HomeMy WebLinkAbout07-10-2012 ph1 adopt reso placing uut ordinance modernization measure on nov ballottcounci lj acenaa aepoa t
C I T Y O F S A N L U I S O B I S P O
FROM :
Charles Bourbeau, Director of Finance and Information Technolog y
Michael Codron, Assistant City Manage r
Prepared By :
Sheryl] Schroeder, Interim City Cler k
SUBJECT :CALLING NOVEMBER 6, 2012 GENERAL MUNICIPAL ELECTION WIT H
RESPECT TO A BALLOT MEASURE FOR A UTILITY USER TA X
MODERNIZATION ORDINANCE, SET PRIORITIES FOR ANALYSIS ,
ARGUMENTS AND REBUTTALS AND APPOINT TWO MEMBERS O F
COUNCIL TO SUBMIT ARGUMENTS AND REBUTTAL S
RECOMMENDATIO N
1)Adopt a resolution requesting the Board of Supervisors to consolidate the Genera l
Municipal Election on November 6, 2012 with the Statewide General Election for th e
purpose of submitting to the voters the question relating to repeal and re-enactment of th e
City's utility user's tax ordinance .
2)Adopt a resolution for the submission of a proposed ballot measure to the qualified voter s
of the City of San Luis Obispo .
3)Adopt a resolution setting priorities for filing written arguments regarding a City measur e
and directing the City Attorney to prepare an Impartial Analysis .
4)Adopt a resolution providing for the filing of Rebuttal Arguments for a City measur e
submitted at Municipal Elections .
5)Appoint an ad hoc committee of the City Council to prepare and submit ballot argument s
and rebuttal arguments, if warranted :
BACKGROUN D
On June 5, 2012 the City Council officially called a General Municipal Election to be held on
November 6, 2012 for the election of municipal officials . The Elections Code provides that a
municipality may request consolidation to combine its election with the statewide election and avoi d
duplication of printing and mailing of sample ballots, computer tabulation, precinct workers an d
canvassing results . A resolution requesting consolidation for the purpose of a ballot measure mus t
be adopted and presented the Board of Supervisors no later than July 25, 2012 (Attachment 1).
At the same meeting Council directed staff to return with a resolution submitting a ballot measur e
relating to the proposal to modernize the City's Utility User's Tax ordinance . This request via
resolution must be submitted and presented to the Board of Supervisors by July 25, 201 2
(Attachment 2).
Meelieg Date
July 10, 201 2
Item Number pH'
UUT Ordinance Modernization Ballot Measure Page2
As discussed at the June 5,2012 Council meeting, since 1973, the City's UUT ordinance ha s
imposed a 5% tax on users of gas, electricity, telephone, water, and cable television to b e
collected by utility providers with customers within the City . The tax generates approximatel y
$4 .8 million each year for the General Fund, used to fund a wide range of critical General Fun d
services . Given its age, the UUT ordinance is out of date in several ways . In particular th e
telecommunications portion of the ordinance, representing $1 .1 million in annual revenue, need s
to be modernized due to the significant evolution of communication services over the years an d
changes to federal legislation and IRS rulings that have created ambiguity over outdate d
language and, in some cases, have led to litigation against local governments .
Because the UUT represents such a significant revenue source the City recently contracted wit h
Mr . Donald Maynor to provide "protective legal services," which includes assistance i n
developing a thoroughly updated, legally defensible UUT ordinance to be placed before th e
City's voters .
Current Ordinance
More than 70 public agencies with UUT ordinances have successfully secured voter approval t o
update the telecommunications component of their UUT ordinance, to close loopholes an d
include modern definitions that avoid potential legal issues . Most of these measures receive d
voter approval, because they simply "modernize" the telecommunications definitions so that al l
taxpayers are treated the same regardless of their choices of telecommunication services . Som e
measures included a modest reduction in the telecommunications tax rate to achieve a revenu e
neutral result .
Proposed Changes to the Ordinance
The revised ordinance proposed for voter approval was crafted by Mr . Maynor and reviewed b y
City staff and City Attorney . It will update language throughout the ordinance to be consisten t
with current and emerging technology, current legislation, and current IRS and court rulings wit h
particular emphasis on the telecommunications and video users portions . Video users is the ne w
term for cable television . The revised ordinance is based on those approved in othe r
jurisdictions . To achieve revenue neutrality and to underscore this is not an attempt to raise s
revenues, the rate charged on telecommunications and video users will be reduced from 5% t o
4.8%. The rate on water, gas, and electric users will remain at 5%. Attachment 6 contains a
table with a brief comparison of services taxed under the current and proposed ordinances .
If the City does not seek voter approval of a modern Utility Users tax, then adverse litigation o r
adverse federal legislation could cause the City to lose a majority, if not all, of its annual $1 .1
million revenue from the telecommunications component of the UUT . Approval of UUT
ordinance would require a majority vote plus one, because the UUT is a general tax imposed fo r
general governmental purposes . If the ballot measure were to fail, then the current UU T
ordinance would continue in effect, including the current 5% rate for all areas, subject to th e
risks of litigation and future legislation, as mentioned above .
Modernizing the City's UUT, will preserve the stability and diversity of the City's revenu e
sources, and is a critical step identified in the work program for the Preservation of Essentia l
Services and Fiscal Health Major City Goal .
PH1-2
UUT Ordinance Modernization Ballot Measure Page3
DISCUSSIO N
To implement the Council's previous direction a number of actions are necessary including placin g
this measure on the ballot and requesting election consolidation with the County . Additionally, th e
Council is presented with a number of recommendations about other aspects of placing this measur e
on the ballot that require City Council consideration . These issues are outlined below .
Analysis, Arguments and Rebuttal s
Pursuant to Elections Code Section 9280, the City Council may direct the City Clerk to provide a
copy of the proposed measure to the City Attorney for the purpose of preparing an impartia l
analysis . It is recommended that the Council provide this direction so that an impartial analysi s
may be prepared (Attachment 3). The impartial analysis shall be submitted no later than July 24 ,
2012 .
Priority for Written Argument s
Elections Code Section 9282 sets priorities for filing written arguments and states :
(b)For measures placed on the ballot by the legislative body, the legislative body, or an y
member or members of the legislative body authorized by that body, or any individual vote r
who is eligible to vote on the measure, or bona fide association of citizens, or an y
combination of voters and associations, may file a written argument for or against any city
measure (Attachment 3).
Based on dates established by State election law, primary ballot arguments would have to be
submitted to the City Clerk no later than Tuesday, July 24,2012. The Elections Cod e
establishes a 300-word limit for primary arguments and also establishes priorities for selectin g
arguments . The public examination period for these arguments would be from July 25 throug h
August 3, 2012 .
It is recommended that the Council appoint an ad hoc subcommittee consisting of two of it s
members to prepare and submit ballot arguments and rebuttal arguments, if warranted . (Note :
public funds may not be used for these purposes . These committee members will meet on thei r
own time and not utilize City resources .) To meet the timeframes established by the Election s
Code, the argument would return to the Council during the July 17, 2012 regular meeting .
The Elections Code allows the City Council to adopt provisions to permit rebuttal arguments to
be filed (Attachment 4). These provisions must be adopted at the same meeting at which th e
election is called .The deadline for submitting rebuttal arguments is dictated by State electio n
law and would be Friday, August 3, 2012 .
Public Review Period and Deadline s
Election Code Section 9295 provides that the Election Official shall allow a 10-calendar da y
public examination period immediately following the filing deadline for submission of specifie d
official election materials (i .e ., arguments, rebuttals, analysis). During that 10-calendar da y
period, any voter of the City or the Election Official may seek court action to require any or al l
such materials be amended or deleted .
UUT Ordinance Modernization Ballot Measure Page4
Deadlines for Filing the Impartial Analysis and Argument s
The following deadlines have been established by the City Clerk for the submission of the impartia l
analysis, primary arguments in favor and against, and rebuttal arguments :
July 24, 2012 - 5 :00 p .m .Last day to file Impartial Analysis and Primar y
Arguments For or Against the Measur e
July 25, 2012 August 3, 2012 10-day public examination period for th e
Impartial Analysis and Primary Arguments For or Against a Measur e
August 3, 2012 - 5 :00 p .m .Last day to file Rebuttal Arguments For o r
Against a Measur e
August 4,, 2012 – August 13, 2012 10-day public examination period fo r
Rebuttal Arguments Only .
Education and Outreac h
If the Council places this measure on the ballot staff intends to conduct educatio n
and outreach consistent with what is allowed by law . Staff intends to produce a
brochure of frequently asked questions, place informational content on the City's
website and to respond to requests for presentations and additional information .
Should the Council wish staff to approach this measure in a different manne r
further direction should be provided .
ALTERNATIVE
Do not place a Utility User Tax modernization ordinance on the November ballot, which would no t
reduce the current tax of 5% to 4 .8% and update the current tax ordinance . Staff does no t
recommend this option as the City's current ordinance is outdated and in need of modernization .
FISCAL IMPAC T
This action is part of the General Municipal Election called by Council on June 5, 2012 . The tota l
cost of the election will be influenced by the number of candidates filing for elected office and th e
printing expenses relating to Candidate Statements, the text of the Ballot Measure, the Cit y
Attorney's Impartial Analysis, Primary Arguments and . Rebuttal Arguments . The County Cler k
provided the City with a cost estimate of $41,115 which includes the cost for mail-in ballots tha t
now have to be covered by the cities and the potential costs of adding one ballot measure . The Cit y
Clerk budget currently has $37,500 available to cover the election cost and the Financial Pla n
Supplement includes a Significant Operating Change request of $6,000 to cover the new cost to th e
City that used to be paid for by the State of California . In total sufficient funding is available in th e
City Clerk's budget to cover the costs of placing this measure on the ballot .
ATTACHMENT S
1.Resolution Requesting Consolidation of the Election for Ballot Measur e
2.Resolution submitting Ballot Measure to Voter s
3.Resolution Setting Priorities for Arguments and Impartial Analysis
PHI-4
UUT Ordinance Modernization Ballot Measur e
4.Resolution Providing for Rebuttal Argument s
5.Draft Utility Tax Modernization Ordinanc e
6.Comparison of Current and Proposed UUT Ordinances
Page5
PHI 5 ,
ATTACHMENT 1
RESOLUTION NO . (2012. SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY O F
SAN LUIS OBISPO REQUESTING THE SAN LUIS OBISP O
COUNTY BOARD OF SUPERVISORS TO CONSOLIDATE TH E
GENERAL MUNICIPAL ELECTION ON TUESDAY ,
NOVEMBER 6, 2012, WITH THE STATEWIDE GENERA L
ELECTION TO BE HELD ON THAT DATE PURSUANT TO ELECTIONS COD E
SECTION 1040 3
WHEREAS,the City Council of the City of San Luis Obispo has called a Genera l
Municipal Election to be held on November 6, 2012, for the purpose of submitting to the voters th e
question with respect to a ballot measure for a utility user tax modernization ordinance relating t o
the City's current utility user's tax ; an d
WHEREAS,Section 302 of the City Charter establishes November of even-numbere d
years as the date for conducting the City's General Municipal Election ; and
WHEREAS,it is desirable that the General Municipal Election be consolidated with th e
Statewide General Election to be held on the same date and that within the City the precincts ,
polling places and election officers of the two elections be the same, and that the County Electio n
Department of the County of San Luis Obispo canvass the returns of the General Municipa l
Election and that the election be held in all respects as if there were only one election ;
NOW, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis
Obispo does declare, determine and order as follows :
SECTION 1 .Pursuant to the requirements of the Section 10403 of the Elections Code, th e
City Council hereby requests that the Board of Supervisors of the County of San Luis Obisp o
consent to and order the consolidation of the General Municipal Election with the Statewid e
General Election to be held on Tuesday, November 6, 2012 for the purpose of submitting to th e
voters the question relating to a utility users tax modernization ordinance .
SECTION 2 .That a measure is to appear on the ballot as follows :
PH1-6
Resolution No . (2012 Series)
Page 2
ATTACHMENT 1
SECTION 3 . The Board of Supervisors is requested to certify the results of the canvass o f
the returns of the General Municipal Election to the Council of the City of San Luis Obispo, whic h
shall thereupon declare the results thereof . The election shall be held in all respects as if there wer e
only one election, and only one form of ballot shall be used .
SECTION 4 . The Board of Supervisors is hereby requested to issue instructions to th e
County Clerk and Registrar of Voters to take any and all steps necessary for the holding of sai d
General Municipal Election . The City will pay its pro rata share of extra costs incurred by th e
County in consolidating the elections pursuant to Section 51350 of the Government Code .
SECTION 5 . The City Clerk is hereby directed to file certified copies of this resolutio n
with the Board of Supervisors, the County Clerk and the Registrar of Voters of the County of San
Luis Obispo .
SECTION 6 . The City Clerk shall certify to the passage and adopt of this resolution .
Upon motion of seconded by
and on the following roll call vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 10th day of July 2012 .
Mayor Jan Mar x
ATTEST :
Shall an ordinance be adopted that would 1 )
reduce the City of San Luis Obispo's curren t
Utility Users Tax on telecommunication an d
video services from 5% to 4 .8%; 2) clarify the
scope and application of the tax to . all taxabl e
utilities ; and 3) modernize the method o f
calculating and collecting the tax to reflec t
technological advances and changes in state an d
federal law so that all taxpayers are treate d
equally regardless of technology used?
Yes
PHI-7
ATTACHMENT 1Resolution No . (2012 Series )
Page 2
Sheryll Schroede r
Interim City Clerk
APPROVED AS TO FORM :
J . Christine Dietrick J . Christine Dietric k_
City Attorney
ATTACHMENT 2
RESOLUTION NO.
(2012 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF TH E
CITY OF SAN LUIS OBISPO CALLING AND GIVING NOTICE OF TH E
HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD
TUESDAY, NOVEMBER 6, 2012,FOR THE SUBMISSION TO THE VOTERS A
QUESTION RELATING TO A UTILITY USER TAX MODERNIZATION ORDINANCE
WHEREAS,under the provisions of the San Luis Obispo City Charter Section 302,a
General Municipal Election shall be held on Tuesday, November 6, 2012, for the submission of a
question relating to a utility user tax modernization ordinance .
NOW,THEREFORE, BE IT RESOLVED that the Council of the City of San Lui s
Obispo does declare, determine and order as follows :
SECTION 1 . Pursuant to Section 302 of the City Charter, a General Municipal Electio n
shall be held Tuesday, November 6, 2012, for the purpose of submission of a question relating to a
utility user tax modernization ordinance .
SECTION 2 . That the City Council, pursuant to its right and authority, does orde r
submitted to the voters at the General Municipal Election the following question :
SECTION 3 . That the full text of the ordinance submitted to the voters is on file in th e
City Clerk's Office and available for viewing on the City's website,www .slocity .org,and i s
incorporated herein by reference, and attached as Exhibit A .
SECTION 4 . That the ballots to be used at the election shall be in form and content a s
required by law .
SECTION 5 . That the City Clerk is authorized, instructed and directed to coordinat e
with the County of San Luis Obispo County Clerk/Recorder to procure and furnish any and all
official ballots, notices, printed matter and all supplies, equipment and paraphernalia that may b e
necessary in order to properly and lawfully conduct the election .
Shall an ordinance be adopted that would 1 )
reduce the City of San Luis Obispo's curren t
Utility Users Tax on telecommunication an d
video services from 5% to 4 .8%; 2) clarify th e
scope and application of the tax to all taxabl e
utilities ; and 3) modernize the method o f
calculating and collecting the tax to reflec t
technological advances and changes in state an d
federal law so that all taxpayers are treate d
equally regardless of technology used?
Yes
No
PH1-9
Resolution No . (2012 Series)
ATTACHMENT 2
Page 2
SECTION 6 .That the polls for the election shall be open at seven o'clock a .m . of the
day of the election and shall remain open continuously from that time until eight o'clock p .m . o f
the same day when the polls shall be closed, except as provided in Section 14401 of the Election s
Code of the State of California .
SECTION 7, That in all particulars not recited in this resolution, the election shall b e
held and conducted as provided by law for holding municipal elections .
SECTION 8 .That notice of the time and place of holding the election is given and th e
City Clerk is authorized, instructed and directed to give further or additional notice of th e
election, in time, form and manner as required by law .
SECTION 9 .That the City Clerk shall certify to the passage and adoption of thi s
resolution .
Upon motion of , seconded by , and o n
the following roll call vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 10th day of July 2012 .
Mayor Jan Mar x
ATTEST :
Sheryll Schroede r
Interim City Cler k
APPROVED AS TO FORM :
J . Christine Dietrick
J . Christine Dietric k
City Attorney
PH1-10
EXHIBIT A
ORDINANCE NO . 2012-??
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNI A
REPEALING AND RE-ENACTING IN FULL TITLE 3, CHAPTER 16 OF THE SA N
LUIS OBISPO MUNICIPAL CODE WITH RESPECT TO UTILITY USER'S TAX .
THE PEOPLE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA DO
ORDAIN AS FOLLOWS :
SECTION 1 .Title 3, Chapter 16 of the San Luis Obispo Municipal Code i s
hereby repealed and re-enacted in full , to read as follows :
Chapter 1 6
Utility Users' Tax
3 .16 .010 Short Title and Purpose
3 .1 6 .020 Definitions
3 .16 .030 Constitutional, Statutory, and Other Exemption s
3 .16 .040 Telecommunication Users' Ta x
3 .16 .050 Electricity Users' Ta x
3 .16 .060 Gas Users Tax
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricit y
3 .16 .080 Video Users' Tax
3 .16 .090 Water Users' Ta x
3 .16 .100 Bundling Taxable Items with Nontaxable Item s
3 .16 .110 Substantial Nexus/Minimum Contacts
3 .16 .120 Duty to Collect – Procedure s
3 .16 .130 Collection Penalties – Service Supplier s
3 .16 .140 Actions to Collec t
3 .16 .150 Deficiency Determination and Assessment – Tax Application Error s
3 .16 .160 Administrative Remedy – Nonpaying Service User s
3 .16 .170 Additional Powers and Duties of the Tax Administrato r
3 .16 .180 Record s
3 .16 .190 Refund s
3 .16 .200 Appeal s
3 .16 .210 No Injunction/Writ of Mandate
3 .16 .220 Notice of Changes to Chapte r
3 .16 .230 Future Amendment to Cited Statut e
3 .16 .240 No Increase in Tax Percentage or Change in Methodology without Vote r
Approva l
3 .16 .250 Remedies Cumulativ e
3 .16 .260 Interaction with Prior Tax
3 .16.010 Short Title and Purpose
PHI-11
EXHIBIT A
This Chapter 16 shall be known as the "Utility Users' Tax Law of the City of Sa n
Luis Obispo". The taxes imposed and levied by the provisions of this chapter ar e
solely for the purpose of providing revenue for the usual and current expenses o f
the city . The provisions of this chapter are not enacted for regulatory purposes .
3 .16 .020 Definition s
The following words and phrases whenever used in this Chapter 16, shall b e
construed as defined in this Section .
(a)
"Ancillary telecommunication services"means services that ar e
associated with or incidental to the provision, use or enjoyment of telecommunication s
services, including but not limited to the following services :
(1)"Conference bridging service"means an ancillary service that links tw o
(2) or more participants of an audio or video conference call and may include th e
provision of a telephone number . Conference bridging service does not include th e
telecommunications services used to reach the conference bridge .
(2)"Detailed telecommunications billing service"means an ancillar y
service of separately stating information pertaining to individual calls on a customer's
billing statement .
(3)"Directory assistance"means an ancillary service of providing telephon e
number information, and/or address information .
(4)"Vertical service"means an ancillary service that is offered in connectio n
with one or more telecommunications services, which offers advanced calling feature s
that allow customers to identify callers and to manage multiple calls and call connections ,
including conference bridging services .
(5)"Voice mail service"means an ancillary service that enables the custome r
to store, send or receive recorded messages . Voice mail service does not include an y
vertical services that the customer may be required to have in order to utilize the voic e
mail servic e
(b)
"Ancillary video services"means services that are associated with o r
incidental to the provision or delivery of video services, including but not limited t o
electronic program guide services, recording services, search functions, or othe r
interactive services or communications that are associated with or incidental to th e
provision, use or enjoyment of video services .
(c)
"Billing address"shall mean the mailing address of the service use r
where the service supplier submits invoices or bills for payment by the customer .
(d)
"City" shall mean the City of San Luis Obispo .
2
PH1-12
EXHIBIT A
(e)
"Gas" shall mean natural or manufactured gas or any alternat e
hydrocarbon fuel which may be substituted therefor .
(f)
"Individual Service"shall mean utility service at a single contiguou s
location . A service user with more than one meter or billing invoice per utility service a t
a single contiguous location may combine all billings for purposes of calculating th e
maximum tax amount .
(g)
"Mobile telecommunications service"has the meaning and usage as se t
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124)and the
regulations thereunder .
(h)
"Month"shall mean a calendar month .
(i)
"Non-Utility Service Supplier"means :
(1)a service supplier, other than a supplier of electric distribution services to al l
or a significant portion of the City, which generates electricity for sale to others ,
and shall include but is not limited to any publicly-owned electric utility, investor -
owned utility, cogenerator, distributed generation provider, exempt wholesal e
generator (15 U.S.C.Section 79z-5a),municipal utility district, federal powe r
marketing agency, electric rural cooperative, or other supplier or seller o f
electricity ;
(2)an electric service provider (ESP), electricity broker, marketer, aggregator ,
pool operator, or other electricity supplier other than a supplier of electri c
distribution services to all or a significant portion of the City, which sells or
supplies electricity or supplemental services to electricity users within the City ;or
(3)a gas service supplier, aggregator, marketer or broker, other than a supplier o f
gas distribution services to all or a significant portion of the City, which sells or
supplies gas or supplemental services to gas users within the City .
(j) "Paging service"means a "telecommunications service" that provide s
transmission of coded radio signals for the purpose of activating specific pagers ; such
transmissions may include messages and/or sounds .
(k)
"Person"shall mean, without limitation, any natural individual, firm ,
trust, common law trust, estate, partnership of any kind, association, syndicate, club, join t
stock company, joint venture, limited liability company, corporation (including foreign ,
domestic, and non-profit), municipal district or municipal corporation (other than th e
City), cooperative, receiver, trustee, guardian, or other representative appointed by orde r
of any court .
PH1-13
EXHIBIT A
(1)
"Place of primary use"means the street address representative of wher e
the customer's use of the telecommunications service primarily occurs, which must b e
the residential street address or the primary business street address of the customer .
(m)"Post-paid telecommunication service"means the telecommunicatio n
service obtained by making a payment on a communication-by-communication basi s
either through the use of a credit card or payment mechanism such as a bank card, trave l
card, credit card, or debit card, or by charge made to a service number which is no t
associated with the origination or termination of the telecommunication service .
(n)
"Prepaid telecommunication service"means the right to acces s
telecommunication services, which must be paid for in advance and which enables th e
origination of communications using an access number or authorization code, whethe r
manually or electronically dialed, and that is sold in predetermined units or dollars o f
which the number declines with use in a known amount .
(o)
"Private telecommunication service"means a telecommunicatio n
service that entitles the customer to exclusive or priority use of a communication s
channel or group of channels between or among termination points, regardless of th e
manner in which such channel or channels are connected, and includes switchin g
capacity, extension lines, stations, and any other associated services that are provided i n
connection with the use of such channel or channels . A communications channel is a
physical or virtual path of communications over which signals are transmitted between o r
among customer channel termination points (i . e ., the location where the customer eithe r
inputs or receives the communications).
(p) "Service address" means the residential street address or the business
street address of the service user . For a telecommunication or video service user ,
"service address" means either :
(1)The location of the service user's telecommunication equipment fro m
which the telecommunication originates or terminates, regardless of where th e
telecommunication is billed or paid ; or ,
(2)If the location in subsection (1) of this definition is unknown (e .g ., mobile
telecommunications service or VoIP service), the service address means the location o f
the service user's place of primary use .
(3)For prepaid telecommunication service, "service address" means the locatio n
associated with the service number or, if not known, the point of sale of the services .
(q)
"Service supplier"shall mean any entity or person, including the City ,
that provides, sells, or resells a utility service to a user of such service within the City .
(r)
"Service user"shall mean a person required to pay a tax imposed unde r
the provisions of this Chapter .
PH1-14
EXHIBIT A
(s)"State" shall mean the State of California .
(t)"Streamlined Sales and Use Tax Agreement"means the multi-stat e
agreement commonly known and referred to as the Streamlined Sales and Use Tax
Agreement, as it is amended from time to time .
(u)"Tax Administrator"shall mean the Finance Director, or his or he r
designee .
(v)"Telecommunications service"means the transmission, conveyance, o r
routing of voice, data, audio, video, or any other information or signals to a point, o r
between or among points, whatever the technology used . The term "telecommunication s
services" includes such transmission, conveyance, or routing in which compute r
processing applications are used to act on the form, code or protocol of the content fo r
purposes of transmission, conveyance or routing without regard to whether such service s
are referred to as voice over internet protocol (VoIP) services or are classified by th e
Federal Communications Commission as enhanced or value added, and includes vide o
and/or data services that is functionally integrated with "telecommunication services ."
