HomeMy WebLinkAbout1586 - Repealing & Re-Enacting Utility Users TaxORDINANCE NO. 1586 (2012 Series)
AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA REPEALING
AND RE- ENACTING IN FULL TITLE 3, CHAPTER 3.16 OF THE SAN LUIS OBISPO
MUNICIPAL CODE WITH RESPECT TO UTILITY USERS' TAX
THE PEOPLE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA DO
ORDAIN AS FOLLOWS:
SECTION 1. Title 3, Chapter 3.16 of the San Luis Obispo Municipal Code is hereby
repealed and re- enacted in full, to read as follows:
Chapter 3.16
Utility Users' Tax
3.16.010 Short Title and Purpose
3.16.020 Definitions
3.16.030 Constitutional, Statutory, and Other Exemptions
3.16.040 Telecommunication Users' Tax
3.16.050 Electricity Users' Tax
3.16.060 Gas Users Tax
3.16.070 Collection of Tax from Service Users Receiving Direct Purchase of Gas or Electricity
3.16.080 Video Users' Tax
3.16.090 Water Users' Tax
3.16.100 Bundling Taxable Items with Nontaxable Items
3.16.110 Substantial Nexus /Minimum Contacts
3.16.120 Duty to Collect — Procedures
3.16.130 Collection Penalties — Service Suppliers
3.16.140 Actions to Collect
3.16.150 Deficiency Determination and Assessment — Tax Application Errors
3.16.160 Administrative Remedy — Nonpaying Service Users
3.16.170 Additional Powers and Duties of the Tax Administrator
3.16.180 Records
3.16.190 Refunds
3.16.200 Appeals
3.16.210 No Injunction/Writ of Mandate
3.16.220 Notice of Changes to Chapter
3.16.230 Future Amendment to Cited Statute
3.16.240 No Increase in Tax Percentage or Change in Methodology without Voter Approval
3.16.250 Remedies Cumulative
3.16.260 Interaction with Prior Tax
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3.16.010 Short Title and Purpose
This Chapter 3.16 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 are solely for the
purpose of providing revenue for the usual and current expenses of the city. The provisions of
this chapter are not enacted for regulatory purposes.
3.16.020 Definitions
The following words and phrases whenever used in this Chapter 3.16 shall be construed as
defined in this Section.
(a) "Ancillary telecommunication services" means services that are associated with or
incidental to the provision, use or enjoyment of telecommunications services, including but not
limited to the following services:
(1) "Conference bridging service" means an ancillary service that links two (2) or more
participants of an audio or video conference call and may include the provision of a
telephone number. Conference bridging service does not include the telecommunications
services used to reach the conference bridge.
(2) "Detailed telecommunications billing service" means an ancillary service of separately
stating information pertaining to individual calls on a customer's billing statement.
(3) "Directory assistance" means an ancillary service of providing telephone 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 features 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 customer to store, send
or receive recorded messages. Voice mail service does not include any vertical services that
the customer may be required to have in order to utilize the voice mail service
(b) "Ancillary video services" means services that are associated with or incidental to the
provision or delivery of video services, including but not limited to electronic program guide
services, recording services, search functions, or other interactive services or communications
that are associated with or incidental to the provision, use or enjoyment of video services.
(c) "Billing address" shall mean the mailing address of the service user where the service
supplier submits invoices or bills for payment by the customer.
(d) "City" shall mean the City of San Luis Obispo.
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(e) "Gas" shall mean natural or manufactured gas or any alternate hydrocarbon fuel which
may be substituted therefor.
(f) "Individual Service" shall mean utility service at a single contiguous location. A
service user with more than one meter or billing invoice per utility service at a single contiguous
location may combine all billings for purposes of calculating the maximum tax amount.
(g) "Mobile telecommunications service" has the meaning and usage as set 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 all 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 wholesale generator (15 U.S.C. Section 79z -5a),
municipal utility district, federal power 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 electric 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 of 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.
0) "Paging service" means a "telecommunications service" that provides 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, joint stock company, joint
venture, limited liability company, corporation (including foreign, domestic, and non - profit),
municipal district or municipal corporation (other than the City), cooperative, receiver, trustee,
guardian, or other representative appointed by order of any court.
