Compton Municipal Code § 3-4 Utility Users' Tax

[1]

Editor's Note: Prior ordinance history includes portions of Ordinance Nos. 1341, 1719, 1843, 1887 and 1940.

[Ord. #2118, § 1]

This section shall be known as the Utility Users' Tax Law of the City of Compton.

[Ord. #2118, § 1; Ord. #2139, § 1]

For the purposes of this Section 3-4, unless otherwise apparent from the context, certain words and phrases used in this Section 3-4 are defined as follows:

ANCILLARY TELECOMMUNICATION SERVICES

Shall mean services that are associated with or incidental to the provision, use or enjoyment of telecommunications services, including but not limited to the following services:

a.

CONFERENCE BRIDGING SERVICEShall mean an ancillary service that links two 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.

b.

DETAILED TELECOMMUNICATIONS BILLING SERVICEshall mean an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement.

c.

DIRECTORY ASSISTANCEShall mean an ancillary service of providing telephone number information, and/or address information.

d.

VERTICAL SERVICEShall mean 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.

e.

VOICE MAIL SERVICEShall mean 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.

BILLING ADDRESS

Shall mean the mailing address of the service user where the service provider submits invoices or bills for payment by the service users.

CITY

Shall mean the City of Compton.

CITY MANAGER

Shall mean the City Manager, or his or her authorized representative.

COGENERATOR

Shall mean any corporation or person employing cogeneration (as defined in Section 218.5 of the California Public Utilities Code) for producing power for the generation of electricity for self use of sale to others from a qualified cogeneration facility (as defined in the federal Public Utility Regulatory Policies Act of 1978 and regulations thereunder).

EXEMPT WHOLESALE GENERATOR

Shall have the same meaning as set forth in the Federal Power Act (15 U.S.C. Section 79z-5a) and regulations thereunder.

GAS

Shall mean natural or manufactured gas or any alternative hydrocarbon fuel, which may be substituted therefor.

MOBILE TELECOMMUNICATIONS SERVICE

Shall have the same meaning and usage as set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations thereunder.

MONTH

Shall mean a calendar month.

MUNICIPAL ORGANIZATION

Shall mean that statewide organization sanctioned by the League of California Cities, or created by statute or voluntary action, whose purpose is to facilitate the development and dissemination of uniform rulings or interpretations regarding the application of utility users taxes to communication services in the State of California.

NON-UTILITY SERVICE SUPPLIER

Shall mean:

a.

A service supplier, other than a supplier of electric distribution services to all or a significant portion of the City of Compton, which generates electricity for the sale to others, and shall include but not be 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;

b.

An electric service provider (ESP), electricity broker, marketer, aggregator, pool operator, or other electricity supplier other than a provider of electric distribution services to all or a significant portion of the City of Compton, which sells or supplies electricity or supplemental services to electricity users within the City of Compton; and

c.

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 of Compton, which sells or supplies gas or supplemental services to gas users within the City of Compton.

d.

A water service supplier, distributor, wholesaler, marketer, or broker, which sells or supplies water to users within the City of Compton (other than a supplier of water distribution services to all or a significant portion of the City of Compton).

PERSON

Shall mean, without limitation, any domestic, non-profit or foreign, corporation; firm; association; syndicate; joint stock company; partnership of any kind; limited liability company; joint venture; club; trust: Massachusetts business or common law trust; estate; society; cooperative; receiver, trustee, guardian or other representative appointed by order of any court; any natural individual; municipal district or municipal corporation, other than the City of Compton.

PLACE OF PRIMARY USE

Shall mean 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.

POST-PAID TELECOMMUNICATION SERVICE

Shall mean the telecommunication service obtained by making a payment on a communication-by-communication basis either through the use of a 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.

PREPAID TELECOMMUNICATION SERVICE

Shall mean 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.

PRIVATE TELECOMMUNICATION SERVICE

Shall mean 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).

SERVICE ADDRESS

Shall mean the residential street address or the business street address of the service user. For a telecommunications service user, "service address" means either:

a.

The location of the telecommunication equipment from which the communication originates or terminates, regardless of where the communication is billed or paid; or

b.

If the location in paragraph a of this definition is unknown (e.g., mobile telecommunications service or VoIP service), the service address shall mean the location of the service user's place of primary use.

c.

