HomeMy WebLinkAboutInternetTaxFreedomAct_LtrToCapps_20150618Office of the City Council
990 Palm Street San Luis Obispo CA 93401-3249
805 781 7114
June 18, 2015
The Honorable Lois Capps
United States House of Representatives
2231 Rayburn House Office Building
Washington, D.C. 20515-0523
Subject: Internet Tax Freedom Act (ITFA) - Reject a Permanent ITFA Extension in
H.R. 235 and S. 431; Support Alternative Amendments to Correct an Overreach
affecting Voter -Approved Local Telecommunication Taxes
Dear Senator Feinstein and Senator Boxer:
In 2012, our local voters overwhelmingly approved a local telecommunication tax (also known
as a utility users tax or UUT), as required by the California Constitution (Prop. 218), because
they wanted to continue essential governmental services such as public safety (50 % of each
tax dollar goes to public safety), emergency 911, street repairs, senior and youth programs,
parks and recreation, and other essential programs. For example, the City receives $2.0
million a year from its telecommunication tax and this revenue would pay for 87% of the street
maintenance budget or 8% of the public safety budget. We needyour help to protect the voter -
approved funding of our essential local services, which are at risk by proposed federal
legislation.
On June 91h, 2015 the House passed H.R. 235 entitled the Internet Tax Freedom Forever Act
ITFFA). The Senate has a similar bill, S. 431, before it. The City of San Luis Obispo joins many
other California cities in strongly opposing these two bills as currently written. We are very
concerned with their over -breadth, since they both go beyond Internet access and extend to
telecommunication services, which have been historically subject to our local tax. These two
bills would have the effect of preempting our state Constitution (Proposition 218), and
ignoring the wishes of our local voters to have their telecommunication tax or UUT imposed in
a technology -neutral, non-discriminatory manner.
The City respectfully requests your consideration of two alternative amendments, which would
correct the over -breadth of these bills and protect our City's existing voter -approved local
telecommunication taxes. The two alternative amendments are:
A. "Unbundling' telecommunications from the definition of "internet access"; or,
B. Create an exception for a voter -approved excise tax on telecommunications, pursuant
to state law. To our knowledge, only three other states have such a voter approval
requirement, and none (other than California) have a local excise tax on
telecommunications.
Either of these two limited amendments would allow the City to support S. 431 and H.R. 235,
and the continued protection of Internet -related services from discriminatory state and local
taxes. Without either amendment, however, approximately 60-80% of the City's $2.0 million
of existing and future telecommunication UUT could be at risk. In that case, we would
vigorously oppose such a permanent ban, and respectfully request that you do the same, and
support an extension of the existing moratorium.
We thank you for your continued support of California local government, and honoring and
protecting the wishes of our local voters from the preemptive effect of any proposed federal
legislation. Thank you!
Sincerely,
Jan Howell Marx
Mayor
cc: The Honorable Katcho Achadijian, State Assembly Member, District 35
The Honorable Bill Morning, State Senator, District 17
Jennifer Whiting (League of CA Cities), jwhiting0cacities.org
Fran Mancia (MuniServices), Fran.Mancia@MuniServices.com
Brenda Narayan (MuniServices), Brenda. NarayanCa)MuniServices.com