Chapter 3.24 — UTILITIES TAX

The provisions of this chapter shall become operative and effective as of September 1, 1970.

(Prior code § 6536)

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 action by the city council.

(Ord. 2436 § 1, 1988: Ord. 2435 § 1, 1988)

This chapter shall be known as the "utility tax law of the city."

(Prior code § 6520)

Except where the context otherwise requires, the definitions set forth in this section shall govern the construction of this chapter:

A.

"City" means the city of Whittier.

B.

"Month" means a calendar month.

C.

"Mobile telecommunications service" shall have the same meaning and usage as set forth in the Mobile Telecommunications Sourcing Act and regulations thereunder, 4 U.S.C. Section 124, as those provisions existed on January 1, 2002.

D.

"Person" means any domestic or foreign corporation, firm, association, syndicate, joint stock company, partnership of any kind, joint venture, club, trust, Massachusetts business or common law trust, society, individual or municipal corporation.

E.

"Return" shall mean information regarding the type of tax being remitted; the time period of collection for the remittance submitted; whether the amount is an estimate or an amount actually collected from service users; identification of the service user(s) and the reason for a refund, when a refund is being requested; and any other information necessary to the city's processing of a payment, remittance, refund, or other aspect of administration of the utility users' tax.

F.

"Service address" shall mean the residential street address or the business street address of the service user. In the case of mobile telecommunications service, "service address" shall mean the service user's "place of primary use" as such term is defined and used in the Mobile Telecommunications Sourcing Act and the regulations thereunder, 4 U.S.C. Section 116, et seq., as those provisions existed on January 1, 2002.

G.

"Service supplier" means any entity which receives taxes paid and remits same as imposed by this chapter.

H.

"Service user" means a person required to pay a tax imposed by this chapter.

I.

"Tax administrator" means the city treasurer of the city.

J.

"Telephone communication services" shall mean "communications services" as defined in Sections 4251 and 4252 of the Internal Revenue Code, and the regulations thereunder, as those provisions existed on January 1, 2002; and shall include any telephonic quality communication for the purpose of transmitting messages or information (including but not limited to digital and analog voice, telegraph, teletypewriter, data, facsimile, video, or text) by electronic, radio or similar means through "interconnected service" with the "public switched network" (as those terms are commonly used in the Federal Communications Act and the regulations of the Federal Communications Commission, 47 U.S.C. Section 332 (d), as those provisions existed on January 1, 2002), whether such transmission occurs by wire, cable, cable modem, internet (e.g., Internet telephone or VOiP), fiber-optic, light wave, laser, microwave, radio wave (including, but not limited to, mobile telecommunications service, cellular service, commercial mobile service and commercial mobile radio service (47 U.S.C. Section 332 (d)(1) and 47 C.F.R. Section 20.3, as those provisions existed on January 1, 2002), personal communications service (PCS), specialized mobile radio (SMR), regardless of radio spectrum used), switching facilities, satellite or any other similar communication facilities. As used in this section, the term "telephone communication services" shall not include "private mobile radio service" as defined in Section 20.3 of Title 47 of the Code of Federal Regulations, or "private mobile service" as defined in 47 U.S.C. Section 332(d)(3), as those provisions existed on January 1, 2002, which is not interconnected to the public switched network. The term "telephone communication services" shall not include private land or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as that section existed on January 1, 1970.

K.

"Telephone corporation," "electrical corporation," "gas corporation," "water corporation" and "cable television corporation," except as provided in this chapter, have the same meaning as defined in Sections 234, 218, 222, 241 and 216.4, respectively, of the Public Utilities Code of the state, as those sections existed on January 1, 1970; except, as follows:

"Electrical corporation" shall be construed to include any municipality or franchised agency engaged in the selling or supplying of electrical power to a service user; however, does not include a corporation or person employing cogeneration technology or producing power from other than a conventional power source for the generation of electricity, as specified by Section 218 of the Public Utility Code, as it existed on January 1, 1970.

"Water corporation" shall be construed to include any organization or municipality, including, but not limited to, a mutual water company, engaged in the selling or supplying of water to a service user.

(Ord. 2804 § 1, 2002: Ord. 2436 § 2, 1988: Ord. 2435 § 2, 1988; prior code § 6521)

(Ord. No. 2916, § 1, 11-18-08; Ord. No. 3112, § 5, 2-25-20)

There is imposed a 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 charges made for such service and shall be paid by the person paying for the service.

(Prior code § 6526)

A.

There is imposed a tax upon every person in the city 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 the energy and shall be paid by the person paying for the energy. "Charges," as used in this section, shall include charges made for metered energy and minimum charges for the service, including customer charges, service charges, demand charges, standby charges, and annual and monthly charges.

B.