For prepaid telecommunication service, "service address" shall mean the location associated with the service number.

SERVICE SUPPLIER

Shall mean any person, including the City of Compton, who provides or sells telecommunication, electric, gas, or water service to a user of such services within the City of Compton. The term shall include any person required to collect, or self-collect under subsection 3-4.6 hereof, and remit a tax as imposed by this Section 3-4, including its billing agent in the case of electric, gas, or water service suppliers.

SERVICE USER

Shall mean a person required to pay a tax imposed by this Section 3-4.

STATE

Shall mean the State of California.

TAX ADMINISTRATOR

Shall mean the City Controller of the City of Compton, or his or her authorized representative.

TELECOMMUNICATIONS SERVICES

Shall mean 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, and includes broadband service (e.g., digital subscriber line (DSL), fiber optic, coaxial cable, and wireless broadband, including Wi-Fi, WiMAX, and Wireless MESH) to the extent Federal and/or State law permits taxation of such broadband services, now or in the future. The term "telecommunications service" 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 service is referred to as voice over internet protocol (VoIP) services or is classified by the Federal Communications Commission as enhanced or value added, and includes video and/or data service that is functionally integrated with "telecommunication services". Telecommunications services include, but is 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; broadband service (to the extent Federal and/or State law permits taxation of such service); 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 prerecorded or live service); and value-added non-voice data service.

VALUE-ADDED NON-VOICE DATA SERVICE

Shall mean a service that otherwise meets the definition of "telecommunications services" in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance or routing.

[Ord. #2118, § 1; Ord. #2139, § 2]

a. There is hereby imposed a tax upon every person in the City of Compton using telecommunication services. The tax imposed by this section shall be at the rate of 8.5% 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 of Compton, are used, in whole or in part, within the City of Compton's boundaries, and such services are 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 section, sourcing rules for the taxation of other telecommunication services, including but not limited to post-paid telecommunication services, prepaid telecommunication services, and private telecommunication services, provided that such rules are based upon custom and common practice that further administrative efficiency and minimize multi-jurisdictional taxation.

c. The Tax Administrator may issue and disseminate to telecommunication service suppliers, which are subject to the tax collection requirements of this section, an administrative ruling identifying those telecommunication services, or charges therefor, that is subject to the tax of paragraph a above. This administrative ruling shall not impose a new tax, revise an existing tax methodology as stated in this section, or increase an existing tax, except as allowed by California Government Code Section 53750(h)(2)(A).

d. To facilitate the uniform interpretation and application of similar ordinance provisions in other local jurisdictions in the State, the Tax Administrator may, prior to issuing and disseminating a sourcing rule or an administrative tax ruling, submit its proposed sourcing rule or administrative tax ruling to the municipal organization for review and comment, according to the rules and procedures of that organization, or its successor organization.

e. As used in this section, the term "telecommunication services" 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.

f. 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 of Compton under this section.

g. 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 20th day of the following month.

h. Upon a showing of hardship, the Tax Administrator may administratively delay the implementation of this section until no later than January 1, 2008. Prior to such time, the Tax Administrator may administratively permit the telecommunications tax to be applied to intrastate, interstate, and international telecommunication services in the same manner as the Federal excise tax was applied to "communication services" as defined in Sections 4251 and 4252 of the Internal Revenue Code, and the IRS regulations and rulings pertaining thereto, prior to May 25, 2006, and regardless of whether charges for such services are based on time, distance, or on any other basis, and as such sections are limited by the exceptions of Section 4252(d) and 4253.

[Ord. #2118, § 1]

a. There is hereby imposed a tax upon every person using electricity in the City of Compton. The tax imposed by this subsection shall be at the rate of 10% 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.

b. As used in this subsection, the term "charges" shall apply to all services, components and items that are: i) necessary or common to the receipt, use and enjoyment of electric service; or, ii) currently, 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. Standby, reserves, firming, voltage support, regulation, emergency, or other similar charges for supplemental services to an electric service user that produces electricity for self-use and is subject to subsection 3-4.6;

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 other charges, fees and surcharges which are necessary to or common for the receipt, use and 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, 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 subsection, 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 City of Compton, 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 providers an administrative ruling identifying those components and items which are: (i) necessary or common to the receipt, use or enjoyment of electric service; or, (ii) currently, 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. Unbundled charges for such components and items shall be subject to the tax of paragraph a above.

