By Jorge Casuso

April 17, 2019 -- Santa Monica businesses that have been operating without a license can have the lion's share of their penalties reduced under the City's Business License Compliance Assistance Program (CAP).

The program is part of an on-going effort to identify unlicensed businesses and collect taxes due to the City, finance officials said.

In Fiscal Year 2017-18 the City collected $31.6 million in business license taxes and penalties.

Under the program, unlicensed businesses will receive a 90 percent reduction on any penalties due if they voluntarily register with the City "regardless of the reason for non-compliance," Finance Director Gigi Decavalles-Hughes wrote in a report to the City Council Monday.

"Business license tax revenues support various City services, including, but not limited to, police and fire protection, street maintenance, libraries, and parks," Decavalles-Hughes said.

Businesses applying for a license must obtain regulatory permits and pay requisite fees, such as police or wastewater permits, she said.

They also must undergo a review process to "ensure compliance with applicable laws, including zoning conformance" and pay Business Improvement District (BID) assessments, if applicable.

"Businesses that do not file in a timely manner for their annual City business license are responsible for paying all taxes, assessments and fees due, and subject to penalties," Decavalles-Hughes said.

The penalties range from 20 to 100 percent of taxes due depending on the length of delinquency.

Businesses operating without a license are also subject to administrative citation or criminal prosecution, officials said.

The City uses multiple data sources -- primarily the Franchise Tax Board (FTB) -- to identify unlicensed businesses, Decavalles-Hughes said.

The Business License Compliance Assistance Program cuts the resources and time it takes staff to sift through the data bases, she said.

It is the first time the City implements the program since 2013, when it registered some 200 businesses and collected approximately $200,000 in taxes, Decavalles-Hughes said.