As used in this section, the term "using electrical energy" shall not be construed to include the storage of the energy by a person in a battery owned or possessed by him/her for use in an automobile or other machinery or device; provided, however, that the term includes the receiving of the energy for the purpose of using it in the charging of batteries. The term shall not include electricity used in water pumping by water corporations; nor shall the term include the mere receiving of the energy by an electrical corporation at a point within the city for resale.

(Prior code § 6523)

(Ord. No. 3112, § 2, 2-25-20)

A.

There is imposed a tax upon every person using, in the city, gas 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 the gas and shall be paid by the person paying for the gas.

B.

There shall be excluded from the base on which the tax imposed by this section is computed:

Charges made for gas which is to be resold and delivered through mains and pipes;

Charges made for gas used in the generation of electrical energy by an electrical corporation;

Charges made for gas used in water pumping by water corporations;

Charges made by a gas corporation for gas used and consumed in the conduct of its business; and

Charges made for gas used in the propulsion of a motor vehicle, as that phrase is defined in the Vehicle Code of the state, utilizing natural gas.

(Prior code § 6524)

A.

There is imposed a tax upon every person in the city, other than a telephone corporation, using intrastate, interstate, intercontinental and cellular telephone communication services in the city. The tax imposed by this section shall be at the rate of five percent of all charges made for such services and shall be paid by the person paying for such services.

B.

To the extent allowed by law, the tax on telephone communication services shall apply to a service user if the billing or service address of the service user is within the city's boundaries, as they existed at the time of enactment of the ordinance codified in this chapter or as they may be modified thereafter from time to time, regardless of where any individual communication may originate, terminate, or pass through, as provided in the Mobile Telecommunications Sourcing Act, 4 U.S.C. Section 116, et seq., as those provisions existed on January 1, 2002. If the billing address of the service user is different from the service address, the service address of the service user shall be used.

C.

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 by Section 4251 of Title 26 of the United States Code as that provision existed and was interpreted on January 1, 2002, and the tax imposed under this section shall not be imposed on "prepaid telephone cards," as that term is used in 26 U.S.C. Section 4251(d), as such section existed and was interpreted on January 1, 2002. In the event that the federal excise tax on "communications services" as provided in Sections 4251, 4252 and 4253 of the Internal Revenue Code is subsequently repealed, any reference in this section and in Section 1(m) to such law, including any related federal regulations, private letter ruling, case law, and other opinions interpreting these sections, shall refer to that body of law that existed as of January 1, 2002.

D.

As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the telephone communication services. The term "charges" shall not include charges for telephone communication services which are paid for by inserting coins in coin-operated telephones except that where such coin-operated service is furnished to a person for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be included within the term "charges."

E.

The tax administrator, from time to time, may issue and disseminate to telecommunication service suppliers, which are subject to the tax collection requirements of this chapter, an administrative ruling identifying those telecommunication services which are subject to the tax of subsection A of this section. Such administrative rulings shall not impose a new tax, revise an existing tax methodology, or increase an existing tax.

F.

To prevent actual multi-jurisdictional taxation of telephone communication services subject to tax under this section, any service user, upon proof to the tax administrator that the service user has previously paid the same tax in another state or city on such telephone communication services, 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 such credit shall not exceed the tax owed to the city under this section.

G.

For purposes of establishing sufficient legal 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 the 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 by judicial interpretation or by statutory enactment.

(Ord. 2883 § 2, 2006; Ord. 2804 §§ 2—7, 2002; Ord. 2575 § 1, 1992; prior code § 6522)

A.

There is imposed a tax upon every person using, in the city, water 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 the water and shall be paid by the person paying for the water. "Charges," as used in this section, shall include charges made for:

Metered water; and

Minimum charges for services, including customer charges, ready to serve charges, standby charges, and annual and monthly charges.

B.

There shall be excluded from the base on which the tax imposed by this section is computed, charges for water which is to be resold and delivered through mains or pipes; and charges made by a water corporation for water used and consumed by the water corporation in the conduct of its business.

(Prior code § 6525)

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

(Prior code § 6527)

A.

The taxes imposed by this chapter shall not apply to any residential service user who has received from the tax administrator an exemption from the payment of such taxes. The tax administrator shall issue such exemptions to those service users who are found qualified, pursuant to this section, to receive such an exemption. A service user shall be qualified to obtain such an exemption if:

The exemption application relates to a residential dwelling unit; and

The combined gross income for all members of the family or household residing together with the applicant service user for the calendar year immediately preceding the date of filing of an application for such exemption was sixty-two

thousand four hundred dollars or less.

B.