(1) "Place of primary use" means the street address representative of where the customer's
use of the telecommunications service primarily occurs, which must be the residential street
address or the primary business street address of the customer.
(m) "Post -paid telecommunication service" means the telecommunication service obtained
by malting a payment on a communication -by- communication basis either through the use of a
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credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or
by charge made to a service number which is not associated with the origination or termination
of the telecommunication service.
(n) "Prepaid telecommunication service" means the right to access telecommunication
services, which must be paid for in advance and which enables the origination of
communications using an access number or authorization code, whether manually or
electronically dialed, and that is sold in predetermined units or dollars of which the number
declines with use in a known amount.
(o) "Private telecommunication service" means a telecommunication service that entitles
the customer to exclusive or priority use of a communications channel or group of channels
between or among termination points, regardless of the manner in which such channel or
channels are connected, and includes switching capacity, extension lines, stations, and any other
associated services that are provided in 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 or among customer channel termination points (i. e., the location where the
customer either 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 from which the
telecommunication originates or terminates, regardless of where the 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 of the
service user's place of primary use.
(3) For prepaid telecommunication service, "service address" means the location 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.
(s) "State" shall mean the State of California.
(t) "Streamlined Sales and Use Tax Agreement" means the multi -state 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 her designee.
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(v) "Telecommunications service" means the transmission, conveyance, or routing of
voice, data, audio, video, or any other information or signals to a point, or between or among
points, whatever the technology used. The term "telecommunications services" includes such
transmission, conveyance, or routing in which computer processing applications are used to act
on the form, code or protocol of the content for purposes of transmission, conveyance or routing
without regard to whether such services are referred to as voice over internet protocol (VoIP)
services or are classified by the Federal Communications Commission as enhanced or value
added, and includes video 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 international
telecommunication services; mobile telecommunications service; prepaid telecommunication
service; post -paid telecommunication service; private telecommunication service; paging service;
800 service (or any other toll -free numbers designated by the Federal Communications
Commission); 900 service (or any other similar numbers designated by the Federal
Communications Commission for services 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 basic services, premium
services, audio services, video games, pay - per -view services, video on demand, origination
programming, or any other similar services, regardless of the content of such video
programming, or the technology used to deliver such services, and regardless of the manner or
basis on which such services are calculated or billed.
(x) "Video services" means "video programming" and any and all services 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," regardless of the technology used to
deliver, store or provide such services, and regardless of the manner or basis on which such
services are calculated or billed, and includes ancillary video services, data services,
"telecommunication services," or interactive 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 capability to receive one or
more channels of video programming, including any communications that are ancillary,
necessary or common to the provision, use or enjoyment of the video programming, to or from a
business or residential address in the City, where some fee is paid, whether directly or included
in dues or rental charges for that service, whether or not public rights -of -way are utilized in the
delivery of the video programming or communications. A "video service supplier" includes, but
is not limited 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; master
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
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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 of making and
receiving real -time voice transmissions over any Internet Protocol network.
(aa) "800 Service" means a "telecommunications service" that allows a caller to dial a toll-
free number without incurring a charge for the call. The service is typically marketed under the
name "800," "855," "866,35 "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 the subscriber's prerecorded
announcement or live service. "900 service" does not include the charge for: collection services
provided by the seller of the "telecommunications 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 any 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 in violation of a Federal
or State statute, the Constitution of the United States or the Constitution of the State.
(b) Any service user that is exempt from the tax imposed by this Chapter pursuant to
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 such 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 service user. If deemed exempt by the Tax
Administrator, such service user shall give the Tax 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 tax exempt status. A service user that fails to comply with this
Chapter shall not be entitled to a refund of a users' tax collected and remitted to the Tax
Administrator from such service user as a result of such noncompliance.
The decision of the Tax Administrator may be appealed pursuant to Section 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 or one or
more classes of utility service otherwise subject to payment of a tax imposed by this Chapter and
provide that such classes of persons or service shall be exempt, in whole or in part from such tax
for a specified period of time.
