East Palo Alto Municipal Code Ch. 3.64 Telephone, Gas, Electricity, Cable Television and Water Users Tax

There is hereby established and imposed a utility users tax in the amount set forth in this chapter for the purpose of raising revenues for the general governmental purposes of the city. All of the proceeds of the taxes levied under this chapter shall be placed in the city's general fund.

(Ord. 103 § 1, 1989)

(Ord. No. 297, § 1, 11-8-2005)

For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them in this section, unless the context or the provision clearly requires otherwise:

"City" means the City of East Palo Alto.

"Electrical corporation," "gas corporation," "telephone corporation," "water corporation" and "cable television corporation" shall have the same meanings as defined in Sections 218, 222, 234 and 241, respectively, of the Public Utilities Code of the state. "Electrical corporation" shall be construed to include any municipality or governmental agency engaged in the selling or supplying of electrical power to a service user.

"Month" means a calendar month.

"Person" means all domestic and foreign corporations, associations, syndicates, joint stock companies, partnerships of every kind, joint ventures, clubs, trusts, societies and individuals.

"Service address" means the address of the ultimate consumer of the service supplied by the service supplier.

"Service supplier" means a person required to collect and remit a tax imposed under the provisions of this chapter.

"Service user" means a person required to pay a tax imposed under the provisions of this chapter.

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

(Ord. 169 § 1, 1994; Ord. 103 § 2, 1989)

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 the Constitution of the United States or the Constitution of the state.

B. No tax under this chapter shall be imposed upon the city or any other governmental entity.

C. Any service user exempt from the taxes imposed by this chapter may apply to the tax administrator for an exemption; provided, however, the tax administrator may waive the filing of an application for exemption if the tax administrator has sufficient information to determine, in the absence of such application, that the service user qualifies for an exemption. The application shall be made upon forms supplied by the tax administrator and shall be accompanied by such additional information and documents as he may require to determine eligibility for an exemption. The tax administrator shall review all such applications and certify as exempt those applicants determined to qualify therefor. The tax administrator shall thereupon notify all service suppliers affected that an exemption has been granted stating the name of the service user, the service address to which the utility 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 collection procedure. Upon receipt of such notice, the service supplier shall not be required to bill or collect any further tax imposed by this chapter from such service user until further notice is given by the tax administrator.

D. All exemptions under this section shall continue and be renewed by the tax administrator so long as the prerequisite facts supporting the initial qualification for exemption shall continue; provided, however, that the exemption shall automatically terminate upon any change in the service address of the exempt person, but such person may apply for a new exemption with each change of address. Any person exempt from the taxes imposed by this chapter shall notify the tax administrator within ten days of any change in fact or circumstance which might disqualify such person from receiving the exemption. It shall be a misdemeanor for any person to knowingly receive the benefits of an exemption provided by this section when the basis for such exemption does not exist or ceases to exist.

E. The exemptions provided by this section shall not eliminate the duty of the service supplier to collect taxes from an exempt person or the duty of such exempt person to pay the taxes to the service supplier unless an exemption is granted by the tax administrator. Nothing in this chapter shall prevent any person who is granted an exemption from thereafter applying for a refund of taxes previously paid, in accordance with the provisions of Section 3.64.170.

F. Any service supplier who determines by any means that a new or nonexempt service user is receiving service through a meter or connection exempt by virtue of an exemption issued to a previous user or exempt user of the same meter or connection, shall immediately notify the tax administrator of such fact and the tax administrator shall conduct an investigation to ascertain whether or not the provisions of this section have been complied with, and, where appropriate, order the service supplier to commence collecting the taxes from the nonexempt service user.

(Ord. 103 § 3, 1989)

A. There is imposed a tax upon every person in the city, other than an electrical corporation or a gas corporation, using electrical energy in the city. The tax imposed by this section shall be at the rate of five percent of the charges made for such energy, including minimum charges for service, and shall be paid by the person paying for such energy.

B. As used in this section, the words "using electrical energy" shall not be construed to mean:

1. The use of such energy from a storage battery, provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of storage batteries; or

2. The receiving of such energy by an electrical corporation or a governmental agency at a point within the city for resale.