Exemptions granted pursuant to this section shall be valid for a period of three hundred sixty-five days following the effective date of such exemption, which shall be at least sixty days after approval of the exemption by the tax administrator, in order to allow implementation by applicable service suppliers. Exemptions shall be granted prospectively only. At least thirty days prior to the expiration of such exemption, the holder of such exemption shall file an application for renewal upon forms provided by the tax administrator. Renewals shall be granted by the tax administrator, if the applicant is found qualified, for additional periods of three hundred sixty-five days each.

C.

The tax administrator shall make his/her determination from competent written proof demonstrating that an applicant is qualified for such an exemption. The decision of the tax administrator shall be final and conclusive.

D.

The tax administrator, upon granting an exemption pursuant to this chapter, shall notify all service suppliers of the fact of such exemption and shall supply each service supplier with all information necessary to permit each service supplier to terminate any further billings for the tax to the person to whom such exemption has been granted. Each service supplier shall eliminate from its billing processes for the utility users' tax each service user to whom an exemption has been granted pursuant to the provisions of this chapter, not later than sixty days following the giving of notice by the tax administrator of such exemptions.

E.

It shall be unlawful for any person to knowingly receive or accept the benefits of an exemption granted pursuant to this chapter when the basis for such exemption does not exist and that fact is known to such person or should have been known to such person.

F.

Only an application, amended application, or re-application for exemption under this section shall be exempt from the claims requirements in Section 3.24.180 of this chapter and Sections 1113 and 1115 of the city Charter.

(Ord. 2804 § 8, 2002)

(Ord. No. 2929, § 1, 7-28-09; Ord. No. 2986, § 1, 6-26-12; Ord. No. 3112, § 2, 2-25-20; Ord. No. 3151, § 2, 10-10-23; Ord. No. 3156, § 2, 7-23-24)

A.

The tax imposed by this chapter shall be collected from the service user by any energy service supplier.

B.

The tax shall be collected at the same time, and in the same manner, as the collection of charges made in accordance with the regular billing practice of the service supplier.

C.

The duty to collect 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 this chapter.

(Ord. 2436 § 5, 1988; Ord. 2435 § 5, 1988; prior code § 6528)

The amount of tax collected in one month by each service supplier shall be remitted by United States mail to the tax administrator, postmarked on or before the twentieth day of the following month; or remitted electronically on or before the twentieth day of the following month. The tax administrator may authorize remittance on a quarterly basis if the average quarterly remittance is less than one hundred dollars per quarter; such payment, if allowed, shall be remitted on or before the twentieth day of the month following the end of the calendar quarter. Remittances shall be accompanied by a return. In the event a service supplier for any reason remits to the city based upon estimates of the amount anticipated to be collected from a service user, the service supplier shall provide a supplemental return to the city for the actual amount collected, which shall be accompanied by the amount of any additional remittance to the city. Such supplemental return shall be presented to the tax administrator within ninety days of the initial return, in accordance with Sections 1113 and 1115 of the Charter. The tax administrator may also require information he/she deems necessary to determine if the tax imposed in this chapter is being levied and collected in accordance with this chapter. A final return and remittance is due from all service suppliers immediately upon cessation of business by the supplier for any reason.

(Ord. 2804 § 9, 2002)

(Ord. No. 3112, § 2, 2-25-20)

The tax administrator shall have the 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 herein imposed. A copy of such rules and regulations shall be on file in the tax administrator's office. The tax administrator may also make administrative agreements to vary the strict requirements of this chapter, so that collection of any tax imposed here may be in conformance with the billing procedures of a particular service supplied, so long as said agreement results in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of such agreement shall be on file in the tax administrator's office.

(Ord. 2804 § 11, 2002)

A.

Taxes collected by a service supplier which are not remitted to the tax administrator on or before the due dates provided in this chapter are delinquent, and shall be subject to the imposition of penalties as provided in this section. Should the 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.

B.

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 them in an amount equal to fifteen percent of the total tax collected or imposed in this chapter.

C.

The tax administrator shall have power to impose additional penalties upon persons required to collect and remit taxes under the provisions of this chapter for fraud or negligence in reporting or remitting in the sum of fifteen percent of the amount of the tax collected or as recomputed by the tax administrator.

D.

The tax administrator shall have the power to waive penalties upon written request for any person required to collect and remit the tax if the administrator finds that the failure to collect and remit the tax in a timely manner was not intentional or repetitive.

E.

Every penalty imposed under the provisions of this section shall be deemed, for all purposes, a part of the tax required to be remitted and paid to the city.