"Telecommunications services" include, but are not limited to the following services ,
regardless of the manner or basis on which such services are calculated or billed :
ancillary telecommunication services ; intrastate, interstate, and internationa l
telecommunication services ; mobile telecommunications service ; prepai d
telecommunication service; post-paid telecommunication service ; private
telecommunication service ; paging service ; 800 service (or any other toll-free number s
designated by the Federal Communications Commission); 900 service (or any othe r
similar numbers designated by the Federal Communications Commission for service s
whereby subscribers who call in to pre-recorded or live service).
(w)"Video programming"means those programming services commonl y
provided to subscribers by a "video service supplier" including but not limited to basi c
services, premium services, audio services, video games, pay-per-view services, video o n
demand, origination programming, or any other similar services, regardless of the conten t
of such video programming, or the technology used to deliver such services, an d
regardless of the manner or basis on which such services are calculated or billed.
(x)"Video services"means "video programming" and any and all service s
related to the providing, recording, delivering, use or enjoyment of "video programming "
(including origination programming and programming using Internet Protocol, e .g ., IP-
TV and IP-Video) using one or more channels by a "video service supplier," regardles s
of the technology used to deliver, store or provide such services, and regardless of th e
manner or basis on which such services are calculated or billed, and includes ancillary
video services, data services, "telecommunication services," or interactiv e
communication services that are functionally integrated with "video services ."
(y)"Video service supplier"means any person, company,or service which
provides or sells one or more channels of video programming, or provides or sells the
5
PH1-15
EXHIBIT A
capability to receive one or more channels of video programming, including an y
communications that are ancillary, necessary or common to the provision, use o r
enjoyment of the video programming, to or from a business or residential address in th e
City, where some fee is paid, whether directly or included in dues or rental charges fo r
that service, whether or not public rights-of-way are utilized in the delivery of the vide o
programming or communications . A "video service supplier" includes, but is not limite d
to, multichannel video programming distributors (as defined in 47 U .S .C .A . Sectio n
522(13)); open video systems (OVS) suppliers ; and suppliers of cable television ; master
antenna television ; satellite master antenna television ; multichannel multipoin t
distribution services (MMDS); video services using internet protocol (e .g ., IP-TV and IP-
Video, which provide, among other things, broadcasting and video on demand), direc t
broadcast satellite to the extent federal law permits taxation of its video services, now o r
in the future ; and other suppliers of video services (including two-way communications),
whatever their technology .
(z)
"VoIP (Voice Over Internet Protocol)"means the digital process o f
making and receiving real-time voice transmissions over any Internet Protocol network .
(aa)"800 Service"means a "telecommunications service" that allows a calle r
to dial a toll-free number without incurring a charge for the call . The service is typicall y
marketed under the name "800," "855," "866," "877," and "888" toll-free calling, an d
any subsequent numbers designated by the Federal Communications Commission .
(bb)"900 Service"means an inbound toll "telecommunications service "
purchased by a subscriber that allows the subscriber's customers to call in to th e
subscriber's prerecorded announcement or live service . "900 service" does not includ e
the charge for : collection services provided by the seller of the "telecommunication s
services" to the subscriber, or service or product sold by the subscriber to the subscriber's
customer . The service is typically marketed under the name "900" service, and an y
subsequent numbers designated by the Federal Communications Commission .
3 .16 .030 Constitutional, statutory, and other exemptions .
(a)Nothing in this Chapter shall be construed as imposing a tax upon any person o r
service when the imposition of such tax upon such person or service would be i n
violation of a Federal or State statute, the Constitution of the United States or th e
Constitution of the State .
(b)Any service user that is exempt from the tax imposed by this Chapter pursuant t o
subsection (a) of this Section shall file an application with the Tax Administrator for a n
exemption ; provided, however, this requirement shall not apply to a service user that is a
State or Federal agency or subdivision with a commonly recognized name for suc h
service . Said application shall be made upon a form approved by the Tax Administrato r
and shall state those facts, declared under penalty of perjury, which qualify the applican t
for an exemption, and shall include the names of all service suppliers serving that servic e
user . If deemed exempt by the Tax Administrator, such service user shall give the Tax
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EXHIBIT A
Administrator timely written notice of any change in service suppliers so that the Ta x
Administrator can properly notify the new service supplier of the service user's ta x
exempt status . A service user that fails to comply with this Chapter shall not be entitled t o
a refund of a users' tax collected and remitted to the Tax Administrator from such servic e
user as a result of such noncompliance .
The decision of the Tax Administrator may be appealed pursuant to Sectio n
3 .16 .200 of this Chapter . Filing an application with the Tax Administrator and appeal t o
the City Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a
prerequisite to a suit thereon .
(c)The City Council may, by resolution, establish one or more classes of persons o r
one or more classes of utility service otherwise subject to payment of a tax imposed b y
this Chapter and provide that such classes of persons or service shall be exempt,in whol e
or in part from such tax for a specified period of time .
(d)If a billing for utility services includes charges for two or more household s
situated within nonprofit retirement facilities which (1) are operated solely for th e
accommodation of persons with low incomes and (2) which qualify for the welfar e
exemption set forth in the California Revenue and Taxation Code, and if the charges fo r
such services are paid by the operators of the retirement facilities, the operators shall b e
entitled to an annual refund of all taxes paid under the provisions of this ordinance . The
procedure for obtaining such refunds shall be established by the Tax Administrator ,
including the requirement for whatever proof he or she deems necessary to establis h
qualification for refund .
3 .16 .040 Telecommunication Users' Tax .
(a)There is hereby imposed a tax upon every person in the City using
telecommunication services . The tax imposed by this Section shall be at the rate of fou r
and eight-tenths percent (4 .8%) of the charges made for such services and shall b e
collected from the service user by the telecommunication services supplier or its billin g
agent . There is a rebuttable presumption that telecommunication services, which ar e
billed to a billing or service address in the City, are used,in whole or in part,within th e
City's boundaries, and such services are subject to taxation under this Section . There i s
also a rebuttable presumption that prepaid telecommunication services sold within th e
city are used, in whole or in part, within the City and are therefore subject to taxatio n
under this Section . If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax . As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the telecommunication services .
(b)"Mobile telecommunications service" shall be sourced in accordance with th e
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C.
Section 124).The Tax Administrator may issue and disseminate to telecommunicatio n
PH1-17
EXHIBIT A
service suppliers, which are subject to the tax collection requirements of this Chapter ,
sourcing rules for the taxation of other telecommunication services, including but no t
limited to post-paid telecommunication services, prepaid telecommunication services ,
VoIP, and private communication services, provided that such rules are based upo n
custom and common practice that further administrative efficiency and minimize mult i
jurisdictional taxation (e .g., Streamlined Sales and Use Tax Agreement).
(c)The Tax Administrator may issue and disseminate to telecommunication servic e
suppliers, which are subject to the tax collection requirements of this Chapter, a n
administrative ruling identifying those telecommunication services, or charges therefore ,
that are subject to or not subject to the tax of subsection (a) above .
(d)As used in this Section, the term "telecommunication services" shall include, bu t
is not limited to, charges for : connection, reconnection, termination, movement, o r
change of telecommunication services ; late payment fees ; detailed billing ; central offic e
and custom calling features (including but not limited to call waiting, call forwarding ,
caller identification and three-way calling); voice mail and other messaging services ;
directory assistance ; access and line charges ; universal service charges ; regulatory o r
administrative fees, charges or surcharges ; cost recovery charges or surcharges for
programs imposed by state or federal law ; local number portability charges ; and text an d
instant messaging . "Telecommunication services" shall not include digital downloads tha t
are not "ancillary telecommunication services," such as music, ringtones, games, an d
similar digital products .
(e)To prevent actual multi jurisdictional taxation of telecommunication service s
subject to tax under this Section, any service user, upon proof to the Tax Administrato r
that the service user has previously paid the same tax in another state or city on suc h
telecommunication services, shall be allowed a credit against the tax imposed to th e
extent of the amount of such tax legally imposed in such other state or city ; provided ,
however, the amount of credit shall not exceed the tax owed to the City under thi s
Section .
(g)
The tax on telecommunication services imposed by this Section shall be collecte d
from the service user by the service supplier. The amount of tax collected in one mont h
shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .050 Electricity Users Tax .
(a) There is hereby imposed a tax upon every person using electricity in the City . The tax
imposed by this Section shall be at the rate of five percent (5%) of the charges made fo r
such electricity, and for any supplemental services or other associated activities directl y
related to and/or necessary for the provision of electricity to the service user, which ar e
provided by a service supplier or non-utility service .supplier to a service user . The tax
shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent .
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PHI-18
EXHIBIT A
(b) As used in this Section, the term "charges" shall apply to all services, components an d
items that are : i) necessary for or common to the receipt, use or enjoyment of electri c
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for electric service by a local distribution company to a class of retail customers . Th e
term "charges" shall include, but is not limited to, the following charges :
(1)energy charges ;
(2)distribution or transmission charges ;
(3)metering charges ;
(4)stand-by, reserves, firming, ramping, voltage support, regulation, emergency ,
or other similar charges for supplemental services to self-generation service users ;
(5)customer charges, late charges, service establishment or reestablishmen t
charges, demand charges,fuel or other cost adjustments, power exchange charges ,
independent system operator (ISO) charges, stranded investment or competitiv e
transition charges (CTC), public purpose program charges, nuclea r
decommissioning charges, trust transfer amounts (bond financing charges),
franchise fees, franchise surcharges, annual and monthly charges, and othe r
charges, fees or surcharges which are necessary for or common to the receipt,use
or enjoyment of electric service ; and ,
(6)charges, fees, or surcharges for electricity services or programs which ar e
mandated by the California Public Utilities Commission or the Federal Energ y
Regulatory Commission, or by any state or federal law,whether or not suc h
charges, fees, or surcharges appear on a bundled or line item basis on th e
customer billing .
(c) As used in this Section, the term "charges" shall include the value of any other
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the electricity or services related to the provision of suc h
electricity.
(d) The Tax Administrator, from time to time, may survey the electric service supplier s
to identify the various unbundled billing components of electric retail service that the y
commonly provide to residential and commercial/industrial customers in the of the City ,
and the charges therefor, including those items that are mandated by state or federa l
regulatory agencies as a condition of providing such electric service . The Tax
Administrator, thereafter, may issue and disseminate to such electric service suppliers a n
administrative ruling identifying those components and items which are : i) necessary fo r
or common to the receipt, use or enjoyment of electric service ; or, ii) currently are o r
historically have been included in a single or bundled rate for electric service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e) As used in this Section, the term "using electricity" shall not include the mer e
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale .
PHI 19
EXHIBIT A
(f) The tax on electricity provided by self-production or by a non-utility service supplie r
not under the jurisdiction of this Chapter 16 shall be collected and remitted in the manne r
set forth in Section 3 .16 .070 of this Chapter . All other taxes on charges for electricit y
imposed by this Section shall be collected from the service user by the electric servic e
supplier or its billing agent . The amount of tax collected in one (1) month shall b e
remitted to the Tax Administrator, and must be received by the Tax Administrator on o r
before the twentieth (20 th ) day of the following month ; or, at the option of the person
required to collect and/or remit the tax, such person shall remit an estimated amount o f
tax measured by the tax billed in the previous month or upon the payment pattern of th e
service user, which must be received by the Tax Administrator on or before the twentiet h
(20 th ) day of the following month, provided that such person shall submit an adjuste d
payment or request for credit, as appropriate, within sixty (60) days following eac h
calendar quarter . The credit, if approved by the Tax Administrator, may be applie d
against any subsequent remittance that becomes due .
3 .16.060 Gas Users Tax .
(a)There is hereby imposed a tax upon every person using gas in the City, which i s
transported and delivered through a pipeline or by mobile transport . The tax imposed b y
this Section shall be at the rate of five percent (5%) of the charges made for such gas ,
including all services related to the storage, transportation and delivery of such gas . The
tax shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent, and shall apply to all uses of gas, including but not limite d
to, heating, electricity generation, and the use of gas as a component of a manufacture d
product .
(b)As used in this Section, the term "charges" shall apply to all services, components an d
items for gas service that are : i) necessary for or common to the receipt, use o r
enjoyment of gas service ; or, ii) currently are or historically have been included in a
single or bundled rate for gas service by a local distribution company to a class of retai l
customers . The term "charges" shall include, but is not limited to, the following charges :
(1)the commodity charges for purchased gas, or the cost of gas owned by th e
service user (including the actual costs attributed to drilling, production, lifting ,
storage, gathering, trunkline, pipeline, and other operating costs associated wit h
the production and delivery of such gas), which is delivered through a ga s
pipeline distribution system ;
(2)gas transportation charges (including interstate charges to the extent no t
included in commodity charges);
(3)storage charges ; provided, however, that the service supplier shall not b e
required to apply the tax to any charges for gas storage services when the servic e
supplier cannot, as a practical matter, determine the jurisdiction where such store d
gas is ultimately used ; but it shall be the obligation of the service user to self -
collect the amount of tax not applied to any charge for gas storage by the servic e
supplier and to remit the tax to the appropriate jurisdiction ;
1 0
PH 1-20
EXHIBIT A
(4)capacity or demand charges, late charges, service establishment o r
reestablishment charges, transition charges, customer charges,minimum charges ,
annual and monthly charges, and any other charges which are necessary for or
common to the receipt, use or enjoyment of gas service ; and,
(5)charges, fees, or surcharges for gas services or programs which are mandate d
by the California Public Utilities Commission or the Federal Energy Regulatory
Commission, or by any state or federal law, whether or not such charges, fees, o r
surcharges appear on a bundled or line item basis on the customer billing.
(c)As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the gas or services related to the delivery of such gas .
(d)The Tax Administrator, from time to time, may survey the gas service suppliers t o
identify the various unbundled billing components of gas retail service that the y
commonly provide to residential and commercial/industrial customers in the City, and th e
charges therefor, including those items that are mandated by state or federal regulator y
agencies as a condition of providing such gas service . The Tax Administrator, thereafter ,
may issue and disseminate to such gas service suppliers an administrative ruling
identifying those components and items which are : i) necessary for or common to th e
receipt, use or enjoyment of gas service ;or,ii) currently are or historically have bee n
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers . Charges for such components and items shall be subject to th e
tax of subsection (a) above .
(e)There shall be excluded from the calculation of the tax imposed in this Section ,
charges made for gas which is to be resold and delivered through a pipeline distributio n
system .
(f)The tax on gas provided by self-production or by a non-utility service supplier no t
under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner se t
forth in Section 3 .16 .070 . All other taxes on charges for gas imposed by this Sectio n
shall be collected from the service user by the gas service supplier or its billing agent .
The amount of tax collected in one (1) month shall be remitted to the Tax Administrator ,
and must be received by the Tax Administrator, on or before the twentieth (20 `h ) day o f
the following month ; or, at the option of the person required to collect and/or remit th e
tax, such person shall remit an estimated amount of tax measured by the tax billed in th e
previous month or upon the payment pattern of the service user, which must be receive d
by the Tax Administrator on or before the twentieth (20 `h) day of the following month ,
provided that such person shall submit an adjusted payment or request for credit,a s
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator, may be applied against any subsequent remittanc e
that becomes due.
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity .
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PH1-21
EXHIBIT A
(a)Any service user subject to the tax imposed by Section 3 .16 .050 or by Section
3 .16 .060 of this Chapter, which produces gas or electricity for self-use regardless o f
technology used to produce such gas or electricity ; which receives gas or electricity ,
including any related supplemental services, directly from a non-utility service supplie r
not under the jurisdiction of this Chapter ; or which, for any other reason, is not having th e
full tax collected and remitted by its service supplier, a non-utility service supplier, or it s
billing agent on the use of gas or electricity in the City, including any relate d
supplemental services, shall report said fact to the Tax Administrator and shall remit th e
tax due directly to the Tax Administrator within thirty (30) days of such use, based on th e
charges for,or value of, such gas or electricity, or supplemental services, as provided i n
subsection (b). In lieu of paying said actual tax, the service user may, at its option, remi t
to the Tax Administrator within thirty (30) days of such use an estimated amount of ta x
measured by the tax billed in the previous month, or upon the payment pattern of simila r
customers of the service supplier using similar amounts of gas or electricity, provide d
that the service user shall submit an adjusted payment or request for credit, a s
appropriate, within sixty (60) days following each calendar quarter. The credit, i f
approved by the Tax Administrator in writing, may be applied against any subsequent tax
bill that becomes due .
(b)The Tax Administrator may require said service user to identify its non-utility servic e
supplier, and otherwise provide, subject to audit : invoices ; books of account ; or other
satisfactory evidence documenting the quantity of gas or electricity used, including an y
related supplemental services, and the cost or price thereof . If the service user is unabl e
to provide such satisfactory evidence, or if the administrative cost of calculating the ta x
in the opinion of the Tax Administrator is excessive, the Tax Administrator may
determine the tax by applying the tax rate to the equivalent charges the service use r
would have incurred if the gas or electricity used, including any related supplementa l
services, had been provided by the service supplier that is the primary supplier of gas o r
electricity within the City . Rate schedules for this purpose shall be available from th e
City .
3 .16 .080 Video Users' Tax.
(a)There is hereby imposed a tax upon every person in the City using video services .
The tax imposed by this section shall be at the rate of four and eight-tenths percen t
(4 .8%) of the charges made for such services and shall be collected from the service use r
by the video service supplier, or its billing agent . There is a rebuttable presumption tha t
video services, which are billed to a billing or service address in the City, are used, i n
whole or in part, within the City's boundaries, and such services are subject to taxatio n
under this Chapter. If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax .
(b)As used in this section, the term "charges" shall include, but is not limited to, charge s
for the following :
1 2
PH 1-22
EXHIBIT A
(1)regulatory fees and surcharges, franchise fees and access fees (PEG);
(2)initial installation of equipment necessary for provision and receipt of vide o
services ;
(3)late fees, collection fees, bad debt recoveries,and return check fees ;
(4)activation fees, reactivation fees, and reconnection fees ;
(5)video programming and video services ;
(6)ancillary video programming services (e .g ., electronic program guid e
services, search functions, recording functions, or other interactive services o r
communications that are ancillary, necessary or common to the use or enjoymen t
of the video services);
(7)equipment leases (e .g., remote, recording and/or search devises ; converters);
and,
(8)service calls, service protection plans, name changes, changes of services, an d
special services .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the video services .
(d)The Tax Administrator may issue and disseminate to video service suppliers, whic h
are subject to the tax collection requirements of this Chapter, an administrative rulin g
identifying those video services, or charges therefor, that are subject to or not subject t o
the tax of subsection (a) above .
(e)The tax imposed by this section shall be collected from the service user by the vide o
service supplier, its billing agent, or a reseller of such services . In the case of video
service, the service user shall be deemed to be the purchaser of the bulk video servic e
(e .g ., an apartment owner), unless such service is resold to individual users, in which cas e
the service user shall be the ultimate purchaser of the video service . The amount of ta x
collected in one (1) month shall be remitted to the Tax Administrator, and must b e
received by the Tax Administrator on or before the twentieth (20th) day of the followin g
month .
3.16 .090 Water Users' Tax .
(a) There is imposed a tax upon every person using water in the City which i s
transported and delivered through a pipeline distribution system . The tax imposed by thi s
section shall be at the rate of five percent (5%) of the charges made for such water .
1 3
PH1-23
EXHIBIT A
(b)As used in this section, the term "charges" shall apply to all services, component s
and items that are : i) necessary for or common to the receipt, use or enjoyment of wate r
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for water service by a local distribution company to a class of retail customers . The term
"charges" shall include, but is not limited to, the following charges : water commodity
charges (potable and non-potable); distribution or transmission charges ; metering
charges; customer charges ; fire protection services ; late charges; service establishment o r
reestablishment charges ; franchise fees ; franchise surcharges ; annual and monthl y
charges ; and other charges, fees and surcharges which are necessary for or common t o
the receipt, use or enjoyment of water service ; and, charges, fees, or surcharges for water
services or programs, which are mandated by a water district or a state or federal agency ,
whether or not such charges, fees, or surcharges appear on a bundled or line item basis o n
the customer billing .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the water services .
(d)The Tax Administrator, from time to time, may survey the water service suppliers i n
the City to identify the various unbundled billing components of water retail service tha t
they commonly provide to residential and commercial/industrial customers in the City ,
and the charges therefor, including those items that are mandated by a water district or a
state or federal agency as a condition of providing such water service . The Tax
Administrator, thereafter, may issue and disseminate to such water service suppliers a n
administrative ruling identifying those components and items which are : i) necessary fo r
or common to the receipt, use or enjoyment of water service ; or, ii) currently are o r
historically have been included in a single or bundled rate for water service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e)The tax on water service imposed by this section shall be collected from the servic e
user by the water service supplier or its billing agent . The amount of tax collected in on e
(1) month shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .100 Bundling Taxable Items .
If any nontaxable charges are combined with and not separately stated from taxabl e
service charges on the customer bill or invoice of a service supplier, the combined charg e
is subject to tax unless the service supplier identifies, by reasonable and verifiabl e
standards, the portions of the combined charge that are nontaxable and taxable throug h
the service supplier's books and records kept in the regular course of business, and i n
accordance with generally accepted accounting principles, and not created an d
maintained for tax purposes . If the service supplier offers a combination of taxable and
non-taxable services, and the charges are separately stated, then for taxation purposes, th e
values assigned the taxable and non-taxable services shall be based on its books and
1 4
PH 1-24
EXHIBIT A
records kept in the regular course of business and in accordance with generally accepte d
accounting principles, and not created and maintained for tax purposes . The servic e
supplier has the burden of proving the proper valuation and apportionment of taxable an d
non-taxable charges .
3 .16 .110 Substantial Nexus/Minimum Contact .
For purposes of imposing a tax or establishing a duty to collect and remit a tax under thi s
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favo r
of the imposition, collection and/or remittance of the utility users' tax to the fullest exten t
permitted by State and Federal law, and as it may change from time to time by judicia l
interpretation or by statutory enactment . Any telecommunication service (includin g
VoIP) used by a person with a service address in the City, which service is capable o f
terminating a call to another person on the general telephone network, shall be subject t o
a rebuttable presumption that "substantial nexus/minimum contacts" exists for purpose s
of imposing a tax, or establishing a duty to collect and remit a tax, under this Chapter .A
service supplier shall be deemed to have sufficient activity in the City for tax collectio n
and remittance purposes if its activities include, but are not limited to, any of th e
following : maintains or has within the City, directly or through an agent or subsidiary,a
place of business of any nature ; solicits business in the City by employees, independen t
contractors, resellers, agents or other representatives ; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advertising that is broadcas t
or relayed from a transmitter with the City or distributed from a location with the City ; o r
advertises in newspapers or other periodicals printed and published within the City o r
through materials distributed in the City by means other than the United States mail ; or if
there are activities performed in the City on behalf of the service supplier that ar e
significantly associated with the service supplier's ability to establish and maintain a
market in the City for the provision of utility services that are subject to a tax under thi s
Chapter .
3 .16 .120 Duty to Collect Procedures .
(a)
Collection by Service Suppliers :The duty of service suppliers to collect an d
remit the taxes imposed by the provisions of this Chapter shall be performed as follows :
(1)The tax shall be collected by service suppliers insofar as practicable at th e
same time as, and along with, the collection of the charges made in accordance with th e
regular billing practice of the service supplier . Where the amount paid by a service use r
to a service supplier is less than the full amount of the charge and tax which was accrue d
for the billing period, a proportionate share of both the charge and the tax shall b e
deemed to have been paid . In those cases where a service user has notified the servic e
supplier of refusal to pay the tax imposed on said charges, Section 3 .16 .916 shall apply .
(2)The duty of a service supplier to collect the tax from a service user shal l
commence with the beginning of the first regular billing period applicable to the servic e
user where all charges normally included in such regular billing are subject to the
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PH1-25
EXHIBIT A
provisions of this Chapter . Where a service user receives more than one billing, one o r
more being for different periods than another, the duty to collect shall arise separately fo r
each billing period.
(b)
Filing Return and Payment :Each person required by this Chapter to remit a tax
shall file a return to the Tax Administrator, on forms approved by the Tax Administrator ,
on or before the due date . The full amount of the tax collected shall be included with th e
return and filed with the Tax Administrator . The Tax Administrator is authorized t o
require such additional information as he or she deems necessary to determine if the ta x
is being levied, collected, and remitted in accordance with this Chapter . Returns are du e
immediately upon cessation of business for any reason . Pursuant to Revenue and Tax
Code Section 7284.6,the Tax Administrator, and its agents, shall maintain such filin g
returns as confidential information that is exempt from the disclosure provisions of th e
Public Records Act .
3 .16 .130 Collection Penalties-Service Suppliers .
(a)Taxes collected from a service user are delinquent if not received by the Ta x
Administrator on or before the due date . Should the due date occur on a weekend or lega l
holiday, the return must be received by the Tax Administrator on the first regula r
working day following the weekend or legal holiday . A direct deposit, includin g
electronic fund transfers and other similar methods of electronically exchanging monie s
between financial accounts, made by a service supplier in satisfaction of its obligation s
under this Chapter shall be considered timely if the transfer is initiated on or before th e
due date, and the transfer settles into the City's account on the following business day .