C. The tax imposed in this section shall be collected from the service user by the person selling such electrical energy. The amount of 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 billed in the previous month, shall be remitted to the tax administrator on or before the last day of each month.

(Ord. 103 § 4, 1989)

A. There is imposed a tax upon every person in the city, other than a gas corporation or an electrical corporation, using gas in the city which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of five percent of the charges made for such gas, including minimum charges for service, and shall be paid by the person paying for such gas.

B. As used in this section, the term "charges" shall not include charges made for gas used in the generation of electrical energy by a public utility or a governmental agency, and the term "using gas" shall not be construed to mean the receiving of such gas by a gas corporation or governmental agency at a point within the city for resale.

C. The tax imposed by this section shall be collected from the service user by the person selling the gas. The amount collected in one month shall be remitted to the 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 billed in the previous month, shall be remitted to the tax administrator on or before the last day of each month.

(Ord. 103 § 5, 1989)

Notwithstanding any other provisions of this chapter, a service user receiving electricity or gas directly from the producer, or otherwise not having the full tax payable under Section 3.64.040 or 3.64.050 billed and collected by the service supplier, shall report such fact to the tax administrator within thirty (30) days of such use and shall remit directly to the tax administrator the amount of tax due.

(Ord. 103 § 6, 1989)

A. There is imposed a tax upon every person in the city, other than a telephone corporation, using intrastate telephone communication services in the city. The tax imposed by this section shall be at the rate of five percent of the charges made for such services, and shall be paid by the person paying for such service. The tax imposed by this section shall apply to all charges billed to a telephone account having a situs in the city, irrespective of whether a particular communication service originates or terminates within the city.

B. As used in this section, the term "charges" shall not include:

1. Charges for telephone communication services that are 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;

2. Charges for any type of service or equipment furnished by a service supplier subject to public utility regulation 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 regulation.

C. As used in this section, the words "telephone communication services" refer to that service which provides access to a telephone system and the privilege of telephonic quality communication with substantially all persons having telephone stations which are part of such telephone system, but such words shall not include land mobile services or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as such section existed on January 1, 1970.

D. The tax imposed by this section shall be collected from the service user by the person providing the intrastate telephone communication services, or the person receiving payment for such services. The amount of 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 billed 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 of this section, the tax imposed under this section shall not be imposed upon any person for using intrastate telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Section 4251 of the United States Internal Revenue Code or the tax imposed under Division 2, Part 20 of the California Revenue and Taxation Code.

(Ord. 103 § 7, 1989)

A. There is imposed a tax upon every person in the city, other than a water corporation, using water in the city which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of five percent of the charges made for such water, including minimum charges for service, and shall be paid by the person paying for such water.

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

(Ord. 103 § 8, 1989)

A. There is imposed a tax (herein called the cable television users tax) upon every person in the city using cable television service. The tax imposed by this section shall be at the rate of five percent of the charge made for such service and shall be paid by the person paying for such service.

B. The cable television users tax 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. 169 § 2, 1994)

Any tax and/or penalty required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the city. Any such tax collected from a service user which has not been remitted to the tax administrator shall be deemed a debt owed to the city by the person required to collect and remit. 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. 103 § 9, 1989)

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

A. Every service supplier who receives, or is entitled to receive, the payment of charges from a service user, shall collect the amount of tax imposed by this chapter from each such service user.

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

C. The duty to collect the tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the effective date of the ordinance codified in this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period.

(Ord. 103 § 10, 1989)

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

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

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

(Ord. 103 § 11, 1989)

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. Any tax billed to a service user but not paid to the service supplier shall not be deemed an obligation of the service supplier unless such tax is thereafter paid to the service supplier.

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

C. If the tax administrator determines that the nonpayment by any service supplier of any remittance under this chapter is due to fraud, a penalty of twenty-five (25) percent of the amount of the tax shall be added thereto in addition to the penalty stated in subsection B of this section.

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

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

(Ord. 103 § 12, 1989)

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

B. The service supplier may within ten days after the serving or mailing of the notice referred to in subsection A of this section make application in writing to the tax administrator for a hearing on the amount assessed. If application by the service supplier for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the tax administrator shall become final and conclusive and immediately due and payable. If such application is made, the tax administrator shall give not less than five days' written notice in the manner prescribed in this chapter for the service supplier to appear at a time and place fixed in such notice and show cause as to why the amount specified therein should not be fixed for such tax, interest and penalties.

