Gilroy Municipal Code Art. II Telephone Users Tax

(a) There is hereby 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 article shall be at the rate of five (5) percent of the charges made for such services, and shall be paid by the person paying for such services.

(b) Except as otherwise provided herein, the words “telephone communication services” shall mean “communications services” as defined in Sections 4251 and 4252 of the Internal Revenue Code, and the regulations thereunder, regardless of the means of technology used to provide such services. “Telephone communication service” shall not include “private mobile radio service” (as defined in Part 20 of Title 47 of the Code of Federal Regulations), which is not interconnected with the public switched network.

(c) To prevent actual multi-jurisdictional taxation of telephone communication services subject to tax under this section, any service user, upon proof to the tax collector that the service user has previously paid the same tax in another state or city on such telephone communication service, 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 under this section. For purposes of establishing sufficient nexus for the imposition and collection of utility users’ tax on charges for telephone communication services pursuant to this chapter, “minimum contacts” shall be construed broadly in favor of imposition and collection of the utility users’ tax to the fullest extent permitted by California and federal law, and as it may change from time to time.

(Ord. No. 99-12, Exh. B, 9-7-1999)

Notwithstanding the provisions of section 26B.7 the tax imposed under this article shall not be imposed upon any person for using intrastate telephone communication services to the extent that, pursuant to Section 4252 and 4253 of the Internal Revenue Code, the amounts paid for such services are exempt from or not subject to the tax imposed under Section 4251 of the Internal Revenue Code.

(Ord. No. 99-12, Exh. B, 9-7-1999)

As used in this article, the term “charges” shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included in the base for computing the amount of tax due.

(Ord. No. 99-12, Exh. B, 9-7-1999)

The tax imposed in this article shall be collected from the service user by the person providing the intrastate telephone communication services. The amount of tax collected in one month shall be remitted to the tax collector on or before the last day of the following month; or at the option of the person required to collect 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 customer(s), which must be received by the tax collector on or before the last day of the following month. The actual tax shall be calculated and paid within a reasonable time, with an appropriate adjustment for the payment of the estimated tax.

(Ord. No. 99-12, Exh. B, 9-7-1999)