REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Authorizing the Director of Finance to Renew a Business License Tax Data Exchange Agreement with the California Franchise Tax Board (FTB)
Report
BACKGROUND
Department of Finance staff regularly conduct audits to identify businesses operating in Sunnyvale without having paid the Business License Tax and obtaining a Business License Tax Certificate, in violation of Sunnyvale Municipal Code (SMC) Chapter 5.04. State law authorizes a city to enter into a reciprocal agreement with the California Franchise Tax Board (FTB) to exchange tax data. The data exchange enables both parties to identify any non-compliant businesses.
Since 2009, the City has exchanged tax data with the FTB. The current agreement expires on December 31, 2026, and the City needs to enter a new agreement before January 1, 2027, to continue the data exchange program through December 31, 2029.
EXISTING POLICY
Sunnyvale Municipal Code (SMC) Section 5.04.100 states: “No person shall transact, engage in, or carry on any business within the City without first having procured a license from the City to do so and having paid the tax.”
Council Policy 7.1.1., Section 7.1B.3.2, states: “An aggressive collection system for all accounts receivable, including utility receivables, will be utilized to assure that monies due to the City are received in a timely fashion.”
ENVIRONMENTAL REVIEW
This action is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline Section 15378(b)(5) (government organizational and administrative activities that will not result in a direct or indirect physical change to the environment).
DISCUSSION
The City of Sunnyvale regularly audits business license tax data to ensure it assesses applicable taxes from businesses operating within city limits. Past audits compared property tax, sales tax, and phone book information to ensure the City receives the revenue it is legally ...
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