Fairfield Municipal Code Art. V Utility Users Excise Tax

The purpose of this chapter is to impose a utility users excise tax as a revenue measure necessary to pay the usual and current expenses of conducting the municipal government of the City, the proceeds of which shall be deposited into the general fund of the City.

(Ord. 2002-27, § 1)

The following words and phrases whenever used in this Article shall have the following meanings:

(a)

"Person"

shall mean any domestic or foreign corporation, firm, association, syndicate, joint stock company, partnership of any kind, joint venture, club, Massachusetts business or common law trust, society, or individuals.

(b)

"City"

shall mean the City of Fairfield.

(c)

"Gas"

shall mean natural or manufactured gas or any alternate hydrocarbon fuel which may be substituted therefore, used for light, heat or power.

(d)

"Telephone corporation," "electrical corporation," "gas corporation" and "cable television corporation"

shall have the same meanings as defined in Sections 234, 218, 222, 241, and 215.5, respectively, of the California Public Utilities Code except, "electrical corporation" and "gas corporation" shall also be construed to include any municipality or other public agency engaged in the selling or supplying of electrical power or gas to a service user.

(e)

"Tax Administrator"

shall mean the Finance Director of the City of Fairfield.

(f)

"Service supplier"

shall mean a person required to collect or self-impose and remit a tax as imposed by this chapter.

(g)

"Service user"

shall mean a person required to pay a tax imposed by this chapter.

(h)

"Month"

shall mean a calendar month.

(i)

"Non-utility supplier"

shall mean: (a) a service supplier, other than an electrical corporation serving within the City, which generates electrical energy in capacities of at least 50 kilowatts for its own use or for sale to others; or (b) a gas supplier other than a gas corporation, that sells or supplies gas to users within the City.

(j)

"Tax"

shall mean the utility users excise tax imposed by this Article through Sections 18.38, 18.39, 18.40 and 18.41.

(a) There is hereby imposed a Tax upon every person, other than a telephone corporation, using Telephone Communication Services in the City when the person using the Telephone Communication Services has a service address in the City. The Tax imposed by this section shall be at the rate of two percent (2%) of all charges made for Telephone Communications Services and shall be paid by the person paying for such Services. The telephone users Tax is intended to, and does, apply to all charges billed to a telephone account having a service address in the City. For the purposes of this section, a person is using Telephone Communication Services in the City if the person has a service address in the City even if a particular Communication Service neither originates nor terminates within the City.

(b) As used in this section, the following terms are defined as follows:

(1)

"Interstate and international telephone communication services"

are those charges which originate or terminate within the City and are charged to a Fairfield service address. Interstate calls shall be deemed to include calls to the District of Columbia.

(2)

"Telephone Communication Services"

means the transmission of any communications, messages, or information, whether by fixed, mobile, portable, or any other form through electronic or other means, between or among points by wire, cable, fiber-optics, laser, microwave, radio, satellite or other methods; and including services for intrastate, interstate, or international calls, any teletypewriter or facsimile exchange services and mobile or cellular telephone communication.

(3)

"Service address"

is the address(es) where the bill for Telephone Communication Services is received.

(4)

"Charges"

shall not include charges for services paid for by inserting coins in coin-operated telephones except where such coin-operated service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other period charge shall be included in the base for computing the amount of tax due; nor shall the term "charges" include charges for any type of service or equipment furnished by a service supplier which is subject to public utility regulations during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulation.

(c) The person providing the Telephone Communications Services, or the person receiving payment for such services, shall collect the tax imposed by this Section from the service users and remit payment to the Tax Administrator in the manner prescribed by Section 18.42.

(d) Upon written documentation in a form acceptable to the Tax Administrator submitted by any taxpayer of payment of a tax in another state on the same interstate telephone communication services taxed and paid for pursuant to this section, that taxpayer shall be eligible for a tax credit in the amount previously paid to the other jurisdiction.

(e) The Tax imposed by this section shall not be imposed upon any person for using intrastate, international, and interstate communications services, including teletypewriter or facsimile exchange services, to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under California Revenue and Taxation Code Section 41001, et seq., or Sections 4251 of Title 26 of the United States Internal Revenue Code, as said sections existed on January 1, 1994.

(a) There is hereby imposed a Tax upon every person, other than an electric or gas corporation, using electrical energy in the City. The tax imposed by this section shall be at the rate of two percent (2%) of the charges made for such energy by an electrical corporation providing service in the City and shall be billed to and paid by the person using the energy.

The Tax applicable to the use of electrical energy imposed by this section, is applicable to electrical energy provided by a non-utility supplier, and electrical corporation and a gas corporation. Non-Utility Suppliers shall install, maintain and use an appropriate utility-type metering system which shall verify compliance with this section.

