Chico Municipal Code Ch. 3.56 Utility Users’ Tax

The following words and phrases, whenever used in this chapter, shall be construed as defined in this section, except where the context requires otherwise:

A. “Electrical corporation,” “gas corporation,” “telephone corporation” and “water corporation” shall have the same meanings as defined in Sections 218, 222, 234 and 241, respectively, of the Public Utilities Code of the state.

B. “Service supplier” shall mean any person required to collect a tax imposed under the provisions of this chapter.

C. “Service user” shall mean a person required to pay a tax imposed under the provisions of this chapter.

(Prior code § 25.100 (Ord. 924 §1, Ord. 1111 §50))

Nothing in this chapter shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the state.

(Prior code § 25.101 (Ord. 924 §1))

A. There is hereby imposed a tax upon every person in the city using intrastate telephone communication services in the city, except as provided by Sections 3.56.180 and 3.56.200. The tax imposed by this section shall be at the rate of five percent of the charges made for such services, including minimum charges for service, and shall be paid by the person paying for such services.

B. As used in this section, the term “charges” shall not include charges for services paid for by inserting coins in coin-operated telephones; except, that where such coin- operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee, plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due; nor shall the term “telephone communications services” include land mobile services or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as such section existed on October 1, 1967.

C. The tax imposed in this section shall be collected from the service user by the person providing the intrastate telephone communications services. The amount of tax collected in one month shall be remitted to the finance director on or before the last day of the following month.

D. Notwithstanding the provisions of subsection A of this section, the tax imposed under this section shall not be imposed upon any person for using intrastate telephone communications services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Section 4251 of Title 26 of the United States Code, as such section existed on November 1, 1967.

(Prior code § 25.102 (Ord. 924 §1 Ord. 1548 §1, Ord. 2113 §1))

A. There is hereby imposed a tax upon every person in the city using electrical energy in the city, except as provided in Sections 3.56.180, 3.56.200 and 3.56.210. The tax imposed by this section shall be at the rate of five percent of the charges made for such energy, including but not limited to minimum charges for service, and shall be paid by the person paying for such energy. The council, by resolution, may authorize the tax imposed by this section to be collected at a rate less than five percent for such period as the council may determine. However, adoption, amendment, repeal or expiration of such a resolution shall not be deemed or construed to affect the rate at which the electricity users’ tax is imposed pursuant to this section.

B. As used in this section, the words “using electrical energy” shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by such person for use in an automobile or other machinery or device apart from the premises upon which the energy was received; however, such words shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall such words be construed to mean the receiving of such energy by an electrical corporation or a governmental agency at a point within the city for resale to service users.

C. The tax imposed in this section shall be collected from the service user by the person supplying such electrical energy. The amount of tax collected in one month shall be remitted to the finance director on or before the last day of the following month.

(Prior code § 25.103 (Ord. 924 §1, Ord. 1548 §2, Ord. 2113 §1; Ord. 2229 §1), Ord. 2268, Ord, 2337 §1)

A. There is hereby imposed a tax upon every person in the city using gas in the city which is delivered through mains or pipes, except as provided in Sections 3.56.180 and 3.56.200. The tax imposed by this section shall be at the rate of five percent of the charges made for such gas including minimum charges for service, and shall be paid by the person paying for such gas. The council, by resolution, may authorize the tax imposed by this section to be collected at a rate less than five percent for such period as the council may determine. However, adoption, amendment, repeal or expiration of such a resolution shall not be deemed or construed to affect the rate at which the gas users’ tax is imposed pursuant to this section.

B. As used in this section, the words “using gas” shall not be construed to mean the receiving of gas by a gas corporation or governmental agency within the city for resale to service users.

C. The tax imposed in this section shall be collected from the service user by the person selling the gas. The amount collected in one month shall be remitted to the finance director on or before the last day of the following month.

(Prior code § 25.104 (Ord. 924 §1, Ord. 1548 §3, Ord. 2113 §1; Ord. 2229 §2))

A. There is hereby imposed a tax upon every person in the city, other than a water corporation, using water in the city which is delivered through mains or pipes except as provided in Sections 3.56.180 and 3.56.200. The tax imposed by this section shall be at the rate of five percent of the charges made for such water including charges for (1) metered quantities of water, (2) service or minimum charges and (3) private fire protection service, and shall be paid by the person paying for such water.

B. The tax imposed in this section shall be collected from the service user by the person selling the water. The amount collected in one month shall be remitted to the finance director on or before the last day of the following month.

(Prior code § 25.105 (Ord. 924 §1, Ord. 1548 §4, Ord. 2113 §1))

A. Taxes collected from a service user which are not remitted to the finance director on or before the due dates provided in this chapter are delinquent.