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(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 the accommodation of
persons with low incomes and (2) which qualify for the welfare exemption set forth in the
California Revenue and Taxation Code, and if the charges for such services are paid by the
operators of the retirement facilities, the operators shall be 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 establish 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 four and eight- tenths percent
(4.8 %) of the charges made for such services and shall be collected from the service user by the
telecommunication services supplier or its billing agent. There is a rebuttable presumption that
telecommunication services, which are billed to a billing or service address in the City, are used,
in whole or in part, within the City's boundaries, and such services are subject to taxation under
this Section. There is also a rebuttable presumption that prepaid telecommunication services sold
within the city are used, in whole or in part, within the City and are therefore subject to taxation
under this Section. If the billing address of the service user is different from the service address,
the service address of the service user shall be used for purposes of imposing the tax. 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 the service user in exchange for the
telecommunication services.
(b) "Mobile telecommunications service" shall be sourced in accordance with the 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 service suppliers, which are
subject to the tax collection requirements of this Chapter, sourcing rules for the taxation of other
telecommunication services, including but not limited to post -paid telecommunication services,
prepaid telecommunication services, VoIP, and private communication services, provided that
such rules are based upon custom and common practice that further administrative efficiency and
minimize multi 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, an 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, but is not
limited to, charges for: connection, reconnection, termination, movement, or change of
telecommunication services; late payment fees; detailed billing; central office 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 for programs imposed by state or federal law; local number
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portability charges; and text and instant messaging. "Telecommunication services" shall not
include digital downloads that are not "ancillary telecommunication services," such as music,
ringtones, games, and similar digital products.
(e) To prevent actual multi jurisdictional taxation of telecommunication services subject to
tax under this Section, any service user, upon proof to the Tax Administrator that the service user
has previously paid the same tax in another state or city on such telecommunication services,
shall be allowed a credit against the tax imposed to the 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 this Section.
(f) The tax on telecommunication services imposed by this Section shall be collected from
the service user by the service supplier. The amount of tax collected in one month shall be
remitted to the Tax Administrator, and must be received by the Tax 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 for such
electricity, and for any supplemental services or other associated activities directly related to
and /or necessary for the provision of electricity to the service user, which are 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.
(b) As used in this Section, the term "charges" shall apply to all services, components and
items that 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 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 reestablishment charges, demand
charges, fuel or other cost adjustments, power exchange charges, independent system
operator (ISO) charges, stranded investment or competitive transition charges (CTC), public
purpose program charges, nuclear decommissioning charges, trust transfer amounts (bond
financing charges), franchise fees, franchise surcharges, annual and monthly charges, and
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other 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 are mandated 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, 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 other services,
credits, property of every kind or nature, or other consideration provided by the service user in
exchange for the electricity or services related to the provision of such electricity.
(d) The Tax Administrator, from time to time, may survey the electric service suppliers to
identify the various unbundled billing components of electric retail service that they 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 federal regulatory agencies as a
condition of providing such electric service. The Tax Administrator, thereafter, may issue and
disseminate to such electric service suppliers an 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 local distribution company to a class of retail customers. Charges for
such components and 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 mere receiving
of such electricity by an electrical corporation or governmental agency at a point within the City
for resale.
(f) The tax on electricity provided by self - production or by a non - utility service supplier not
under the jurisdiction of this Chapter 3.16 shall be collected and remitted in the manner set forth
in Section 3.16.070 of this Chapter. All other taxes on charges for electricity imposed by this
Section shall be collected from the service user by the electric 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 (20th) 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 of tax measured by the tax billed in the previous month
or upon the payment pattern of the service user, which must be received by the Tax
Administrator on or before the twentieth (20th) 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, if approved by the Tax Administrator, may be
applied 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 is
transported and delivered through a pipeline or by mobile transport. The tax imposed by this
Section shall be at the rate of five percent (5 %) of the charges made for such gas, including all
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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 service supplier, or its billing agent,
and shall apply to all uses of gas, including but not limited to, heating, electricity generation, and
the use of gas as a component of a manufactured 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 or 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 retail 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 the service user
(including the actual costs attributed to drilling, production, lifting, storage, gathering,
trunkline, pipeline, and other operating costs associated with 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 be required to
apply the tax to any charges for gas storage services when the service supplier cannot, as a
practical matter, determine the jurisdiction where such stored 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 service supplier and to remit the tax to the appropriate
jurisdiction;
(4) capacity or demand charges, late charges, service establishment or 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 mandated 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, 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 other 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 to
identify the various unbundled billing components of gas retail service that they commonly
provide to residential and commercial /industrial customers in the City, and the charges therefor,
including those items that are mandated by state or federal regulatory 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
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which are: i) necessary for or common to the receipt, use or 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 retail customers. Charges for such components and
items shall be subject to the 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 distribution system.