(b) As used in this section, the following terms shall be defined as follows:

(1)

"Charges,"

as used in this section, shall include charges made for: (1) metered energy and (2) minimum charges for service, including customer charges, service charges, demand charges, standby charges and all other annual and monthly charges, fuel or other cost adjustments, authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission.

(2)

"Using electrical energy"

shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by that person for use in an automobile or other machinery device apart from the premises upon which the energy was received, provided, however, that the term shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include the mere receiving of such energy by an electrical public utility or governmental agency at a point within the City for resale.

(c) The service supplier or non-utility supplier shall collect from the service user the Tax imposed by this section and remit the amounts collected to the Tax Administrator in the manner prescribed by Section 18.42.

(d) A service user who receives electricity without having the full tax due, billed and collected by the supplier of electricity, or who receives electricity by self-generation or cogeneration, shall report said fact to the Tax Administrator and shall remit directly to the Tax Administrator the amount of the tax due pursuant to this Section 18.39 within 30 days of said use.

(a) There is hereby imposed a Tax upon every person in the City other than a gas corporation or electrical corporation, using, in the City, gas which is transported through mains or pipes or by mobile transport or by rail. The Tax imposed by this section shall be at the rate of two percent (2%) of the charges made for the gas and shall be billed to and paid by the person using the gas. The tax applicable to gas or gas transportation provided by non-utility suppliers shall be based on the sale price of the gas or gas transportation.

(b) "Charges," as used in this section, shall include:

(1) Those billed for gas which is delivered through mains or pipes or by motor vehicle or by rail;

(2) Gas transportation charges; and

(3) Demand charges, service charges, customer charges, minimum charges, annual and monthly charges, and any other charge authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission.

(c) The Tax imposed by this section is not applicable to:

(1) Charges made for gas which is to be resold and delivered through mains and pipes or by motor vehicle or by rail;

(2) Charges made for gas sold by a public utility or governmental agency for use in the generation of electrical energy or for the production or distribution of water;

(3) Charges made by a gas public utility for gas used and consumed in the course of its public utility business; and

(4) Charges made for gas used in the propulsion of a motor vehicle, as authorized in the Vehicle Code of the State of California.

(d) The person selling or transporting the gas shall collect the Tax imposed by this section from the service user and remit those amounts to the Tax Administrator in the manner prescribed by Section 18.42. A person selling only transportation services to a user for delivery of gas through mains or pipes or by motor vehicle or by rail shall collect the tax from the service user based on the transportation charges.

(e) A service user receiving gas directly from a non-utility supplier, or a non-utility supplier not under the jurisdiction of this chapter, or otherwise not having the full tax due, billed and collected by the service supplier, shall report said fact to the tax administrator within thirty days of said use; and shall remit directly to the Tax Administrator the amount of said tax due.

(f) The Tax Administrator may require from a person who is a service user pursuant to subsection (e), the filing of tax returns or other satisfactory evidence documenting the sale price, or fair market value in the absence of a sales price, and quantity of gas used.

(a) There is hereby imposed a Tax upon every person in the City using cable television service in the City. The Tax imposed by this section shall be at the rate of two percent (2%) of the charges made for such cable television service and shall be paid by the person paying for such service.

(b) The person furnishing the cable television service shall collect the Tax imposed in this section from the service user and remit those amounts to the Tax Administrator in the manner prescribed by Section 18.42.

(c) For purposes of this section, cable television service shall mean a television signal delivered by cable for a fee or charge.

(a) Every person required to collect the Tax by Sections 18.38, 18.39, 18.40 and 18.41 shall remit the Tax collected monthly to the Tax Administrator postmarked on or before the last day of the following month. At the option of the person required to collect and remit the tax, an estimated amount of tax collected which shall be measured by the tax billed in the previous month shall be remitted to the Tax Administrator postmarked on or before the last day of each month.

If estimated tax payments are remitted to the Tax Administrator, the person required to collect and remit the tax shall reconcile the difference between the amount of the tax actually due and the amount of the estimated tax paid to the Tax Administrator every third month after the date that the tax is first imposed. Any additional tax due to the city shall immediately be paid to the Tax Administrator. The amount of any overpaid tax may be deducted from the next payment due to the City.

In the event of a tax overpayment, documentation establishing such overpayment shall be provided to the City along with the tax payment for the month in which the overpayment is claimed.

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

(c) Penalties for delinquency in remittance of any tax collected or any deficiency determination shall attach and be paid by the person required to collect and remit the tax at the rate of fifteen percent (15%) of the total tax collected or imposed herein.

(d) Every penalty imposed under the provisions of this chapter shall become part of the amounts required to be remitted by the person who is required to collect the Tax and on whom the penalty has been imposed.