e. As used in this subsection, the term "using electricity" shall not be construed to include the mere receiving of such electricity by an electric public utility or governmental agency at a point within the City of Compton for resale.

f. The tax on electricity provided by self-production or by a non-utility service supplier not under the jurisdiction of this Section 3-4 shall be collected and remitted in the manner set forth in subsection 3-4.6 hereof. All other taxes on charges for electricity imposed by this subsection shall be collected from the service user by the electric service supplier or its billing agent. 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 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 20th day of following month, provided that the service user shall submit an adjusted payment or request for credit, as appropriate, within 60 days following each calendar quarter. The credit, if approved by the Tax Administrator, may be applied against any subsequent tax bill that becomes due.

[Ord. #2118, § 1]

a. There is imposed a tax upon every person using gas in the City of Compton which is delivered through a pipeline distribution system. The tax imposed by this section shall be at the rate of 10% of the charges made for such gas, including all services related to the storage, transportation and delivery of such gas.

b. As used in this subsection, the term "charges" shall apply to all services, components and items for gas service that are: i) necessary or common to the receipt, use and enjoyment of gas service; or, ii) currently, 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 provider shall not be required to apply the tax to any charges for gas storage services when the service providers 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, marketing charges, administrative charges, transition charges, customer charges, minimum charges, annual and monthly charges, and any other charges which are necessary or common to the receipt, use and 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, 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 subsection, 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 of Compton, 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 which are: (i) necessary or common to the receipt, use or enjoyment of gas service; or, (ii) currently, 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. Unbundled charges for such components and items shall be subject to the tax of paragraph a above.

e. There shall be excluded from the base on which the tax imposed by this section is computed:

1. Charges made for gas which is to be resold and delivered through a pipeline distribution system;

2. Charges made for gas sold for use in the generation of electricity by a public utility or a governmental agency; and

3. Charges made by a gas public utility for gas used and consumed in the conduct of the business of gas public utilities.

f. The tax on gas provided by self-production or by a non-utility service supplier not under the jurisdiction of this Section 3-4 shall be collected and remitted in the manner set forth in subsection 3-4.6 hereof. All other taxes on charges for gas imposed by this subsection shall be collected from the service user by the gas service supplier or its billing agent. 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 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 20th day of the following month, provided that the service user shall submit an adjusted payment or request for credit, as appropriate, within 60 days following each calendar quarter. The credit, if approved by the Tax Administrator, may be applied against any subsequent tax bill that becomes due.

[Ord. #2118, § 1]

a. Any service user subject to the tax imposed by subsections 3-4.4 or 3-4.5 hereof, which produces gas or electricity for self-use; which receives gas or electricity, including any related supplemental services, directly from a non-utility service supplier not under the jurisdiction of this Section 3-4; 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 of Compton, 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 30 days of such use. In lieu of paying said actual tax, the service user may, at its option, remit to the Tax Administrator within 30 days for such use an estimated amount of tax measured by the tax billed in the previous month, or upon the payment patter 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 60 days following each calendar quarter. The credit, if approved by the Tax Administrator, may be applied against any subsequent tax bill that becomes due.

b. The Tax Administrator may require said service user to identify its nonutility service supplier and 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 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 of Compton. Rate schedules for this purpose shall be available from the City of Compton.

[Ord. #2118, § 1]

a. There is hereby imposed a tax upon every person using water in the City of Compton which is delivered through a pipeline distribution system. The tax imposed by this section shall be at the rate of 10% of the charges made for such water.

b. As used in this subsection, the term "charges" shall apply to all services, components and items that are: i) necessary or common to the receipt, use and enjoyment of water service; or, ii) currently, 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:

1. Water commodity charges (potable and nonpotable);

2. Distribution or transmission charges;

3. Metering charges;

4. Customer charges, 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 and enjoyment of water service; and

5. 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 subsection, 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 of Compton to identify the various unbundled billing components of water retail service that they commonly provide to residential and commercial/industrial customers in the City of Compton, and the charges therefor, including those items that are mandated by a water district or a State or Federal regulatory agency as a condition of providing such water service. The Tax Administrator, thereafter, may issue and disseminate to such water service providers an administrative ruling identifying those components and items which are: (1) necessary or common to the receipt, use or enjoyment of water service; or, (2) currently, 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. Unbundled charges for such components and items shall be subject to the tax of paragraph a above.

e. There shall be excluded from the base on which the tax imposed by this section is computed charges made for water which is to be resold and delivered through a pipeline distribution system.

f. The tax imposed by this subsection shall be collected from the service user by the service supplier, or its billing agent. The amount collected in one month shall be remitted to the Tax Administrator on or before the 20th day of the following month, and must be received by Tax Administrator on or before 20th day of the following month.