(f) The tax on gas provided by self - production or by a non - utility service supplier not under
the jurisdiction of this Chapter 3.16 shall be collected and remitted in the manner set forth in
Section 3.16.070. All other taxes on charges for gas imposed by this Section 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 (20th) 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
of tax measured by the tax billed in the previous month or upon the payment pattern of the
service user, which must be received by the Tax Administrator on or before the twentieth (20th)
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, if 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 or
Electricity.
(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 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 supplier not under the jurisdiction of
this Chapter; or which, for any other reason, is not having the full tax collected and remitted by
its service supplier, a non - utility service supplier, or its 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 the tax due directly to the Tax Administrator within thirty (30)
days of such use, based on the 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, remit to the Tax Administrator within thirty (30) days of such use an estimated
amount of tax measured by the tax billed in the previous month, or upon the payment pattern of
similar customers of the service supplier using similar amounts of gas or electricity, provided
that the service user shall submit an adjusted payment or request for credit, as 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 tax bill that becomes due.
(b) The Tax Administrator may require said service user to identify its non - utility service
supplier, and otherwise provide, subject to audit: invoices; books of account; or other
satisfactory evidence documenting the quantity of gas or electricity used, including any related
supplemental services, and the cost or price thereof. If the service user is unable to provide such
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satisfactory evidence, or if the administrative cost of calculating the tax 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 user would have incurred if the gas or electricity used,
including any related supplemental services, had been provided by the service supplier that is the
primary supplier of gas or electricity within the City. Rate schedules for this purpose shall be
available from the 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 percent (4.8 %) of the
charges made for such services and shall be collected from the service user 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, in whole or in part, within the City's
boundaries, and such services are subject to taxation under this Chapter. If the billing address of
the service user is different from the service 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, charges for
the following:
(1) regulatory fees and surcharges, franchise fees and access fees (PEG);
(2) initial installation of equipment necessary for provision and receipt of video 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 guide services, search
functions, recording functions, or other interactive services or communications that are
ancillary, necessary or common to the use or enjoyment 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, and special
services.
(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 the service user in
exchange for the video services.
(d) The Tax Administrator may issue and disseminate to video service suppliers, which are
subject to the tax collection requirements of this Chapter, an administrative ruling identifying
Ordinance 1586 (2012 Series)
Page 13
those video services, or charges therefor, that are subject to or not subject to the tax of
subsection (a) above.
(e) The tax imposed by this section shall be collected from the service user by the video
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 service (e.g., an apartment
owner), unless such service is resold to individual users, in which case the service user shall be
the ultimate purchaser of the video service. 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 (20th) day of the following month.
3.16.090 Water Users' Tax.
(a) There is imposed a tax upon every person using water in the City which is 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.
(b) As used in this section, the term "charges" shall apply to all services, components and
items that are: i) necessary for or common to the receipt, use or enjoyment of water service; or,
ii) currently are or historically have been included in a single or bundled rate 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 or reestablishment charges; franchise fees; franchise
surcharges; annual and monthly charges; and other charges, fees and surcharges which are
necessary for or common to 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 on the 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 the service user in
exchange for the water services.
(d) The Tax Administrator, from time to time, may survey the water service suppliers in the
City to identify the various unbundled billing components of water retail service that 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 an 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 or historically have been included in a single or bundled rate
for water service by a local distribution company to a class of retail customers. Charges for such
components and items shall be subject to the tax of subsection (a) above.