(b)If the person required to collect and/or remit the utility users' tax fails to collec t
the tax (by failing to properly assess the tax on one or more services or charges on th e
customer's billing) or fails to remit the tax collected on or before the due date, the Tax
Administrator shall attach a penalty for such delinquencies or deficiencies at the rate o f
fifteen percent (15%) of the total tax that is delinquent or deficient in the remittance, an d
shall pay interest at the rate of seventy-five one-hundredths percent (0 .75%) per month ,
or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date o n
which the remittance first became delinquent, until paid .
(c)The Tax Administrator shall have the power to impose additional penalties upo n
persons required to collect and remit taxes pursuant to the provisions of this Chapter fo r
fraud or gross negligence in reporting or remitting at the rate of fifteen percent (15%) o f
the amount of the tax collected and/or required to be remitted, or as recomputed by th e
Tax Administrator.
(d)For collection purposes only, every penalty imposed and such interest that i s
accrued under the provisions of this Chapter shall become a part of the tax herei n
required to be paid .
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(e)
Notwithstanding the foregoing, the Tax Administrator may, in his or her
discretion, modify the due dates of this Chapter to be consistent with any unifor m
standards or procedures that are mutually agreed upon by other public agencies imposin g
a utility users' tax, or otherwise legally established, to create a central payment location
or mechanism .
3 .16 .140 Actions to Collect .
Any tax required to be paid by a service user under the provisions of this Chapter shall b e
deemed a debt owed by the service user to the City . Any such tax collected from a servic e
user which has not been remitted to the Tax Administrator shall be deemed a debt owe d
to the City by the person required to collect and remit and shall no longer be a debt of th e
service user . Any person owing money to the City under the provisions of this Chapte r
shall be liable to an action brought in the name of the City for the recovery of suc h
amount, including penalties and interest as provided for in this Chapter, along with an y
collection costs incurred by the City as a result of the person's noncompliance with thi s
Chapter, including, but not limited to, reasonable attorneys' fees . Any tax required to b e
collected by a service supplier or owed by a service user is an unsecured priority excis e
tax obligation under 11 U. S. CA . Section 507(a)(8)(C).Service suppliers who seek t o
collect charges for service in bankruptcy proceedings shall also include in any such clai m
the amount of taxes due the City for those services, unless the Tax Administrato r
determines that such duty is in conflict with any federal or state law,rule, or regulation o r
that such action would be administratively impractical .
3 .16 .150 Deficiency Determination and Assessment-Tax Application Errors .
(a)The Tax Administrator shall make a deficiency determination if he or sh e
determines that any person required to pay or collect taxes pursuant to the provisions o f
this Chapter has failed to pay, collect, and/or remit the proper amount of tax b y
improperly or failing to apply the tax to one or more taxable services or charges . Nothin g
herein shall require that the Tax Administrator institute proceedings under this Sectio n
3 .16 .150 if, in the opinion of the Tax Administrator, the cost of collection or enforcemen t
likely outweighs the tax benefit .
(b)The Tax Administrator shall mail a notice of such deficiency determination to th e
person required to pay or remit the tax, which notice shall refer briefly to the amount o f
the taxes owed, plus interest at the rate of seventy-five one-hundredths percent (0 .75%)
per month, or any fraction thereof, on the amount of the tax from the date on which th e
tax should have been received by the City . Within fourteen (14) calendar days after th e
date of service of such notice, the person may request in writing to the Tax Administrato r
for a hearing on the matter .
(c)If the person fails to request a hearing within the prescribed time period, th e
amount of the deficiency determination shall become a final assessment, and shal l
immediately be due and owing to the City . If the person requests a hearing, the Ta x
Administrator shall cause the matter to be set for hearing, which shall be scheduled
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EXHIBIT A
within thirty (30)days after receipt of the written request for hearing . Notice of the time
and place of the hearing shall be mailed by the Tax Administrator to such person at leas t
ten (10) calendar days prior to the hearing, and, if the Tax Administrator desires sai d
person to produce specific records at such hearing, such notice may designate the record s
requested to be produced .
(d)At the time fixed for the hearing, the Tax Administrator shall hear all relevant
testimony and evidence, including that of any other interested parties . At the discretion o f
the Tax Administrator, the hearing may be continued from time to time for the purpose o f
allowing the presentation of additional evidence . Within a reasonable time following th e
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non -
assessment), thereafter, by confirming, modifying or rejecting the original deficienc y
determination, and shall mail a copy of such final assessment to person owing the tax .
The decision of the Tax Administrator may be appealed pursuant to Section 3 .16 .200 o f
this Chapter . Filing an application with the Tax Administrator and appeal to the Cit y
Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a prerequisit e
to a suit thereon .
(e)Payment of the final assessment shall become delinquent if not received by th e
Tax Administrator on or before the thirtieth (30th) day following the date of receipt of th e
notice of final assessment . The penalty for delinquency shall be fifteen percent (15%) o n
the total amount of the assessment, along with interest at the rate of seventy-five one -
hundredths percent (0.75%) per month, or any fraction thereof, on the amount of the tax ,
exclusive of penalties, from the date of delinquency, until paid . The applicable statute o f
limitations regarding a claim by the City seeking payment of a tax assessed under thi s
Chapter shall commence from the date of delinquency as provided in this subsection (e).
(f)All notices under this Chapter may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16.160 Administrative Remedy-Non-Paying Service Users .
(a)
Whenever the Tax Administrator determines that a service user has deliberatel y
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whenever the Tax Administrator deems it in the bes t
interest of the City, he or she may relieve such person of the obligation to collect th e
taxes due under this Chapter from certain named service users for specific billing periods .
To the extent the service user has failed to pay the amount of tax owed for a period o f
two (2) or more billing periods, the service supplier shall be relieved of the obligation t o
collect taxes due . The service supplier shall provide the City with the names an d
addresses of such service users and the amounts of taxes owed under the provisions o f
this Chapter. Nothing herein shall require that the Tax Administrator institut e
proceedings under this Section 3 .16 .160 if, in the opinion of the Tax Administrator, th e
cost of collection or enforcement likely outweighs the tax benefit .
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(b)In addition to the tax owed, the service user shall pay a delinquency penalty at th e
rate of fifteen percent (15%) of the total tax that is owed, and shall pay interest at the rat e
of seventy-five one-hundredths percent (0 .75%)per month, or any fraction thereof, on th e
amount of the tax, exclusive of penalties, from the due date, until paid .
(c)The Tax Administrator shall notify the non-paying service user that the Ta x
Administrator has assumed the responsibility to collect the taxes due for the state d
periods and demand payment of such taxes, including penalties and interest . The notice
shall be served on the service user by personal delivery or by deposit of the notice in th e
United States mail, postage prepaid, addressed to the service user at the address to whic h
billing was made by the person required to collect the tax ; or, should the service use r
have a change of address, to his or her last known address .
(d)If the service user fails to remit the tax to the Tax Administrator within thirty (30 )
days from the date of the service of the notice upon him or her, the Tax Administrato r
may impose an additional penalty of fifteen percent (15%) of the amount of the total ta x
that is owed .
3 .16 .170 Additional Powers and Duties of the Tax Administrator .
(a)The Tax Administrator shall have the power and duty, and is hereby directed, t o
enforce each and all of the provisions of this Chapter .
(b)The Tax Administrator may adopt administrative rules and regulations consisten t
with provisions of this Chapter for the purpose of interpreting, clarifying, carrying ou t
and enforcing the payment, collection and remittance of the taxes herein imposed . Th e
administrative ruling shall not impose a new tax,revise an existing tax methodology as
stated in this Chapter, or increase an existing tax, except as allowed by Californi a
Government Code Section 53750(h)(2). A copy of such administrative rules an d
regulations shall be on file in the Tax Administrator's office . To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected i n
full for any period of time from any particular service supplier or service user, tha t
determination shall be considered an exercise of the Tax Administrator's discretion t o
settle disputes and shall not constitute a change in taxing methodology for purposes o f
Government Code Section 53750 or otherwise . The Tax Administrator is not authorize d
to amend the City's methodology for purposes of Government Code Section 53750 and
the City does not waive or abrogate its ability to impose the utility users' tax in full as a
result of promulgating administrative rulings or entering into agreements .
(c)Upon a proper showing of good cause, the Tax Administrator may mak e
administrative agreements, with appropriate conditions, to vary from the stric t
requirements of this Chapter and thereby : (1) conform to the billing procedures of a
particular service supplier so long as said agreements result in the collection of the tax i n
conformance with the general purpose and scope of this Chapter ; or, (2) to avoid a
hardship where the administrative costs of collection and remittance greatly outweigh th e
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tax benefit . A copy of each such agreement shall be on file in the Tax Administrator's
office, and are voidable by the Tax Administrator or the City at any time .
(d)The Tax Administrator may conduct an audit, to ensure proper compliance wit h
the requirements of this Chapter, of any person required to collect and/or remit a ta x
pursuant to this Chapter . The Tax Administrator shall notify said person of the initiatio n
of an audit in writing . In the absence of fraud or other intentional misconduct, the audi t
period of review shall not exceed a period of three (3) years next preceding the date o f
receipt of the written notice by said person from the Tax Administrator . Upon completion
of the audit, the Tax Administrator may make a deficiency determination pursuant t o
Section 3 .16 .150 of this Chapter for all taxes (and applicable penalties and interest) owe d
and not paid, as evidenced by information provided by such person to the Ta x
Administrator . If said person is unable or unwilling to provide sufficient records to enabl e
the Tax Administrator to verify compliance with this Chapter, the Tax Administrator i s
authorized to make a reasonable estimate of the deficiency . Said reasonable estimate shal l
be entitled to a rebuttable presumption of correctness .
(e)Upon receipt of a written request of a taxpayer, and for good cause, the Ta x
Administrator may extend the time for filing any statement required pursuant to thi s
Chapter for a period of not to exceed forty-five (45) days, provided that the time for filin g
the required statement has not already passed when the request is received . No penalt y
for delinquent payment shall accrue by reason of such extension . Interest shall accru e
during said extension at the rate of seventy-five one-hundredths percent (0 .75%) pe r
month, prorated for any portion thereof .
(f)The Tax Administrator shall determine the eligibility of any person who asserts a
right to exemption from, or a refund of, the tax imposed by this Chapter .
(g)Notwithstanding any provision in this Chapter to the contrary, the Ta x
Administrator may waive any penalty or interest imposed upon a person required t o
collect and/or remit for failure to collect the tax imposed by this Chapter if the non -
collection occurred in good faith . In determining whether the non-collection was in goo d
faith, the Tax Administrator shall take into consideration the uniqueness of the product o r
service, industry practice or other precedence . The Tax Administrator may als o
participate with other utility users' tax public agencies in conducting coordinate d
compliance reviews with the goal of achieving administrative efficiency and uniform ta x
application determinations, where possible . To encourage full disclosure and on-goin g
cooperation on annual compliance reviews, the Tax Administrator, and its agents, ma y
enter into agreements with the tax-collecting service providers and grant prospective onl y
effect on any changes regarding the taxation of services or charges that were previousl y
deemed by the service provider, in good faith and without gross negligence, to be non -
taxable . In determining whether the non-collection was in good faith and without gros s
negligence, the Tax Administrator shall take into consideration the uniqueness of th e
product or service, industry practice or other precedence .
3 .16.180 Records.
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(a)It shall be the duty of every person required to collect and/or remit to the City an y
tax imposed by this Chapter to keep and preserve, for a period of at least three (3) years ,
all records as may be necessary to determine the amount of such tax as he/she may hav e
been liable for the collection of and remittance to the Tax Administrator, which record s
the Tax Administrator shall have the right to inspect at a reasonable time .
(b)The City may issue an administrative subpoena to compel a person to deliver, t o
the Tax Administrator, copies of all records deemed necessary by the Tax Administrato r
to establish compliance with this Chapter, including the delivery of records in a common
electronic format on readily available media if such records are kept electronically by th e
person in the usual and ordinary course of business . As an alternative to delivering th e
subpoenaed records to the Tax Administrator on or before the due date provided in th e
administrative subpoena, such person may provide access to such records outside the Cit y
on or before the due date, provided that such person shall reimburse the City for al l
reasonable travel expenses incurred by the City to inspect those records, including travel ,
lodging, meals, and other similar expenses, but excluding the normal salary or hourl y
wages of those persons designated by the City to conduct the inspection .
(c)The Tax Administrator is authorized to execute a non-disclosure agreemen t
approved by the City Attorney to protect the confidentiality of customer informatio n
pursuant to California Revenue and Tax Code Sections 7284 .6 and 7284 .7.
(d)If a service supplier uses a billing agent or billing aggregator to bill, collect ,
and/or remit the tax, the service supplier shall : 1) provide to the Tax Administrator th e
name, address and telephone number of each billing agent and billing aggregato r
currently authorized by the service supplier to bill, collect, and/or remit the tax to th e
City ; and, 2) upon request of the Tax Administrator, deliver, or effect the delivery of, an y
information or records in the possession of such billing agent or billing aggregator that, i n
the opinion of the Tax Administrator, is necessary to verify the proper application ,
calculation, collection and/or remittance of such tax to the City .
(e)If any person subject to record-keeping under this Chapter unreasonably denie s
the Tax Administrator access to such records, or fails to produce the informatio n
requested in an administrative subpoena within the time specified, then the Tax
Administrator may impose a penalty of Five Hundred Dollars ($500 .00) on such perso n
for each day following : 1) the initial date that the person refuses to provide such access ;
or, 2) the due date for production of records as set forth in the administrative subpoena .
This penalty shall be in addition to any other penalty imposed under this Chapter .
3 .16 .190 Refunds
Whenever the amount of any tax has been overpaid or paid more than once or has bee n
erroneously or illegally collected or received by the Tax Administrator under this Chapte r
from a person or service supplier, it may be refunded as provided in this Section a s
follows :
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(a)Written Claim for Refund :The Tax Administrator may refund any tax that ha s
been overpaid or paid more than once or has been erroneously or illegally collected o r
received by the Tax Administrator under this Chapter from a person or service supplier ,
provided that no refund shall be paid under the provisions of this Section unless th e
claimant or his or her guardian, conservator, executor, or administrator has submitted a
written claim to the Tax Administrator within one year of the overpayment or erroneou s
or illegal collection of said tax . Such claim must clearly establish claimant's right to th e
refund by written records showing entitlement thereto . Nothing herein shall permit the
filing of a claim on behalf of a class or group of taxpayers unless each member of th e
class has submitted a written claim under penalty of perjury as provided by this Section .
(b)Compliance with Claims Act : The filing of a written claim pursuant t o
Government Code Section 935 is a prerequisite to any suit thereon . Any action brough t
against the City pursuant to this Chapter shall be subject to the provisions of Governmen t
Code Sections 945.6 and 946 .The Tax Administrator, or the City Council where th e
claim is in excess of Five Thousand Dollars ($5,000 .00), shall act upon the refund clai m
within the time period set forth in Government Code Section 912 .4.If the Tax
Administrator/City Council fails or refuses to act on a refund claim within the tim e
prescribed by Government Section 912 .4,the claim shall be deemed to have been rejecte d
by the City Council on the last day of the period within which the City Council wa s
required to act upon the claim as provided in Government Code Section 912 .4 .The Tax
Administrator shall give notice of the action in a form which substantially complies wit h
that set forth in Government Code Section 913 .
(c)Refunds to Service Suppliers :Notwithstanding the notice provisions o f
subsection (a) of this Section, the Tax Administrator may, at his or her discretion, giv e
written permission to a service supplier, who has collected and remitted any amount o f
tax in excess of the amount of tax imposed by this Chapter, to claim credit for suc h
overpayment against the amount of tax which is due the City upon a subsequent monthl y
return(s) to the Tax Administrator, provided that, prior to taking such credit by the
service supplier : 1) such credit is claimed in a return dated no later than one year from th e
date of overpayment or erroneous collection of said tax ; 2) the Tax Administrator i s
satisfied that the underlying basis and amount of such credit has been reasonabl y
established ; and, 3) in the case of an overpayment by a service user to the service supplie r
that has been remitted to the City, the Tax Administrator has received proof, to his or he r
satisfaction, that the overpayment has been refunded by the service supplier to the servic e
user in an amount equal to the requested credit .
3 .16 .200 Appeals .
(a)
The provisions of this Section apply to any decision (other than a decision relatin g
to a refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator . Any person aggrieved by
any decision (other than a decision relating to a refund pursuant to Section 3 .16 .190 o f
this Chapter), deficiency determination, assessment, or administrative ruling of the Ta x
Administrator, shall be required to comply with the appeals procedure of this Section .
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Compliance with this Section shall be a prerequisite to a suit thereon . [See Governme n
Code Section 935(b)].Nothing herein shall permit the filing of a claim or action on
behalf of a class or group of taxpayers .
(b)If any person is aggrieved by any decision (other than a decision relating to a
refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator ; he or she may appeal t o
the City Administrator, or designee, by filing a notice of appeal with the City Clerk
within fourteen (14) days of the date of the decision, deficiency determination ,
assessment, or administrative ruling of the Tax Administrator which aggrieved th e
service user or service supplier .
(c)The matter shall be scheduled for hearing before an independent hearing office r
selected by the City Administrator, or designee, no more than thirty (30) days from th e
receipt of the appeal . The appellant shall be served with notice of the time and place o f
the hearing, as well as any relevant materials, at least five (5) calendar days prior to the
hearing . The hearing may be continued from time to time upon mutual consent . At th e
time of the hearing, the appealing party, the Tax Administrator, and any other intereste d
person may present such relevant evidence as he or she may have relating to th e
determination from which the appeal is taken .
(d)Based upon the submission of such evidence and the review of the City's files, th e
hearing officer shall issue a written notice and order upholding, modifying or reversin g
the determination from which the appeal is taken . The notice shall be given withi n
fourteen (14) days after the conclusion of the hearing and shall state the reasons for th e
decision . The notice shall specify that the decision is final and that any petition fo r
judicial review shall be filed within ninety (90) days from the date of the decision i n
accordance with Code of Civil Procedure Section 1094 .6 .
(e)All notices under this Section may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .210 No Injunction/Writ of Mandate .
No injunction or writ of mandate or other legal or equitable process shall issue in any
suit, action, or proceeding in any court against this City or against any officer of the Cit y
to prevent or enjoin the collection under this Chapter of any tax or any amount of tax
required to be collected and/or remitted .
3 .16.220 Notice of Changes to Ordinance .
If a tax under this Chapter is added repealed, increased, reduced, or the tax base i s
changed, the Tax Administrator shall follow the notice requirements of California Publi c
Utilities Code Section 799 .
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EXHIBIT A
3 .16.230 Effect of State and Federal Reference/Authorization .
Unless specifically provided otherwise, any reference to a State or Federal statute in thi s
Chapter shall mean such statute as it may be amended from time to time, provided tha t
such reference to a statute herein shall not include any subsequent amendment thereto, o r
to any subsequent change of interpretation thereto by a State or Federal agency or cour t
of law with the duty to interpret such law, to the extent that such amendment or change o f
interpretation would require voter approval under California law, or to the extent tha t
such change would result in a tax decrease (as a result of excluding all or a part of a
utility service, or charge therefor, from taxation). Only to the extent voter approval woul d
otherwise be required or a tax decrease would result, the prior version of the statute (o r
interpretation) shall remain applicable ; for any application or situation that would not
require voter approval or result in a decrease of a tax, provisions of the amended statut e
(or new interpretation) shall be applicable to the maximum possible extent .
To the extent that the City's authorization to collect or impose any tax imposed under thi s
Chapter is expanded or limited as a result of changes in State or Federal law, n o
amendment or modification of this Chapter shall be required to conform the tax to thos e
changes, and the tax shall be imposed and collected to the full extent of the authorizatio n
up to the full amount of the tax imposed under this Chapter .
3 .16 .240 No Increase in Tax Percentage or Change in Methodology Without Vote r
Approval ; Amendment or Repeal .
This Title 3, Chapter 16 of the San Luis Obispo Municipal Code may be repealed o r
amended by the City Council without a vote of the People . However, as required by
Chapter XIIIC of the California Constitution,voter approval is required for an y
amendment provision that would increase the rate of any tax levied pursuant to thi s
Ordinance . The People of the City of San Luis Obispo affirm that the following action s
shall not constitute an increase of the rate of a tax :
(1)The restoration of the rate of the tax to a rate that is no higher than that set by thi s
Ordinance, if the City Council has acted to reduce the rate of the tax ;
(2)An action that interprets or clarifies the methodology of the tax, or any definitio n
applicable to the tax, so long as such interpretation or clarification (even if contrary t o
some prior interpretation or clarification) is not inconsistent with the language of thi s
Ordinance ;
(3)The establishment a class of persons that is exempt or excepted from the tax or th e
discontinuation of any such exemption or exception (other than the discontinuation of a n
exemption or exception specifically set forth in this Ordinance); and
(4)The collection of the tax imposed by this ordinance, even if the City had, for som e
period of time, failed to collect the tax .
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3 .16 .250 Remedies Cumulative .
All remedies and penalties prescribed by this Chapter or which are available under an y
other provision of law or equity, including but not limited to the California False Claim s
Act (Government Code Section 12650 et seq .)and the California Unfair Practices Ac t
(Business and Professions Code Section 17070 et seq .),are cumulative . The use of on e
or more remedies by the City shall not bar the use of any other remedy for the purpose o f
enforcing the provisions of this Chapter .
3 .16 .260 Interaction With Prior Tax .
(a).Collection of Tax by Service Providers . Service providers shall begin to collect th e
tax imposed by this amended Chapter 16 as soon as feasible after the effective date of th e
Chapter, but in no event later than permitted by Section 799 of the California Public
Utilities Code .
(b).Satisfaction of Tax Obligation by Service Users . Prior to April 1, 2013,any perso n
who pays the tax levied pursuant to Title 3, Chapter 16 of this Code,as it existed prior t o
its amendment as provided herein, with respect to any charge for a service shall b e
deemed to have satisfied his or her obligation to pay the tax levied pursuant to Title 3 ,
Chapter 16 as amended herein, with respect to that charge . The intent of this paragraph i s
to prevent the imposition of multiple taxes upon a single utility charge during th e
transition period from the prior Utility Users' Tax ordinance to the amended Utilit y
Users' Tax ordinance (which transition period ends April 1, 2013) and to permit servic e
providers or other persons with an obligation to remit the tax hereunder, during that
transition period, to satisfy their collection obligations by collecting either tax .
(c) In the event that a final court order should determine that the election enacting thi s
Title 3, Chapter 16 (as amended herein) is invalid for whatever reason, or that any ta x
imposed under this Title 3, Chapter 16 (as amended herein) is invalid in whole or in part ,
then the taxes imposed under Title 3, Chapter 16 of this Code, as it existed prior to it s
amendment as provided herein, shall automatically continue to apply with respect to any
service for which the tax levied pursuant to this Chapter 16 has been determined to b e
invalid . Such automatic continuation shall be effective beginning as of the first date of
service (or billing date) for which the tax imposed by this Chapter is not valid . However ,
in the event of an invalidation, any tax (other than a tax that is ordered refunded by th e
court or is otherwise refunded by the City) paid by a person with respect to a service an d
calculated pursuant to this Title 3, Chapter 16 (as amended herein) shall be deemed t o
satisfy the tax imposed under Title 3, Chapter 16, as it existed prior to its amendment a s
provided herein, on that service, so long as the tax is paid with respect to a service provide d
no later than six months subsequent to the date on which the final court order is published .
SECTION 2 .Effective Date . This Chapter, if approved by the electorate of the Cit y
of San Luis Obispo at the General Municipal Election of November 6, 2012 shal l
become effective immediately upon the declaration of the results of that election b y
the City Council of the City of San Luis Obispo .
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EXHIBIT A
SECTION 3 .Severability . If any section, subsection, sentence, clause, phrase, o r
portion of this Ordinance is for any reason held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining portions of this Ordinance shal l
nonetheless remain in full force and effect . The People hereby declares that the y
would have adopted each section, subsection, sentence, clause, phrase, or portion o f
this Ordinance, irrespective of the fact that any one or more sections, subsections ,
sentences, clauses, phrases, or portions of this Ordinance be declared invalid o r
unenforceable .
SECTION 4 .Ratification of Prior Tax . The People of the City of San Luis Obisp o
hereby ratify and approve the past collection of the Utility Users' Tax Title 3, Chapte r
16 of the San Luis Obispo Municipal Code, as it existed prior to the effective date o f
this Ordinance .
SECTION 5 .Execution . The Mayor is hereby authorized to attest to the adoption o f
the Ordinance by the voters of the City by signing where indicated below .
I hereby certify that the foregoing Ordinance was PASSED, APPROVE D
and ADOPTED by the People of the City of San Luis Obispo, California voting o n
the 6th day of November, 2012 .