B. Interest and penalties for delinquency in remittance of any tax collected and not remitted shall be assessed as follows:

1. Any service supplier who fails to remit any tax imposed by this chapter within ten days after receipt of written notice from the city of such failure, shall pay a penalty of ten percent of the amount of the tax.

2. If the finance director determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalty stated in subparagraph l of this subsection B.

3. In addition to the penalties imposed in this subsection B, any service supplier who fails to remit any tax imposed by this chapter, shall pay interest at the rate of one- half of one percent per month, or fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent, until paid.

4. Every penalty imposed upon a service supplier, and such interest as accrues, under the provisions of this subsection B, shall become a part of the tax required to be remitted.

C. Failure by a service user to pay any tax herein imposed shall result in the following interest and penalties on the service user:

1. Any service user who fails to pay any tax imposed by this chapter within one hundred twenty days of the date of receipt of notice of the amount of tax due from the service supplier, shall pay a penalty of ten percent of the amount of the tax.

2. Any service user who fails to pay any delinquent remittance on or before a period of one hundred eighty days of the date of the receipt of notice of the amount of tax due from the service supplier, shall pay a second delinquency penalty of ten percent of the amount of the tax, in addition to the amount of the tax and the ten percent penalty first imposed.

3. In addition to the penalties imposed in this subsection C, any service user who fails to pay any tax imposed by this chapter, shall pay interest at the rate of six percent per annum, exclusive of penalties, from the date on which the remittance first became delinquent, until paid, and a collection charge of ten dollars for each delinquent account.

4. Every penalty imposed upon a service user, and such interest as accrues, under the provisions of this subsection C, shall become a part of the tax required to be paid.

5. The penalties, interest and collection charges imposed in this subsection C shall not be collected by the service supplier, but shall be determined and collected by the city.

(Prior code § 25.106 (Ord. 924 §l, Ord. 2113 §1))

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 finance director shall be deemed a debt owing to the city by the person required to collect and remit. 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.

(Prior code § 25.107 (Ord. 924 §1, Ord. 2113 §1))

This duty to collect and remit the taxes imposed by this chapter shall be performed as follows:

A. The tax shall be collected insofar as practicable at the same time as, and along with, the charges made in accordance with the regular billing practice of the service supplier. Except in those cases when a service user pays the full amount of such charges, but does not pay any portion of a tax imposed by this chapter, or when a service user has notified a service supplier of the service user’s refusal to pay a tax imposed by this chapter which such service supplier is required to collect, if the amount paid by a service user is less than the full amount of the charge and the tax which has accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid.

B. The duty to collect tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of this chapter. Where a person 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.

(Prior code § 25.108 (Ord. 924 §1), Ord. 2268)

A. The finance director shall have the power and duty, and is hereby directed to enforce each and all of the provisions of this chapter.

B. The finance director, subject to prior approval of the city manager and the city attorney, may make administrative agreements to vary the strict requirements of this chapter so that the collection of any tax imposed herein may be made in conformance with the billing procedures of a particular service supplier, so long as the overall result of such agreements is the collection of the tax in conformity with the general purpose and scope of this chapter. A copy of each such agreement shall be on file and available for public inspection in the finance director’s office.

(Prior code § 25.109 (Ord. 924 §1, Ord. 2113 §1))

If any service supplier shall refuse to make, within the time provided in this chapter, any report and remittance of such tax, or any portion thereof required by this chapter, the finance director shall proceed in such manner as may be deemed best to obtain facts and information on which to base an estimate of the tax due. As soon as such facts and information are obtained by the finance director upon which to base the assessment of any tax imposed by this chapter and payable by any service supplier who has refused to make such report and remittance the finance director shall proceed to determine and assess against such service supplier the tax, interest and penalties provided for by this chapter. In case such determination is made, the finance director shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the service supplier so assessed at service suppliers last known place of address.

(Prior code § 25.110 (Ord 924 §l, Ord. l548 §5, Ord. 2113 §1))

Whenever the finance director determines that a service user has deliberately withheld the amount of any tax imposed by the provisions of this chapter from the amounts remitted to a service supplier required to collect the tax or that a service user has failed to pay the amount of the tax to such service supplier for a period of four or more billing periods, or whenever the finance director deems it in the best interests of the city, the finance director may relieve such service supplier of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods. The finance director shall notify the service user that the city has assumed responsibility to collect the taxes due for the stated periods, and demand payment of such taxes, plus any penalty imposed, and such interest as may be due pursuant to the provisions of Section 3.56.070. The notice shall be served on the service user by handing it to the service user personally 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 service supplier required to collect the tax; or should the service user have changed addresses, to the service user’s last known address.