C. If a hearing is conducted on the amount of tax assessed, as provided in subsection B of this section, the tax administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the service supplier of such determination and the amount of tax, interest and penalties due and payable to the city. Such amount shall be paid in full by the service supplier within ten days after the serving or mailing of the notice unless, prior to the expiration of such ten-day period, the service supplier files with the city clerk a written notice of appeal to the city council. No penalty provided for in this chapter shall be imposed after the filing of an appeal to the city council or until completion of the hearing thereon and the making of a determination on the subject of the appeal by the city council.

(Ord. 103 § 13, 1989)

A. Whenever the tax administrator determines that a service user has deliberately withheld the amount of any tax imposed by the provisions of this chapter from the amounts remitted to a service supplier required to collect the tax, or that a service user has failed to pay the amount of the tax to such service supplier for a period of four or more billing periods, or whenever the tax administrator deems it to be in the best interest of the city, he may relieve the service supplier of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods.

B. The service supplier shall provide the tax administrator with a monthly report showing the name and address of each service user refusing to pay a tax imposed by the provisions of this chapter, or failing to pay such tax for a period of four billing periods, and the amount of tax such service user has failed or refused to pay.

C. The tax administrator shall give written notice to the service user that he has assumed responsibility to collect the taxes due for the stated periods and demand payment thereof. 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 thereon, addressed to the service user at the address to which billing was made by the person required to collect the tax; or, if the service user has changed addresses, to the last known address of the service user. In the event the service user fails to pay the tax to the tax administrator within fifteen (15) days from the date of service of the notice, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty-five (25) percent of the amount of the tax set forth in the notice shall be imposed, or ten dollars ($10.00), whichever is greater. If the tax is not paid in full within sixty (60) days from the date of service of the tax administrator's notice, the service user shall pay interest on the unpaid tax, exclusive of penalties, at the rate of one and one-half percent per month, or fraction thereof, from the date which is sixty (60) days after service of the tax administrator's notice to the date on which the tax is paid in full.

D. Any penalty and interest charged to a service user pursuant to subsection C of this section shall become a part of the tax required to be paid; provided, however, the tax administrator, or the city council on appeal, shall have authority to waive collection of the penalty or interest or both if the service user establishes, to the satisfaction of the tax administrator or city council, that failure to pay the tax was the result of financial inability, mistake or excusable inadvertence.

(Ord. 103 § 14, 1989)

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

(Ord. 103 § 15, 1989)

A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once, or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subsections B and C of this section provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator on such forms as he may prescribe. Claims for refunds must be filed within three years after the date of payment of the tax.

B. A service supplier may claim a refund or claim a credit against taxes collected but not yet remitted to the city, of the amount overpaid, paid more than once or erroneously or illegally collected or received, when it is established, in a manner prescribed by the tax administrator, that a refund is justified; provided, however, in the case of a tax erroneously or illegally collected by the service supplier, no refund shall be allowed unless the amount thereof has either been refunded by the service supplier to the service user or other person from whom the amount was collected, or credited against charges subsequently payable by such service user or other person.

C. A service user may obtain a refund of the amount overpaid, or paid more than once, or erroneously or illegally collected or received by the city, by filing a claim in the manner provided in subsection A of this section, but only when the service user having paid the tax, interest and/or penalty establishes to the satisfaction of the tax administrator that: (1) the service user has been unable to obtain a refund from the service supplier who collected the same; and (2) the refund is justified.

D. The decision of the tax administrator on any claim for a refund may be appealed to the city council by filing a notice of appeal with the city clerk within ten calendar days after the decision is rendered.

E. Notwithstanding any 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 services, the taxes paid pursuant to this chapter on the amount of such refunded service charges may also be refunded to service users by the service supplier and the service supplier can claim credit for such refunded taxes against the amount which is due upon any monthly returns. In the event this chapter has been repealed as of the time such refund is to be made, the amount of any refundable taxes will be borne by the city.

(Ord. 103 § 16, 1989)

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

(Ord. 103 § 17, 1989)