(Ord. 2717 §§ 1, 2, 1997; Ord. 2436 § 8, 1988; Ord. 2435 § 8, 1988; prior code § 6530)

Any tax required to be paid by a service user pursuant to the provisions of this chapter, shall be deemed a civil debt owed by the service user to the city. Any such tax collected from a service user, but which has not been remitted to the tax administrator, shall be deemed to be held in trust by such service supplier for the benefit of the city. Any tax which a service supplier had a duty to collect under the provisions of this chapter but failed to so collect, shall be a civil debt owed to the city by the person required to collect and remit it. Any service supplier or service user who has failed to remit or pay taxes to the city, pursuant to the provisions of this chapter, shall be liable therefor in an action brought in the name of the city for the recovery of the amount.

(Ord. 2804 § 10, 2002)

Whenever the tax administrator determines that a service user has deliberately withheld the amount of the tax owed by him/her from the amounts remitted to a service supplier, or that a service user has failed to pay the amount of the tax for a period of two or more billing periods, or whenever the tax administrator otherwise deems it in the best interest of the city, he/she shall relieve the affected service supplier of the obligation to collect taxes due under this chapter from the specific service users for one or more specified billing periods. The tax administrator shall notify the service user that he/she has assumed responsibility to collect the taxes due for the stated periods and demand payment of the taxes. The notice shall be served on the service user by handing it to him/her personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at his/her last known address. If a service user fails to pay the tax to the tax administrator within fifteen days from the date of the service of the notice upon him/her, which shall be the date of mailing if service is not accomplished in person, a penalty of twenty-five percent of the amount of the tax set forth in the notice shall be imposed, but in no event less than five dollars. The penalty shall become, for all purposes, a part of the tax required to be paid pursuant to the provisions of this chapter.

(Prior code § 6532)

(Ord. No. 3112, § 2, 2-25-20)

It shall be the duty of every service supplier who is required to collect and remit to the city a tax by this chapter, to keep and preserve, for a period of not less than three years, all records as may be necessary to determine the amount of the taxes due to the city from service users supplied by the services supplier, which records the tax administrator shall have the right to inspect at all reasonable times.

(Prior code § 6533)

A.

If any service user or service supplier is aggrieved by any decision of the tax administrator, or with the administration of this chapter, except as may be otherwise specifically provided for in this chapter, such person may appeal to the city manager, or his/her duly authorized designee(s), by filing a notice of appeal with the city clerk within ten calendar days of the decision which aggrieved the applicant. The city clerk shall thereupon fix a time and place for hearing of such appeal. The city clerk shall give notice to such person of the time and place of hearing.

B.

If the service user or service supplier is aggrieved by any decision of the city manager, or her/her duly authorized designee(s) with respect to the administration of this chapter, he/she may appeal to the city council by filing a notice of appeal with the city clerk within ten calendar days of the decision rendered by the city manager, or his/her duly authorized designee(s). The city clerk shall thereupon fix a time and place for hearing such appeal. The city council shall have the authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this chapter. The city council shall issue a written decision within fifteen days after the hearing on the appeal. The city clerk shall thereafter mail a copy of such written decision to the person appealing, and shall notify the person appealing that such decision is governed by the city's claims requirements.

(Ord. 2804 § 12, 2002)

(Ord. No. 3112, § 2, 2-25-20)

All claims for refunds not covered by Section 3.24.180 and, notwithstanding Section 3.24.175 all claims involving a claim for money or damages, shall be made in accordance with the provisions of Section 1113 and 1115 of the Charter. The claims requirements contained in Section 1113 and 1115 of the Charter shall be an administrative prerequisite to the maintaining of any legal action against the city relating to those issues for which the claims requirement is mandatory according to this chapter.

(Ord. 2804 § 13, 2002)

A.

Whenever an overpayment of any tax collected or received by the tax administrator under this chapter is claimed, a service user, or service supplier on behalf of the service use, may make written application of a refund of such overpayment to the tax administrator, with appropriate supporting documentation to demonstrate the claimed overpayment, within thirty days of such overpayment. The applicant may appeal a denial of the application for refund of overpayment according to the provisions of Section 3.24.175 of this chapter. If the appeal is denied, any claim for overpayment shall thereafter be subject to the provisions of Sections 1113 and 1115 of the Charter.

B.

A service supplier may claim a refund for overpayment, or claim as a credit against taxes collected but not yet remitted to the city, the amount overpaid, provided that the amount claimed as overpaid by a service user has been refunded to, or credited to charges subsequently payable by, the service user. 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 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 ninety days from the date of overpayment.

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.

(Ord. 2804 § 14, 2002)

Any legal action to challenge, test, or otherwise determine the validity of this chapter, or any portion thereof; the ordinance enacting this chapter, or any portion thereof; or the tax imposed in this chapter must be brought within sixty days of the effective date of the ordinance adopting this chapter, in accordance with the provisions of California Code of Civil Procedure Section 860, et seq., and Sections 860 and 863 in particular.

(Ord. 2804 § 15, 2002)