[Ord. #2118, § 1; Ord. #2139, § 3]

Except as otherwise provided by applicable Federal or State law, 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. The service supplier has the burden of proving the proper apportionment of taxable and non-taxable charges.

[Ord. #2118, § 1; Ord. #2139, § 4]

For purposes of imposing a tax or establishing a duty to collect and remit a tax under this Section 3-4, "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 communication service (including VoIP) 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 section.

[Ord. #2118, § 1]

a. The taxes imposed by this Section 3-4 shall not apply to:

1. Any person or service if imposition of such tax upon that person or service would be in violation of a Federal or State statute or the Constitution of the State of California, or the Constitution of the United States; or

2. The City of Compton.

b. Any person that is exempt from the tax imposed by this Section 3-4 pursuant to paragraph a above 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, or is a service user of telephone communication services that has received a Federal excise tax exemption certificate 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 utility service suppliers serving the service user. If deemed exempt by the Tax Administrator, such service user shall give the Tax Administrator timely written notice of any change in utility service suppliers so that the Tax Administrator can properly notify the new utility service supplier of the service user's tax exempt status. A service user that fails to comply with this section shall not be entitled to a refund of utility users' taxes collected and remitted to the Tax Administrator from such service user as a result of such noncompliance. Upon request of the Tax Administrator, a service supplier or non-utility service supplier, or their billing agent, shall provide a list of the names and addresses of those customers which, according to their billing records, are deemed exempt from the utility users' tax. With respect to a service user of telephone communication services, a service supplier of such telephone communication services doing business in the City of Compton shall, upon request of the Tax Administrator, provide a copy of the Federal exemption certificate for each exempt customer within the City of Compton that is served by such service supplier.

c. The decision of the Tax Administrator may be appealed pursuant to subsection 3-4.19 hereof. Filing an application with the Tax Administrator and appeal to the City Manager pursuant to subsection 3-4.19 of this Section 3-4 is a prerequisite to a suit thereon.

[Ord. #2118, § 1]

a. The tax imposed by this section shall not apply to:

(1) Any individual 62 years of age or older who uses telephone, electric, gas or water services in or upon any residential premises occupied by such individual, provided the gross total household combined incomes is equal to or less than the limits for "Very Low Family Income" set by the U.S. Department of Housing and Urban Development (HUD) in its income limits for public housing and Section 8 programs and median family incomes for Los Angeles County; or

(2) Any individual who certified as meeting the criteria of disability as established by the United States Social Security Administration for Supplemental Income for a blind or disabled person.

b. To qualify for the exemption set forth in paragraph a of this subsection, the individual shall file an application in a form, time and manner prescribed by the Tax Administrator. Applications may be filed at any time.

c. Applications shall be verified by declaration under penalty of perjury and shall contain such information as may be required by the Tax Administrator. The Tax Administrator shall review each application and shall certify the service user as exempt if the eligibility requirements of paragraph a of this subsection are met, except that no exemption shall be granted to a service user who is receiving from a service supplier through a master meter and no exemption shall be granted with respect to any tax imposed by Section 3-4 which is or has been paid by a public agency or where the service user receives funds from a public agency specifically for the payment of such tax. The decision of the Tax Administrator regarding an exemption may be appealed pursuant to subsection 3-4.19 of this Section 3-4. Filing an application with the Tax Administrator and appeal to the City Manager pursuant to subsection 3-4.19 of this Section 3-4 is a prerequisite to a suit thereon.

d. If a service user is certified as exempt, the Tax Administrator shall promptly notify service user's service suppliers, stating the name of the service user, the address to which such 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. Upon receipt of such notice, the service supplier shall within 60 days discontinue billing service user for taxes imposed by this Section 3-4.

