San Jose Municipal Code Part 3 Exemptions

A. Exemptions. The tax imposed under this chapter shall not apply where the director determines that a service user or a telecommunications service is one of the following:

1. The city;

2. Telephone corporation;

3. Any person when imposition of a tax imposed by this chapter upon that person would be in violation of the Constitution of the United States or that of the State;

4. The United States or any agency or instrumentality thereof;

5. International, etc., organizations. On any payment received for telecommunications services furnished to an international organization as defined in Section 7701(a)(18) of Title 26 of the United States Code, or to the American National Red Cross;

6. Service personnel in combat zone. On any payment received for any toll telephone service as defined in Section 4252(b) of Title 26 of the United States Code, which originates within a combat zone, as defined in Section 112 of Title 26 of the United States Code, from a member of the Armed Forces of the United States performing service in such combat zone, as determined under Section 112;

7. Common carriers and communications companies. On any amount paid for any toll telephone service as defined in Section 4252(b)(2) of Title 26 of the United States Code to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such;

8. Nonprofit hospitals. On any amount paid by a nonprofit hospital for telecommunications services furnished to such organization. For purposes of this subsection, the term "nonprofit hospital" means a hospital referred to in Section 170(b)(1)(A)(iii) of Title 26 of the United States Code, which is exempt from federal income tax under Section 501(a) of Title 26 of the United States Code;

9. State and local governments. On any payment received for telecommunications services or facilities furnished to the government of any state, or any political subdivision thereof, or the District of Columbia;

10. Nonprofit educational organizations. On any amount paid by a nonprofit educational organization for telecommunications services or facilities furnished to such organization. For purposes of this subsection, the term "nonprofit educational organization" means an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, which is exempt from income tax under Section 501(a) of Title 26 of the United States Code. The term also includes a school operated as an activity of an organization described in Section 501(c)(3) of Title 26 of the United States Code which is exempt from federal income tax under Section 501(a) of Title 26 of the United States Code, if such school normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on;

11. Qualified blood collector organizations. On any amount paid by a qualified blood collector organization as defined in Section 7701(a)(49) of Title 26 of the United States Code for Telecommunications Services or facilities furnished to such organization;

12. Certain coin-operated service. On any payment received from any person for services paid for by inserting coins in coin-operated telephones available to the public except where 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;

13. Installation charges. On so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation;

14. News services. Except with respect to local telephone service as defined in Section 4252(a) of Title 26 of the United States Code, on any payment received from any Person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such service is billed in writing to such person; or

15. Any person otherwise exempted by this chapter from payment of a tax imposed by this chapter.

B. Filing exemption application. Except those persons determined to be exempt pursuant to the rules and regulations adopted by the director, no exemption shall be granted by the director unless an application in writing, stating under penalty of perjury the specific grounds for the exemption, is filed with the director. The application shall be submitted on a form furnished by the director.

C. Proof required. No exemption shall be granted by the director unless the applicant establishes to the satisfaction of the director a right thereto by written records demonstrating entitlement.

D. Determined by the director. Within a reasonable time following receipt of a properly completed application, the director shall notify the applicant in writing of the director's determination on exemption. In the event of approval, the director shall also give written notice to the applicant's service supplier.

E. Action by service supplier(s). If the director grants an exemption to a service user, the service supplier(s) shall discontinue collecting taxes imposed by this chapter from the service user within sixty (60) days of receipt of the director's written notice.

F. Refund. In the event a service user who has paid the tax is granted an exemption, that service user may apply for a refund of the tax paid under Section 4.70.700.

G. Finality. Any decision of the director made under this section shall be final.

(Measure K (Ord. 2008.2), adopted by electorate 12-9-08)