Chino Municipal Code Ch. 3.22 Utility Users Tax

This article shall be known as the Utility Users Tax of the city.

(Ord. 93-13 (part), 1993.)

For the purposes of this chapter, the following words and phrases shall have the ascribed meanings:

"City" means the City of Chino.

"Gas" means natural or manufactured gas or any alternate hydrocarbon fuel which may be substituted therefor.

"Month" means a calendar month.

"Nonutility supplier" means: (a) a service supplier, other than an electrical corporation serving within the city, which generates electrical energy in capacities of at least fifty kilowatts for its own use or for sale to others; or (b) a gas supplier other than a gas corporation, that sells or supplies gas to service users within the city.

"Person" means any domestic or foreign corporation, firm, association, syndicate, joint stock company, partnership of any kind, joint venture, club, Massachusetts business or common law trust, society or individual or group.

"Public utility" shall have the same meaning as defined in section 216 of the California Public Utilities Code.

"Service supplier" means any entity required to collect or self-impose and remit a tax as imposed by this chapter.

"Service user" means a person required to pay a tax imposed by this chapter.

"Tax administrator" means the finance director of the city.

"Telephone corporation," "electrical corporation," "gas corporation," "water corporation" and "cable television corporation" shall have the same meanings as defined in sections 234, 218, 222, 241 and 215.5 respectively, of the California Public Utilities Code except, "electrical corporation," "gas corporation," "telephone corporation," "cable television corporation" and "water corporation" shall also be construed to include any municipality, public agency or person, other than a nonutility supplier, engaged in the selling or supplying of electrical power or gas or telephone or cable television or water to a service user, and "cable television corporation" shall also be construed to include any entity that provides cable television services of any kind in the city including but not limited to wireless cable.

(Ord. 93-13 (part), 1993.)

A. 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 California statute, applicable federal law or the Constitution of the United States or the state of California.

B. The tax imposed by this chapter shall not apply to any governmental entity including federal, state, county, city, district or political subdivision thereof.

C. The tax imposed by this chapter shall not apply to those entities as defined in section 3.22.020(d), on their use of gas, electricity, telephone, water and cable television services in the conduct of their business, who are required by this chapter to administer, collect and remit the tax imposed herein.

D. The city council may, by order or 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.

E. The tax administrator shall prepare a list of the persons exempt from the provisions of this chapter by virtue of this section, and furnish a copy thereof to each service supplier.

F. The exemption granted by this section shall not eliminate the duty of the service supplier, non-utility supplier or person to collect and remit utility users taxes from exempt persons, or the duty of exempt persons to pay such taxes unless and until an exemption is applied for and granted in accordance with sections 3.22.030 and 3.22.040 herein.

G. The tax imposed by this chapter shall not apply to utilities supplied to the residence, located in the city, of a service user if: (1) the combined gross income of all members of the service user's residence is less than the amount established for San Bernardino County by the United States Department of Housing and Urban Development for very low-income families for the applicable household size; and (2) such condition is demonstrated to the tax administrator's satisfaction.

H. The income exemption limit provided in subsection (F) above shall be revised by the tax administrator to conform to the very low-income limits for San Bernardino County for applicable household sizes, as determined by the United States Department of Housing and Urban Development (HUD) with regard to the Public Housing and section 8 Program, within sixty days of the effective date of any revision of such amounts by HUD.

I. The decision of the tax administrator regarding the granting of an exemption may be appealed to the city manager within thirty days after receipt of the notification of the tax administrator's decision, through the filing of an appeal with the city clerk. Within thirty days of the filing of the appeal with the city clerk and after completing a review of the requested exemption, the city manager shall either grant the exemption as requested in the appeal, or he shall deny the request for an exemption. In all cases, the decision of the city manager shall be final and conclusive.

(Ord. 93-17, 1993; Ord. 93-13 (part), 1993.)

A. Any service user meeting the exemption qualifications imposed by section 3.22.030 may file an application with the tax administrator for an exemption. Applications for exemption shall be made on forms supplied by the tax administrator and qualifications for such exemption shall be demonstrated to the tax administrator's satisfaction.