e. Exemptions certified by the Tax Administrator shall continue as long as the facts supporting the qualification for exemption shall exist; provided, however, that the exemption shall automatically terminate with the change in the service address or residence of the exempt individual; and provided, further, such individual may nevertheless apply for a new exemption with each change of address of residence. Any service user who has been exempted under this subsection shall notify the Tax Administrator within 10 days of any change in fact or circumstance which might disqualify such individual from receiving such exemption. It shall be a misdemeanor for any person to knowingly receive the benefits of the exemption provided by this subsection when the basis for such exemption either does not exist or ceases to exist.

f. The Tax Administrator shall have the power and right to demand evidence of continued eligibility of a service user for exemption under the provisions of this subsection. Such evidence may include, but need not be limited to, copies of business records, letter or statements from the Social Security Administration and State, County, City and private pension administrators or unemployment and welfare agencies, copies of income tax returns, and such other evidence concerning the service user or other members of the service user's household as may tend to prove or disprove such eligibility. Failure to provide such evidence as is within the control of a service user to so provide, either directly by the service user or by the service user's consent or the consent of a member of the service user's household when such evidence is requested of the service user in writing by the Tax Administrator, shall be grounds for the immediate discontinuance of the service user's eligibility for exemption under the provisions of this section. Evidence provided to the Tax Administrator at the Tax Administrator's request, or voluntarily provided to the Tax Administrator by the service user without the Tax Administrator's request, may not be used against such service as evidence of violation of the provisions of this subsection. Such evidence may only be used as grounds for termination of the exemption provided by this subsection.

[Ord. #2118, § 1]

a. Collection by Service Suppliers. The duty of service suppliers to collect and remit the taxes imposed by the provisions of this Section 3-4 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, subsection 3-4.14 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 Section 3-4. 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.

b. Filing Return and Payment. Each person required by this Section 3-4 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 Section 3-4. 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.

[Ord. #2118, § 1; Ord. #2139, § 5]

a. Taxes collected from a service user, or owned by a service user subject to subsection 3-4.6 hereof, 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 subsection 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, or, in the case of a service user that fails to properly self-collect and remit the tax under subsection 3-4.6 hereof on or before the due date, the Tax Administrator shall attach a penalty for such delinquencies or deficiencies at the rate of 15% of the total tax that is delinquent or deficient in the remittance, and shall pay interest at the rate of and 0.75% per month, or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first become 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 Section 3-4 for fraud or gross negligence in reporting or remitting at the rate of 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 section 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 and/or penalty and interest provisions of this section to be consistent with any uniform standards or procedures that are mutually agreed upon by UUT public agencies, or otherwise legally established, to create a UUT central payment location or mechanism.

[Ord. #2118, § 1]

a. The Tax Administrator shall make a deficiency determination if he or she determines that any person required to collect or self-collect taxes pursuant to the provisions of this Section 3-4 has failed to collect and remit the proper amount of tax by improperly or failing to apply the tax to one or more taxable services or charges.

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 3/4% per month, or any fraction thereof, on the amount of the tax from the date on which the tax should have been received by the City of Compton.

Within 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. 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 of Compton.

c. If the person requests a hearing, the Tax Administrator shall cause the matter to be set for hearing not later than 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 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 nonassessment), 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 subsection 3-4.19. Filing an application with the Tax Administrator and appeal to the City Manager pursuant to subsection 3-4.19 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 30th day following the date of receipt of the notice of final assessment. The penalty for delinquency shall be 15% on the total amount of the assessment, along with interest at the rate of 3/4% per month, or any fraction thereof, on the amount of the tax, exclusive of penalties, from the date of delinquency, until paid. The applicable statue of limitations regarding a claim by the City of Compton seeking payment of a tax assessed under this subsection 3-4.13 shall commence from the date of delinquency as provided in this paragraph e.

f. 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.

[Ord. #2118, § 1]

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 Section 3-4 from certain named service users for specific billing periods. Whenever the service user has failed to pay the amount of tax owed for a period of two or more billing periods, the service supplier shall be relieved of the obligation to collect taxes due. The service supplier shall provide the City of Compton with the names and addresses of such service users and the amounts of taxes owed under the provisions of this Section 3-4.

b. In addition to the tax owed, the service user shall pay a delinquency penalty at the rate of 15% of the total tax that is owed, and shall pay interest at the rate of 3/4% 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 nonpaying 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 30 days from the date of the service of the notice upon him or her, the Tax Administrator may impose an additional penalty of 15% of the amount of the total tax that is owed.

