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SR-212-004 (3) . . . 'taP JUl 1 "90 2/2----oot/ CA:RMM:rmd1128jhpca1 city council Meeting 7-10-90 Santa Monica, California STAFF REPORT TO: Mayor and city Council FROM: city Attorney SUBJECT: Ordinance Amending Santa Monica Municipal Code Sections 6621, 6622, 6623, and 6623A to Increase the utility User Tax At its meeting on June 26, 1990, the City Council directed the city Attorney to prepare an ordinance increasing the city's utility User Tax. In response to this direction, the accompanying ordinance has been prepared and is presented to the city Council for its consideration. The accompanying ordinance amends Municipal Code sections 6621, 6622, 6623, and 6623A to increase the telephone, electrici ty , gas, and cable television taxes. The taxes are currently set at eight percent (8%) of all charges made for each service. This ordinance increases the tax rate for each utility, to be effective November I, 1990, to nine and one-half percent (9.5%) of all charges made for each service. RECOMMENDATION It is respectfully recommended that the accompanying ordinance be adopted. PREPARED BY: Robert M. Myers, City Attorney ~B JUL 1 0 1990 . . . CA:RMM:rmd1127jhpca1 city council Meeting 7-10-90 Santa Monica, California ORDINANCE NUMBER (city council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTIONS 6621, 6622, 6623, AND 6623A TO INCREASE THE UTILITY USER TAX THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. Santa Monica Municipal Code Section 6621 is amended to read as follows: SECTION 6621. Te1ephone Tax. (a) There is hereby imposed a tax upon every person in the City, other than a telephone corporation, using instrastate, interstate, and international telephone communication services in the city. The tax imposed by this section shall be at the fo11owinq rate: (1) prior to November 1, 1990, eight percent (8%) of all charges made for such services, which tax shall be paid by the person paying for such services, except that any taxpayer who provides proof that the taxpayer has properly paid a telephone communication - 1 - . . services tax to a jurisdiction other than the City of Santa Monica based on the same transmission as is taxed by the city shall be entitled to a refund or credit for any duplicative tax that the taxpayer has paid to the city. (2) On and after November 1, 1990, nine and one-half percent (9.5%) of all charges made for such services, which tax shall be paid by the person paying for such services, except that any taxpayer who provides proof that the taxpayer has properly paid a telephone communication services tax to a jurisdiction other than the City of Santa Monica based on the same transmission as is taxed by the city shall be entitled to a refund or credit for any duplicative tax that the taxpayer has paid to the city. (b) As used in this Section, the following terms are defined as follows: (1) "Interstate and international telephone communication services1l are those charges whiCh originate or terminate wi thin the City of Santa Monica and are charged to a Santa Monica service address. - 2 - . . (2) "Telephone communication servicesll mean 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, fiberoptics, laser, microwave, radio, satellite or other methods. (3) IIservice address" is the address where t.he telephone equipment is located and to which the telephone number is assigned. (c) The duty to collect the tax on interstate and international telephone communication services shall commence with the first regular billing period of each service user beginning on or after september 1, 1989. (d) As used in this section, the term II 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: nor shall - 3 - . . the term "telephone communication services" include land mobile services or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as such section existed on January 1, 1989. (e) Notwithstanding the provisions of subsection (a), the tax imposed under this Section shall not be imposed upon any person for using intrastate, interstate, and international 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 such section existed on January I, 1989, without regard to subsection (b) thereof. (f) Any taxpayer who claims to be entitled to a refund for any tax paid pursuant to this Section shall file an application for a tax refund with the Director of Finance. The application shall be made on a form provided by the Director and the taxpayer shall provide under penalty of perjury all facts, including all documentary evidence, which supports the claim for a refund. The - 4 - . . Director shall review all refund applications and shall determine the amount, if any, of any refund due. The Director shall notify the taxpayer of his or her decision in writing by mailing a copy of the decision to the taxpayer at the taxpayer's last known address. All taxpayers claiming a refund must file their refund applications no later than one hundred eighty (180) days following payment of the tax which is the subject of the application. The Director's decision shall be final on the day it is mailed to the taxpayer and shall not be subject to further appeal, except that judicial review of the decision may be sought pursuant to sections 1094.5 and 1094.6 of the California Code of Civil Procedure only if judicial review is commenced no later than the ninetieth (90th) days following the date on which the Director's decision is made final. SECTION 2. Santa Monica Municipal Code Section 6622 is amended to read as follows: SECTION 6622. Electricity Tax. (a) There is hereby imposed a tax upon every person in the City of Santa - 5 - . . Monica using electrical energy in the City of Santa Monica. The tax imposed by this section shall be at the following rate: (1) Prior to November 1, 1990, eight percent (8%) of all charges made for such services changed to energy, which tax shall be paid by the person paying for such services changed to energy. (2) On and after November 1, 1990, nine and one-half percent (9.5%) of all charges made for such services changed to energy, which tax shall be paid by the person paying for such services changed to energy. (b) As used in this Section, the term "charges" shall include charges made for: (1) metered energy; and (2) minimum charges for service, including customer charges, service charges, demand charges, standby charges, and annual and monthly charges. (c) As used in this Section, the term "using electrical energytt shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him for use in an automobile or other machinery or device apart from - 6 - . . 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. The term shall not include electricity used in water pumping by water corporations, nor shall the term include the mere receiving of such energy by an electrical corporation at a point wi thin the ci ty of Santa Monica for resale. SECTION 3. Santa Monica Municipal Code Section 6623 is amended to read as follows: SECTION 6623. Gas Tax. (a) There is hereby imposed a tax upon every person in the City of Santa Monica using in the city gas which is delivered through mains or pipes. The tax imposed by this section shall be at the following rate: (1) prior to November 1, 1990, eight percent (8%) of all charges made for such gas, which tax shall be paid by the person paying for such gas. e 2) On and af'ter November 1, 1990, nine and one-half percent (9.5%) of all charges made for such gas, which tax - 7 - . . shall be paid by the person paying for such gas. (b) There shall be excluded from the base on which the tax imposed in this Section is computed: (1) charges made for gas which is to be resold and delivered through mains or pipes; (2) charges made for gas to be used in the generation of electrical energy by an electrical corporation; and (3) charges made by a gas public utility for gas used and consumed in the conduct of the business of gas pUblic utilities. SECTION 4. Santa Monica Municipal Code section 6623A is amended to read as follows: SECTION 6623A. Cable Television. (a) Commencing on January 1, 1984, there is hereby imposed a tax upon every person in the City of Santa Monica using in the City a cable television service. The tax imposed by this section shall be at the following rate: (1) Prior to November 1, 1990, eight percent (8%) of all charges made for such cable television service, which tax shall be paid by the person paying for such cable television service. - 8 - ... . . (2 ) On and af1;er November 1, 1990, nine and one-half percen1; (9.5%) of all charges made for such cable television service, which 1;ax shall be pa.id by 1;he person paying for such cable 1;elevision service. (b) For purposes of this Section, cable television service shall mean a television signal delivered by cable for a fee or charge. SECTION 5. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. - 9 - . . SECTION 7. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be publ ished once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective after 30 days from its adoption. APPROVED AS TO FORM: ~,t \.---r ~ ROBERT M. MYERS IJ City Attorney - 10 -