B. The tax administrator shall review all such applicants, certify qualified applicants as exempt, and notify all affected service suppliers when an exemption is approved, stating the name of the applicant, the address to which exempt service is being supplied, the account number, if any, and such other information as may be necessary for the service supplier to remove the exempt service user from its tax billing procedure. The service supplier shall remove the exempt service user from its tax billing procedure no later than sixty days after receipt of such notice of exemption from the tax administrator.

C. Service users shall only be entitled to an exemption after completing an exemption application, and being certified as qualified by the tax administrator. Upon certification of exemption, a service user may apply for a refund as provided in section 3.22.180 for the period of time that the utility users tax was paid and the exemption qualifications existed, but not to exceed a twelve-month retroactive period. The service user must demonstrate to the tax administrator's satisfaction that the exemption qualifications existed throughout the time period for which the refund is requested.

D. Except as provided hereinafter, exemptions shall continue and be renewed annually by the tax administrator as long as the facts supporting the application for exemption continue. An exemption granted shall automatically terminate with any change in the residence of the person exempted, but such person may apply for a new exemption with each change of residence.

E. Any person exempt from the tax shall notify the tax administrator within ten days of any change in fact or circumstance which might cause the person to become ineligible for exemption.

F. Any person knowingly receiving the benefits of this exemption when the basis for such exemption does not exist or ceases to exist, shall be guilty of a misdemeanor.

G. Any service supplier who determines that a new or nonexempt service user is receiving exempt service through a meter or connection previously used by an exempt service user shall immediately notify the tax administrator of such fact, and the tax administrator shall ascertain whether or not the provisions of this chapter have been complied with and, where appropriate, order the service supplier to commence collecting the tax from the nonexempt service user.

(Ord. 93-13 (part), 1993.)

A. There is imposed a tax on the amounts paid for any intrastate, interstate and international telephone services by every person in the city using such services. "Telephone communication service" means that service which provides access to a telephone system and the privilege of telephone quality communication with substantially all persons having telephone stations which are part of such telephone system; and shall include the transmission of any communications, messages or information, whether by fixed, mobile, portable, cellular or other form through electronic or other means, between or among points by wire, cable, fiberoptics, laser, microwave, radio, satellite or other methods. The tax imposed by this section shall be at the rate of three and six-tenths percent of the charges made for such services and shall be paid by the person paying for and/or using 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 where such coin-operated service is furnished for a guaranteed amount, in which case 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 "charges" include charges for any type of service or equipment furnished by a service supplied subject to public utility commission regulations during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility commission regulation; nor shall the words "telephone communication services" include land mobile service or maritime mobile services as defined in section 2.1 of Title 47 of the Code of Federal Regulations, as said section existed on June 1, 1983.

C. The telephone users tax is intended to, and does, apply to all charges billed to a telephone account having a situs in the city, irrespective of whether a particular communication service originates and/or terminates within the city.

D. The tax imposed by this section shall be collected from the service user by the person providing the intrastate, interstate and/or international telephone communication services, or the person receiving payment for such services. The amount of the tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month; or at the option of the person required to collect and remit the tax, an estimated amount of tax collected, measured by the tax bill in the previous month, shall be remitted to the tax administrator on or before the last day of each month.

E. Notwithstanding the provisions of subsection A, the tax imposed under this section shall not be imposed upon any person for using intrastate, interstate and/or international telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Division 2, Part 20, of the California Revenue and Taxation Code, or the tax imposed under section 4251 of the Internal Revenue Code.

(Ord. 95-11 § 1, 1995; Ord. 94-6 (part), 1994; Ord. 93-26 § 1, 1993; Ord. 93-13 (part), 1993.)

A. There is imposed a tax upon every person in the city using electrical energy in the city. The tax imposed by this section shall be at the rate of three and six-tenths percent of the charges made for such energy by an electrical corporation or public utility providing service in the city and shall be billed to and paid by the person using the energy. The tax applicable to electrical energy provided by a nonutility supplier shall be determined by applying the tax rate to the equivalent charges the service user would have incurred if the energy used had been provided by the electrical corporation franchised by the city. Rate schedules for this purpose shall be available from the city. Nonutility suppliers shall install, maintain and use an appropriate utility-type metering system which will enable compliance with this section. "Charges," as used in this section, shall include charges made for: (1) metered energy; and (2) minimum charges for service, including customer charges, service charges, demand charges, minimum standby charges and all other annual and monthly charges, fuel or other cost adjustments authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission.