(a) The Tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the City.

(b) The Tax collected from a service user by a service supplier or non-utility supplier which has not been paid to the Tax Administrator shall be deemed a debt owed to the City by the person required to collect and remit.

(c) Any person owing money to the City under the provisions of this chapter shall be liable to the City for the amounts owed, including penalties, as well as for the costs and expenses incurred by the City, including collection fees, attorney’s fees and court costs, resulting from the failure to pay said amounts.

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

(a) The tax shall be collected at the same time as, and along with, 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 for utility service and the Tax which accrued for the billing period, a proportionate share of both the charge and the Tax shall be deemed to have been paid except in those cases where a service user pays the full amount of the charge for utility service, but notifies the service supplier of her/her refusal to pay the tax imposed on said charge for utility service.

(b) 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 operative 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.

(a) The Tax Administrator shall have the power and duty to enforce each and all of the provisions of this chapter.

(b) The Tax Administrator shall have the power to adopt rules and regulations consistent with the provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes herein imposed. A copy of such rules and regulations shall be on file in the Tax Administrator’s office.

(c) The Tax Administrator may make administrative agreements to vary the strict requirements of this chapter so that collection of any tax imposed herein may be made in conformance with the billing procedures of a particular service supplier so long as said agreements result in collection of the tax in conformance with the general purpose and scope of this chapter.

(d) The Tax Administrator shall determine the eligibility of any service user who asserts a right to exemption from the tax imposed by this ordinance. The Tax Administrator shall provide the service supplier with the name of any person who the Tax Administrator determines is exempt from the tax imposed hereby, together with the address and account number to which service is supplied to any such exempt person. The Tax Administrator shall notify the service supplier of termination of any person’s right to exemption hereunder, or the change of any address to which service is supplied to any exempt person.

(e) The Tax Administrator shall provide notice to all service suppliers, at least 90 days prior to any annexation or other change in the city’s boundaries. Said notice shall set forth the revised boundaries by street and address, along with a copy of the final annexation order from the Local Agency Formation Commission. Failure to make this notice in a timely fashion relieves the service supplier from obligation to collect the tax but such obligation to collect the tax shall commence 90 days after said notice is received.

(a) The Tax Administrator may make an assessment for taxes not remitted by the person required to remit such taxes.

(b) The service supplier shall provide the City with names and addresses of the service users failing to pay the tax imposed under the provisions of this chapter, and the amounts of any delinquent taxes due and owing to the City.

(c) Whenever the Tax Administrator determines that a service user has failed to pay the tax due and owing under this chapter, or that a service user has failed to pay the amount of the tax for a period of two (2) or more billing periods, or whenever the Tax Administrator deems it in the best interest of the City, he may relieve the service supplier of the obligation to collect taxes due under this chapter from said service user for the specified billing periods in which the service user’s taxes are delinquent.

(d) The Tax Administrator shall notify the service user that the Tax Administrator has assumed responsibility to collect the delinquent taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user personally or by deposit of the notice in the United States mail, postage pre-paid, addressed to the service user at the address to which billing was made by the person required to collect the tax. If the service user fails to remit the tax to the Tax Administrator within fifteen (15) days from the date of the mailing or personal service of the notice, a penalty of twenty-five percent (25%) of the amount of the tax set forth in the notice shall be imposed, but not less than five dollars ($5.00). The penalty shall become a part of the tax herein required to be paid. In the event the city commences a collection action as provided for in Section 18.43, the service user shall also be responsible for the payment of the City’s collection fees, attorney’s fees and court costs.

(a) It shall be the duty of every person required to collect and remit to the City the Tax imposed by this chapter to keep and preserve, for a period of three (3) years, all records as may be necessary to determine the amount of such tax such person may have been liable for according to this chapter. The Tax Administrator shall have the right to inspect these records at all reasonable times.

(b) Unless in compliance with judicial order or as may be required for the proper administration of this chapter, the Tax Administrator, his agents or employees shall not divulge facts or information, as hereinabove described, obtained in the administration hereof.

(a) 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, it shall be refunded as provided in this section.

(b) A service supplier may claim a refund; or take as a credit against taxes remitted, the amount overpaid, paid more than once, or erroneously or illegally collected or received, when it is established that the service user from whom the tax has been collected did not owe the tax; provided however, that neither a refund or a credit shall be allowed unless the amount of the tax so collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the person required to collect and remit. A service supplier that has collected and paid to the Tax Administrator any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user, may refund such amount to the service user and claim credit for such overpayment against the amount of tax which is due upon any other monthly returns, provided such credit is claimed in a return dated no later than three years from the date of overpayment.

(c) No refund shall be paid under the provisions of this section unless the claimant establishes the right thereto by written records showing entitlement thereto.

