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5.0 COMPENSATION <br />5.1 REVENUE ENHANCEMENT AUDIT SERVICE <br />5.11 SALES/USE TAX <br />MRC's compensation for continuing to conduct the sales/use tax <br />enhancement audits is 20% of the new sales/use tax revenue realized by the <br />City as a result of MRC detecting, documenting and correcting the related <br />point -of -sale/ use distribution error. Said 20 % applies to each correction for <br />fund transfers (i.e., retroactive adjustments for eligible amounts improperly <br />distributed in prior quarters) and the first four consecutive reporting <br />quarters following completion of the audit by MRC and confirmation of <br />corrections by the State Board of Equalization. <br />Sales/use tax audit invoices are submitted quarterly after the City has <br />received the revenue from the correction and quarterly distribution report <br />verifying it. Each invoice is to include the business name, permit number, <br />local allocation amount received by the City and amount due MRC. <br />Invoices are due and payable upon receipt. <br />5.12 OTHER REVENUE SOURCES <br />MRC's compensation for conducting enhancement audits for revenue <br />sources other than sales/use tax (business license tax, documentary transfer <br />tax, franchise fees, property tax - including RDA tax increment - transient <br />occupancy tax, utility users tax, etc.) shall be entirely predicated and <br />contingent upon the results achieved. <br />Under this arrangement, the City/Redevelopment Agency (Agency) <br />agree(s) to pay MRC an amount equal to 25% of the deficiency recoveries <br />from eligible prior periods (plus associated charges for penalties and <br />interest). When MRC's audits result in the detection and correction of <br />errors/omissions that the City/Agency and MRC mutually agree will <br />produce ongoing (rather than one-time) benefits to the City/Agency, <br />MRC's compensation shall be 25% of the incremental revenue realized by <br />the City/Agency during the first 12 consecutive quarters following <br />correction. <br />Under this arrangement, the City/Agency agrees to: <br />■ Invoice the responsible party for tax deficiencies (plus associated <br />charges for penalties and interest) identified and confirmed by MRC <br />within 30 days following receipt of MRC's report; and <br />■ Notify MRC within 10 days following receipt by the City/Agency of <br />payments resulting from MRC's audit service. Upon being notified <br />of receipt of payment(s), MRC will then invoice the City/Agency. <br />Earned compensation is due and payable upon receipt of invoices. <br />29 <br />