Ordinance 1586 (2012 Series)
Page 14
(e) The tax on water service imposed by this section shall be collected from the service user
by the water 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 (20th) day of the following month.
3.16.100 Bundling Taxable Items.
If any nontaxable charges are combined with and not separately stated from taxable service
charges on the customer bill or invoice of a service supplier, the combined charge is subject to
tax unless the service supplier identifies, by reasonable and verifiable standards, the portions of
the combined charge that are nontaxable and taxable through 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 and 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, the values assigned the taxable and non - taxable services shall be
based on its books and records kept in the regular course of business and in accordance with
generally accepted accounting principles, and not created and maintained for tax purposes. The
service supplier has the burden of proving the proper valuation and apportionment of taxable and
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 this
Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor of the
imposition, collection and /or remittance of the utility users' tax to the fullest extent permitted by
State and Federal law, and as it may change from time to time by judicial interpretation or by
statutory enactment. Any telecommunication service (including Vol?) used by a person with a
service address in the City, which service is capable of terminating a call to another person on
the general telephone network, shall be subject to a rebuttable presumption that "substantial
nexus /minimum contacts" exists for purposes 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 collection and remittance purposes if its activities include, but are not limited
to, any of the 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,
independent 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 broadcast 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 or 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 are 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 this Chapter.
Ordinance 1586 (2012 Series)
Page 15
3.16.120 Duty to Collect Procedures.
(a) Collection by Service Suppliers: The duty of service suppliers to collect and 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 the same time as,
and along with, the collection of the charges made in accordance with the 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 accrued for the billing period, a
proportionate share of both the charge and the tax shall be 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 3.16.160 shall apply.
(2) The duty of a service supplier to collect the tax from a service user shall commence with
the beginning of the first regular billing period applicable to the service user where all
charges normally included in such regular billing are subject to the provisions of this
Chapter. Where a service user receives more than one billing, one or more being for different
periods than another, the duty to collect shall arise separately for 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 the return and filed with
the Tax Administrator. The Tax Administrator is authorized to 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 due 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 filing returns as confidential information that is
exempt from the disclosure provisions of the Public Records Act.
3.16.130 Collection Penalties - Service Suppliers.
(a) Taxes collected from a service user are delinquent if not received by the Tax
Administrator on or before the due date. Should the due date occur on a weekend or legal
holiday, the return must be received by the Tax Administrator on the first regular working day
following the weekend or legal holiday. A direct deposit, including electronic fund transfers and
other similar methods of electronically exchanging monies between financial accounts, made by
a service supplier in satisfaction of its obligations 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 collect 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 of fifteen percent (15 %) of the
total tax that is delinquent or deficient in the remittance, and shall pay interest at the rate of
seventy -five one - hundredths percent (0.75 %) per month, or any fraction thereof, on the amount
Ordinance 1586 (2012 Series)
Page 16
of the tax, exclusive of penalties, from the date on 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 for fraud or gross
negligence in reporting or remitting at the rate of fifteen percent (15 %) of the amount of the tax
collected and /or required to be remitted, or as recomputed by the Tax Administrator.
(d) For collection purposes only, every penalty imposed and such interest that is accrued
under the provisions of this Chapter shall become a part of the tax herein required to be paid.
(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 uniform standards or procedures
that are mutually agreed upon by other public agencies imposing 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 be
deemed a debt owed by the service user to the City. Any such tax collected from a service user
which has not been remitted to the Tax Administrator shall be deemed a debt owed to the City by
the person required to collect and remit and shall no longer be a debt of the service user. Any
person owing money to the City under the provisions of this Chapter shall be liable to an action
brought in the name of the City for the recovery of such amount, including penalties and interest
as provided for in this Chapter, along with any collection costs incurred by the City as a result of
the person's noncompliance with this 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 excise 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 claim the amount of taxes due the City for those services, unless the Tax Administrator
determines that such duty is in conflict with any federal or state law, rule, or regulation or 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 she determines that
any person required to pay or collect taxes pursuant to the provisions of this Chapter has failed to
pay, collect, and /or remit the proper amount of tax by 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 Section 3.16.150 if, in the opinion of the Tax Administrator, the
cost of collection or enforcement likely outweighs the tax benefit.