Mayor
ATTEST :
City Cler k
APPROVED AS TO FORM :
City Attorney
2 6
PH1-36
ATTACHMENT 3
RESOLUTION NO . (2012 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISP O
SETTING PRIORITIES FOR FILING WRITTEN ARGUMENTS REGARDING A CIT Y
MEASURE AND DIRECTING THE CITY ATTORNEY FOR THE CITY OF SAN LUI S
OBISPO TO PREPARE THE IMPARTIAL ANALYSI S
WHEREAS,a General Municipal Election is to be held in the City of San Luis Obisp o
on November 6, 2012, at which time there will be submitted to the voters in the City th e
following measure :
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Lui s
Obispo as follows :
SECTION 1 . That pursuant to Elections Code Section 9282, for measures placed on th e
ballot by the legislative body, the legislative body or any member or members of the legislativ e
body authorized by that body, or any individual voter who is eligible to vote on the measure, o r
bona fide association of citizens, or any combination of voters and associations, may file a writte n
argument for or against any city measure . The City Council authorizes the following member(s) of
its body
Council Member in Favor Council Member Agains t
Council Member in Favor Council Member Agains t
Council Member in Favor Council Member Against
Council Member in Favor Council Member Agains t
Council Member in Favor Council Member Agains t
to file written arguments not exceeding 300 words regarding the City measure as specified above ,
accompanied by the printed names and signature of the authors submitting it, in accordance wit h
Article 4, Chapter 3, Division 9 of the Elections Code of the State of California .
The arguments may be changed or withdrawn until and including the date fixed by the City Cler k
after which no arguments for or against the City measure may be submitted to the City Clerk .
Shall an ordinance be adopted that would 1 )
reduce the City of San Luis Obispo's curren t
Utility Users Tax on telecommunication an d
video services from 5% to 4 .8%; 2) clarify the
scope and application of the tax to all taxabl e
utilities ; and 3) modernize the method of
calculating and collecting the tax to reflect
technological advances and changes in state an d
federal law so that all taxpayers are treated
equally regardless of technology used?
Yes
PH1-37
ATTACHMENT 3
The arguments shall be filed with the City Clerk, signed, with the printed names and signatures o f
the authors submitting it, or if submitted on behalf of an organization, the name of the organization ,
and the printed name and signature of at least one of its principal officers who is the author of th e
argument . The arguments shall be accompanied by the Form of Statement To Be Filed By Author s
of Argument .
SECTION 2 . That the City Council directs the City Clerk to transmit a copy of th e
measure to the City Attorney . The City Attorney shall prepare an impartial analysis of the measur e
not exceeding 500 words showing the effect of the measure on the existing law and the operation o f
the measure . The impartial analysis shall be filed by the date set by the City Clerk for the filing o f
primary arguments .
SECTION 3.That the full text of the ordinance submitted to the voters is on file in the Office o f
the City Clerk and available for viewing on the City's website,www .slocity.org,and is attached as
Exhibit A.
SECTION 3 :That in all particulars not recited in this resolution, the election shall be hel d
and conducted as provided by law for holding municipal elections .
SECTION 4 . That the City Clerk shall certify to the passage and adoption of thi s
resolution and enter it into the book or original resolutions .
Upon motion of seconded by , and on the
following vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 10th day of July, 2012 .
Mayor Jan Marx
ATTEST :
Sheryll Schroede r
Interim City Clerk
PH 1-38
ATTACHMENT 3
APPROVED AS TO FORM :
J . Christine Dietric k
City Attorney
EXHIBIT A
ORDINANCE NO . 2012-??
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNI A
REPEALING AND RE-ENACTING IN FULL TITLE 3, CHAPTER 16 OF THE SA N
LUIS OBISPO MUNICIPAL CODE WITH RESPECT TO UTILITY USER'S TAX .
THE PEOPLE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA D O
ORDAIN AS FOLLOWS :
SECTION 1 .Title 3, Chapter 16 of the San Luis Obispo Municipal Code i s
hereby repealed and re-enacted in full , to read as follows :
Chapter 1 6
Utility Users' Ta x
3 .16 .010 Short Title and Purpos e
3 .16 .020 Definition s
3 .16 .030 Constitutional, Statutory, and Other Exemption s
3 .16 .040 Telecommunication Users' Tax
3 .16 .050 Electricity Users' Tax
3 .16 .060 Gas Users Ta x
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity
3 .16 .080 Video Users' Tax
3 .16 .090 Water Users' Tax
3 .16 .100 Bundling Taxable Items with Nontaxable Item s
3 .16 .110 Substantial Nexus/Minimum Contact s
3 .16 .120 Duty to Collect – Procedure s
3 .16 .130 Collection Penalties – Service Supplier s
3 .16 .140 Actions to Collect
3 .16 .150 Deficiency Determination and Assessment – Tax Application Error s
3 .16 .160 Administrative Remedy - Nonpaying Service User s
3 .16 .170 Additional Powers and Duties of the Tax Administrato r
3 .16 .180 Record s
3 .16 .190 Refunds
3 .16 .200 Appeal s
3 .16 .210 No Injunction/Writ of Mandat e
3 .16 .220 Notice of Changes to Chapte r
3 .16 .230 Future Amendment to Cited Statut e
3 .16.240 No Increase in Tax Percentage or Change in Methodology without Vote r
Approva l
3 .16 .250 Remedies Cumulativ e
3 .16 .260 Interaction with Prior Ta x
3 .16 .010 Short Title and Purpose
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PH1-40
EXHIBIT A
This Chapter 16 shall be known as the "Utility Users' Tax Law of the City of Sa n
Luis Obispo". The taxes imposed and levied by the provisions of this chapter ar e
solely for the purpose of providing revenue for the usual and current expenses o f
the city . The provisions of this chapter are not enacted for regulatory purposes .
3 .16 .020 Definition s
The following words and phrases whenever used in this Chapter 16, shall b e
construed as defined in this Section .
(a)
"Ancillary telecommunication services"means services that ar e
associated with or incidental to the provision, use or enjoyment of telecommunication s
services, including but not limited to the following services :
(1)"Conference bridging service"means an ancillary service that links tw o
(2) or more participants of an audio or video conference call and may include th e
provision of a telephone number . Conference bridging service does not include th e
telecommunications services used to reach the conference bridge .
(2)"Detailed telecommunications billing service"means an ancillar y
service of separately stating information pertaining to individual calls on a customer's
billing statement .
(3)"Directory assistance"means an ancillary service of providing telephon e
number information, and/or address information .
(4)"Vertical service"means an ancillary service that is offered in connectio n
with one or more telecommunications services, which offers advanced calling feature s
that allow customers to identify callers and to manage multiple calls and call connections ,
including conference bridging services .
(5)"Voice mail service"means an ancillary service that enables the custome r
to store, send or receive recorded messages . Voice mail service does not include an y
vertical services that the customer may be required to have in order to utilize the voic e
mail service
(b)
"Ancillary video services"means services that are associated with o r
incidental to the provision or delivery of video services, including but not limited t o
electronic program guide services, recording services, search functions,or other
interactive services or communications that are associated with or incidental to th e
provision, use or enjoyment of video services .
(c)
"Billing address"shall mean the mailing address of the service use r
where the service supplier submits invoices or bills for payment by the customer .
(d)
"City" shall mean the City of San Luis Obispo .
PH1-41'
EXHIBIT A
(e)
"Gas" shall mean natural or manufactured gas or any alternat e
hydrocarbon fuel which may be substituted therefor .
(f)
"Individual Service"shall mean utility service at a single contiguou s
location . A service user with more than one meter or billing invoice per utility service a t
a single contiguous location may combine all billings for purposes of calculating th e
maximum tax amount .
(g)
"Mobile telecommunications service"has the meaning and usage as se t
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C.Section 124)and th e
regulations thereunder .
(h)
"Month"shall mean a calendar month .
(i)
"Non-Utility Service Supplier" means :
(1)a service supplier, other than a supplier of electric distribution services to al l
or a significant portion of the City, which generates electricity for sale to others,
and shall include but is not limited to any publicly-owned electric utility, investor -
owned utility, cogenerator, distributed generation provider, exempt wholesal e
generator (15 U.S.C. Section 79z-5a),municipal utility district, federal powe r
marketing agency, electric rural cooperative, or other supplier or seller of
electricity ;
(2)an electric service provider (ESP), electricity broker, marketer, aggregator ,
pool operator, or other electricity supplier other than a supplier of electri c
distribution services to all or a significant portion of the City, which sells o r
supplies electricity or supplemental services to electricity users within the City ; o r
(3)a gas service supplier, aggregator, marketer or broker, other than a supplier o f
gas distribution services to all or a significant portion of the City, which sells o r
supplies gas or supplemental services to gas users within the City .
(j) "Paging service"means a "telecommunications service" that provide s
transmission of coded radio signals for the purpose of activating specific pagers ; suc h
transmissions may include messages and/or sounds .
(k)
"Person"shall mean, without limitation, any natural individual, firm ,
trust, common law trust, estate, partnership of any kind, association, syndicate, club, join t
stock company, joint venture, limited liability company, corporation (including foreign ,
domestic, and non-profit), municipal district or municipal corporation (other than th e
City), cooperative, receiver, trustee, guardian, or other representative appointed by orde r
of any court .
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PH1-42
EXHIBIT A
(1)
"Place of primary use"means the street address representative of where
the customer's use of the telecommunications service primarily occurs, which must b e
the residential street address or the primary business street address of the customer .
(m)
"Post-paid telecommunication service"means the telecommunicatio n
service obtained by making a payment on a communication-by-communication basi s
either through the use of a credit card or payment mechanism such as a bank card, trave l
card, credit card, or debit card, or by charge made to a service number which is no t
associated with the origination or termination of the telecommunication service .
(n)
"Prepaid telecommunication service"means the right to acces s
telecommunication services, which must be paid for in advance and which enables th e
origination of communications using an access number or authorization code, whethe r
manually or electronically dialed, and that is sold in predetermined units or dollars o f
which the number declines with use in a known amount .
(o)
"Private telecommunication service"means a telecommunicatio n
service that entitles the customer to exclusive or priority use of a communication s
channel or group of channels between or among termination points, regardless of th e
manner in which such channel or channels are connected, and includes switchin g
capacity, extension lines, stations, and any other associated services that are provided i n
connection with the use of such channel or channels . A communications channel is a
physical or virtual path of communications over which signals are transmitted between o r
among customer channel termination points (i . e ., the location where the customer eithe r
inputs or receives the communications).
(p)"Service address"means the residential street address or the busines s
street address of the service user . For a telecommunication or video service user ,
"service address" means either :
(1)The location of the service user's telecommunication equipment fro m
which the telecommunication originates or terminates, regardless of where th e
telecommunication is billed or paid ; or,
(2)If the location in subsection (1) of this definition is unknown (e .g ., mobil e
telecommunications service or VoIP service), the service address means the location o f
the service user's place of primary use .
(3)For prepaid telecommunication service, "service address" means the locatio n
associated with the service number or, if not known, the point of sale of the services .
(q)
"Service supplier"shall mean any entity or person, including the City ,
that provides, sells, or resells a utility service to a user of such service within the City .
(r)
"Service user"shall mean a person required to pay a tax imposed unde r
the provisions of this Chapter .
PH1-43
EXHIBIT A
(s)"State" shall mean the State of California .
(t)"Streamlined Sales and Use Tax Agreement"means the multi-stat e
agreement commonly known and referred to as the Streamlined Sales and Use Ta x
Agreement, as it is amended from time to time .
(u)"Tax Administrator"shall mean the Finance Director, or his or he r
designee .
(v)"Telecommunications service"means the transmission, conveyance, o r
routing of voice, data, audio, video, or any other information or signals to a point, o r
between or among points, whatever the technology used . The term "telecommunication s
services" includes such transmission, conveyance, or routing in which compute r
processing applications are used to act on the form, code or protocol of the content fo r
purposes of transmission, conveyance or routing without regard to whether such service s
are referred to as voice over internet protocol (VoIP) services or are classified by th e
Federal Communications Commission as enhanced or value added, and includes vide o
and/or data services that is functionally integrated with "telecommunication services ."
"Telecommunications services" include, but are not limited to the following services ,
regardless of the manner or basis on which such services are calculated or billed :
ancillary telecommunication services ; intrastate, interstate, and internationa l
telecommunication services ; mobile telecommunications service ; prepai d
telecommunication service ; post-paid telecommunication service ; private
telecommunication service ; paging service ; 800 service (or any other toll-free number s
designated by the Federal Communications Commission); 900 service (or any othe r
similar numbers designated by the Federal Communications Commission for service s
whereby subscribers who call in to pre-recorded or live service).
(w)"Video programming"means those programming services commonly
provided to subscribers by a "video service supplier" including but not limited to basi c
services, premium services, audio services, video games, pay-per-view services, video on
demand, origination programming, or any other similar services, regardless of the conten t
of such video programming, or the technology used to deliver such services, an d
regardless of the manner or basis on which such services are calculated or billed .
(x)"Video services"means "video programming" and any and all service s
related to the providing, recording, delivering, use or enjoyment of "video programming "
(including origination programming and programming using Internet Protocol, e .g ., IP-
TV and IP-Video) using one or more channels by a "video service supplier," regardles s
of the technology used to deliver, store or provide such services, and regardless of th e
manner or basis on which such services are calculated or billed, and includes ancillar y
video services, data services, "telecommunication services," or interactiv e
communication services that are functionally integrated with "video services ."
(y)"Video service supplier"means any person, company, or service whic h
provides or sells one or more channels of video programming, or provides or sells the
5
PH 1-44
EXHIBIT A
capability to receive one or more channels of video programming,including any
communications that are ancillary, necessary or common to the provision, use o r
enjoyment of the video programming, to or from a business or residential address in th e
City, where some fee is paid, whether directly or included in dues or rental charges fo r
that service, whether or not public rights-of-way are utilized in the delivery of the vide o
programming or communications . A "video service supplier" includes, but is not limite d
to, multichannel video programming distributors (as defined in 47 U .S .C .A. Section
522(13)); open video systems (OVS) suppliers ; and suppliers of cable television ; maste r
antenna television ; satellite master antenna television ; multichannel multipoint
distribution services (MMDS); video services using internet protocol (e.g ., IP-TV and IP-
Video, which provide, among other things, broadcasting and video on demand), direct
broadcast satellite to the extent federal law permits taxation of its video services,now or
in the future ; and other suppliers of video services (including two-way communications),
whatever their technology .
(z)
"VoIP (Voice Over Internet Protocol)"means the digital process o f
making and receiving real-time voice transmissions over any Internet Protocol network .
(aa)"800 Service"means a "telecommunications service" that allows a calle r
to dial a toll-free number without incurring a charge for the call . The service is typicall y
marketed under the name "800," "855," "866," "877," and "888" toll-free calling, an d
any subsequent numbers designated by the Federal Communications Commission .
(bb)"900 Service"means an inbound toll "telecommunications service"
purchased by a subscriber that allows the subscriber's customers to call in to th e
subscriber's prerecorded announcement or live service . "900 service" does not includ e
the charge for : collection services provided by the seller of the "telecommunication s
services" to the subscriber,or service or product sold by the subscriber to the subscriber's
customer . The service is typically marketed under the name "900" service, and an y
subsequent numbers designated by the Federal Communications Commission .
3.16.030 Constitutional, statutory, and other exemptions .
(a)Nothing in this Chapter shall be construed as imposing a tax upon any person or
service when the imposition of such tax upon such person or service would be i n
violation of a Federal or State statute, the Constitution of the United States or th e
Constitution of the State .
(b)Any service user that is exempt from the tax imposed by this Chapter pursuant t o
subsection (a) of this Section shall file an application with the Tax Administrator for an
exemption ; provided, however, this requirement shall not apply to a service user that is a
State or Federal agency or subdivision with a commonly recognized name for suc h
service . Said application shall be made upon a form approved by the Tax Administrator
and shall state those facts, declared under penalty of perjury, which qualify the applicant
for an exemption, and shall include the names of all service suppliers serving that servic e
user. If deemed exempt by the Tax Administrator, such service user shall give the Tax
6
PH1-45
EXHIBIT A
Administrator timely written notice of any change in service suppliers so that the Ta x
Administrator can properly notify the new service supplier of the service user's ta x
exempt status . A service user that fails to comply with this Chapter shall not be entitled t oarefund of a users' tax collected and remitted to the Tax Administrator from such servic e
user as a result of such noncompliance .
The decision of the Tax Administrator may be appealed pursuant to Sectio n
3 .16 .200 of this Chapter . Filing an application with the Tax Administrator and appeal t o
the City Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a
prerequisite to a suit thereon .
(c)The City Council may, by resolution, establish one or more classes of persons o r
one or more classes of utility service otherwise subject to payment of a tax imposed b y
this Chapter and provide that such classes of persons or service shall be exempt, in whol e
or in part from such tax for a specified period of time .
(d)If a billing for utility services includes charges for two or more household s
situated within nonprofit retirement facilities which (1) are operated solely for th e
accommodation of persons with low incomes and (2) which qualify for the welfar e
exemption set forth in the California Revenue and Taxation Code, and if the charges fo r
such services are paid by the operators of the retirement facilities, the operators shall b e
entitled to an annual refund of all taxes paid under the provisions of this ordinance . The
procedure for obtaining such refunds shall be established by the Tax Administrator ,
including the requirement for whatever proof he or she deems necessary to establis h
qualification for refund .
3 .16 .040 Telecommunication Users' Tax .
(a)There is hereby imposed a tax upon every person in the City usin g
telecommunication services . The tax imposed by this Section shall be at the rate of fou r
and eight-tenths percent (4 .8%) of the charges made for such services and shall b e
collected from the service user by the telecommunication services supplier or its billin g
agent. There is a rebuttable presumption that telecommunication services, which ar e
billed to a billing or service address in the City, are used, in whole or in part, within th e
City's boundaries, and such services are subject to taxation under this Section . There i s
also a rebuttable presumption that prepaid telecommunication services sold within th e
city are used, in whole or in part, within the City and are therefore subject to taxatio n
under this Section . If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax . As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the telecommunication services .
(b)"Mobile telecommunications service" shall be sourced in accordance with th e
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C.
Section 124).The Tax Administrator may issue and disseminate to telecommunication
7
PH1-46
EXHIBIT A
service suppliers, which are subject to the tax collection requirements of this Chapter ,
sourcing rules for the taxation of other telecommunication services, including but no t
limited to post-paid telecommunication services, prepaid telecommunication services ,
VoIP, and private communication services, provided that such rules are based upo n
custom and common practice that further administrative efficiency and minimize mult i
jurisdictional taxation (e .g., Streamlined Sales and Use Tax Agreement).
(c)The Tax Administrator may issue and disseminate to telecommunication service
suppliers, which are subject to the tax collection requirements of this Chapter, a n
administrative ruling identifying those telecommunication services, or charges therefore ,
that are subject to or not subject to the tax of subsection (a) above .
(d)As used in this Section, the term "telecommunication services" shall include, bu t
is not limited to, charges for : connection, reconnection, termination, movement, o r
change of telecommunication services ; late payment fees ; detailed billing ; central offic e
and custom calling features (including but not limited to call waiting, call forwarding ,
caller identification and three-way calling); voice mail and other messaging services ;
directory assistance ; access and line charges ; universal service charges ; regulatory or
administrative fees, charges or surcharges ; cost recovery charges or surcharges fo r
programs imposed by state or federal law ; local number portability charges ; and text and
instant messaging . "Telecommunication services" shall not include digital downloads tha t
are not "ancillary telecommunication services," such as music, ringtones, games, an d
similar digital products .
(e)To prevent actual multi jurisdictional taxation of telecommunication service s
subject to tax under this Section, any service user, upon proof to the Tax Administrato r
that the service user has previously paid the same tax in another state or city on suc h
telecommunication services, shall be allowed a credit against the tax imposed to th e
extent of the amount of such tax legally imposed in such other state or city ; provided,
however, the amount of credit shall not exceed the tax owed to the City under thi s
Section .
(g)
The tax on telecommunication services imposed by this Section shall be collecte d
from the service user by the service supplier . The amount of tax collected in one mont h
shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .050 Electricity Users Tax .
(a) There is hereby imposed a tax upon every person using electricity in the City . The tax
imposed by this Section shall be at the rate of five percent (5%) of the charges made fo r
such electricity, and for any supplemental services or other associated activities directl y
related to and/or necessary for the provision of electricity to the service user, which ar e
provided by a service supplier or non-utility service supplier to a service user . The tax
shall be collected from the service user by the service supplier or non-utility service
supplier, or its billing agent .
PH1-47
EXHIBIT A
(b) As used in this Section, the term "charges" shall apply to all services, components an d
items that are : i) necessary for or common to the receipt, use or enjoyment of electri c
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for electric service by a local distribution company to a class of retail customers . Th e
term "charges" shall include, but is not limited to, the following charges :
(1)energy charges ;
(2)distribution or transmission charges ;
(3)metering charges ;
(4)stand-by, reserves, firming, ramping, voltage support, regulation, emergency ,
or other similar charges for supplemental services to self-generation service users ;
(5)customer charges, late charges, service establishment or reestablishmen t
charges, demand charges, fuel or other cost adjustments, power exchange charges ,
independent system operator (ISO) charges, stranded investment or competitiv e
transition charges (CTC), public purpose program charges, nuclea r
decommissioning charges, trust transfer amounts (bond financing charges),
franchise fees, franchise surcharges, annual and monthly charges, and othe r
charges, fees or surcharges which are necessary for or common to the receipt, us e
or enjoyment of electric service ; and,
(6)charges, fees, or surcharges for electricity services or programs which ar e
mandated by the California Public Utilities Commission or the Federal Energ y
Regulatory Commission, or by any state or federal law, whether or not suc h
charges, fees, or surcharges appear on a bundled or line item basis on the
customer billing .
(c) As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the electricity or services related to the provision of suc h
electricity .
(d) The Tax Administrator, from time to time, may survey the electric service supplier s
to identify the various unbundled billing components of electric retail service that the y
commonly provide to residential and commercial/industrial customers in the of the City ,
and the charges therefor, including those items that are mandated by state or federa l
regulatory agencies as a condition of providing such electric service . The Tax
Administrator, thereafter, may issue and disseminate to such electric service suppliers a n
administrative ruling identifying those components and items which are : i) necessary fo r
or common to the receipt, use or enjoyment of electric service ; or, ii) currently are or
historically have been included in a single or bundled rate for electric service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e) As used in this Section, the term "using electricity" shall not include the mer e
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale .
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PH1-48
EXHIBIT A
(f) The tax on electricity provided by self-production or by a non-utility service supplie r
not under the jurisdiction of this Chapter 16 shall be collected and remitted in the manne r
set forth in Section 3 .16 .070 of this Chapter . All other taxes on charges for electricit y
imposed by this Section shall be collected from the service user by the electric servic e
supplier or its billing agent . The amount of tax collected in one (1) month shall b e
remitted to the Tax Administrator, and must be received by the Tax Administrator on o r
before the twentieth (20 `h) day of the following month ; or, at the option of the perso n
required to collect and/or remit the tax, such person shall remit an estimated amount o f
tax measured by the tax billed in the previous month or upon the payment pattern of th e
service user, which must be received by the Tax Administrator on or before the twentiet h
(20th) day of the following month, provided that such person shall submit an adjuste d
payment or request for credit, as appropriate, within sixty (60) days following eac h
calendar quarter . The credit, if approved by the Tax Administrator, may be applie d
against any subsequent remittance that becomes due .
3 .16.060 Gas Users Tax .
(a)There is hereby imposed a tax upon every person using gas in the City, which i s
transported and delivered through a pipeline or by mobile transport . The tax imposed b y
this Section shall be at the rate of five percent (5%) of the charges made for such gas ,
including all services related to the storage, transportation and delivery of such gas . The
tax shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent, and shall apply to all use's of gas, including but not limite d
to, heating, electricity generation, and the use of gas as a component of a manufacture d
product .
(b)As used in this Section, the term "charges" shall apply to all services, components and
items for gas service that are : i) necessary for or common to the receipt, use o r
enjoyment of gas service ; or, ii) currently are or historically have been included in a
single or bundled rate for gas service by a local distribution company to a class of retai l
customers . The term "charges" shall include, but is not limited to, the following charges :
(1)the commodity charges for purchased gas, or the cost of gas owned by th e
service user (including the actual costs attributed to drilling, production, lifting ,
storage, gathering, trunkline, pipeline, and other operating costs associated wit h
the production and delivery of such gas), which is delivered through a ga s
pipeline distribution system ;
(2)gas transportation charges (including interstate charges to the extent no t
included in commodity charges);
(3)storage charges ; provided, however, that the service supplier shall not b e
required to apply the tax to any charges for gas storage services when the servic e
supplier cannot, as a practical matter, determine the jurisdiction where such store d
gas is ultimately used; but it shall be the obligation of the service user to self-
collect the amount of tax not applied to any charge for gas storage by the servic e
supplier and to remit the tax to the appropriate jurisdiction ;
1 0
PHI 49
EXHIBIT A
(4)capacity or demand charges, late charges, service establishment o r
reestablishment charges, transition charges, customer charges, minimum charges ,
annual and monthly charges, and any other charges which are necessary for o r
common to the receipt, use or enjoyment of gas service ; and,
(5)charges, fees, or surcharges for gas services or programs which are mandate d
by the California Public Utilities Commission or the Federal Energy Regulator y
Commission, or by any state or federal law, whether or not such charges, fees, o r
surcharges appear on a bundled or line item basis on the customer billing .