[Ord. #2118, § 1]

Any tax required to be paid by a service user under the provisions of this Section 3-4 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 of Compton 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 Section 3-4 shall be liable to an action brought in the name of the City of Compton for the recovery of such amount, including penalties and interest as provided for in this Section 3-4, along with any collection costs incurred by the City of Compton as a result of the person's noncompliance with this Section 3-4, including, but not limited to, reasonable attorney's fees. In the event that a service user or service supplier owing a tax under this Section 3-4 files bankruptcy, then such debt to the City of Compton shall be deemed an unsecured priority excise tax obligation under 11 U.S.C.A. Section 507(a)(8)(C).

[Ord. #2118, § 1]

a. The Tax Administrator shall have the power and duty, and is hereby directed, to enforce each and all of the provisions of this Section 3-4.

b. The Tax Administrator may adopt administrative rules and regulations not inconsistent with provisions of this Section 3-4 for the purpose of interpreting, clarifying, carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such administrative rules and regulations shall be on file in the Tax Administrator's office. The adoption of an administrative ruling by Tax Administrator pursuant to this paragraph b shall not constitute an "extension" or "increase" of the tax imposed by this Section 3-4, provided that the administrative ruling does not cause the percentage rate of the tax to exceed the percentage rates set forth in this Section 3-4 (as authorized by California Constitution Chapter XIIIC, Section 2 (d), and California Government Code Section 53750(h)(2) ).

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 Section 3-4 and thereby; (1) conform to the billing procedures of a particular service supplier (or service user subject to subsection 3-4.6 hereof) so long as said agreements result in the collection of the tax in conformance with the general purpose and scope of this Section 3-4; or, (2) to avoid a hardship where the administrative costs of collection and 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 of Compton at any time.

d. The Tax Administrator may conduct an audit, to ensure proper compliance with the requirements of this Section 3-4, of any person required to collect and/or remit a tax pursuant to this Section 3-4. 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 or review shall not exceed a period of three 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 subsection 3-4.13 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 Section 3-4, the Tax Administrator is authorized to make a reasonable estimate of the deficiency. Said reasonable estimate shall be entitled to be 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 Section 3-4 for a period of not to exceed 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 3/4% 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 Section 3-4.

g. The Tax Administrator, with the written approval of the City Attorney, may compromise a claim pursuant to this Section 3-4 where the portion of the claim proposed to be released is equal to or less than $4,999; and, with the approval of the City Attorney and the City Council, may compromise such a claim where the portion proposed to be released is greater than $4,999.

h. Notwithstanding any provision in this Section 3-4 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 Section 3-4 if the noncollection occurred in good faith. In determining whether the noncollection was in good faith, the Tax Administrator shall take into consideration industry practice or other precedence.

[Ord. #2118, § 1]

a. It shall be the duty of every person required to collect and/or remit to the City of Compton any tax imposed by this Section 3-4 to keep and preserve, for a period of at least three years, all records as may be necessary to determine the amount of such tax that such person 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 Tax Administrator 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 Section 3-4, 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 of Compton on or before the due date, provided that such person shall reimburse the City of Compton for all reasonable travel expenses incurred by the City of Compton 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 of Compton to conduct the inspection.

c. The Tax Administrator is authorized to execute a nondisclosure 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. The Tax Administrator may request from a person providing transportation or distribution services of gas or electricity to service users within the City, a list of the names, billing and service addresses, quantities of gas or electricity delivered, and other pertinent information, of its transportation customers within the City of Compton pursuant to Section 6354(e) of the California Public Utilities Code.

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 of Compton; 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 of Compton.

e. If any person subject to record-keeping under this Section 3-4 unreasonably denies the Tax Administrator, or the Tax Administrator's designated representative, access to such records, or fails to produce the information requested in an administrative subpoena within the time specified, the Tax Administrator may impose a penalty of $500 on such person for each day following: i) the initial date that the person refuses to provide such access; or, ii) 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 Section 3-4.