(b) The Tax Administrator shall mail a notice of such deficiency determination to the person
required to pay or remit the tax, which notice shall refer briefly to the amount of 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 the tax should have been
Ordinance 1586 (2012 Series)
Page 17
received by the City. Within fourteen (14) calendar days after the date of service of such notice,
the person may request in writing to the Tax Administrator for a hearing on the matter.
(c) If the person fails to request a hearing within the prescribed time period, the amount of
the deficiency determination shall become a final assessment, and shall immediately be due and
owing to the City. If the person requests a hearing, the Tax Administrator shall cause the matter
to be set for hearing, which shall be scheduled 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 least ten (10) calendar days prior to the hearing, and, if the Tax
Administrator desires said person to produce specific records at such hearing, such notice may
designate the records 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 of the Tax
Administrator, the hearing may be continued from time to time for the purpose of allowing the
presentation of additional evidence. Within a reasonable time following the conclusion of the
hearing, the Tax Administrator shall issue a final assessment (or non - assessment), thereafter, by
confirming, modifying or rejecting the original deficiency 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 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.
(e) Payment of the final assessment shall become delinquent if not received by the Tax
Administrator on or before the thirtieth (30th) day following the date of receipt of the notice of
final assessment. The penalty for delinquency shall be fifteen percent (15 %) on 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 of limitations regarding a claim by the City
seeking payment of a tax assessed under this 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, and 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 deliberately 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 best interest of the City, he or
she may relieve such person of the obligation to collect the 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 of 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 and addresses of such service users and the amounts of taxes owed under
Ordinance 1586 (2012 Series)
Page 18
the provisions of this Chapter. Nothing herein shall require that the Tax Administrator institute
proceedings under this Section 3.16.160 if, in the opinion of the Tax Administrator, the cost of
collection or enforcement likely outweighs the tax benefit.
(b) In addition to the tax owed, the service user shall pay a delinquency penalty at the rate of
fifteen percent (15 %) of the total tax that is owed, and 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 due date, until paid.
(c) The Tax Administrator shall notify the non - paying service user that the Tax
Administrator has assumed the responsibility to collect the taxes due for the stated 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 the United States mail, postage
prepaid, addressed to the service user at the address to which billing was made by the person
required to collect the tax; or, should the service user 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 Administrator may impose an
additional penalty of fifteen percent (15 %) of the amount of the total tax 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, to enforce
each and all of the provisions of this Chapter.
(b) The Tax Administrator may adopt administrative rules and regulations consistent with
provisions of this Chapter for the purpose of interpreting, clarifying, carrying out 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 as 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 and 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 in full for any period of time from any particular service supplier
or service user, that determination shall be considered an exercise of the Tax Administrator's
discretion to settle disputes and shall not constitute a change in taxing methodology for purposes
of Government Code Section 53750 or otherwise. The Tax Administrator is not authorized 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 make administrative
agreements, with appropriate conditions, to vary from the strict 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
Ordinance 1586 (2012 Series)
Page 19
remittance greatly outweigh the 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 with 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 initiation of an audit in writing. In
the absence of fraud or other intentional misconduct, the audit period of review shall not exceed
a period of three (3) years next preceding the date of 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 to Section 3.16.150 of this Chapter for all taxes (and
applicable penalties .and interest) owed 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 enable the Tax Administrator to verify compliance with this Chapter, the Tax
Administrator is authorized to make a reasonable estimate of the deficiency. Said reasonable
estimate shall be entitled to a rebuttable presumption of correctness.
(e) Upon receipt of a written request of a taxpayer, and for good cause, the Tax
Administrator may extend the time for filing any statement required pursuant to this Chapter for
a period of not to exceed forty -five (45) days, provided that the time for filing 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 accrue 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 Tax 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 good faith, the Tax Administrator shall take into
consideration the uniqueness of the product or service, industry practice or other precedence.
