Montclair Municipal Code Ch. 3.36 Utility Users Tax

This chapter shall be known as the "Utility Users Tax Law of the City of Montclair."

(Ord. 99-791 Exh. A (part); prior code § 3-5.601)

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

B. The City Council may, by resolution, establish one or more classes of persons or one or more classes of utility service otherwise subject to payment of a tax imposed by this chapter, and provide that such classes of persons or service shall be exempt, in whole or in part, from such tax.

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

(Prior code § 3-5.603)

A. The exemption granted by this section shall not eliminate the duty of the service supplier, nonutility supplier, or person to collect and remit utility users' taxes from exempt persons, or the duty of exempt persons to pay such taxes unless an exemption is applied for and granted in accordance with Section 3.36.040.

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

C. The income exemption limit provided herein shall be revised by the Tax Administrator to conform to the Low-Income Limits for San Bernardino County for applicable household sizes, as determined by HUD with regard to the Public Housing and Section 8 Program, within 60 days of the effective date of any revision of such amounts by HUD.

(Prior code § 3-5.604)

A. Any service user meeting the exemption qualifications imposed by Section 3.36.030 may file an application with the Tax Administrator for an exemption. Such application shall be made on forms supplied by the Tax Administrator and shall recite under oath facts which qualify the applicant for an exemption.

B. The Tax Administrator shall review all such applications, certify qualified applicants as exempt, and notify all affected service suppliers when an exemption is approved, stating the name of the applicant, the address to which exempt service is being supplied, the account number, if any, and such other information as may be necessary for the service supplier to remove the exempt service user from its tax billing procedure. The service supplier shall remove the exempt service user from its tax billing procedure no later than 60 days after receipt of such notice from the Tax Administrator.

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

D. Any person exempt from the tax shall notify the Tax Administrator within 10 days of any change in fact or circumstance which might cause the person to become ineligible for exemption.

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

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

(Prior code § 3-5.605)

A. There is imposed a tax on the amounts paid for any intrastate, interstate, and international telephone services by every person in the City using such services. The tax imposed by this section shall be at the rate of 3.89 percent of the charges made for such services, and shall be paid by the person paying for such services.

B. As used in this section, the term "charges" shall not include charges for services paid for by inserting coins in coin-operated telephones, except that where such coin-operated 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; nor shall the term "charges" include charges for any type of service or equipment furnished by a service supplier subject to Public Utilities Commission regulations during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to Public Utilities Commission regulations; nor shall the words "telephone communication services" include land mobile service or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as said section existed on January 1, 1970. The term "telephone communication services" refers to that service which provides access to a telephone system and the privilege of telephone quality communication with substantially all persons having telephone stations which are part of such telephone system. The telephone users tax is intended to, and does, apply to all charges billed to a telephone account having a situs in the City, irrespective of whether a particular communication service originates and/or terminates within the City.

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

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

(Ord. 01-807 § 1 (part); Ord. 00-795 § 1 (part); prior code § 3-5.606; Ord. No. 20-994, § I, 12-7-20)

A. There is 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 3.89 percent 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 electrical energy provided by a nonutility supplier shall be determined by applying the tax rate to the equivalent charge the service user would have incurred if the energy used has been provided by the electrical corporation franchised by the City. Rate schedules for this purpose shall be available from the City. Nonutility suppliers shall install, maintain, and use an appropriate utility-type metering system which will enable compliance with this section.

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

B. As used in this section, the term "using electrical energy" shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him or her 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 electricity used and consumed by an electric utility supplier in the conduct of its business; nor shall the term include the mere receiving of such energy by an electric corporation or governmental agency at a point within the City for resale; nor shall the term include the use of such energy in the production or distribution of water by a water utility or a governmental agency.

C. The tax imposed in this section shall be collected from the service user by the service supplier or nonutility supplier. The tax imposed in this section on use supplied by self-generation, or from a nonutility supplier not subject to the jurisdiction of this chapter, shall be collected and remitted to the Tax Administrator in the manner set forth in Section 3.36.080. The amount of tax collected by a service supplier or a nonutility supplier in one month shall be remitted by United States mail to the Tax Administrator, postmarked 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 measured by the tax billed in the previous month, shall be remitted by United States mail to the Tax Administrator, postmarked on or before the last day of each month.

(Ord. 01-807 § 1 (part); Ord. 00-795 § 1 (part); prior code § 3-5.607)

A. There is imposed a tax upon every person in the City, other than a gas corporation or electrical corporation, using, in the City, gas which is transported through mains or pipes or by mobile transport. The tax imposed by this section shall be at the rate of 3.89 percent 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 nonutility suppliers shall be determined by applying the tax rate to the equivalent charges the service user would have incurred if the gas or gas transportation had been provided by the gas corporation franchised by the City.

"Charges," as used in this section, shall include: (1) that billed for gas which is delivered through mains or pipes; (2) gas transportation charges; and (3) demand charges, service charges, customer charges, minimum charges, annual and monthly charges, and any other charge authorized by the California Public Utilities Commission or the Federal Energy Regulatory Commission.

B. The tax otherwise imposed by this section is not applicable to: (1) charges made for gas which is to be resold and delivered through mains and pipes; (2) charges made for gas used and consumed by a public utility or governmental agency in the conduct of its business; or (3) charges made by a gas public utility or 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.