B. As used in this section, the term "using electrical energy" shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him for use in an automobile or other machinery device apart from the premises upon which the energy was received; provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include the mere receiving of such energy by an electric corporation and/or public utility or governmental agency at a point within the city for resale; nor shall the term include the use of such energy in the production or distribution of water by a public utility or a governmental agency.

C. The tax imposed in this section shall be collected from the service user by the service supplier. The tax imposed in this section on use supplied by self-generation or from a nonutility supplier shall be collected and remitted to the tax administrator in the manner set forth in section 3.22.110. The amount of tax collected by a service supplier, self-generator or a nonutility supplier in one month shall be remitted by United States mail, postage prepaid, to the tax administrator, postmarked on or before the last day of the following month. At the option of the person required to collect and remit the tax, an estimated amount of tax measured by the tax billed in the previous month, shall be remitted by United States mail, postage prepaid to the tax administrator, postmarked on or before the last day of each month. If an estimated tax amount is remitted for any month, the person required to remit the tax must reconcile the estimated amount with the actual amount and include the credit or debit as part of the next month's remittance.

(Ord. 95-11 § 2, 1995; Ord. 94-6 (part), 1994; Ord. 93-26 § 2, 1993; Ord. 93-13 (part), 1993.)

A. There is imposed a tax upon every person in the city other than a gas corporation or electrical corporation, using, in the city, gas which is transported through mains or pipes or mobile transport. The tax imposed by this section shall be at the rate of three and six-tenths percent of the charges made for such gas and shall be billed to and paid by the person using and/or paying for such gas. The tax applicable to gas or gas transportation provided by nonutility suppliers shall be determined by applying the tax rate to the equivalent charges the service user would have incurred if the gas or gas transportation had been provided by the gas corporation franchised by the city. "Charges," as used in this section, shall include: (1) the charges for gas which is delivered through mains or pipes; (2) gas transportation charges; and (3) demand charges, service charges, customer charges, minimum charges, annual and monthly charges, and any other charge authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission.

B. The tax otherwise imposed by this section is not applicable to: (1) charges made for gas which is to be resold and delivered through mains and pipes; (2) charges made for gas sold for use in the generation of electrical energy; (3) charges made by a gas public utility for gas used and consumed in the conduct of the business of gas public utilities; (4) charges made for gas used in the propulsion of a motor vehicle, as authorized in the Vehicle Code of the State of California; and (5) charges made for gas used by a nonutility supplier to general electrical energy for its own use or for sale to others provided that electricity so generated is subject to the tax in accordance with section 3.22.060 of this chapter.

C. Tax imposed in this section shall be collected from the service user by the person selling or transporting the gas. A person selling only transportation services to a user for delivery of gas through mains or pipes shall collect the tax from the service user based on the transportation charges. The person selling or transporting the gas shall, on or before the last day of each calendar month, commencing on the twentieth day of the calendar month after the effective date of this chapter, make a return to the tax administrator stating the amount of taxes billed during the preceding calendar month. At the time such returns are filed, the person selling or transporting the gas shall remit tax payments to the tax administrator in accordance with schedules established or approved by the tax administrator. The tax imposed in this section on use supplied by self-production or a nonutility supplier, shall be collected and remitted to the tax administrator in the manner set forth in section 3.22.110.

(Ord. 95-11 § 3, 1995; Ord. 94-6 (part), 1994; Ord. 93-26 § 3, 1993; Ord. 93-13 (part), 1993.)

A. Notwithstanding any other provision of this chapter, a service user receiving gas, electricity, telephone, water or cable television service directly from a self-generator or a nonutility supplier who would not have the full tax due on the use of gas, electricity, telephone, water or cable television service in the city directly billed and collected by the service supplier, shall report that fact to the tax administrator within thirty days of use and shall directly remit to the city the amount of tax due.

B. The tax administrator may require the service user to provide, subject to audit, filed tax returns or other satisfactory evidence documenting the quantity of gas, electricity, telephone, water or cable television service used and the price thereof.

(Ord. 93-13 (part), 1993.)

A. There is imposed a tax upon every person in the city using water which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of three and six-tenths percent of the charges made for such water and shall be paid by the person paying for such water.