The Tax Administrator may also participate with other utility users' tax public agencies in
conducting coordinated compliance reviews with the goal of achieving administrative efficiency
and uniform tax application determinations, where possible. To encourage full disclosure and
on -going 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 previously 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 gross negligence, the Tax
Administrator shall take into consideration the uniqueness of the product or service, industry
practice or other precedence.
Ordinance 1586 (2012 Series)
Page 20
3.16.180 Records.
(a) It shall be the duty of every person required to collect and /or remit to the City any 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 have been liable for the
collection of and remittance to the Tax Administrator, which records 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, to the Tax
Administrator, copies of all records deemed necessary by the Tax Administrator 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 the 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 the administrative subpoena, such person
may provide access to such records outside the City on or before the due date, provided that such
person shall reimburse the City for all 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 hourly wages of those persons designated by the City to conduct the inspection.
(c) The Tax Administrator is authorized to execute a non - disclosure agreement approved by
the City Attorney to protect the confidentiality of customer information 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 the name, address and
telephone number of each billing agent and billing aggregator currently authorized by the service
supplier to bill, collect, and /or remit the tax to the City; and, 2) upon request of the Tax
Administrator, deliver, or effect the delivery of, any information or records in the possession of
such billing agent or billing aggregator that, in 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 denies the Tax
Administrator access to such records, or fails to produce the information 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 person 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 been
erroneously or illegally collected or received by the Tax Administrator under this Chapter from a
person or service supplier, it may be refunded as provided in this Section as follows:
Ordinance 1586 (2012 Series)
Page 21
(a) Written Claim for Refund: The Tax Administrator may refund any tax that has been
overpaid or paid more than once or has been erroneously or illegally collected or 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 the 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 erroneous or illegal collection of said tax. Such claim
must clearly establish claimant's right to the 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 the 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 brought 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 the 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 time prescribed by Government Section 912.4, the claim shall be
deemed to have been rejected by the City Council on the last day of the period within which the
City Council was 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 of subsection (a)
of this Section, the Tax Administrator may, at his or her discretion, give written permission to a
service supplier, who has collected and remitted any amount of tax in excess of the amount of tax
imposed by this Chapter, to claim credit for such 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 the service supplier: 1) such credit is claimed in a return dated no later
than one year from the date of overpayment or erroneous collection of said tax; 2) the Tax
Administrator is satisfied that the underlying basis and amount of such credit has been
reasonably established; and, 3) in the case of an overpayment by a service user to the service
supplier that has been remitted to the City, the Tax Administrator has received proof, to his or
her satisfaction, that the overpayment has been refunded by the service supplier to the service
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 relating 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 of this Chapter), deficiency
determination, assessment, or administrative ruling of the Tax Administrator, shall be required to
comply with the appeals procedure of this Section. Compliance with this Section shall be a
prerequisite to a suit thereon. [See Government Code Section 935(b)]. Nothing herein shall
permit the filing of a claim or action on behalf of a class or group of taxpayers.
Ordinance 1586 (2012 Series)
Page 22
(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 Clerk within fourteen (14) days of the date
of the decision, deficiency determination, assessment, or administrative ruling of the Tax
Administrator which aggrieved the service user or service supplier.
(c) The matter shall be scheduled for hearing before an independent hearing officer selected
by the City Administrator, or designee, no more than thirty (30) days from the receipt of the
appeal. The appellant shall be served with notice of the time and place of 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 the time of the hearing, the appealing
party, the Tax Administrator, and any other interested person may present such relevant evidence
as he or she may have relating to the determination from which the appeal is taken.
(d) Based upon the submission of such evidence and the review of the City's files, the
hearing officer shall issue a written notice and order upholding, modifying or reversing the
determination from which the appeal is taken. The notice shall be given within fourteen (14)
days after the conclusion of the hearing and shall state the reasons for the decision. The notice
shall specify that the decision is final and that any petition for judicial review shall be filed
within ninety (90) days from the date of the decision in accordance with Code of Civil Procedure
Section 1094.6.