C. The tax imposed in this section shall be collected from the service user by the person selling or transporting the gas. A person selling only transportation services to a service user for delivery of gas through mains or pipes shall collect the tax from the service user based on the transportation charges. The person selling or transporting the gas shall, on or before the 20th day of each calendar month, commencing on the twentieth day of the calendar month after the effective date of the ordinance codified in this chapter, make a report to the Tax Administrator stating the amount of taxes billed during the preceding calendar month. At the time such reports are filed, the person selling or transporting the gas shall remit tax payments to the Tax Administrator in accordance with schedules established or approved by the Tax Administrator. The tax imposed in this section on use supplied by self-production or a nonutility supplier not subject to the jurisdiction of this chapter, shall be collected and remitted to the Tax Administrator in the manner set forth in Section 3.36.080.

(Ord. 01-807 § 1 (part); Ord. 00-795 § 1 (part); prior code § 3-5.608)

A. Notwithstanding any other provision of this chapter, a service user receiving gas or electricity directly from a nonutility supplier not under the jurisdiction of this chapter, or otherwise not having the full tax due on the use of gas or electricity in the City directly billed and collected by the service supplier, shall report said fact to the Tax Administrator within 30 days of said use and shall directly remit to the City the amount of tax due.

B. The Tax Administrator may require said service user to provide, subject to audit, filed tax returns or other satisfactory evidence documenting the quantity of gas or electricity used and the price thereof.

(Prior code § 3-5.609)

A. There is imposed a tax upon every person in the City using water which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of 3.89 percent of the charges made for such water and shall be paid by the person paying for such water.

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

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

(Ord. 01-807 § 1 (part); Ord. 00-795 § 1 (part); prior code § 3-5.610)

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.

(Prior code § 3-5.611)

Any tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the City. Any such tax collected from a service user, and not re mitted 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.

(Prior code § 3-5-6.12)

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

A. Notwithstanding the provisions of Section 3.36.080, the tax shall be collected insofar as practicable at the same time as, and along with, the charges made in accordance with the regular billing practices of the service supplier. Where the amount paid by a service user to a service supplier is less than the full amount of the service charge and tax which has accrued for the billing period, such amount and any subsequent payments by a service user shall be applied to the utility charge first until such charge has been fully satisfied. Any remaining balance shall be applied to taxes due. In those cases where a service user has notified the service supplier of his or her refusal to pay the tax imposed on said energy charges, Section 3.36.140(C) will apply.

B. The duty to collect tax from a service user shall commence with the beginning of the first full regular billing period applicable to the service user where all charges normally included in such regular billing are subject to the provisions of this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing.

C. The City is authorized to collet any such tax as provided in Chapter 1.12 of this Code.

(Ord. 99-791 Exh. A (part); prior code § 3-5.613)

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

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

C. The Tax Administrator may make administrative agreements to vary the requirements of this chapter so that collection of any tax imposed hereby may be made in conformance with the billing procedures of the 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. A copy of each such agreement shall be on file in the Tax Administrator's office.

D. The Tax Administrator shall determine the eligibility of any person who asserts a right to exemption from the tax imposed by this chapter. 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 LAFCO.

(Prior code § 3-5.614)

A. Whenever the Tax Administrator determines that a service user has deliberately withheld the amount of the tax owed by him or her from the amounts remitted to a person required to collect the tax, or that a service user has refused to pay the amount of tax, the person required to collect the tax may be relieved of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods as set forth below.

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

C. The Tax Administrator shall notify the service user that the Tax Administrator assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him or her personally 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, should the service user's address change, to the last known address. If a service user fails to remit the tax to the Tax Administrator within fifteen 15 days from the date of the service of the notice upon him, which shall be the date of mailing if service is not accomplished in person, a penalty of 25 percent of the amount of the tax set forth in the notice shall be imposed, but not less than Five (5) Dollars. The penalty shall become part of the tax herein required to be paid.

(Prior code § 3-5.615)

It shall be the duty of every service supplier to keep and preserve, for a period of three years, all records relating to collection and remittance of the tax imposed by this chapter. The Tax Administrator shall have the right to inspect such records during normal business hours.

(Prior code § 3-5.616)

A. Whenever it has been determined by the City's Finance Department, an independent audit, court decision or other source determined by the City to factually represent, with evidence, that the amount of any tax subject to this chapter has been overpaid, or paid more than once, or has been erroneously or illegally collected or received by the Tax Administrator under this chapter, such tax payment so collected or received may be refunded as provided in this section.

B. Notwithstanding the provisions of subsection A of this section, a service supplier claiming a refund may take as credit against taxes owed the amount overpaid, paid more than once, or erroneously or illegally collected or received when it is established to the City's satisfaction that the service user from whom the tax has been collected did not owe the amount of the tax overpaid, paid more than once, or erroneously or illegally collected; provided, however, that neither a refund nor a credit shall be allowed by the service supplier unless it can be established to the City's satisfaction that the amount of the tax overpaid, paid more than once, or erroneously or illegally collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the service supplier required to collect and remit. A service supplier that has collected any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user may refund such excess 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 as provided in Chapter 1.16 of the Montclair Municipal Code.

C. Notwithstanding other provisions of this section, whenever a service supplier, pursuant to an order of the California Public Utilities Commission or a court of competent jurisdiction, makes a refund to service users of charges for past utility services, the taxes paid pursuant to this chapter on the amount of such refunded charges shall also be refunded to service users, and the service supplier shall be entitled to claim a credit for such refunded taxes against the amount of tax which is due upon the next monthly returns, provided such credit is claimed as provided in Chapter 1.16 of the Montclair Municipal Code. In the event the ordinance codified in this chapter is repealed, the amounts of any refundable taxes will be borne by the City.

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

(Prior code § 3-5.617)

(Ord. No. 16-960, § 1, 10-3-16)

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

(Prior code § 3-5.618)