[Ord. #2118, § 1]

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, it may be refunded or credited as provided in this subsection:

a. 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 Section 3-4, 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.

b. The submission of a written claim, which is acted upon by the City Council, shall be a prerequisite to a suit thereon. (See Section 935 of the California Government Code). The Tax Administrator, or the City Council where the claim is in excess of $4,995 shall act upon the refund claim within the time period set forth in Government Code Section 912.4. If the 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. It is the intent of the City Council that the one year written claim requirement of this subsection be given retroactive effect; provided, however, that any claims which arose prior to the commencement of the one year claims period of this subsection, and which are not otherwise barred by a then applicable statue of limitations or claims procedure, must be filed with the Tax Collector as provided in this subsection within 90 days following the effective date of this section.[1]

[1]

Editor's Note: Ordinance No. 2118, codified herein as Section 3-4, was adopted February 1, 2005.

c. Notwithstanding the notice provisions of paragraph a of this subsection, a service supplier that has collected any amount of tax in excess of the amount of tax imposed by this Section 3-4 and actually due from a service user (whether due to overpayment or erroneous or illegal collection of said tax), may refund such amount to the service user, or credit to charges subsequently payable by the service user to the service supplier, and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns to the Tax Administrator, provided such credit is claimed in a return dated no later than one year from the date of overpayment or erroneous or illegal collection of said tax. The Tax Administrator shall determine the validity of the service user's claim of credit, and the underlying basis for such claim.

d. Notwithstanding the notice provisions of paragraph a of this subsection, in the event that a service supplier, or a service user subject to subsection 3-4.6 hereof, remits a tax to City in excess of the amount of tax imposed by this Section 3-4, said service supplier, or service user subject to subsection 3-4.6 hereof, may claim credit for such overpayment against the amount of tax which is due upon any other monthly returns to the Tax Administrator, provided such credit is claimed in a return dated no later than one year from the date of overpayment of said tax. The Tax Administrator shall determine the validity of the service user's claim of credit, and the underlying basis for such claim.

e. Notwithstanding other provisions of this subsection, whenever a service supplier, pursuant to an order of the California Public Utilities Commission, makes a refund to service users of charges for past utility services, the taxes paid pursuant to this Section 3-4 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 section is repealed, the amounts of any refundable taxes will be borne by the City of Compton.

[Ord. #2118, § 1]

a. The provisions of this section apply to any decision (other than a decision relating to a refund pursuant to subsection 3-4.18 hereof), 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 subsection 3-4.18 hereof), 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.

b. If any person is aggrieved by any decision (other than a decision relating to a refund pursuant to subsection 3-4.18 hereof), deficiency determination, assessment, or administrative ruling of the Tax Administrator; he or she may appeal to the City Manager by filing a notice of appeal with the City Clerk within 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 set for hearing no more than 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 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, the City Manager, 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 City Manager 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 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 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.

[Ord. #2118, § 1]

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 of Compton or against any officer of the City of Compton to prevent or enjoin the collection under this Section 3-4 of any tax or any amount of tax required to be collected and/or remitted.

[Ord. #2118, § 1]

All remedies and penalties prescribed by this Section 3-4 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 of Compton shall not bar the use of any other remedy for the purpose of enforcing the provisions of this Section 3-4.

[Ord. #2118, § 1]

If a tax under this Section 3-4 is added, repealed, increased, reduced, or the tax base is changed, the Tax Administrator shall follow the notice requirements of Public Utilities Code Section 799. Prior to the effective date of the ordinance change, the service supplier shall provide the Tax Administrator with a copy of any written procedures describing the information that the service supplier needs to implement the ordinance change. If the service supplier fails to provide such written instructions, the Tax Administrator, or his or her agent, shall send, by first class mail, a copy of the ordinance change to all collectors and remitters of the City's utility users taxes according to the latest payment records of the Tax Administrator.

[Ord. #2118, § 1]

Unless specifically provided otherwise, any reference to a State or Federal statute in this Section 3-4 shall mean such statute as it may be amended from time to time.

[Ord. #2118, § 1]

Any person violating any of the provisions of this Section 3-4 shall be deemed guilty of a misdemeanor, or an infraction at the discretion of the City Attorney.

[Ord. #2139, § 6]

The City shall annually verify that the taxes owed under this section have been properly applied, exempted, collected, and remitted in accordance with this section, and properly expended according to applicable municipal law. The annual verification shall be performed by a qualified independent third party and the review shall employ reasonable, cost-effective steps to assure compliance, including the use of sampling audits. The verification shall not be required of tax remitters where the cost of the verification may exceed the tax revenues to be reviewed.