(e) All notices under this Section may be sent by regular mail, postage prepaid, and shall be
deemed received on the third calendar day following the date of mailing, as 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 City 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 is changed, the
Tax Administrator shall follow the notice requirements of California Public Utilities Code
Section 799.
3.16.230 Effect of State and Federal Reference /Authorization.
Unless specifically provided otherwise, any reference to a State or Federal statute in this 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, or to any subsequent
change of interpretation thereto by a State or Federal agency or court of law with the duty to
Ordinance 1586 (2012 Series)
Page 23
interpret such law, to the extent that such amendment or change of interpretation would require
voter approval under California law, or to the extent that 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 would otherwise be required or a tax decrease would
result, the prior version of the statute (or 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 statute (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 this
Chapter is expanded or limited as a result of changes in State or Federal law, no amendment or
modification of this Chapter shall be required to conform the tax to those changes, and the tax
shall be imposed and collected to the full extent of the authorization 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 Voter
Approval; Amendment or Repeal.
This Title 3, Chapter 3.16 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 by 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 this Ordinance. The People of the City of San Luis
Obispo affirm that the following actions shall not constitute an increase of the rate of a tax:
(a) 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;
(b) An action that interprets or clarifies the methodology of the tax, or any definition
applicable to the tax, so long as such interpretation or clarification (even if contrary to some prior
interpretation or clarification) is not inconsistent with the language of this Ordinance;
(c) The establishment a class of persons that is exempt or excepted from the tax or the
discontinuation of any such exemption or exception (other than the discontinuation of an
exemption or exception specifically set forth in this Ordinance); and
(d) The collection of the tax imposed by this ordinance, even if the City had, for some
period of time, failed to collect the tax.
3.16.250 Remedies Cumulative.
All remedies and penalties prescribed by this Chapter or which are available under any other
provision of law or equity, including but not limited to the California False Claims Act
(Government Code Section 12650 et seq.) and the California Unfair Practices Act (Business and
Professions Code Section 17070 et seq.), are cumulative. The use of one or more remedies by
the City shall not bar the use of any other remedy for the purpose of enforcing the provisions of
this Chapter.
Ordinance 1586 (2012 Series)
Page 24
3.16.260 Interaction With Prior Tax.
(a) Collection of Tax by Service Providers. Service providers shall begin to collect the tax
imposed by this amended Chapter 3.16 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 3.16 of this Code, as it existed prior to 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 3.16 as amended
herein, with respect to that charge. The intent of this paragraph is to prevent the imposition of
multiple taxes upon a single utility charge during the 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 service 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 this Title 3,
Chapter 3.16 (as amended herein) is invalid for whatever reason, or that any tax imposed under
this Title 3, Chapter 3.16 (as amended herein) is invalid in whole or in part, then the taxes imposed
under Title 3, Chapter 3.16 of this Code, as it existed prior to its amendment as provided herein,
shall automatically continue to apply with respect to any service for which the tax levied pursuant
to this Chapter 3.16 has been determined to be 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 the court or is otherwise refunded by the City) paid by a person with respect
to a service and calculated pursuant to this Title 3, Chapter 3.16 (as amended herein) shall be
deemed to satisfy the tax imposed under Title 3, Chapter 3.16, as it existed prior to its amendment
as provided herein, on that service, so long as the tax is paid with respect to a service provided 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 City of
San Luis Obispo at the General Municipal Election of November 6, 2012 shall become effective
immediately upon the declaration of the results of that election by the City Council of the City of
San Luis Obispo.
SECTION 3. Severability. If any section, subsection, sentence, clause, phrase, or
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 shall nonetheless remain in full
force and effect. The People hereby declares that they would have adopted each section,
subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any
one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be
declared invalid or unenforceable.
Ordinance 1586 (2012 Series)
Page 25
SECTION 4._ 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, Chapter 3.16 of
the San Luis Obispo Municipal Code, as it existed prior to the effective date of this Ordinance.
SECTION 5._ Execution. The Mayor is hereby authorized to attest to the adoption of 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.
ATTEST:
iaaxe,
Maeve Kenj1dy Grines
City Clerk
APPROVED AS-10 FORM:
J. C stine Dietrick
ty Attorney