(Prior code § 25.111 (Ord. 924 §1, Ord. 1548 §6, Ord. 2113 §1), Ord. 2268)

A. Any person aggrieved by any determination of the finance director pursuant to this chapter may request and shall be granted a hearing before the city manager to show cause why such determination should not be sustained. A notice setting forth the time and place fixed for such hearing shall be given in writing to the protestant. The city manager shall render a decision within 15 days after the conclusion of such hearing and, thereupon, the protestant shall be given written notice thereof. The decision of the city manager on the matter shall become final and conclusive upon the expiration of the time hereinafter fixed for appeal if the protestant does not appeal within such time as hereinafter provided.

B. Any person aggrieved by any determination of the city manager pursuant to this chapter may appeal to the council by filing a written notice of appeal with the city clerk within 30 days after such determination, setting forth the determination with which such person is dissatisfied.

C. Within 30 days after the filing of such notice, the council shall fix a time and place for hearing such appeal, which hearing shall be within 30 days after the date thereof has been so fixed.

D. Written notice of the time and place of such hearing shall be given to the appellant by the city clerk either:

1. By personally delivering to the appellant written notice thereof; or

2. By mailing such notice, by depositing the same in the United States mail in a sealed envelope, postage prepaid, addressed to the appellant at appellant’s last known address.

E. The council shall consider at the hearing such appeal and render a decision therein, which shall be final and conclusive upon all parties.

F. Pending decision upon any appeal relative to the amount of any charge hereunder, the person making such appeal shall pay such charge. After the appeal is heard the council shall order refunded to the person making such appeal such amount, if any, as the council shall determine should be refunded.

(Prior code § 25.112 (Ord. 924 §1, Ord. 1548 §7, Ord. 2113 §1), Ord. 2268)

It shall be the duty of every service supplier required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of one year, all records as may be necessary to determine the amount of such tax as such service supplier may have been required to collect and remit to the city, which records the finance director shall have the right to inspect at all reasonable times.

(Prior code § 25.113 (Ord. 924 §1, Ord. 2113 §1), Ord. 2418 §3)

A. Filing Claim. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once, or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subsections B and C of this section, provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the finance director within one year of the date of payment. The claim shall be on forms furnished by the finance director.

B. Refund to Service Supplier. A service supplier may claim a refund or take as credit against taxes collected and remitted an amount overpaid, paid more than once, or erroneously or illegally collected or received, when it is established that the person from whom the tax has been collected was not a service user.

C. Refund to Service User. Any service user may obtain a refund of taxes overpaid, or paid more than once, or erroneously or illegally collected or received by the city, by filing a claim in the city, by filing a claim in the manner provided in subsection A of this section, but only when the service user having paid the tax to the service supplier establishes to the satisfaction of the finance director that the service user has been unable to obtain a refund from the service supplier who collected the tax.

D. Proof Required. No refund shall be paid under the provisions of this section unless the claimant establishes a right thereto by written records showing entitlement thereto.

(Prior code § 25.114 (Ord. 924 §1, Ord. 1548 §8, Ord. 2113 §1), Ord. 2418 §4)

Any person violating any of the provisions of this chapter, or any person willfully refusing to pay any tax required hereunder, shall be guilty of a misdemeanor.

(Prior code § 25.115 (Ord. 924 §1))

Nothing contained in this chapter is intended to conflict with applicable rules, regulations and tariffs of any service supplier subject to the jurisdiction of the California Public Utilities Commission. In the event of any such conflict, the provisions of such rules, regulations and tariffs shall control.

(Prior code § 25.116 (Ord. 924 §1))

The use of electrical energy, gas, telephone or water shall not be construed to mean, and this chapter shall not apply to:

A. Electrical energy used by an electrical corporation engaged in the production or furnishing of electrical energy;

B. Gas or electrical energy used by a gas corporation engaged in the production or furnishing of gas:

C. Water used by a water company engaged in the production or furnishing of water:

D. Telephones used by a telephone company in the conduct of its business:

E. Electrical energy or gas used by a water corporation in the production of water:

F. Gas or water used by an electrical corporation in the production of electrical energy.

(Prior code § 25.117 (Ord. 924 §1))

The following procedures, regulations and limits shall apply:

A. A refund not to exceed thirty dollars, or such higher amount as the council may determine by resolution, of taxes due and paid under the provisions of this chapter for utility services rendered on and after May 1, 1997, and through April 30, 1998, or for any such succeeding twelve-month period, shall be made whenever all of the following occur:

1. The annual gross income of the household in which claimant lives is less than eight thousand five hundred dollars, or such higher amount as the council may determine by resolution;

2. The claimant makes application and files a verified claim in writing with the finance director of the city for such refund upon a claim form provided by such officer;

3. The claim is approved by the finance director as being in conformance with this subsection.

B. The claimant shall be the person in whose name the bills for utilities services were rendered. Only one member of each claimant’s household may file a claim, and only one claim may be filed for each individual household.