(c)As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the gas or services related to the delivery of such gas .
(d)The Tax Administrator, from time to time, may survey the gas service suppliers t o
identify the various unbundled billing components of gas retail service that they
commonly provide to residential and commercial/industrial customers in the City, and th e
charges therefor, including those items that are mandated by state or federal regulator y
agencies as a condition of providing such gas service . The Tax Administrator, thereafter ,
may issue and disseminate to such gas service suppliers an administrative rulin g
identifying those components and items which are : i) necessary for or common to th e
receipt, use or enjoyment of gas service ; or, ii) currently are or historically have bee n
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers . Charges for such components and items shall be subject to th e
tax of subsection (a) above.
(e)There shall be excluded from the calculation of the tax imposed in this Section,
charges made for gas which is to be resold and delivered through a pipeline distributio n
system .
(f)The tax on gas provided by self-production or by a non-utility service supplier no t
under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner se t
forth in Section 3 .16 .070 . All other taxes on charges for gas imposed by this Sectio n
shall be collected from the service user by the gas service supplier or its billing agent .
The amount of tax collected in one (1) month shall be remitted to the Tax Administrator ,
and must be received by the Tax Administrator, on or before the twentieth (20 `h) day of
the following month ; or, at the option of the person required to collect and/or remit th e
tax, such person shall remit an estimated amount of tax measured by the tax billed in th e
previous month or upon the payment pattern of the service user, which must be receive d
by the Tax Administrator on or before the twentieth (20 th) day of the following month ,
provided that such person shall submit an adjusted payment or request for credit, a s
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator, may be applied against any subsequent remittance
that becomes due .
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity .
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PH1-50
EXHIBIT A
(a)Any service user subject to the tax imposed by Section 3 .16 .050 or by Sectio n
3 .16 .060 of this Chapter, which produces gas or electricity for self-use regardless o f
technology used to produce such gas or electricity ; which receives gas or electricity ,
including any related supplemental services, directly from a non-utility service supplie r
not under the jurisdiction of this Chapter ;or which, for any other reason, is not having th e
full tax collected and remitted by its service supplier, a non-utility service supplier, or it s
billing agent on the use of gas or electricity in the City, including any relate d
supplemental services, shall report said fact to the Tax Administrator and shall remit th e
tax due directly to the Tax Administrator within thirty (30) days of such use, based on th e
charges for, or value of, such gas or electricity,or supplemental services, as provided in
subsection (b). In lieu of paying said actual tax, the service user may, at its option, remi t
to the Tax Administrator within thirty (30) days of such use an estimated amount of ta x
measured by the tax billed in the previous month, or upon the payment pattern of simila r
customers of the service supplier using similar amounts of gas or electricity, provide d
that the service user shall submit an adjusted payment or request for credit, a s
appropriate, within sixty (60) days following each calendar quarter . The credit, if
approved by the Tax Administrator in writing, may be applied against any subsequent ta x
bill that becomes due .
(b)The Tax Administrator may require said service user to identify its non-utility servic e
supplier, and otherwise provide, subject to audit : invoices ; books of account ; or othe r
satisfactory evidence documenting the quantity of gas or electricity used, including an y
related supplemental services, and the cost or price thereof . If the service user is unabl e
to provide such satisfactory evidence, or if the administrative cost of calculating the ta x
in the opinion of the Tax Administrator is excessive, the Tax Administrator ma y
determine the tax by applying the tax rate to the equivalent charges the service use r
would have incurred if the gas or electricity used, including any related supplementa l
services, had been provided by the service supplier that is the primary supplier of gas o r
electricity within the City . Rate schedules for this purpose shall be available from th e
City.
3 .16 .080 Video Users' Tax.
(a)There is hereby imposed a tax upon every person in the City using video services .
The tax imposed by this section shall be at the rate of four and eight-tenths percen t
(4 .8%) of the charges made for such services and shall be collected from the service use r
by the video service supplier, or its billing agent . There is a rebuttable presumption that
video services, which are billed to a billing or service address in the City, are used, i n
whole or in part, within the City's boundaries, and such services are subject to taxatio n
under this Chapter. If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax .
(b)As used in this section, the term "charges" shall include, but is not limited to, charge s
for the following :
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(1)regulatory fees and surcharges, franchise fees and access fees (PEG);
(2)initial installation of equipment necessary for provision and receipt of vide o
services ;
(3)late fees, collection fees, bad debt recoveries, and return check fees ;
(4)activation fees, reactivation fees, and reconnection fees ;
(5)video programming and video services ;
(6)ancillary video programming services (e .g ., electronic program guid e
services, search functions, recording functions, or other interactive services o r
communications that are ancillary, necessary or common to the use or enjoymen t
of the video services);
(7)equipment leases (e .g ., remote, recording and/or search devises ; converters);
and,
(8)service calls, service protection plans, name changes, changes of services, an d
special services .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the video services .
(d)The Tax Administrator may issue and disseminate to video service suppliers, whic h
are subject to the tax collection requirements of this Chapter, an administrative rulin g
identifying those video services, or charges therefor, that are subject to or not subject t o
the tax of subsection (a) above .
(e)The tax imposed by this section shall be collected from the service user by the vide o
service supplier, its billing agent, or a reseller of such services . In the case of vide o
service, the service user shall be deemed to be the purchaser of the bulk video servic e
(e .g ., an apartment owner), unless such service is resold to individual users, in which cas e
the service user shall be the ultimate purchaser of the video service . The amount of ta x
collected in one (1) month shall be remitted to the Tax Administrator, and must b e
received by the Tax Administrator on or before the twentieth (20th) day of the followin g
month.
3 .16.090 Water Users' Tax .
(a)There is imposed a tax upon every person using water in the City which i s
transported and delivered through a pipeline distribution system . The tax imposed by this
section shall be at the rate of five percent (5%) of the charges made for such water .
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(b)As used in this section, the term "charges" shall apply to all services, component s
and items that are : i) necessary for or common to the receipt, use or enjoyment of wate r
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for water service by a local distribution company to a class of retail customers . The term
"charges shall include, but is not limited to, the following charges : water commodity
charges (potable and non-potable); distribution or transmission charges ; meterin g
charges ; customer charges ; fire protection services ; late charges ; service establishment or
reestablishment charges ; franchise fees ; franchise surcharges ; annual and monthl y
charges ; and other charges, fees and surcharges which are necessary for or common t o
the receipt, use or enjoyment of water service ; and, charges, fees, or surcharges for wate r
services or programs, which are mandated by a water district or a state or federal agency ,
whether or not such charges, fees, or surcharges appear on a bundled or line item basis o n
the customer billing.
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the water services .
(d)The Tax Administrator, from time to time, may survey the water service suppliers i n
the City to identify the various unbundled billing components of water retail service tha t
they commonly provide to residential and commercial/industrial customers in the City ,
and the charges therefor, including those items that are mandated by a water district or a
state or federal agency as a condition of providing such water service . The Tax
Administrator, thereafter, may issue and disseminate to such water service suppliers a n
administrative ruling identifying those components and items which are : i) necessary for
or common to the receipt, use or enjoyment of water service ; or, ii) currently are o r
historically have been included in a single or bundled rate for water service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e)The tax on water service imposed by this section shall be collected from the servic e
user by the water service supplier or its billing agent . The amount of tax collected in on e
(1) month shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16.100 Bundling Taxable Items .
If any nontaxable charges are combined with and not separately stated from taxabl e
service charges on the customer bill or invoice of a service supplier, the combined charg e
is subject to tax unless the service supplier identifies, by reasonable and verifiabl e
standards, the portions of the combined charge that are nontaxable and taxable throug h
the service supplier's books and records kept in the regular course of business, and i n
accordance with generally accepted accounting principles, and not created an d
maintained for tax purposes . If the service supplier offers a combination of taxable and
non-taxable services, and the charges are separately stated, then for taxation purposes, th e
values assigned the taxable and non-taxable services shall be based on its books and
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records kept in the regular course of business and in accordance with generally accepte d
accounting principles, and not created and maintained for tax purposes . The servic e
supplier has the burden of proving the proper valuation and apportionment of taxable an d
non-taxable charges .
3 .16 .110 Substantial Nexus/Minimum Contact .
For purposes of imposing a tax or establishing a duty to collect and remit a tax under thi s
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favo r
of the imposition, collection and/or remittance of the utility users' tax to the fullest exten t
permitted by State and Federal law, and as it may change from time to time by judicia l
interpretation or by statutory enactment . Any telecommunication service (includin g
VoIP) used by a person with a service address in the City, which service is capable o f
terminating a call to another person on the general telephone network, shall be subject t o
a rebuttable presumption that "substantial nexus/minimum contacts" exists for purpose s
of imposing a tax, or establishing a duty to collect and remit a tax, under this Chapter .A
service supplier shall be deemed to have sufficient activity in the City for tax collectio n
and remittance purposes if its activities include, but are not limited to, any of th e
following : maintains or has within the City, directly or through an agent or subsidiary,a
place of business of any nature ; solicits business in the City by employees, independen t
contractors, resellers, agents or other representatives ; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advertising that is broadcas t
or relayed from a transmitter with the City or distributed from a location with the City ; or
advertises in newspapers or other periodicals printed and published within the City o r
through materials distributed in the City by means other than the United States mail ; or i f
there are activities performed in the City on behalf of the service supplier that ar e
significantly associated with the service supplier's ability to establish and maintain a
market in the City for the provision of utility services that are subject to a tax under thi s
Chapter .
3 .16 .120 Duty to Collect Procedures .
(a)
Collection by Service Suppliers :The duty of service suppliers to collect an d
remit the taxes imposed by the provisions of this Chapter shall be performed as follows :
(1)The tax shall be collected by service suppliers insofar as practicable at th e
same time as, and along with, the collection of the charges made in accordance with th e
regular billing practice of the service supplier . Where the amount paid by a service user
to a service supplier is less than the full amount of the charge and tax which was accrue d
for the billing period, a proportionate share of both the charge and the tax shall b e
deemed to have been paid . In those cases where a service user has notified the service
supplier of refusal to pay the tax imposed on said charges, Section 3 .16 .916 shall apply .
(2)The duty of a service supplier to collect the tax from a service user shal l
commence with the beginning of the first regular billing period applicable to the servic e
user where all charges normally included in such regular billing are subject to the
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provisions of this Chapter . Where a service user receives more than one billing, one o r
more being for different periods than another, the duty to collect shall arise separately fo r
each billing period .
(b)
Filing Return and Payment :Each person required by this Chapter to remit a tax
shall file a return to the Tax Administrator, on forms approved by the Tax Administrator ,
on or before the due date . The full amount of the tax collected shall be included with th e
return and filed with the Tax Administrator . The Tax Administrator is authorized t o
require such additional information as he or she deems necessary to determine if the tax
is being levied, collected, and remitted in accordance with this Chapter . Returns are du e
immediately upon cessation of business for any reason . Pursuant to Revenue and Tax
Code Section 7284 .6,the Tax Administrator, and its agents, shall maintain such filin g
returns as confidential information that is exempt from the disclosure provisions of th e
Public Records Act .
3 .16 .130 Collection Penalties-Service Suppliers .
(a)Taxes collected from a service user are delinquent if not received by the Ta x
Administrator on or before the due date . Should the due date occur on a weekend or lega l
holiday, the return must be received by the Tax Administrator on the first regula r
working day following the weekend or legal holiday . A direct deposit, includin g
electronic fund transfers and other similar methods of electronically exchanging monie s
between financial accounts, made by a service supplier in satisfaction of its obligation s
under this Chapter shall be considered timely if the transfer is initiated on or before the
due date, and the transfer settles into the City's account on the following business day .
(b)If the person required to collect and/or remit the utility users' tax fails to collec t
the tax (by failing to properly assess the tax on one or more services or charges on the
customer's billing) or fails to remit the tax collected on or before the due date, the Tax
Administrator shall attach a penalty for such delinquencies or deficiencies at the rate o f
fifteen percent (15%) of the total tax that is delinquent or deficient in the remittance, an d
shall pay interest at the rate of seventy-five one-hundredths percent (0 .75%) per month ,
or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date o n
which the remittance first became delinquent, until paid .
(c)The Tax Administrator shall have the power to impose additional penalties upon
persons required to collect and remit taxes pursuant to the provisions of this Chapter fo r
fraud or gross negligence in reporting or remitting at the rate of fifteen percent (15%) o f
the amount of the tax collected and/or required to be remitted, or as recomputed by th e
Tax Administrator .
(d)For collection purposes only, every penalty imposed and such interest that i s
accrued under the provisions of this Chapter shall become a part of the tax herein
required to be paid .
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(e)
Notwithstanding the foregoing, the Tax Administrator may, in his or he r
discretion, modify the due dates of this Chapter to be consistent with any unifor m
standards or procedures that are mutually agreed upon by other public agencies imposin g
a utility users' tax, or otherwise legally established, to create a central payment locatio n
or mechanism .
3 .16 .140 Actions to Collect .
Any tax required to be paid by a service user under the provisions of this Chapter shall b e
deemed a debt owed by the service user to the City . Any such tax collected from a servic e
user which has not been remitted to the Tax Administrator shall be deemed a debt owe d
to the City by the person required to collect and remit and shall no longer be a debt of th e
service user . Any person owing money to the City under the provisions of this Chapte r
shall be liable to an action brought in the name of the City for the recovery of suc h
amount, including penalties and interest as provided for in this Chapter, along with an y
collection costs incurred by the City as a result of the person's noncompliance with thi s
Chapter, including, but not limited to, reasonable attorneys' fees . Any tax required to be
collected by a service supplier or owed by a service user is an unsecured priority excis e
tax obligation under 11 U S. CA . Section 507(a)(8)(C).Service suppliers who seek to
collect charges for service in bankruptcy proceedings shall also include in any such clai m
the amount of taxes due the City for those services, unless the Tax Administrato r
determines that such duty is in conflict with any federal or state law, rule, or regulation o r
that such action would be administratively impractical .
3 .16.150 Deficiency Determination and Assessment-Tax Application Errors .
(a)The Tax Administrator shall make a deficiency determination if he or sh e
determines that any person required to pay or collect taxes pursuant to the provisions o f
this Chapter has failed to pay, collect, and/or remit the proper amount of tax b y
improperly or failing to apply the tax to one or more taxable services or charges . Nothing
herein shall require that the Tax Administrator institute proceedings under this Sectio n
3 .16 .150 if, in the opinion of the Tax Administrator, the cost of collection or enforcemen t
likely outweighs the tax benefit .
(b)The Tax Administrator shall mail a notice of such deficiency determination to th e
person required to pay or remit the tax, which notice shall refer briefly to the amount o f
the taxes owed, plus interest at the rate of seventy-five one-hundredths percent (0 .75%)
per month, or any fraction thereof, on the amount of the tax from the date on which th e
tax should have been received by the City . Within fourteen (14) calendar days after th e
date of service of such notice, the person may request in writing to the Tax Administrato r
for a hearing on the matter .
(c)If the person fails to request a hearing within the prescribed time period, th e
amount of the deficiency determination shall become a final assessment, and shal l
immediately be due and owing to the City . If the person requests a hearing, the Ta x
Administrator shall cause the matter to be set for hearing, which shall be scheduled
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within thirty (30) days after receipt of the written request for hearing . Notice of the tim e
and place of the hearing shall be mailed by the Tax Administrator to such person at least
ten (10) calendar days prior to the hearing, and, if the Tax Administrator desires sai d
person to produce specific records at such hearing, such notice may designate the record s
requested to be produced .
(d)At the time fixed for the hearing, the Tax Administrator shall hear all relevan t
testimony and evidence, including that of any other interested parties . At the discretion of
the Tax Administrator, the hearing may be continued from time to time for the purpose o f
allowing the presentation of additional evidence . Within a reasonable time following th e
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non -
assessment), thereafter, by confirming, modifying or rejecting the original deficienc y
determination,and shall mail a copy of such final assessment to person owing the tax .
The decision of the Tax Administrator may be appealed pursuant to Section 3 .16 .200 o f
this Chapter . Filing an application with the Tax Administrator and appeal to the Cit y
Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a prerequisite
to a suit thereon .
(e)Payment of the final assessment shall become delinquent if not received by th e
Tax Administrator on or before the thirtieth (30th) day following the date of receipt of th e
notice of final assessment. The penalty for delinquency shall be fifteen percent (15%) o n
the total amount of the assessment, along with interest at the rate of seventy-five one -
hundredths percent (0 .75%) per month, or any fraction thereof, on the amount of the tax ,
exclusive of penalties, from the date of delinquency, until paid . The applicable statute o f
limitations regarding a claim by the City seeking payment of a tax assessed under thi s
Chapter shall commence from the date of delinquency as provided in this subsection (e).
(f)All notices under this Chapter may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .160 Administrative Remedy-Non-Paying Service Users .
(a)
Whenever the Tax Administrator determines that a service user has deliberatel y
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whenever the Tax Administrator deems it in the bes t
interest of the City, he or she may relieve such person of the obligation to collect th e
taxes due under this Chapter from certain named service users for specific billing periods .
To the extent the service user has failed to pay the amount of tax owed for a period o f
two (2) or more billing periods, the service supplier shall be relieved of the obligation t o
collect taxes due . The service supplier shall provide the City with the names an d
addresses of such service users and the amounts of taxes owed under the provisions o f
this Chapter . Nothing herein shall require that the Tax Administrator institut e
proceedings under this Section 3 .16 .160 if, in the opinion of the Tax Administrator, th e
cost of collection or enforcement likely outweighs the tax benefit .
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(b)In addition to the tax owed, the service user shall pay a delinquency penalty at th e
rate of fifteen percent (15%) of the total tax that is owed, and shall pay interest at the rat e
of seventy-five one-hundredths percent (0 .75%) per month, or any fraction thereof, on th e
amount of the tax, exclusive of penalties, from the due date, until paid .
(c)The Tax Administrator shall notify the non-paying service user that the Ta x
Administrator has assumed the responsibility to collect the taxes due for the state d
periods and demand payment of such taxes, including penalties and interest . The notice
shall be served on the service user by personal delivery or by deposit of the notice in th e
United States mail, postage prepaid, addressed to the service user at the address to whic h
billing was made by the person required to collect the tax ; or, should the service use r
have a change of address, to his or her last known address .
(d)If the service user fails to remit the tax to the Tax Administrator within thirty (30 )
days from the date of the service of the notice upon him or her, the Tax Administrato r
may impose an additional penalty of fifteen percent (15%) of the amount of the total ta x
that is owed .
3 .16 .170 Additional Powers and Duties of the Tax Administrator .
(a)The Tax Administrator shall have the power and duty, and is hereby directed, t o
enforce each and all of the provisions of this Chapter .
(b)The Tax Administrator may adopt administrative rules and regulations consisten t
with provisions of this Chapter for the purpose of interpreting, clarifying, carrying ou t
and enforcing the payment, collection and remittance of the taxes herein imposed . The
administrative ruling shall not impose a new tax, revise an existing tax methodology a s
stated in this Chapter, or increase an existing tax, except as allowed by California
Government Code Section 53750(h)(2).A copy of such administrative rules an d
regulations shall be on file in the Tax Administrator's office . To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected i n
full for any period of time from any particular service supplier or service user, tha t
determination shall be considered an exercise of the Tax Administrator's discretion t o
settle disputes and shall not constitute a change in taxing methodology for purposes o f
Government Code Section 53750 or otherwise . The Tax Administrator is not authorize d
to amend the City's methodology for purposes of Government Code Section 53750 and
the City does not waive or abrogate its ability to impose the utility users' tax in full as a
result of promulgating administrative rulings or entering into agreements .
(c)Upon a proper showing of good cause, the Tax Administrator may mak e
administrative agreements, with appropriate conditions, to vary from the stric t
requirements of this Chapter and thereby : (1) conform to the billing procedures of a
particular service supplier so long as said agreements result in the collection of the tax in .
conformance with the general purpose and scope of this Chapter ; or, (2) to avoid a
hardship where the administrative costs of collection and remittance greatly outweigh th e
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tax benefit . A copy of each such agreement shall be on file in the Tax Administrator's
office, and are voidable by the Tax Administrator or the City at any time .
(d)The Tax Administrator may conduct an audit, to ensure proper compliance wit h
the requirements of this Chapter, of any person required to collect and/or remit a ta x
pursuant to this Chapter . The Tax Administrator shall notify said person of the initiatio n
of an audit in writing . In the absence of fraud or other intentional misconduct, the audi t
period of review shall not exceed a period of three (3) years next preceding the date o f
receipt of the written notice by said person from the Tax Administrator . Upon completion
of the audit, the Tax Administrator may make a deficiency determination pursuant t o
Section 3 .16 .150 of this Chapter for all taxes (and applicable penalties and interest) owe d
and not paid, as evidenced by information provided by such person to the Ta x
Administrator . If said person is unable or unwilling to provide sufficient records to enabl e
the Tax Administrator to verify compliance with this Chapter, the Tax Administrator i s
authorized to make a reasonable estimate of the deficiency . Said reasonable estimate shal l
be entitled to a rebuttable presumption of correctness .
(e)Upon receipt of a written request of a taxpayer, and for good cause, the Ta x
Administrator may extend the time for filing any statement required pursuant to thi s
Chapter for a period of not to exceed forty-five (45) days, provided that the time for filin g
the required statement has not already passed when the request is received . No penalty
for delinquent payment shall accrue by reason of such extension . Interest shall accru e
during said extension at the rate of seventy-five one-hundredths percent (0 .75%) pe r
month, prorated for any portion thereof .
(f)The Tax Administrator shall determine the eligibility of any person who asserts a
right to exemption from, or a refund of, the tax imposed by this Chapter .
(g)Notwithstanding any provision in this Chapter to the contrary, the Ta x
Administrator may waive any penalty or interest imposed upon a person required to
collect and/or remit for failure to collect the tax imposed by this Chapter if the non -
collection occurred in good faith . In determining whether the non-collection was in goo d
faith, the Tax Administrator shall take into consideration the uniqueness of the product o r
service, industry practice or other precedence . The Tax Administrator may als o
participate with other utility users' tax public agencies in conducting coordinate d
compliance reviews with the goal of achieving administrative efficiency and uniform ta x
application determinations, where possible . To encourage full disclosure and on-goin g
cooperation on annual compliance reviews, the Tax Administrator, and its agents, ma y
enter into agreements with the tax-collecting service providers and grant prospective onl y
effect on any changes regarding the taxation of services or charges that were previousl y
deemed by the service provider, in good faith and without gross negligence, to be non -
taxable . In determining whether the non-collection was in good faith and without gros s
negligence, the Tax Administrator shall take into consideration the uniqueness of th e
product or service, industry practice or other precedence .
3 .16 .180 Records.
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(a)It shall be the duty of every person required to collect and/or remit to the City an y
tax imposed by this Chapter to keep and preserve, for a period of at least three (3) years ,
all records as may be necessary to determine the amount of such tax as he/she may hav e
been liable for the collection of and remittance to the Tax Administrator, which record s
the Tax Administrator shall have the right to inspect at a reasonable time .
(b)The City may issue an administrative subpoena to compel a person to deliver, t o
the Tax Administrator, copies of all records deemed necessary by the Tax Administrato r
to establish compliance with this Chapter, including the delivery of records in a commo n
electronic format on readily available media if such records are kept electronically by th e
person in the usual and ordinary course of business . As an alternative to delivering th e
subpoenaed records to the Tax Administrator on or before the due date provided in th e
administrative subpoena, such person may provide access to such records outside the Cit y
on or before the due date, provided that such person shall reimburse the City for al l
reasonable travel expenses incurred by the City to inspect those records, including travel ,
lodging, meals, and other similar expenses, but excluding the normal salary or hourl y
wages of those persons designated by the City to conduct the inspection .
(c)The Tax Administrator is authorized to execute a non-disclosure agreemen t
approved by the City Attorney to protect the confidentiality of customer informatio n
pursuant to California Revenue and Tax Code Sections 7284 .6 and 7284.7.
(d)If a service supplier uses a billing agent or billing aggregator to bill, collect ,
and/or remit the tax, the service supplier shall : 1) provide to the Tax Administrator th e
name, address and telephone number of each billing agent and billing aggregato r
currently authorized by the service supplier to bill, collect, and/or remit the tax to th e
City; and, 2) upon request of the Tax Administrator, deliver, or effect the delivery of, an y
information or records in the possession of such billing agent or billing aggregator that, i n
the opinion of the Tax Administrator, is necessary to verify the proper application ,
calculation, collection and/or remittance of such tax to the City .
(e)If any person subject to record-keeping under this Chapter unreasonably denie s
the Tax Administrator access to such records, or fails to produce the informatio n
requested in an administrative subpoena within the time specified, then the Ta x
Administrator may impose a penalty of Five Hundred Dollars ($500 .00) on such perso n
for each day following : l) the initial date that the person refuses to provide such access ;
or, 2) the due date for production of records as set forth in the administrative subpoena .
