Date: |
December 17, 2024 |
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Subject: |
Implementation of a Local Transactions and Use Tax (Measure Q) |
Recommendation:
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Adopt a resolution 1) Authorizing the City Manager to Execute Agreements with the California Department of Tax and Fee Administration (CDTFA) for Implementation of a Local Transactions and Use Tax; and 2) adopt a resolution authorizing the Examination of Sales or Transactions and Use Tax Records.
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Background:
On November 5, 2024, the voters of the City of Manteca approved Ordinance No. 2024-16 (Measure Q), establishing a three-quarters cent (0.75 cents) General Transactions and Use Tax (Measure Q), to be administered by the CDTFA.
State law requires the City to contract with the California Department of Tax and Fee Administration (CDTFA) to collect and administer the new tax. These functions rest solely with the CDTFA and are not provided by other entities. The CDTFA requires the City to enter into a Preparatory Agreement and an Administration Agreement before implementing the Measure Q tax.
The City or its consultants periodically need access to sales, transactions and use tax information for various purposes, including budgeting, forecasting, and compliance. This information is confidential per state law and requires specific resolution authority to access those records. Attachment 4 is a resolution granting this authority to CDTFA.
Fiscal Impact:
Approving these resolutions have no direct impact on the General Fund. The City will pay the CDTFA for preparatory setup costs related to collecting this tax in a one-time amount not to exceed $175,000 (per Revenue and Taxation Code Section 7272) from the tax proceeds.
Upon Council approval, the Administrative Agreements with the CDTFA will commence on April 1, 2025, and remittances are expected to start in June 2025 (60 day lag in remittances).
Documents Attached:
1. Attachment 1 - Resolution Authorizing the City Manager to Execute Agreements with the CDTFA
2. Attachment 2 - Preparatory Agreement
3. Attachment 3 - Administrative Agreement
4. Attachment 4 - Resolution Authorizing Examination of Sales or Transactions and Use Taxes Records