C. “Gross income” shall mean the sum of adjusted gross income for the claimant’s last preceding federal or state personal income tax reporting period as documented by a federal or state tax return for such period, or if no such tax return is available, other documentation acceptable to the finance director.

D. The claim for such refund for utility taxes paid during the period from May 1 through April 30 of a given year shall be made only during the months of May and June of the following year, and must be accompanied by a copy of the utility bills, together with proof that the utility taxes have been paid by the claimant or some member of the household. No such refund shall be made on any claim filed or postmarked later than the thirtieth day of June.

E. No refund shall be made to any person for taxes levied on a utility account for which any utility tax is due and outstanding for the period for which refund is claimed or for any prior period. No refund shall be made of any tax which was paid with public assistance or relief funds which included an allowance to pay the tax.

F. Nothing in this section shall be construed to require that any utility company has any obligation to make or furnish, for the purpose of the refund provisions hereof, proof of utility taxes due or utility taxes paid.

(Prior code § 25.118 (Ord. 924 §1, Ord. 1186 §1, Ord. 1324 §§1 and 2, Ord. 1461 §§1 and 2, Ord. 1548 §§9, 10 and 11, Ord. 2113 §1, Ord. 2149 §1))

The following procedures, regulations and limits shall apply:

A. Notwithstanding any provision of this chapter to the contrary, persons sixty (60) years of age and older living in households having an annual gross income of less than eight thousand five hundred dollars, or such higher amount as the council may determine by resolution, shall be exempt from the payment of the utility users’ tax.

B. In order to quality for the exemption set forth in subsection A above, persons meeting the age and income requirements established therein shall file an initial application with the finance director of the city upon a form provided by such officer. Such form may be filed at any time after the applicant becomes eligible therefor. Thereafter, when deemed necessary by the finance director, and upon a form provided by said finance director, each person granted an exemption shall file a statement certifying such person continues to meet the exemption eligibility requirements of this section.

C. Upon review and approval of any initial application for exemption, the finance director shall file with each utility company, at least once every thirty (30) days, a certification of the applicant’s eligibility for exemption, upon a form satisfactory to the finance director and to the utility companies. Upon receipt of such certification of exemption, each utility company shall cease to apply the tax to the exempt account at the earliest possible date, considering each utility’s billing change processing time requirements. Such exemption shall remain in effect thereafter until such time as the finance director notifies each utility company, in a similar manner, of the withdrawal of the exemption.

D. The applicant for exemption shall be the person in whose name the bills for utility services are rendered.

E. “Gross income” shall mean the sum of adjusted gross income for the claimant’s last preceding federal or state personal income tax reporting period as documented by a federal or state tax return for such period, or if no such tax return is available, other documentation acceptable to the finance director.

(Ord. 1186 §2, Ord. 1324 §3, Ord. 1461 §§3 and 4, Ord. 1548 §§12, 13 and 14, Ord. 2113 §1, Ord. 2149 §2)

A. Notwithstanding any provision of this chapter to the contrary, charges for electricity used in pumping water for agricultural irrigation shall be exempt from the tax imposed by this chapter, as provided in subsections B and C.

B. The exemption set forth in subsection A, above, shall be established as follows:

1. The electric service user of a property or contiguous properties used for agricultural production shall file a written request for the exemption, including a copy of the current electrical utility bill for the service, with the finance director of the city. Thereafter, when deemed necessary by the finance director, each electric service user granted an exemption shall file a statement certifying that the property continues to meet the exemption eligibility requirements of this section.

2. Upon review and approval of any initial application for exemption, the finance director shall file with the utility company providing electrical service a certification of the applicant’s eligibility for the exemption, in a form satisfactory to the finance director and to the utility company. Upon receipt of such certification of exemption, the utility company shall cease to apply the tax to the exempt account at the earliest possible date, considering the utility’s billing change processing time requirements. Such exemption shall remain in effect thereafter until such time as the finance director notifies the utility company, in a similar manner, of the withdrawal of the exemption.

C. The exemption set forth in subsection A, above, may be granted and continued if all of the following circumstances apply:

1. The property or contiguous properties for which the exemption is granted are in active agricultural production requiring pumped irrigation water and are collectively at least three acres in size; and

2. The property was annexed to the city after January 1, 2005; and

3. The electric pumps used for agricultural irrigation are metered separately from any other use on the property. (Ord. 2337 §2)