This penalty shall be in addition to any other penalty imposed under this Chapter .
3 .16 .190 Refunds
Whenever the amount of any tax has been overpaid or paid more than once or has bee n
erroneously or illegally collected or received by the Tax Administrator under this Chapte r
from a person or service supplier, it may be refunded as provided in this Section a s
follows :
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(a)Written Claim for Refund :The Tax Administrator may refund any tax that ha s
been overpaid or paid more than once or has been erroneously or illegally collected o r
received by the Tax Administrator under this Chapter from a person or service supplier ,
provided that no refund shall be paid under the provisions of this Section unless th e
claimant or his or her guardian, conservator, executor, or administrator has submitted a
written claim to the Tax Administrator within one year of the overpayment or erroneou s
or illegal collection of said tax . Such claim must clearly establish claimant's right to th e
refund by written records showing entitlement thereto . Nothing herein shall permit th e
filing of a claim on behalf of a class or group of taxpayers unless each member of th e
class has submitted a written claim under penalty of perjury as provided by this Section .
(b)Compliance with Claims Act :The filing of a written claim pursuant to
Government Code Section 935 is a prerequisite to any suit thereon . Any action brough t
against the City pursuant to this Chapter shall be subject to the provisions of Government
Code Sections 945 .6 and 946 .The Tax Administrator, or the City Council where th e
claim is in excess of Five Thousand Dollars ($5,000 .00), shall act upon the refund clai m
within the time period set forth in Government Code Section 912 .4 .If the Tax
Administrator/City Council fails or refuses to act on a refund claim within the tim e
prescribed by Government Section 912 .4,the claim shall be deemed to have been rejecte d
by the City Council on the last day of the period within which the City Council wa s
required to act upon the claim as provided in Government Code Section 912.4.The Tax
Administrator shall give notice of the action in a form which substantially complies wit h
that set forth in Government Code Section 913 .
(c)Refunds to Service Suppliers :Notwithstanding the notice provisions o f
subsection (a)of this Section, the Tax Administrator may, at his or her discretion, giv e
written permission to a service supplier, who has collected and remitted any amount o f
tax in excess of the amount of tax imposed by this Chapter, to claim credit for suc h
overpayment against the amount of tax which is due the City upon a subsequent monthl y
return(s) to the Tax Administrator, provided that, prior to taking such credit by th e
service supplier : 1) such credit is claimed in a return dated no later than one year from th e
date of overpayment or erroneous collection of said tax ; 2) the Tax Administrator i s
satisfied that the underlying basis and amount of such credit has been reasonabl y
established ; and, 3) in the case of an overpayment by a service user to the service supplie r
that has been remitted to the City, the Tax Administrator has received proof, to his or he r
satisfaction, that the overpayment has been refunded by the service supplier to the servic e
user in an amount equal to the requested credit .
3.16.200 Appeals .
(a)
The provisions of this Section apply to any decision (other than a decision relatin g
to a refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator . Any person aggrieved by
any decision (other than a decision relating to a refund pursuant to Section 3 .16 .190 o f
this Chapter), deficiency determination, assessment, or administrative ruling of the Tax
Administrator, shall be required to comply with the appeals procedure of this Section .
22
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EXHIBIT A
Compliance with this Section shall be a prerequisite to a suit thereon . [See Governmen t
Code Section 935(b)_j .Nothing herein shall permit the filing of a claim or action o n
behalf of a class or group of taxpayers .
(b)If any person is aggrieved by any decision (other than a decision relating to a
refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator ; he or she may appeal t o
the City Administrator, or designee, by filing a notice of appeal with the City Cler k
within fourteen (14) days of the date of the decision, deficiency determination ,
assessment, or administrative ruling of the Tax Administrator which aggrieved th e
service user or service supplier .
(c)The matter shall be scheduled for hearing before an independent hearing office r
selected by the City Administrator, or designee, no more than thirty (30) days from th e
receipt of the appeal . The appellant shall be served with notice of the time and place o f
the hearing, as well as any relevant materials, at least five (5) calendar days prior to th e
hearing . The hearing may be continued from time to time upon mutual consent . At th e
time of the hearing, the appealing party, the Tax Administrator, and any other intereste d
person may present such relevant evidence as he or she may have relating to th e
determination from which the appeal is taken .
(d)Based upon the submission of such evidence and the review of the City's files, th e
hearing officer shall issue a written notice and order upholding, modifying or reversin g
the determination from which the appeal is taken . The notice shall be given withi n
fourteen (14) days after the conclusion of the hearing and shall state the reasons for th e
decision . The notice shall specify that the decision is final and that any petition fo r
judicial review shall be filed within ninety (90) days from the date of the decision i n
accordance with Code of Civil Procedure Section 1094 .6 .
(e)All notices under this Section may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .210 No Injunction/Writ of Mandate .
No injunction or writ of mandate or other legal or equitable process shall issue in an y
suit, action, or proceeding in any court against this City or against any officer of the Cit y
to prevent or enjoin the collection under this Chapter of any tax or any amount of ta x
required to be collected and/or remitted .
3 .16.220 Notice of Changes to Ordinance .
If a tax under this Chapter is added repealed, increased, reduced, or the tax base i s
changed, the Tax Administrator shall follow the notice requirements of California Publi c
Utilities Code Section 799 .
2 3
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EXHIBIT A
3 .16 .230 Effect of State and Federal Reference/Authorization .
Unless specifically provided otherwise, any reference to a State or Federal statute in thi s
Chapter shall mean such statute as it may be amended from time to time, provided tha t
such reference to a statute herein shall not include any subsequent amendment thereto,or
to any subsequent change of interpretation thereto by a State or Federal agency or cour t
of law with the duty to interpret such law, to the extent that such amendment or change o f
interpretation would require voter approval under California law, or to the extent tha t
such change would result in a tax decrease (as a result of excluding all or a part of a
utility service, or charge therefor, from taxation). Only to the extent voter approval woul d
otherwise be required or a tax decrease would result, the prior version of the statute (o r
interpretation) shall remain applicable ;for any application or situation that would no t
require voter approval or result in a decrease of a tax, provisions of the amended statut e
(or new interpretation) shall be applicable to the maximum possible extent .
To the extent that the City's authorization to collect or impose any tax imposed under thi s
Chapter is expanded or limited as a result of changes in State or Federal law, n o
amendment or modification of this Chapter shall be required to conform the tax to thos e
changes, and the tax shall be imposed and collected to the full extent of the authorizatio n
up to the full amount of the tax imposed under this Chapter .
3 .16 .240 No Increase in Tax Percentage or Change in Methodology Without Vote r
Approval;Amendment or Repeal .
This Title 3, Chapter 16 of the San Luis Obispo Municipal Code may be repealed o r
amended by the City Council without a vote of the People . However, as required b y
Chapter XIIIC of the California Constitution,voter approval is required for an y
amendment provision that would increase the rate of any tax levied pursuant to thi s
Ordinance . The People of the City of San Luis Obispo affirm that the following action s
shall not constitute an increase of the rate of a tax :
(1)The restoration of the rate of the tax to a rate that is no higher than that set by thi s
Ordinance, if the City Council has acted to reduce the rate of the tax ;
(2)An action that interprets or clarifies the methodology of the tax, or any definitio n
applicable to the tax, so long as such interpretation or clarification (even if contrary t o
some prior interpretation or clarification) is not inconsistent with the language of thi s
Ordinance ;
(3)The establishment a class of persons that is exempt or excepted from the tax or th e
discontinuation of any such exemption or exception (other than the discontinuation of a n
exemption or exception specifically set forth in this Ordinance); and
(4)The collection of the tax imposed by this ordinance, even if the City had, for som e
period of time, failed to collect the tax .
24
PH1-63
EXHIBIT A
3 .16 .250 Remedies Cumulative .
All remedies and penalties prescribed by this Chapter or which are available under an y
other provision of law or equity, including but not limited to the California False Claim s
Act (Government Code Section 12650 et seq .)and the California Unfair Practices Ac t
(Business and Professions Code Section 17070 et seq .),are cumulative . The use of on e
or more remedies by the City shall not bar the use of any other remedy for the purpose o f
enforcing the provisions of this Chapter .
3 .16 .260 Interaction With Prior Tax .
(a).Collection of Tax by Service Providers . Service providers shall begin to collect th e
tax imposed by this amended Chapter 16 as soon as feasible after the effective date of th e
Chapter, but in no event later than permitted by Section 799 of the California Public
Utilities Code .
(b).Satisfaction of Tax Obligation by Service Users . Prior to April 1, 2013, any perso n
who pays the tax levied pursuant to Title 3, Chapter 16 of this Code, as it existed prior t o
its amendment as provided herein, with respect to any charge for a service shall b e
deemed to have satisfied his or her obligation to pay the tax levied pursuant to Title 3 ,
Chapter 16 as amended herein, with respect to that charge . The intent of this paragraph i s
to prevent the imposition of multiple taxes upon a single utility charge during th e
transition period from the prior Utility Users' Tax ordinance to the amended Utility
Users' Tax ordinance (which transition period ends April 1, 2013) and to permit servic e
providers or other persons with an obligation to remit the tax hereunder, during tha t
transition period, to satisfy their collection obligations by collecting either tax .
(c) In the event that a final court order should determine that the election enacting thi s
Title 3, Chapter 16 (as amended herein) is invalid for whatever reason, or that any ta x
imposed under this Title 3, Chapter 16 (as amended herein) is invalid in whole or in part ,
then the taxes imposed under Title 3, Chapter 16 of this Code, as it existed prior to it s
amendment as provided herein, shall automatically continue to apply with respect to an y
service for which the tax levied pursuant to this Chapter 16 has been determined to b e
invalid. Such automatic continuation shall be effective beginning as of the first date o f
service (or billing date) for which the tax imposed by this Chapter is not valid . However,
in the event of an invalidation, any tax (other than a tax that is ordered refunded by th e
court or is otherwise refunded by the City) paid by a person with respect to a service an d
calculated pursuant to this Title 3, Chapter 16 (as amended herein) shall be deemed t o
satisfy the tax imposed under Title 3, Chapter 16, as it existed prior to its amendment a s
provided herein, on that service, so long as the tax is paid with respect to a service provide d
no later than six months subsequent to the date on which the final court order is published .
SECTION2 .Effective Date . This Chapter, if approved by the electorate of the Cit y
of San Luis Obispo at the General Municipal Election of November 6, 2012 shal l
become effective immediately upon the declaration of the results of that election b y
the City Council of the City of San Luis Obispo .
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EXHIBIT A
SECTION3 .Severability . If any section, subsection, sentence, clause, phrase, o r
portion of this Ordinance is for any reason held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining portions of this Ordinance shal l
nonetheless remain in full force and effect. The People hereby declares that the y
would have adopted each section, subsection, sentence, clause, phrase,or portion o f
this Ordinance, irrespective of the fact that any one or more sections, subsections ,
sentences, clauses, phrases,or portions of this Ordinance be declared invalid o r
unenforceable .
SECTION4.Ratification of Prior Tax . The People of the City of San Luis Obisp o
hereby ratify and approve the past collection of the Utility Users' Tax Title 3, Chapte r
16 of the San Luis Obispo Municipal Code, as it existed prior to the effective date o f
this Ordinance .
SECTION5.Execution . The Mayor is hereby authorized to attest to the adoption o f
the Ordinance by the voters of the City by signing where indicated below .
I hereby certify that the foregoing Ordinance was PASSED, APPROVE D
and ADOPTED by the People of the City of San Luis Obispo, California voting o n
the 6th day of November, 2012 .
Mayor
ATTEST :
City Cler k
APPROVED AS TO FORM :
City Attorney
ATTACHMENT 4
RESOLUTION NO .(2012 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUI S
OBISPO, CALIFORNIA PROVIDING FOR THE FILING OF REBUTTA L
ARGUMENTS FOR CITY MEASURE SUBMITTED AT THE NOVEMBER 6, 201 2
GENERAL MUNICIPAL ELECTION
WHEREAS,Section 9285 of the Elections Code of the State of California authorize s
the City Council, by majority vote, to adopt provisions to provide for the filing of rebutta l
arguments for City measures submitted at municipal elections .
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Lui s
Obispo as follows :
SECTION 1 . That pursuant to Section 9285 of the Elections Code of the State o f
California, when the elections official has selected the arguments for and against the measur e
which will be printed and distributed to the voters, the elections official shall send a copy of a n
argument in favor of the proposition to the authors of any argument against the measure and a
copy of an argument against the measure to the authors of any argument in favor of the measur e
immediately upon receiving the arguments .
The author or a majority of the authors of an argument relating to a City measure ma y
prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing an y
other person or persons to prepare, submit, or sign the rebuttal argument .
A rebuttal argument may not be signed by more than five authors .
The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name s
and signatures of the authors submitting it, or if submitted on behalf of an organization, the nam e
of the organization, and the printed name and signature of at least one of its principal officers ,
not more than 10 days after the final date for filing direct arguments . The rebuttal argument s
shall be accompanied by the Form of Statement to Be Filed By Authors of Argument .
Rebuttal arguments shall be printed in the same manner as the direct arguments . Eac h
rebuttal argument shall immediately follow the direct argument which it seeks to rebut .
SECTION 2 . That all previous resolutions providing for the filing of rebuttal argument s
for City measures are repealed .
SECTION 3 .That the provisions of Section 1 shall apply at the next enuing municipa l
election and at each municipal election after that time .
SECTION 4 . That the City Clerk shall certify to the passage and adoption of thi s
Resolution and enter it into the book of original Resolutions .
PH1-66
ATTACHMENT 4
Upon motion of seconded by , and on th e
following vote :
AYES :
NOES :
ABSENT :
The foregoing resolution was adopted this 10th day of July, 2012 .
Mayor Jan Marx
ATTEST :
Sheryll Schroede r
Interim City Cler k
APPROVED AS TO FORM :
J . Christine Dietrick
J . Christine Dietrick
City Attorney
PH1-67
ATTACHMENT 5
ORDINANCE NO . 2012-??
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA
REPEALING AND RE-ENACTING IN FULL TITLE 3, CHAPTER 16 OF THE SAN
LUIS OBISPO MUNICIPAL CODE WITH RESPECT TO UTILITY USER'S TAX .
THE PEOPLE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA D O
ORDAIN AS FOLLOWS :
SECTION 1 .Title 3, Chapter 16 of the San Luis Obispo Municipal Code i s
hereby repealed and re-enacted in full , to read as follows :
Chapter 1 6
Utility Users' Tax
3 .16 .010 Short Title and Purpos e
3 .16 .020 Definition s
3 .16 .030 Constitutional, Statutory, and Other Exemption s
3 .16 .040 Telecommunication Users' Tax
3 .16 .050 Electricity Users' Tax
3 .16 .060 Gas Users Ta x
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas or
Electricit y
3 .16 .080 Video Users' Ta x
3 .16 .090 Water Users' Tax
3 .16 .100 Bundling Taxable Items with Nontaxable Item s
3 .16 .110 Substantial Nexus/Minimum Contact s
3 .16 .120 Duty to Collect – Procedure s
3 .16 .130 Collection Penalties – Service Supplier s
3 .16 .140 Actions to Collec t
3 .16 .150 Deficiency Determination and Assessment — Tax Application Error s
3 .16 .160 Administrative Remedy — Nonpaying Service User s
3 .16 .170 Additional Powers and Duties of the Tax Administrato r
3 .16 .180 Record s
3 .16 .190 Refunds
3 .16 .200 Appeal s
3 .16 .210 No Injunction/Writ of Mandat e
3 .16 .220 Notice of Changes to Chapte r
3 .16 .230 Future Amendment to Cited Statut e
3.16 .240 No Increase in Tax Percentage or Change in Methodology without Vote r
Approva l
3 .16 .250 Remedies Cumulative
3 .16 .260 Interaction with Prior Ta x
3 .16 .010 Short Title and Purpose
1
PH1-68
ATTACHMENT 5
This Chapter 16 shall be known as the "Utility Users'Tax Law of the City of San
Luis Obispo". The taxes imposed and levied by the provisions of this chapter ar e
solely for the purpose of providing revenue for the usual and current expenses o f
the city . The provisions of this chapter are not enacted for regulatory purposes .
3 .16 .020 Definition s
The following words and phrases whenever used in this Chapter 16, shall b e
construed as defined in this Section .
(a)
"Ancillary telecommunication services"means services that ar e
associated with or incidental to the provision, use or enjoyment of telecommunication s
services, including but not limited to the following services :
(1)"Conference bridging service"means an ancillary service that links tw o
(2) or more participants of an audio or video conference call and may include th e
provision of a telephone number . Conference bridging service does not include th e
telecommunications services used to reach the conference bridge .
(2)"Detailed telecommunications billing service"means an ancillar y
service of separately stating information pertaining to individual calls on a customer's
billing statement .
(3)"Directory assistance"means an ancillary service of providing telephon e
number information, and/or address information .
(4)"Vertical service" means an ancillary service that is offered in connection
with one or more telecommunications services, which offers advanced calling feature s
that allow customers to identify callers and to manage multiple calls and call connections ,
including conference bridging services .
(5)"Voice mail service"means an ancillary service that enables the custome r
to store, send or receive recorded messages . Voice mail service does not include an y
vertical services that the customer may be required to have in order to utilize the voic e
mail servic e
(b)
"Ancillary video services"means services that are associated with o r
incidental to the provision or delivery of video services, including but not limited t o
electronic program guide services, recording services, search functions, or othe r
interactive services or communications that are associated with or incidental to th e
provision, use or enjoyment of video services .
(c)
"Billing address"shall mean the mailing address of the service use r
where the service supplier submits invoices or bills for payment by the customer .
(d)
"City" shall mean the City of San Luis Obispo .
PH1-69
ATTACHMENT 5
(e)"Gas"shall mean natural or manufactured gas or any alternat e
hydrocarbon fuel which may be substituted therefor .
(f)"Individual Service"shall mean utility service at a single contiguou s
location . A service user with more than one meter or billing invoice per utility service a t
a single contiguous location may combine all billings for purposes of calculating th e
maximum tax amount .
(g)"Mobile telecommunications service"has the meaning and usage as se t
forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124)and the
regulations thereunder .
"Month"shall mean a calendar month .
"Non-Utility Service Supplier"means :
(1)a service supplier, other than a supplier of electric distribution services to al l
or a significant portion of the City, which generates electricity for sale to others,
and shall include but is not limited to any publicly-owned electric utility, investor -
owned utility, cogenerator, distributed generation provider, exempt wholesal e
generator (15 U.S.C. Section 79z-5a),municipal utility district, federal powe r
marketing agency, electric rural cooperative, or other supplier or seller o f
electricity ;
(2)an electric service provider (ESP), electricity broker, marketer, aggregator ,
pool operator, or other electricity supplier other than a supplier of electri c
distribution services to all or a significant portion of the City, which sells o r
supplies electricity or supplemental services to electricity users within the City ; o r
(3)a gas service supplier, aggregator, marketer or broker, other than a supplier o f
gas distribution services to all or a significant portion of the City, which sells o r
supplies gas or supplemental services to gas users within the City .
(j)"Paging service"means a "telecommunications service" that provide s
transmission of coded radio signals for the purpose of activating specific pagers ; suc h
transmissions may include messages and/or sounds .
(k)"Person"shall mean, without limitation, any natural individual, firm ,
trust, common law trust, estate, partnership of any kind, association, syndicate, club, join t
stock company, joint venture, limited liability company, corporation (including foreign ,
domestic, and non-profit), municipal district or municipal corporation (other than th e
City), cooperative, receiver, trustee, guardian, or other representative appointed by orde r
of any court.
3
PH T-7 0
(h)
(i)
ATTACHMENT 5
(1)
"Place of primary use"means the street address representative of wher e
the customer's use of the telecommunications service primarily occurs, which must b e
the residential street address or the primary business street address of the customer .
(m)"Post-paid telecommunication service"means the telecommunicatio n
service obtained by making a payment on a communication-by-communication basi s
either through the use of a credit card or payment mechanism such as a bank card, trave l
card, credit card, or debit card, or by charge made to a service number which is no t
associated with the origination or termination of the telecommunication service .
(n)
"Prepaid telecommunication service"means the right to acces s
telecommunication services, which must be paid for in advance and which enables th e
origination of communications using an access number or authorization code, whethe r
manually or electronically dialed, and that is sold in predetermined units or dollars o f
which the number declines with use in a known amount .
(o)
"Private telecommunication service"means a telecommunicatio n
service that entitles the customer to exclusive or priority use of a communication s
channel or group of channels between or among termination points, regardless of th e
manner in which such channel or channels are connected, and includes switchin g
capacity, extension lines, stations, and any other associated services that are provided i n
connection with the use of such channel or channels . A communications channel is a
physical or virtual path of communications over which signals are transmitted between o r
among customer channel termination points (i . e ., the location where the customer eithe r
inputs or receives the communications).
(p)"Service address"means the residential street address or the busines s
street address of the service user . For a telecommunication or video service user ,
"service address" means either :
(1)The location of the service user's telecommunication equipment fro m
which thetelecommunication originates or terminates, regardless of where th e
telecommunication is billed or paid ; or,
(2)If the location in subsection (1) of this definition is unknown (e .g ., mobile
telecommunications service or VoIP service), the service address means the location o f
the service user's place of primary use .
(3)For prepaid telecommunication service, "service address" means the locatio n
associated with the service number or, if not known, the point of sale of the services .
(q)
"Service supplier"shall mean any entity or person, including the City ,
that provides, sells, or resells a utility service to a user of such service within the City .
(r)
"Service user"shall mean a person required to pay a tax imposed under
the provisions of this Chapter .
PH1-71
ATTACHMENT 5
(s)"State" shall mean the State of California .
(t)"Streamlined Sales and Use Tax Agreement"means the multi-stat e
agreement commonly known and referred to as the Streamlined Sales and Use Ta x
Agreement, as it is amended from time to time .
(u)"Tax Administrator"shall mean the Finance Director, or his or he r
designee .
(v)"Telecommunications service"means the transmission, conveyance, o r
routing of voice, data, audio, video, or any other information or signals to a point, o r
between or among points, whatever the technology used . The term "telecommunication s
services" includes such transmission, conveyance, or routing in which compute r
processing applications are used to act on the form, code or protocol of the content fo r
purposes of transmission, conveyance or routing without regard to whether such service s
are referred to as voice over internet protocol (VoIP) services or are classified by th e
Federal Communications Commission as enhanced or value added, and includes vide o
and/or data services that is functionally integrated with "telecommunication services ."
"Telecommunications services" include, but are not limited to the following services ,
regardless of the manner or basis on which such services are calculated or billed :
ancillary telecommunication services ; intrastate, interstate, and internationa l
telecommunication services ; mobile telecommunications service ; prepai d
telecommunication service ; post-paid telecommunication service ; private
telecommunication service ; paging service ; 800 service (or any other toll-free number s
designated by the Federal Communications Commission); 900 service (or any othe r
similar numbers designated by the Federal Communications Commission for service s
whereby subscribers who call in to pre-recorded or live service).
(w)"Video programming"means those programming services commonl y
provided to subscribers by a "video service supplier" including but not limited to basi c
services, premium services, audio services, video games, pay-per-view services, video o n
demand, origination programming, or any other similar services, regardless of the conten t
of such video programming, or the technology used to deliver such services, an d
regardless of the manner or basis on which such services are calculated or billed .
(x)"Video services"means "video programming" and any and all service s
related to the providing, recording, delivering, use or enjoyment of "video programming "
(including origination programming and programming using Internet Protocol, e .g ., IP-
TV and IP-Video) using one or more channels by a "video service supplier," regardles s
of the technology used to deliver, store or provide such services, and regardless of th e
manner or basis on which such services are calculated or billed, and includes ancillar y
video services, data services, "telecommunication services," or interactiv e
communication services that are functionally integrated with "video services ."
(y)"Video service supplier"means any person, company, or service whic h
provides or sells one or more channels of video programming, or provides or sells the
5
PHI-72
ATTACHMENT 5
capability to receive one or more channels of video programming, including an y
communications that are ancillary, necessary or common to the provision, use o r
enjoyment of the video programming, to or from a business or residential address in th e
City, where some feeds paid, whether directly or included in dues or rental charges fo r
that service, whether or not public rights-of-way are utilized in the delivery of the vide o
programming or communications . A "video service supplier" includes, but is not limite d
to, multichannel video programming distributors (as defined in 47 U .S .C .A . Sectio n
522(13)); open video systems (OVS) suppliers ; and suppliers of cable television ; master
antenna television ; satellite master antenna television ; multichannel multipoin t
distribution services (MMDS); video services using internet protocol (e .g ., IP-TV and IP-
Video, which provide, among other things, broadcasting and video on demand), direct
broadcast satellite to the extent federal law permits taxation of its video services, now o r
in the future ; and other suppliers of video services (including two-way communications),
whatever their technology .
(z)
"VoIP (Voice Over Internet Protocol)"means the digital process of
making and receiving real-time voice transmissions over any Internet Protocol network .
