Does Santa Monica Require That Nonprofits Obtain City Business Licenses?

Hello City Attorney Sloan and City Manager White,

Since the City Council is about to discuss an update to the business license/tax ordinance, this is to request that the City clarify whether non-profit organizations are subject to the City business license requirement or not.

Last year when I enquired about this issue with the City Attorney's Office, the following response was offered:

"In general, a nonprofit is exempt from paying the City's business license tax, but is still required to apply for and maintain a business license and pay any applicable fees and assessments (i.e. industrial wastewater permit, zoning conformance review).

The City, however, has not required a business license for a nonprofit engaged in an event such as a concert, exhibition, or lecture for the purpose of entertainment on scientific, historical, literary, religious, political, or moral subjects. See Santa Monica Municipal Code section 6.04.190.

Please note that depending on the facts, there may be additional applicable exemptions or limits on taxation under State and Federal law, including: (1) exemptions for veterans who received Honorary Discharge; (2) blind individuals; (3) disabled individuals (up to $60,000 in gross receipts per Santa Monica Municipal Code section 6.04.180); or (4) federally chartered veterans organizations that solicit donations for the support of veterans."

However, a public records request I filed last year to obtain copies of business licenses for over forty nonprofit organizations that claim to be operating in Santa Monica showed that a vast majority of them do not in fact possess City business licenses.

Business License Administrator Ms. Haley Favre-Smith was less than cooperative in resolving this issue, and even engaged in efforts to sabotage my attempts to obtain clarification. Ms. Favre-Smith's apparent position was that as a City employee she does not have to respond to a resident's concern.

Some of the unlicensed nonprofits in question are powerful lobbyist organizations which constitute the political establishment that in effect largely controls the City of Santa Monica and its $745M annual budget. At the same time, the City department Ms. Favre-Smith works for has no problem collecting annual business license fees from a small independent nonprofit organization like ACTION. There seems to be an inconsistency in how the different nonprofit organizations are treated by the Business License Office, which raises concern.

Enclosed is a partial list of the nonprofits that I enquired about last year. To my knowledge as of last year, most of them did not possess City business licenses. Please note that some of them receive or have in the past received public funding from the City, e.g. the neighborhood groups (some of which have in the past endorsed political candidates).

I am looking forward to the City's clarification whether nonprofit organizations in general, and particularly the organizations listed below, are required to obtain City business licenses. If they are, it is my hope the City will undertake to immediately check if there is a need to notify those organizations of the requirement to apply for business licenses.

Thank you for your time and attention to this important matter of transparency.

Regards,

Olga Zurawska

List of some nonprofit organizations that may be required to hold city business licenses:

Santa Monica Municipal Employee Association

Santa Monica Police Activities League

The League of Women Voters of Santa Monica

DTSM

Outreach Through The Arts

Santa Monica Democratic Club

Santa Monica Police Officers Association

Santa Monica Bayside Business Owners Association (SMBOA)

Santa Monica Coalition

Santa Monica Coalition for a Livable City

Santa Monica Forward

Santa Monicans for Renters Rights (SMRR)

Friends of Sunset Park

Abundant Housing LA (their website claims they have a Santa Monica chapter)

Northeast Neighbors

Santa Monica Office of Legal Aid Foundation of Los Angeles

Ocean Park Association

Human Relations Council Santa Monica Bay Area

Community Corporation of Santa Monica (CCSM) – locations other than administrative office

Santa Monica Pier Corporation

NRDC

Santa Monica Housing Council

Community for Excellent Public Schools (CEPS)

Santa Monica Education Foundation

Santa Monica–Malibu Council PTA

North of Montana Association

Wilshire Montana Neighborhood Coalition

Pico Neighborhood Association

Santa Monica Mid City Neighbors

The Santa Monica College Foundation

Santa Monica Black Lives Association

National Society Daughters of the American Revolution, Santa Monica Chapter

Santa Monica Bay Woman's Club

Upward Bound House

Salvation Army (several locations including Silvercrest Apartments )

Santa Monica Spoke

Santa Monica Travel & Tourism (SMTT)

Santa Monica Pier Corporation

Santa Monica Pier Business Association

Santa Monica – Venice Reunion Organization

Santa Monica Pickleball Club