B. Charges made for water which is to be resold and delivered through mains or pipes; and charges made by a municipal water department, public utility or a city or municipal water district for water used and consumed by such department, utility or district, shall be excluded from the base on which the tax imposed in this section is computed.

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

(Ord. 95-11 § 4, 1995; Ord. 94-6 (part), 1994; Ord. 93-26 § 4, 1993; Ord. 93-13 (part), 1993.)

A. There is imposed a tax upon every person in the city using cable television service. The tax imposed by this section shall be at the rate of three and six-tenths; percent of the charges made of such service and shall be paid by the person paying for such service.

B. The tax imposed in this section shall be collected from the service user by the person furnishing the cable television service. The amount collected in one month shall be remitted to the tax administrator on or before the last day of the following month.

(Ord. 95-11 § 5, 1995; Ord. 94-6 (part), 1994; Ord. 93-26 § 5, 1993; Ord. 93-13 (part), 1993.)

A. Taxes collected from a service user which are not remitted to the tax administrator on or before the due dates provided in this chapter are delinquent. Should the due date occur on a weekend or legal holiday, the return may be postmarked on the first regular working day following a Saturday/Sunday or legal holiday.

B. The tax administrator shall have the power to adopt rules and regulations not inconsistent with provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the tax administrator's office.

C. The tax administrator may make administrative agreements to vary the requirements of this chapter so that collection of any fee imposed here may be made in conformance with the billing procedures of the particular service supplier so long as such agreements result in collection of the fee in conformance with the general purpose and scope of this chapter. A copy of each such agreement shall be on file in the tax administrator's office.

(Ord. 93-13 (part), 1993.)

A. Commencing with the operative date of this chapter as defined in section 3.22.230, and ending December 31, 1993, the maximum amount of taxes to be collected in accordance with this chapter upon any service user for any one location shall not exceed three thousand six hundred dollars for gas; three thousand six hundred dollars for electricity; three thousand six hundred dollars for telephone; and three thousand six hundred dollars for water.

B. Commencing on January 1, 1994, and ending December 31, 1994, and each calendar year thereafter, the maximum amount of taxes collected in accordance with this chapter upon any service user for any one location shall not exceed three thousand six hundred dollars for gas; three thousand six hundred dollars for electricity; three thousand six hundred dollars for telephone; and three thousand six hundred dollars for water.

C. Service users may pay the maximum amount in either of the following manners:

1. Provide payment of utility billings as they become due with the applicable utility tax being applied as authorized within this chapter. Once the service user has paid three thousand six hundred dollars in utility taxes on gas, or three thousand six hundred dollars in utility taxes on electricity, or three thousand six hundred dollars in utility taxes on telephone, or three thousand six hundred dollars in utility taxes on water, the service user shall submit proof of such payment to the tax administrator. Once proof of payment has been established the tax administrator will notify the appropriate service suppliers to extinguish the utility tax charge on all billings for the service user for the remainder of the year as defined in this section;

2. If the service user is certain that the maximum payment as defined in this section will be paid, the service user may approach the city at any time during the year to arrange for a single payment or monthly payments. Credit shall be applied for any utility users taxes paid within the year as demonstrated by the service user. The tax administrator will then notify the appropriate service supplier to extinguish the utility users tax charge on all billings for the service user for the remainder of the year;

3. If upon the completion of a calendar year a service user has paid utility users taxes in excess of the amounts provided in this section, the service user may bring in proof of utility payments and receive a refund from the city for any utility users tax payments that are over the maximum as defined herein. Retroactivity does not apply to taxes paid in a prior calendar year.

D. The tax administrator shall be responsible to notify the service supplier of those service users who have reached the cap and instruct the service supplier to remove the tax from the service user's billing for the remainder of the calendar year, and will also notify the service supplier when it is necessary to reinstate the tax on service user's billings.

(Ord. 93-13 (part), 1993.)

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 and not remitted to the tax administrator shall be deemed a debt owed 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.

(Ord. 93-13 (part), 1993.)

The 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 practices of the service supplier. Where the amount paid by a service user to a service supplier is less than the full amount of the service charge and tax which has accrued for the billing period, such amount and any subsequent payments by a service user shall be applied to the utility charge first until such charge has been fully satisfied. Any remaining balance shall be applied to taxes due. In those cases where a service user has notified the service supplier of his refusal to pay the tax imposed on the energy charges, section 3.22.160 (c) will apply.