(aa)"800 Service"means a "telecommunications service" that allows a calle r
to dial a toll-free number without incurring a charge for the call .The service is typically
marketed under the name "800," "855," "866," "877," and "888" toll-free calling, and
any subsequent numbers designated by the Federal Communications Commission .
(bb)"900 Service"means an inbound toll "telecommunications service "
purchased by a subscriber that allows the subscriber's customers to call in to th e
subscriber's prerecorded announcement or live service . "900 service" does not includ e
the charge for : collection services provided by the seller of the "telecommunication s
services" to the subscriber, or service or product sold by the subscriber to the subscriber's
customer . The service is typically marketed under the name "900" service, and an y
subsequent numbers designated by the Federal Communications Commission .
3 .16.030 Constitutional, statutory, and other exemptions .
(a)Nothing in this Chapter shall be construed as imposing a tax upon any person o r
service when the imposition of such tax upon such person or service would be i n
violation of a Federal or State statute, the Constitution of the United States or th e
Constitution of the State .
(b)Any service user that is exempt from the tax imposed by this Chapter pursuant t o
subsection (a) of this Section shall file an application with the Tax Administrator for an
exemption ; provided, however, this requirement shall not apply to a service user that is a
State or Federal agency or subdivision with a commonly recognized name for suc h
service . Said application shall be made upon a form approved by the Tax Administrato r
and shall state those facts, declared under penalty of perjury, which qualify the applican t
for an exemption, and shall include the names of all service suppliers serving that servic e
user . If deemed exempt by the Tax Administrator, such service user shall give the Tax
PH1-73
ATTACHMENT 5
Administrator timely written notice of any change in service suppliers so that the Tax
Administrator can properly notify the new service supplier of the service user's ta x
exempt status . A service user that fails to comply with this Chapter shall not be entitled t o
a refund of a users' tax collected and remitted to the Tax Administrator from such servic e
user as a result of such noncompliance .
The decision of the Tax Administrator may be appealed pursuant to Sectio n
3 .16 .200 of this Chapter. Filing an application with the Tax Administrator and appeal to
the City Administrator, or designee, pursuant to Section 3 .16 .200 of this Chapter is a
prerequisite to a suit thereon .
(c)The City Council may, by resolution, establish one or more classes of persons o r
one or more classes of utility service otherwise subject to payment of a tax imposed b y
this Chapter and provide that such classes of persons or service shall be exempt, in whol e
or in part from such tax for a specified period of time .
(d)If a billing for utility services includes charges for two or more households
situated within nonprofit retirement facilities which (1) are operated solely for th e
accommodation of persons with low incomes and (2) which qualify for the welfar e
exemption set forth in the California Revenue and Taxation Code, and if the charges fo r
such services are paid by the operators of the retirement facilities, the operators shall b e
entitled to an annual refund of all taxes paid under the provisions of this ordinance . Th e
procedure for obtaining such refunds shall be established by the Tax Administrator ,
including the requirement for whatever proof he or she deems necessary to establis h
qualification for refund .
3 .16 .040 Telecommunication Users' Tax .
(a)There is hereby imposed a tax upon every person in the City usin g
telecommunication services . The tax imposed by this Section shall be at the rate of fou r
and.eight-tenths percent (4 .8%) of the charges made for such services and shall b e
collected from the service user by the telecommunication services supplier or its billing
agent . There is a rebuttable presumption that telecommunication services, which ar e
billed to a billing or service address in the City, are used, in whole or in part, within th e
City's boundaries, and such services are subject to taxation under this Section . There i s
also a rebuttable presumption that prepaid telecommunication services sold within th e
city are used, in whole or in part, within the City and are therefore subject to taxatio n
under this Section . If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing th e
tax . As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the telecommunication services .
(b)"Mobile telecommunications service" shall be sourced in accordance with th e
sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C.
Section 124).The Tax Administrator may issue and disseminate to telecommunication
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service suppliers, which are subject to the tax collection requirements of this Chapter ,
sourcing rules for the taxation of other telecommunication services, including but no t
limited to post-paid telecommunication services, prepaid telecommunication services ,
VoIP, and private communication services, provided that such rules are based upo n
custom and common practice that further administrative efficiency and minimize mult i
jurisdictional taxation (e .g., Streamlined Sales and Use Tax Agreement).
(c)The Tax Administrator may issue and disseminate to telecommunication servic e
suppliers, which are subject to the tax collection requirements of this Chapter, a n
administrative ruling identifying those telecommunication services, or charges therefore ,
that are subject to or not subject to the tax of subsection (a) above .
(d)As used in this Section, the term "telecommunication services" shall include, bu t
is not limited to, charges for : connection, reconnection, termination, movement,or
change of telecommunication services ; late payment fees ; detailed billing ; central offic e
and custom calling features (including but not limited to call waiting, call forwarding ,
caller identification and three-way calling); voice mail and other messaging services ;
directory assistance ; access and line charges ; universal service charges ; regulatory o r
administrative fees, charges or surcharges ; cost recovery charges or surcharges for
programs imposed by state or federal law ; local number portability charges ; and text an d
instant messaging . "Telecommunication services"shall not include digital downloads tha t
are not "ancillary telecommunication services,"such as music, ringtones, games, an d
similar digital products .
(e)To prevent actual multi jurisdictional taxation of telecommunication service s
subject to tax under this Section, any service user, upon proof to the Tax Administrato r
that the service user has previously paid the same tax in another state or city on suc h
telecommunication services, shall be allowed a credit against the tax imposed to th e
extent of the amount of such tax legally imposed in such other state or city ; provided ,
however, the amount of credit shall not exceed the tax owed to the City under thi s
Section .
(g)
The tax on telecommunication services imposed by this Section shall be collecte d
from the service user by the service supplier . The amount of tax collected in one mont h
shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .050 Electricity Users Tax .
(a) There is hereby imposed a tax upon every person using electricity in the City . The tax
imposed by this Section shall be at the rate of five percent (5%) of the charges made fo r
such electricity, and for any supplemental services or other associated activities directl y
related to and/or necessary for the provision of electricity to the service user, which ar e
provided by a service supplier or non-utility service supplier to a service user . The tax
shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent .
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(b)As used in this Section, the term "charges" shall apply to all services, components an d
items that are : i) necessary for or common to the receipt, use or enjoyment of electri c
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for electric service by a local distribution company to a class of retail customers . The
term "charges" shall include, but is not limited to, the following charges :
(1)energy charges ;
(2)distribution or transmission charges ;
(3)metering charges ;
(4)stand-by, reserves, firming, ramping, voltage support, regulation, emergency ,
or other similar charges for supplemental services to self-generation service users ;
(5)customer charges, late charges, service establishment or reestablishmen t
charges, demand charges, fuel or other cost adjustments, power exchange charges ,
independent system operator (ISO) charges, stranded investment or competitiv e
transition charges (CTC), public purpose program charges, nuclea r
decommissioning charges, trust transfer amounts (bond financing charges),
franchise fees, franchise surcharges, annual and monthly charges, and other
charges, fees or surcharges which are necessary for or common to the receipt, us e
or enjoyment of electric service ; and ,
(6)charges, fees, or surcharges for electricity services or programs which ar e
mandated by the California Public Utilities Commission or the Federal Energ y
Regulatory Commission,or by any state or federal law, whether or not suc h
charges, fees, or surcharges appear on a bundled or line item basis on th e
customer billing .
(c) As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the electricity or services related to the provision of suc h
electricity .
(d) The Tax Administrator, from time to time,may survey the electric service supplier s
to identify the various unbundled billing components of electric retail service that the y
commonly provide to residential and commercial/industrial customers in the of the City ,
and the charges therefor, including those items that are mandated by state or federa l
regulatory agencies as a condition of providing such electric service . The Tax
Administrator, thereafter, may issue and disseminate to such electric service suppliers a n
administrative ruling identifying those components and items which are : i) necessary for
or common to the receipt, use or enjoyment of electric service ; or, ii) currently are or
historically have been included in a single or bundled rate for electric service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e) As used in this Section, the term "using electricity" shall not include the mer e
receiving of such electricity by an electrical corporation or governmental agency at a
point within the City for resale .
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(f) The tax on electricity provided by self-production or by a non-utility service supplie r
not under the jurisdiction of this Chapter 16 shall be collected and remitted in the manne r
set forth in Section 3 .16 .070 of this Chapter . All other taxes on charges for electricit y
imposed by this Section shall be collected from the service user by the electric servic e
supplier or its billing agent. The amount of tax collected in one (1) month shall b e
remitted to the Tax Administrator, and must be received by the Tax Administrator on o r
before the twentieth (20 th) day of the following month ; or, at the option of the perso n
required to collect and/or remit the tax, such person shall remit an estimated amount o f
tax measured by the tax billed in the previous month or upon the payment pattern of th e
service user, which must be received by the Tax Administrator on or before the twentiet h
(20 th ) day of the following month, provided that such person shall submit an adjuste d
payment or request for credit, as appropriate, within sixty (60) days following eac h
calendar quarter . The credit, if approved by the, Tax Administrator, may be applie d
against any subsequent remittance that becomes due .
3 .16 .060 Gas Users Tax.
(a)There is hereby imposed a tax upon every person using gas in the City, which i s
transported and delivered through a pipeline or by mobile transport . The tax imposed b y
this Section shall be at the rate of five percent (5%) of the charges made for such gas ,
including all services related to the storage, transportation and delivery of such gas . The
tax shall be collected from the service user by the service supplier or non-utility servic e
supplier, or its billing agent, and shall apply to all uses of gas, including but not limite d
to, heating, electricity generation, and the use of gas as a component of a manufacture d
product .
(b)As used in this Section, the term "charges" shall apply to all services, components an d
items for gas service that are : i) necessary for or common to the receipt, use o r
enjoyment of gas service ; or, ii) currently are or historically have been included in a
single or bundled rate for gas service by a local distribution company to a class of retai l
customers . The term "charges" shall include, but is not limited to, the following charges :
(1)the commodity charges for purchased gas, or the cost of gas owned by th e
service user (including the actual costs attributed to drilling, production, lifting ,
storage, gathering, trunkline, pipeline, and other operating costs associated wit h
the production and delivery of such gas), which is delivered through a gas
pipeline distribution system ;
(2)gas transportation charges (including interstate charges to the extent not
included in commodity charges);
(3)storage charges ; provided, however, that the service supplier shall not b e
required to apply the tax to any charges for gas storage services when the servic e
supplier cannot, as a practical matter, determine the jurisdiction where such store d
gas is ultimately used ; but it shall be the obligation of the service user to self -
collect the amount of tax not applied to any charge for gas storage by the servic e
supplier and to remit the tax to the appropriate jurisdiction ;
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(4)capacity or demand charges, late charges, service establishment o r
reestablishment charges, transition charges, customer charges, minimum charges ,
annual and monthly charges, and any other charges which are necessary for o r
common to the receipt, use or enjoyment of gas service ; and ,
(5)charges, fees, or surcharges for gas services or programs which are mandate d
by the California Public Utilities Commission or the Federal Energy Regulator y
Commission, or by any state or federal law, whether or not such charges, fees, o r
surcharges appear on a bundled or line item basis on the customer billing .
(c)As used in this Section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the gas or services related to the delivery of such gas .
(d)The Tax Administrator, from time to time, may survey the gas service suppliers t o
identify the various unbundled billing components of gas retail service that the y
commonly provide to residential and commercial/industrial customers in the City, and th e
charges therefor, including those items that are mandated by state or federal regulator y
agencies as a condition of providing such gas service . The Tax Administrator, thereafter ,
may issue and disseminate to such gas service suppliers an administrative rulin g
identifying those components and items which are : i) necessary for or common to th e
receipt, use or enjoyment of gas service ; or, ii) currently are or historically have bee n
included in a single or bundled rate for gas service by a local distribution company to a
class of retail customers . Charges for such components and items shall be subject to th e
tax of subsection (a)above .
(e)There shall be excluded from the calculation of the tax imposed in this Section ,
charges made for gas which is to be resold and delivered through a pipeline distributio n
system .
(f)The tax on gas provided by self-production or by a non-utility service supplier no t
under the jurisdiction of this Chapter 16 shall be collected and remitted in the manner se t
forth in Section 3 .16 .070 . All other taxes on charges for gas imposed by this Sectio n
shall be collected from the service user by the gas service supplier or its billing agent .
The amount of tax collected in one (1) month shall be remitted to the Tax Administrator ,
and must be received by the Tax Administrator, on or before the twentieth (20 th) day o f
the following month ; or, at the option of the person required to collect and/or remit th e
tax, such person shall remit an estimated amount of tax measured by the tax billed in th e
previous month or upon the payment pattern of the service user, which must be receive d
by the Tax Administrator on or before the twentieth (20 th ) day of the following month ,
provided that such person shall submit an adjusted payment or request for credit, as
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator, may be applied against any subsequent remittanc e
that becomes due .
3 .16 .070 Collection of Tax from Service Users Receiving Direct Purchase of Gas o r
Electricity.
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(a)Any service user subject to the tax imposed by Section 3 .16 .050 or by Sectio n
3 .16 .060 of this Chapter, which produces gas or electricity for self-use regardless of
technology used to produce such gas or electricity ; which receives gas or electricity ,
including any related supplemental services, directly from a non-utility service supplie r
not under the jurisdiction of this Chapter ; or which, for any other reason, is not having th e
full tax collected and remitted by its service supplier, a non-utility service supplier, or it s
billing agent on the use of gas or electricity in the City, including any related
supplemental services, shall report said fact to the Tax Administrator and shall remit th e
tax due directly to the Tax Administrator within thirty (30)days of such use, based on th e
charges for, or value of, such gas or electricity,or supplemental services, as provided in
subsection (b). In lieu of paying said actual tax, the service user may, at its option, remi t
to the Tax Administrator within thirty (30) days of such use an estimated amount of ta x
measured by the tax billed in the previous month, or upon the payment pattern of simila r
customers of the service supplier using similar amounts of gas or electricity, provide d
that the service user shall submit an adjusted payment or request for credit, a s
appropriate, within sixty (60) days following each calendar quarter . The credit, i f
approved by the Tax Administrator in writing, may be applied against any subsequent ta x
bill that becomes due .
(b)The Tax Administrator may require said service user to identify its non-utility servic e
supplier, and otherwise provide, subject to audit : invoices ; books of account ; or other
satisfactory evidence documenting the quantity of gas or electricity used, including an y
related supplemental services, and the cost or price thereof If the service user is unabl e
to provide such satisfactory evidence, or if the administrative cost of calculating the tax
in the opinion of the Tax Administrator is excessive, the Tax Administrator ma y
determine the tax by applying the tax rate to the equivalent charges the service use r
would have incurred if the gas or electricity used, including any related supplementa l
services, had been provided by the service supplier that is the primary supplier of gas o r
electricity within the City . Rate schedules for this purpose shall be available from th e
City.
3 .16 .080 Video Users' Tax .
(a)There is hereby imposed a tax upon every person in the City using video services .
The tax imposed by this section shall be at the rate of four and eight-tenths percen t
(4 .8%) of the charges made for such services and shall be collected from the service use r
by the video service supplier, or its billing agent ., There is a rebuttable presumption tha t
video services, which are billed to a billing or service address in the City, are used,i n
whole or in part, within the City's boundaries, and such services are subject to taxatio n
under this Chapter. If the billing address of the service user is different from the servic e
address, the service address of the service user shall be used for purposes of imposing the
tax .
(b)As used in this section, the term "charges" shall include, but is not limited to, charge s
for the following:
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(1)regulatory fees and surcharges, franchise fees and access fees (PEG);
(2)initial installation of equipment necessary for provision and receipt of vide o
services ;
(3)late fees, collection fees, bad debt recoveries, and return check fees ;
(4)activation fees, reactivation fees, and reconnection fees ;
(5)video programming and video services ;
(6)ancillary video programming services (e .g ., electronic program guid e
services, search functions, recording functions, or other interactive services o r
communications that are ancillary, necessary or common to the use or enjoymen t
of the video services);
(7)equipment leases (e .g ., remote, recording and/or search devises ; converters);
and,
(8)service calls, service protection plans, name changes, changes of services, an d
special services .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the video services .
(d)The Tax Administrator may issue and disseminate to video service suppliers, whic h
are subject to the tax collection requirements of this Chapter, an administrative rulin g
identifying those video services, or charges therefor, that are subject to or not subject t o
the tax of subsection (a) above .
(e)The tax imposed by this section shall be collected from the service user by the vide o
service supplier, its billing agent, or a reseller of such services . In the case of vide o
service, the service user shall be deemed to be the purchaser of the bulk video servic e
(e .g ., an apartment owner), unless such service is resold to individual users, in which cas e
the service user shall be the ultimate purchaser of the video service . The amount of ta x
collected in one (1) month shall be remitted to the Tax Administrator, and must b e
received by the Tax Administrator on or before the twentieth (20th) day of the followin g
month .
3 .16 .090 Water Users' Tax .
(a) There is imposed a tax upon every person using water in the City which i s
transported and delivered through a pipeline distribution system . The tax imposed by this
section shall be at the rate of five percent (5%) of the charges made for such water .
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(b)As used in this section, the term "charges" shall apply to all services, component s
and items that are : i) necessary for or common to the receipt, use or enjoyment of wate r
service ; or, ii) currently are or historically have been included in a single or bundled rat e
for water service by a local distribution company to a class of retail customers . The term
"charges" shall include, but is not limited to, the following charges : water commodity
charges (potable and non-potable); distribution or transmission charges ; meterin g
charges ; customer charges ; fire protection services ; late charges ; service establishment o r
reestablishment charges ; franchise fees ; franchise surcharges ; annual and monthl y
charges ; and other charges, fees and surcharges which are necessary for or common t o
the receipt, use or enjoyment of water service ; and, charges, fees, or surcharges for wate r
services or programs, which are mandated by a water district or a state or federal agency ,
whether or not such charges, fees, or surcharges appear on a bundled or line item basis o n
the customer billing .
(c)As used in this section, the term "charges" shall include the value of any othe r
services, credits, property of every kind or nature, or other consideration provided by th e
service user in exchange for the water services .
(d)The Tax Administrator, from time to time, may survey the water service suppliers i n
the City to identify the various unbundled billing components of water retail service tha t
they commonly provide to residential and commercial/industrial customers in the City,
and the charges therefor, including those items that are mandated by a water district or a
state or federal agency as a condition of providing such water service . The Tax
Administrator, thereafter, may issue and disseminate to such water service suppliers a n
administrative ruling identifying those components and items which are : i) necessary for
or common to the receipt, use or enjoyment of water service ; or, ii) currently are o r
historically have been included in a single or bundled rate for water service by a loca l
distribution company to a class of retail customers . Charges for such components an d
items shall be subject to the tax of subsection (a) above .
(e)The tax on water service imposed by this section shall be collected from the servic e
user by the water service supplier or its billing agent . The amount of tax collected in on e
(1) month shall be remitted to the Tax Administrator, and must be received by the Ta x
Administrator on or before the twentieth (20th) day of the following month .
3 .16 .100 Bundling Taxable Items .
If any nontaxable charges are combined with and not separately stated from taxabl e
service charges on the customer bill or invoice of a service supplier, the combined charg e
is subject to tax unless the service supplier identifies, by reasonable and verifiabl e
standards, the portions of the combined charge that are nontaxable and taxable throug h
the service supplier's books and records kept in the regular course of business, and in
accordance with generally accepted accounting principles, and not created an d
maintained for tax purposes . If the service supplier offers a combination of taxable an d
non-taxable services, and the charges are separately stated, then for taxation purposes, th e
values assigned the taxable and non-taxable services shall be based on its books and
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records kept in the regular course of business and in accordance with generally accepte d
accounting principles, and not created and maintained for tax purposes . The servic e
supplier has the burden of proving the proper valuation and apportionment of taxable an d
non-taxable charges .
3 .16 .110 Substantial Nexus/Minimum Contact .
For purposes of imposing a tax or establishing a duty to collect and remit a tax under thi s
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favo r
of the imposition, collection and/or remittance of the utility users' tax to the fullest exten t
permitted by State and Federal law, and as it may change from time to time by judicia l
interpretation or by statutory enactment . Any telecommunication service (includin g
VoIP) used by a person with a service address in the City, which service is capable o f
terminating a call to another person on the general telephone network, shall be subject t o
a rebuttable presumption that "substantial nexus/minimum contacts" exists for purpose s
of imposing a tax, or establishing a duty to collect and remit a tax, under this Chapter .A
service supplier shall be deemed to have sufficient activity in the City for tax collectio n
and remittance purposes if its activities include, but are not limited to, any of th e
following: maintains or has within the City, directly or through an agent or subsidiary,a
place of business of any nature ; solicits business in the City by employees, independen t
contractors, resellers, agents or other representatives ; solicits business in the City on a
continuous, regular, seasonal or systematic basis by means of advertising that is broadcas t
or relayed from a transmitter with the City or distributed from a location with the City ; o r
advertises in newspapers or other periodicals printed and published within the City o r
through materials distributed in the City by means other than the United States mail ; or if
there are activities performed in the City on behalf of the service supplier that ar e
significantly associated with the service supplier's ability to establish and maintain a
market in the City for the provision of utility services that are subject to a tax under thi s
Chapter .
3 .16 .120 Duty to Collect Procedures .
(a)
Collection by Service Suppliers :The duty of service suppliers to collect an d
remit the taxes imposed by the provisions of this Chapter shall be performed as follows :
(1)The tax shall be collected by service suppliers insofar as practicable at th e
same time as, and along with, the collection of the charges made in accordance with th e
regular billing practice of the service supplier . Where the amount paid by a service user
to a service supplier is less than the full amount of the charge and tax which was accrue d
for the billing period, a proportionate share of both the charge and the tax shall b e
deemed to have been paid . In those cases where a service user has notified the service
supplier of refusal to pay the tax imposed on said charges, Section 3 .16 .916 shall apply .
(2)The duty of a service supplier to collect the tax from a service user shal l
commence with the beginning of the first regular billing period applicable to the servic e
user where all charges normally included in such regular billing are subject to the
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provisions of this Chapter . Where a service user receives more than one billing, one o r
more being for different periods than another, the duty to collect shall arise separately fo r
each billing period .
(b)
Filing Return and Payment :Each person required by this Chapter to remit a ta x
shall file a return to the Tax Administrator, on forms approved by the Tax Administrator ,
on or before the due date . The full amount of the tax collected shall be included with th e
return and filed with the Tax Administrator . The Tax Administrator is authorized t o
require such additional information as he or she deems necessary to determine if the ta x
is being levied, collected, and remitted in accordance with this Chapter . Returns are du e
immediately upon cessation of business for any reason . Pursuant to Revenue and Ta x
Code Section 7284 .6,the Tax Administrator, and its agents, shall maintain such filin g
returns as confidential information that is exempt from the disclosure provisions of th e
Public Records Act .
3 .16 .130 Collection Penalties-Service Suppliers.
(a)Taxes collected from a service user are delinquent if not received by the Ta x
Administrator on or before the due date . Should the due date occur on a weekend or lega l
holiday, the return must be received by the Tax Administrator on the first regula r
working day following the weekend or legal holiday . A direct deposit, includin g
electronic fund transfers and other similar methods of electronically exchanging monie s
between financial accounts, made by a service supplier in satisfaction of its obligation s
under this Chapter shall be considered timely if the transfer is initiated on or before th e
due date, and the transfer settles into the City's account on the following business day .
(b)If the person required to collect and/or remit the utility users' tax fails to collec t
the tax (by failing to properly assess the tax on one or more services or charges on th e
customer's billing) or fails to remit the tax collected on or before the due date, the Tax
Administrator shall attach a penalty for such delinquencies or deficiencies at the rate o f
fifteen percent (15%) of the total tax that is delinquent or deficient in the remittance, an d
shall pay interest at the rate of seventy-five one-hundredths percent (0 .75%) per month ,
or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date o n
which the remittance first became delinquent, until paid .
(c)The Tax Administrator shall have the power to impose additional penalties upo n
persons required to collect and remit taxes pursuant to the provisions of this Chapter for
fraud or gross negligence in reporting or remitting at the rate of fifteen percent (15%) o f
the amount of the tax collected and/or required to be remitted, or as recomputed by th e
Tax Administrator.
(d)For collection purposes only, every penalty imposed and such interest that i s
accrued under the provisions of this Chapter shall become a part of the tax herei n
required to be paid .
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(e)
Notwithstanding the foregoing, the Tax Administrator may, in his or he r
discretion, modify the due dates of this Chapter to be consistent with any unifor m
standards or procedures that are mutually agreed upon by other public agencies imposin g
a utility users' tax, or otherwise legally established, to create a central payment locatio n
or mechanism.
3 .16 .140 Actions to Collect .