(d) 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 charges shall also be refunded or credited 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 the ordinance codified in this chapter is repealed, the amounts of any refundable taxes will be borne by the City.

(e) A service supplier may refund the taxes collected from the service user as required by this section in accordance with this section or by the service supplier’s customary practice.

(a) The purpose of this section is to mitigate the tax burden imposed on large users of gas, electricity and telephone services, to avoid adversely affecting economic development and job creation in Fairfield.

(b) No service user need pay more than the "major service users tax limitation amount" in combined electricity users tax, gas users tax and telephone users tax, in a single fiscal year.

(c) For purposes of this section, the "major service users tax limitation amount" for the 1994/95 fiscal year shall be $6,500, which amount shall be increased by two percent (2%) annually effective with the 1995/96 fiscal year.

(d) A service user must select one of the following means of obtaining relief under this section:

(1) The affected service user elects to pay the "major service user tax limitation amount" to the City up-front, and be exempted from payment of the tax on future gas, electricity and telephone utility billings. On or before July 1 of each fiscal year, the affected service user shall transmit to the Tax Administrator the amount of the "major service users tax limitation amount" applicable to the fiscal year starting on July 1, and shall direct the Tax Administrator to notify the gas, electricity and telephone service providers to exempt the service user from the tax on subsequent billings for gas, electricity and telephone services. Once this option is initiated, the service user shall continue to transmit to the Tax Administrator annually before July 1 of each fiscal year the "major service users tax limitation amount" applicable to that fiscal year. Failure to transmit the required amount by July 1 shall result in the Tax Administrator notifying the gas, electricity and telephone service providers to reinstate the application of the gas users tax, the electricity users tax, and the telephone users tax to the utility billings of that service user. This option is available only once annually; the Tax Administrator will not otherwise change the service users status from "taxable" to "non-taxable" during the course of the fiscal year.

(2) The affected service user elects to pay the gas users tax, electricity users tax and telephone users tax to the service provider as billed, and at the conclusion of each fiscal year, transmit to the Tax Administrator a copy of all gas, electricity and telephone billings for which the service user made payment during said fiscal year, together with proof acceptable to the Tax Administrator that the gas, electricity and telephone users taxes applied to said billings were paid by the service user. If the taxes paid exceed the "major service users tax limitation amount" applicable to that fiscal year, the Tax Administrator shall within 30 days of receipt of appropriate documentation from the service user transmit payment to the service user in the amount of the difference between the gas, electricity and telephone users taxes actually paid, and the "major service users tax limitation amount" applicable to that fiscal year.

Information furnished or secured pursuant to the provisions of Section 18.49, the disclosure of which to other persons would result in unfair competitive disadvantage, shall not be subject to public inspection, and shall be kept so that the contents thereof shall not become known except to the persons charged with the administration of this chapter.

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

No Tax shall be imposed on utility charges with respect to property or facilities or equipment owned and operated by a governmental entity for governmental purposes, including the City, Solano County, school districts, special districts, the State of California and the United States government.

Any person who meets he eligibility requirements of this section may apply for an exemption from the Tax required to be paid under this Article. The Tax Administrator shall approve an exemption if the applicant meets all of the following requirements:

(a) The applicant is (1) over 62 years of age; or (2) is disabled and receives Social Security Supplemental Income due to such disability, or (3) is a veteran receiving a Veterans Administration disability pension.

(b) The applicant is a head of household. As used herein, "head of household" means the person filing or who would file a federal income tax return as a head of household, or a single individual, or the husband or wife if a joint return is filed, but in such case, the individual applying for the exemption must additionally declare that his or her spouse has not also applied for the exemption.

(c) The applicant’s household income is less than the United States Housing and Urban Development eligibility limit for a family of two with very low income or meets such other income test that is approved by resolution of the City Council.

The Tax Administrator may establish rules and regulations for the administration and implementation of this exemption.

By no later than October 31 of each year, the City’s independent auditors shall complete a Utility Users Tax Ordinance Compliance and Internal Control Audit Report. Such report shall review whether the Tax revenue is collected, managed and expended in accordance with this Article.

The City Council has found and determined and declares that all persons using utility services in the City enjoy the privilege of using and benefit from the providing, by the City, of municipal services and facilities.

The validity of this chapter or of any tax levied pursuant to this chapter shall not be contested in any action or proceeding or defense unless such action or proceeding or defense shall have been brought or raised in a court of competent jurisdiction within sixty days from the date of the adoption of the ordinance codified in this chapter. Unless an action or proceeding is commenced or such defense raised within said period, this chapter and any tax levied pursuant to this chapter shall be held valid and in every respect legal and incontestable.

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

(Ord. No. 94-8, § 1)