B. The duty to collect tax from a service user shall commence with the beginning of the first full 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 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.

(Ord. 93-13 (part), 1993.)

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

B. Annually, as part of the city budget process, the tax administrator shall prepare and provide to the city manager a report on the amount of revenue generated by the utility users tax and its relationship to general fund program expenditures, and the city manager shall incorporate this information as part of each annual budget presentation for city council consideration prior to adoption of the budget.

C. The tax administrator shall provide notice to all service suppliers at least ninety days prior to any annexation or other change in the city's boundaries. The notice shall set forth the revised boundaries by street and address, along with a copy of the final annexation order from local agency formation commission.

(Ord. 93-13 (part), 1993.)

A. The tax administrator may make an assessment for taxes not remitted by a person required to remit.

B. Whenever the tax administrator determines that a service user has deliberately withheld the amount of the tax owed by him from the amounts remitted to a person required to collect the tax, or that a service user has refused to pay the amount of tax to such person, or whenever the tax administrator deems it in the best interest of the city, he may relieve such person of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods.

C. The service supplier shall provide the city with amounts refused and/or unpaid along with the names and addresses of the service users neglecting to pay the tax imposed under provisions of this chapter. Whenever the service user has failed to pay the amount of tax for a period to two or more billings periods, and the service supplier has so notified the city, the service supplier shall be relieved of the obligation to collect past taxes due, except that the service supplier shall forthwith notify the tax administrator if any tax payment is made by the service user.

D. The tax administrator shall notify the service user that the tax administrator has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him personally or by depositing the notice in the United States mail, postage prepaid thereon, 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's address change, to his last known address. If a service user fails to remit the tax to the tax administrator within fifteen days from the date of the service of the notice upon him, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty-five percent of the amount of the tax set forth in the notice shall be imposed, but not less than five dollars. The penalty shall become part of the tax herein required to be paid.

(Ord. 93-13 (part), 1993.)

It shall be the duty of every person required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he may have been liable for the remittance to the tax administrator, which records the tax administrator shall have the right to inspect at all reasonable times.

(Ord. 93-13 (part), 1993.)

A. Whenever the amount of any tax has been overpaid or paid more than once or has been erroneously collected or received by the tax administrator under this chapter, it may be refunded by the city as provided in this section.

B. Notwithstanding the provisions of subsection A of this section, a service supplier may claim a refund; or take as credit against taxes remitted the amount overpaid, paid more than once, or erroneously collected or received when it is established that the service user from whom the tax has been collected did not owe the tax; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax erroneously collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the person required to collect and remit. A service supplier that has collected any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user, may refund such amount to the service user and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns, provided such credit is claimed in a return dated not later than three years from the date of overpayment.

C. No refund shall be paid under the provisions of this section unless the claimant establishes his right hereto by written records showing entitlement thereto.

D. Notwithstanding other provisions of this section, whenever a service supplier, pursuant to an order of the California Public Utilities Commission or a court of competent jurisdiction, makes a refund to service users of charges for past utility charges, the taxes paid pursuant to this chapter on the amount of such refunded charges shall also be refunded to service users, and the service supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax which is due upon the next monthly returns. In the event this chapter is repealed, the amounts of any refundable taxes will be borne by the city.

E. A service supplier may refund the taxes collected to the service user in accordance with this section or by the service supplier's customary practice.

(Ord. 93-13 (part), 1993.)

The tax imposed by this chapter is in addition to any other tax, license or permit fee that may be required of any person by this code or any other ordinance of the city.

(Ord. 93-13 (part), 1993.)

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this chapter or any part thereof. The city council declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional.

(Ord. 93-13 (part), 1993.)

The service supplier shall, upon notification, terminate or suspend any utility users tax commencing with the first full billing period which occurs after the effective date of such action by the city council.

(Ord. 93-13 (part), 1993.)

This chapter and all terms contained herein shall be in effect as provided by law until July 15, 1998. At least fourteen months prior to July 15, 1998 the city manager shall be responsible for providing a full impact analysis of the affects of the tax and the city's fiscal status. The city council will review the analysis and make a determination as to the need for an extension of the tax prior to July 15, 1997.

(Ord. 93-13 (part), 1993.)