Any tax required to be paid by a service user under the provisions of this Chapter shall b e
deemed a debt owed by the service user to the City . Any such tax collected from a servic e
user which has not been remitted to the Tax Administrator shall be deemed a debt owe d
to the City by the person required to collect and remit and shall no longer be a debt of th e
service user . Any person owing money to the City under the provisions of this Chapte r
shall be liable to an action brought in the name of the City for the recovery of suc h
amount, including penalties and interest as provided for in this Chapter, along with an y
collection costs incurred by the City as a result of the person's noncompliance with thi s
Chapter, including, but not limited to, reasonable attorneys' fees . Any tax required to be
collected by a service supplier or owed by a service user is an unsecured priority excis e
tax obligation under 11 U. S. CA . Section 507(a)(8)(C).Service suppliers who seek t o
collect charges for service in bankruptcy proceedings shall also include in any such clai m
the amount of taxes due the City for those services, unless the Tax Administrato r
determines that such duty is in conflict with any federal or state law, rule, or regulation o r
that such action would be administratively impractical .
3 .16 .150 Deficiency Determination and Assessment-Tax Application Errors .
(a)The Tax Administrator shall make a deficiency determination if he or sh e
determines that any person required to pay or collect taxes pursuant to the provisions o f
this Chapter has failed to pay, collect, and/or remit the proper amount of tax b y
improperly or failing to apply the tax to one or more taxable services or charges . Nothing
herein shall require that the Tax Administrator institute proceedings under this Sectio n
3 .16 .150 if, in the opinion of the Tax Administrator, the cost of collection or enforcemen t
likely outweighs the tax benefit .
(b)The Tax Administrator shall mail a notice of such deficiency determination to th e
person required to pay or remit the tax, which notice shall refer briefly to the amount o f
the taxes owed, plus interest at the rate of seventy-five one-hundredths percent (0 .75%)
per month, or any fraction thereof, on the amount of the tax from the date on which th e
tax should have been received by the City . Within fourteen (14) calendar days after th e
date of service of such notice, the person may request in writing to the Tax Administrato r
for a hearing on the matter.
(c)If the person fails to request a hearing within the prescribed time period, th e
amount of the deficiency determination shall become a final assessment, and shal l
immediately be due and owing to the City . If the person requests a hearing, the Ta x
Administrator shall cause the matter to be set for hearing, which shall be scheduled
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within thirty (30) days after receipt of the written request for hearing . Notice of the tim e
and place of the hearing shall be mailed by the Tax Administrator to such person at least
ten (10) calendar days prior to the hearing, and, if the Tax Administrator desires sai d
person to produce specific records at such hearing, such notice may designate the record s
requested to be produced.
(d)At the time fixed for the hearing, the Tax Administrator shall hear all relevan t
testimony and evidence, including that of any other interested parties . At the discretion o f
the Tax Administrator, the hearing may be continued from time to time for the purpose o f
allowing the presentation of additional evidence . Within a reasonable time following th e
conclusion of the hearing, the Tax Administrator shall issue a final assessment (or non -
assessment), thereafter, by confirming, modifying or rejecting the original deficienc y
determination, and shall mail a copy of such final assessment to person owing the tax .
The decision of the Tax Administrator may be appealed pursuant to Section 3 .16 .200 o f
this Chapter . Filing an application with the Tax Administrator and appeal to the Cit y
Administrator,or designee, pursuant to Section 3 .16 .200 of this Chapter is a prerequisit e
to a suit thereon .
(e)Payment of the final assessment shall become delinquent if not received by th e
Tax Administrator on or before the thirtieth (30th) day following the date of receipt of th e
notice of final assessment. The penalty for delinquency shall be fifteen percent (15%) o n
the total amount of the assessment, along with interest at the rate of seventy-five one -
hundredths percent (0 .75%) per month, or any fraction thereof, on the amount of the tax ,
exclusive of penalties, from the date of delinquency, until paid . The applicable statute o f
limitations regarding a claim by the City seeking payment of a tax assessed under thi s
Chapter shall commence from the date of delinquency as provided in this subsection (e).
(f)All notices under this Chapter may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing,as
established by a proof of mailing .
3.16 .160 Administrative Remedy-Non-Paying Service Users .
(a)
Whenever the Tax Administrator determines that a service user has deliberatel y
withheld the amount of the tax owed by the service user from the amounts remitted to a
person required to collect the tax, or whenever the Tax Administrator deems it in the bes t
interest of the City,he or she may relieve such person of the obligation to collect th e
taxes due under this Chapter from certain named service users for specific billing periods .
To the extent the service user has failed to pay the amount of tax owed for a period o f
two (2) or more billing periods, the service supplier shall be relieved of the obligation to
collect taxes due . The service supplier shall provide the City with the names an d
addresses of such service users and the amounts of taxes owed under the provisions o f
this Chapter . Nothing herein shall require that the Tax Administrator institut e
proceedings under this Section 3 .16 .160 if, in the opinion of the Tax Administrator, th e
cost of collection or enforcement likely outweighs the tax benefit .
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(b)In addition to the tax owed, the service user shall pay a delinquency penalty at th e
rate of fifteen percent (15%) of the total tax that is owed, and shall pay interest at the rat e
of seventy-five one-hundredths percent (0 .75%) per month, or any fraction thereof, on th e
amount of the tax, exclusive of penalties, from the due date, until paid .
(c)The Tax Administrator shall notify the non-paying service user that the Ta x
Administrator has assumed the responsibility to collect the taxes due for the state d
periods and demand payment of such taxes, including penalties and interest . The notice
shall be served on the service user by personal delivery or by deposit of the notice in th e
United States mail, postage prepaid, addressed to the service user at the address to whic h
billing was made by the person required to collect the tax ; or, should the service use r
have a change of address, to his or her last known address .
(d)If the service user fails to remit the tax to the Tax Administrator within thirty (30 )
days from the date of the service of the notice upon him or her, the Tax Administrato r
may impose an additional penalty of fifteen percent (15%) of the amount of the total ta x
that is owed .
3 .16 .170 Additional Powers and Duties of the Tax Administrator .
(a)The Tax Administrator shall have the power and duty, and is hereby directed, t o
enforce each and all of the provisions of this Chapter .
(b)The Tax Administrator may adopt administrative rules and regulations consisten t
with provisions of this Chapter for the purpose of interpreting, clarifying, carrying ou t
and enforcing the payment, collection and remittance of the taxes herein imposed . Th e
administrative ruling shall not impose a new tax, revise an existing tax methodology a s
stated in this Chapter, or increase an existing tax, except as allowed by Californi a
Government Code Section 53750(h)(2).A copy of such administrative rules an d
regulations shall be on file in the Tax Administrator's office . To the extent that the Tax
Administrator determines that the tax imposed under this Chapter shall not be collected i n
full for any period of time from any particular service supplier or service user, tha t
determination shall be considered an exercise of the Tax Administrator's discretion t o
settle disputes and shall not constitute a change in taxing methodology for purposes o f
Government Code Section 53750 or otherwise . The Tax Administrator is not authorize d
to amend the City's methodology for purposes of Government Code Section 53750 and
the City does not waive or abrogate its ability to impose the utility users' tax in full as a
result of promulgating administrative rulings or entering into agreements .
(c)Upon a proper showing of good cause, the Tax Administrator may mak e
administrative agreements, with appropriate conditions, to vary from the stric t
requirements of this Chapter and thereby : (1) conform to the billing procedures of a
particular service supplier so long as said agreements result in the collection of the tax i n
conformance with the general purpose and scope of this Chapter ; or, (2) to avoid a
hardship where the administrative costs of collection and remittance greatly outweigh th e
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tax benefit. A copy of each such agreement shall be on file in the Tax Administrator's
office, and are voidable by the Tax Administrator or the City at any time .
(d)The Tax Administrator may conduct an audit, to ensure proper compliance wit h
the requirements of this Chapter, of any person required to collect and/or remit a tax
pursuant to this Chapter . The Tax Administrator shall notify said person of the initiatio n
of an audit in writing . In the absence of fraud or other intentional misconduct, the audi t
period of review shall not exceed a period of three (3) years next preceding the date o f
receipt of the written notice by said person from the Tax Administrator . Upon completio n
of the audit, the Tax Administrator may make a deficiency determination pursuant t o
Section 3 .16 .150 of this Chapter for all taxes (and applicable penalties and interest) owe d
and not paid, as evidenced by information provided by such person to the Tax
Administrator . If said person is unable or unwilling to provide sufficient records to enabl e
the Tax Administrator to verify compliance with this Chapter, the Tax Administrator i s
authorized to make a reasonable estimate of the deficiency . Said reasonable estimate shal l
be entitled to a rebuttable presumption of correctness .
(e)Upon receipt of a written request of a taxpayer, and for good cause, the Ta x
Administrator may extend the time for filing any statement required pursuant to thi s
Chapter for a period of not to exceed forty-five (45) days, provided that the time for filin g
the required statement has not already passed when the request is received . No penalty
for delinquent payment shall accrue by reason of such extension . Interest shall accru e
during said extension at the rate of seventy-five one-hundredths percent (0 .75%) per
month, prorated for any portion thereof .
(f)The Tax Administrator shall determine the eligibility of any person who asserts a
right to exemption from, or a refund of, the tax imposed by this Chapter .
(g)Notwithstanding any provision in this Chapter to the contrary, the Ta x
Administrator may waive any penalty or interest imposed upon a person required t o
collect and/or remit for failure to collect the tax imposed by this Chapter if the no n
collection occurred in good faith . In determining whether the non-collection was in goo d
faith, the Tax Administrator shall take into consideration the uniqueness of the product o r
service, industry practice or other precedence . The Tax Administrator may als o
participate with other utility users' tax public agencies in conducting coordinate d
compliance reviews with the goal of achieving administrative efficiency and uniform ta x
application determinations, where possible . To encourage full disclosure and on-goin g
cooperation on annual compliance reviews, the Tax Administrator, and its agents, may
enter into agreements with the tax-collecting service providers and grant prospective only
effect on any changes regarding the taxation of services or charges that were previousl y
deemed by the service provider, in good faith and without gross negligence, to be non -
taxable . In determining whether the non-collection was in good faith and without gros s
negligence, the Tax Administrator shall take into consideration the uniqueness of th e
product or service, industry practice or other precedence .
3 .16 .180 Records .
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(a)It shall be the duty of every person required to collect and/or remit to the City an y
tax imposed by this Chapter to keep and preserve, for a period of at least three (3) years ,
all records as may be necessary to determine the amount of such tax as he/she may hav e
been liable for the collection of and remittance to the Tax Administrator, which record s
the Tax Administrator shall have the right to inspect at a reasonable time .
(b)The City may issue an administrative subpoena to compel a person to deliver, t o
the Tax Administrator, copies of all records deemed necessary by the Tax Administrato r
to establish compliance with this Chapter, including the delivery of records in a commo n
electronic format on readily available media if such records are kept electronically by th e
person in the usual and ordinary course of business . As an alternative to delivering the
subpoenaed records to the Tax Administrator on or before the due date provided in th e
administrative subpoena, such person may provide access to such records outside the Cit y
on or before the due date, provided that such person shall reimburse the City for al l
reasonable travel expenses incurred by the City to inspect those records, including travel ,
lodging, meals, and other similar expenses, but excluding the normal salary or hourl y
wages of those persons designated by the City to conduct the inspection .
(c)The Tax Administrator is authorized to execute a non-disclosure agreemen t
approved by the City Attorney to protect the confidentiality of customer informatio n
pursuant to California Revenue and Tax Code Sections 7284 .6 and 7284.7.
(d)If a service supplier uses a billing agent or billing aggregator to bill, collect ,
and/or remit the tax, the service supplier shall : 1) provide to the Tax Administrator th e
name, address and telephone number of each billing agent and billing aggregato r
currently authorized by the service supplier to bill, collect, and/or remit the tax to th e
City ; and, 2) upon request of the Tax Administrator, deliver, or effect the delivery of, an y
information or records in the possession of such billing agent or billing aggregator that, i n
the opinion of the Tax Administrator, is necessary to verify the proper application ,
calculation, collection and/or remittance of such tax to the City .
(e)If any person subject to record-keeping under this Chapter unreasonably denie s
the Tax Administrator access to such records, or fails to produce the informatio n
requested in an administrative subpoena within the time specified, then the Ta x
Administrator may impose a penalty of Five Hundred Dollars ($500 .00) on such perso n
for each day following: 1) the initial date that the person refuses to provide such access ;
or, 2) the due date for production of records as set forth in the administrative subpoena .
This penalty shall be in addition to any other penalty imposed under this Chapter .
3 .16 .190 Refund s
Whenever the amount of any tax has been overpaid or paid more than once or has bee n
erroneously or illegally collected or received by the Tax Administrator under this Chapte r
from a person or service supplier, it may be refunded as provided in this Section a s
follows :
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(a)Written Claim for Refund :The Tax Administrator may refund any tax that ha s
been overpaid or paid more than once or has been erroneously or illegally collected o r
received by the Tax Administrator under this Chapter from a person or service supplier ,
provided that no refund shall be paid under the provisions of this Section unless th e
claimant or his or her guardian, conservator, executor, or administrator has submitted a
written claim to the Tax Administrator within one year of the overpayment or erroneou s
or illegal collection of said tax . Such claim must clearly establish claimant's right to th e
refund by written records showing entitlement thereto . Nothing herein shall permit th e
filing of a claim on behalf of a class or group of taxpayers unless each member of th e
class has submitted a written claim under penalty of perjury as provided by this Section .
(b)Compliance with Claims Act : The filing of a written claim pursuant t o
Government Code Section 935 is a prerequisite to any suit thereon . Any action brough t
against the City pursuant to this Chapter shall be subject to the provisions of Government
Code Sections 945 .6 and 946.The Tax Administrator, or the City Council where th e
claim is in excess of Five Thousand Dollars ($5,000 .00),shall act upon the refund claim
within the time period set forth in Government Code Section 912 .4 .If the Tax
Administrator/City Council fails or refuses to act on a refund claim within the tim e
prescribed by Government Section 912 .4,the claim shall be deemed to have been rejecte d
by the City Council on the last day of the period within which the City Council wa s
required to act upon the claim as provided in Government Code Section 912 .4 .The Tax
Administrator shall give notice of the action in a form which substantially complies with
that set forth in Government Code Section 913 .
(c)Refunds to Service Suppliers :Notwithstanding the notice provisions o f
subsection (a)of this Section, the Tax Administrator may, at his or her discretion, giv e
written permission to a service supplier, who has collected and remitted any amount o f
tax in excess of the amount of tax imposed by this Chapter, to claim credit for suc h
overpayment against the amount of tax which is due the City upon a subsequent monthly
return(s) to the Tax Administrator, provided that, prior to taking such credit by th e
service supplier : 1) such credit is claimed in a return dated no later than one year from th e
date of overpayment or erroneous collection of said tax; 2) the Tax Administrator i s
satisfied that the underlying basis and amount of such credit has been reasonabl y
established ; and, 3) in the case of an overpayment by a service user to the service supplie r
that has been remitted to the City, the Tax Administrator has received proof, to his or he r
satisfaction, that the overpayment has been refunded by the service supplier to the servic e
user in an amount equal to the requested credit .
3 .16 .200 Appeals .
(a)
The provisions of this Section apply to any decision (other than a decision relatin g
to a refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator . Any person aggrieved b y
any decision (other than a decision relating to a refund pursuant to Section 3 .16 .190 of
this Chapter), deficiency determination, assessment, or administrative ruling of the Ta x
Administrator, shall be required to comply with the appeals procedure of this Section .
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Compliance with this Section shall be a prerequisite to a suit thereon . [See Governmen t
Code Section 935(b)].Nothing herein shall permit the filing of a claim or action o n
behalf of a class or group of taxpayers .
(b)If any person is aggrieved by any decision (other than a decision relating to a
refund pursuant to Section 3 .16 .190 of this Chapter), deficiency determination ,
assessment, or administrative ruling of the Tax Administrator ; he or she may appeal to
the City Administrator, or designee, by filing a notice of appeal with the City Cler k
within fourteen (14) days of the date of the decision, deficiency determination ,
assessment, or administrative ruling of the Tax Administrator which aggrieved th e
service user or service supplier .
(c)The matter shall be scheduled for hearing before an independent hearing office r
selected by the City Administrator, or designee, no more than thirty (30) days from th e
receipt of the appeal . The appellant shall be served with notice of the time and place o f
the hearing, as well as any relevant materials, at least five (5) calendar days prior to th e
hearing . The hearing may be continued from time to time upon mutual consent . At the
time of the hearing, the appealing party, the Tax Administrator, and any other intereste d
person may present such relevant evidence as he or she may have relating to th e
determination from which the appeal is taken .
(d)Based upon the submission of such evidence and the review of the City's files, th e
hearing officer shall issue a written notice and order upholding, modifying or reversin g
the determination from which the appeal is taken . The notice shall be given withi n
fourteen (14) days after the conclusion of the hearing and shall state the reasons for th e
decision . The notice shall specify that the decision is final and that any petition fo r
judicial review shall be filed within ninety (90) days from the date of the decision i n
accordance with Code of Civil Procedure Section 1094 .6 .
(e)All notices under this Section may be sent by regular mail, postage prepaid, an d
shall be deemed received on the third calendar day following the date of mailing, a s
established by a proof of mailing .
3 .16 .210 No Injunction/Writ of Mandate .
No injunction or writ of mandate or other legal or equitable process shall issue in an y
suit, action, or proceeding in any court against this City or against any officer of the Cit y
to prevent or enjoin the collection under this Chapter of any tax or any amount of ta x
required to be collected and/or remitted .
3 .16.220 Notice of Changes to Ordinance .
If a tax under this Chapter is added repealed, increased, reduced, or the tax base i s
changed, the Tax Administrator shall follow the notice requirements of California Publi c
Utilities Code Section 799 .
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3 .16 .230 Effect of State and Federal Reference/Authorization .
Unless specifically provided otherwise, any reference to a State or Federal statute in thi s
Chapter shall mean such statute as it may be amended from time to time, provided that
such reference to a statute herein shall not include any subsequent amendment thereto, o r
to any subsequent change of interpretation thereto by a State or Federal agency or cour t
of law with the duty to interpret such law, to the extent that such amendment or change o f
interpretation would require voter approval under California law, or to the extent tha t
such change would result in a tax decrease (as a result of excluding all or a part of a
utility service, or charge therefor, from taxation). Only to the extent voter approval woul d
otherwise be required or a tax decrease would result, the prior version of the statute (o r
interpretation) shall remain applicable ; for any application or situation that would no t
require voter approval or result in a decrease of a tax, provisions of the amended statut e
(or new interpretation) shall be applicable to the maximum possible extent .
To the extent that the City's authorization to collect or impose any tax imposed under thi s
Chapter is expanded or limited as a result of changes in State or Federal law, n o
amendment or modification of this Chapter shall be required to conform the tax to thos e
changes, and the tax shall be imposed and collected to the full extent of the authorizatio n
up to the full amount of the tax imposed under this Chapter .
3 .16 .240 No Increase in Tax Percentage or Change in Methodology Without Vote r
Approval ; Amendment or Repeal .
This Title 3, Chapter 16 of the San Luis Obispo Municipal Code may be repealed or
amended by the City Council without a vote of the People . However, as required b y
Chapter XIIIC of the California Constitution,voter approval is required for any
amendment provision that would increase the rate of any tax levied pursuant to thi s
Ordinance . The People of the City of San Luis Obispo affirm that the following action s
shall not constitute an increase of the rate of a tax :
(1)The restoration of the rate of the tax to a rate that is no higher than that set by this
Ordinance, if the City Council has acted to reduce the rate of the tax ;
(2)An action that interprets or clarifies the methodology of the tax, or any definitio n
applicable to the tax, so long as such interpretation or clarification (even if contrary t o
some prior interpretation or clarification) is not inconsistent with the language of thi s
Ordinance ;
(3)The establishment a class of persons that is exempt or excepted from the tax or th e
discontinuation of any such exemption or exception (other than the discontinuation of a n
exemption or exception specifically set forth in this Ordinance); and
(4)The collection of the tax imposed by this ordinance, even if the City had, for some
period of time, failed to collect the tax .
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3.16 .250 Remedies Cumulative .
All remedies and penalties prescribed by this Chapter or which are available under an y
other provision of law or equity, including but not limited to the California False Claim s
Act (Government Code Section 12650 et seq .)and the California Unfair Practices Ac t
(Business and Professions Code Section 17070 et seq .),are cumulative . The use of on e
or more remedies by the City shall not bar the use of any other remedy for the purpose o f
enforcing the provisions of this Chapter .
3 .16 .260 Interaction With Prior Tax .
(a).Collection of Tax by Service Providers . Service providers shall begin to collect th e
tax imposed by this amended Chapter 16 as soon as feasible after the effective date of the
Chapter, but in no event later than permitted by Section 799 of the California Public
Utilities Code .
(b).Satisfaction of Tax Obligation by Service Users . Prior to April 1, 2013, any person
who pays the tax levied pursuant to Title 3, Chapter 16 of this Code, as it existed prior t o
its amendment as provided herein, with respect to any charge for a service shall be
deemed to have satisfied his or her obligation to pay the tax levied pursuant to Title 3 ,
Chapter 16 as amended herein, with respect to that charge . The intent of this paragraph i s
to prevent the imposition of multiple taxes upon a single utility charge during th e
transition period from the prior Utility Users' Tax ordinance to the amended Utilit y
Users'Tax ordinance (which transition period ends April 1, 2013) and to permit servic e
providers or other persons with an obligation to remit the tax hereunder, during tha t
transition period, to satisfy their collection obligations by collecting either tax .
(c) In the event that a final court order should determine that the election enacting thi s
Title 3, Chapter 16 (as amended herein) is invalid for whatever reason, or that any ta x
imposed under this Title 3, Chapter 16 (as amended herein) is invalid in whole or in part ,
then the taxes imposed under Title 3, Chapter 16 of this Code, as it existed prior to it s
amendment as provided herein, shall automatically continue to apply with respect to an y
service for which the tax levied pursuant to this Chapter 16 has been determined to b e
invalid . Such automatic continuation shall be effective beginning as of the first date o f
service (or billing date) for which the tax imposed by this Chapter is not valid . However,
in the event of an invalidation, any tax (other than a tax that is ordered refunded by th e
court or is otherwise refunded by the City) paid by a person with respect to a service an d
calculated pursuant to this Title 3, Chapter 16 (as amended herein) shall be deemed t o
satisfy the tax imposed under Title 3, Chapter 16, as it existed prior to its amendment a s
provided herein, on that service, so long as the tax is paid with respect to a service provide d
no later than six months subsequent to the date on which the final court order is published .
SECTION 2 .Effective Date . This Chapter, if approved by the electorate of the Cit y
of San Luis Obispo at the General Municipal Election of November 6, 2012 shal l
become effective immediately upon the declaration of the results of that election b y
the City Council of the City of San Luis Obispo .
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SECTION3 .Severability. If any section, subsection, sentence, clause, phrase, o r
portion of this Ordinance is for any reason held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining portions of this Ordinance shal l
nonetheless remain in full force and effect . The People hereby declares that the y
would have adopted each section, subsection, sentence, clause, phrase, or portion o f
this Ordinance, irrespective of the fact that any one or more sections, subsections ,
sentences, clauses, phrases, or portions of this Ordinance be declared invalid o r
unenforceable .
SECTION4 .Ratification of Prior Tax . The People of the City of San Luis Obispo
hereby ratify and approve the past collection of the Utility Users' Tax Title 3, Chapte r
16 of the San Luis Obispo Municipal Code, as it existed prior to the effective date o f
this Ordinance .
SECTION5 .Execution . The Mayor is hereby authorized to attest to the adoption o f
the Ordinance by the voters of the City by signing where indicated below .
I hereby certify that the foregoing Ordinance was PASSED, APPROVED
and ADOPTED by the People of the City of San Luis Obispo, California voting on
the 6th day of November, 2012 .
Mayor
ATTEST :
City Clerk
APPROVED AS TO FORM :
City Attorney
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City of San Luis Obispo UUT Ordinance Comparison Matrix June 201 2
Current Ordinance Proposed Ordinanc e
Electricity Yes 5%Yes 5 %
Gas Yes 5%Yes 5 %
Water Yes 5%Yes 5 %
Video Users (formerly Cable TV)Yes 5%Yes 4 .8 %
Cable TV Yes Ye s
Uverse Yes Yes
Satellite ie Dish/DriectTV No No Federal law prohibits local tax on direct broadcast satellite .
IP TV No Possibly FCC looking into treating Hulu and others like CAN .
Current Ordinance Proposed Ordinanc e
Telecommunications Yes 5%Yes 4 .8%
Local AT&T Yes Ye s
Interstate No*Ye s
International No*Ye s
Cell Yes Ye s
Prepaid Yes Yes
VoIP Yes*Yes
Private (T-1)No Yes
Paging No Yes
Text Messaging No Ye s
Internet Access**No N o
* Many telecom providers are unable to "unbundle local, intrastate, interstate and international "and therefore tax the entire amount under the existin g
ordinance . The distinction between local, intrastate, interstate and international no longer makes sense in today 's telecom market . Free Skype service is no t
taxed under either ordinance .
**A current federal moratorium (Internet Tax Freedom Act) does not allow local taxation of "internet access" including charges for DSL, cable modem, wireles s
broadband (for smartphones). Also, the new ordinance specifically excludes digital downloads such as music, ringtones and other content services, such as N Y
Times and WSJ .
PH1-94