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From: JAMES F. PENMAN Subject: 1. RESOLUTION OF THE CITY OF SAN
City Attorney BERNARDINO SUBMITTING TO THE QUALIFIED
ELECTORS OF SAID CITY FOR THEIR APPROVAL
Dept: CITY ATTORNEY THE"SERVICE USER'S TAX REDUCTION AND
MODERNIZATION ACT"; TRANSMISSION OF THE
' Date: November 2, 2007 PROPOSED BALLOT MEASURE TO THE OFFICE OF
THE CITY ATTORNEY FOR PURPOSES OF
PREPARATION OF AN IMPARTIAL ANALYSIS.
i
2. RESOLUTION OF THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO
PLACING THE"SERVICE USER'S TAX REDUCTION
AND MODERNIZATION ACT"ON THE BALLOT FOR
' A SPECIAL MUNICIPAL ELECTION TO BE
CONSOLIDATED WITH THE FEBRUARY 5, 2008
PRESIDENTIAL PRIMARY ELECTION;DIRECTION
TO THE CITY CLERK TO TRANSMIT A COPY TO
THE BOARD OF SUPERVISORS OF COUNTY OF SAN
BERNARDINO AND TO FILE A COPY WITH THE
REGISTRAR OF VOTERS.
M&CC Meeting: November 5,2007
Synopsis of Previous Council Action:
April 18, 2007 -Ways&Means
July 17, 2007 -Legislative Review
August 6, 2007 -Proposed Ordinance Clarifying Telephone User's Tax
September 4, 2007 -Proposed Ordinance Clarifying Telephone User's Tax-Continued to
September 17,2007
September 17, 2007 -Continued to October 1, 2007
October 1, 2007 -Discussion Regarding UUT to be Placed on Ballot. Recommended for
February 5, 2008 Election.
October 15, 2007 -UUT Ballot Measure
Recommended motion:
Adopt Resolutions.
i ature
Contact person: James F. Penman Phone: 5255
Supporting data attached: Staff Report Ward:
FUNDING REQUWMENTS: Amount:
Source:
Finance:
Council Notes: — A147 ¢ ZGQ 7— `V-11
I I I
Agenda Item No. 3
STAFF REPORT
Council Meeting Date: November 5, 2007
TO: Mayor and Common Council
FROM: James F. Penman, City Attorney
DATE: November 5, 2007
AGENDA ITEM: The City of San Bernardino's Service User's Tax Reduction and
Modernization Act.
On October 1,2007,the Mayor and Common Council,requested the City Attorney to prepare
a draft ordinance modernizing the City's Service User's Tax (SUT) and reducing the tax rate. The
proposed"Service Users Tax Reduction and Modernization"("ACT"),if adopted by the voters,will
reduce the current tax rate from 7.83% to 7.75% on all components of the SUT, namely,
telecommunications (telephone and video (cable television)), electricity and gas services.
In addition to reducing the SUTs across the board,the City's expert and consultant,Donald
Maynor, has recommended that the City modernize the current telephone and video provisions to
address recent changes in federal law and court rulings. The proposed City of San Bernardino's
Service Users Modernization and Tax Reduction Act adding Chapter 3.46 to the Municipal Code
addresses the changes in federal law and court rulings concerning issues related to telephone and
video services and modernizes those provisions to comport with changes in modern technology and
the law.
If adopted by the voters,the ACT provides that the reduced taxes cannot be increased by the
Mayor and Common Council. Only the registered voters of the City may authorize an increase at
an election held for that purpose. The Mayor and Common Council will be authorized to reduce
the SUT without a vote of the people. It is important to note that the current tax exemptions for
residents of mobile home parks and certain low-income households will not be affected by this
action, and those programs will continue to be available to all qualified residents.
With the approval of the Mayor and Common Council, the ACT will be transmitted to the
Registrar of Voters for the County of San Bernardino to be placed on the ballot for the for the City's
consolidated special municipal election to be held on February 5, 2008. A majority vote of the
electorate is required to adopt the measure. In the event that the voters do not approve the proposed
reduction, the users of the utility services shall continue to pay the higher tax rates provided under
the current SUT.
The enclosed resolution authorizes the City Clerk to transmit the ACT to the Registrar of
Voters of the County of San Bernardino,and place it on the ballot for the City's Special Municipal
Election to be held on February 5, 2008.
FACALKINS\Staff Reports\UUT.Ord.Reduction Ordinance Election.StaffReport.wpd
COPY
I RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO SUBMITTING TO THE
QUALIFIED ELECTORS OF SAID CITY FOR THEIR APPROVAL THE"SERVICE
3 USER'S TAX REDUCTION AND MODERNIZATION ACT"; TRANSMISSION OF THE
PROPOSED BALLOT MEASURE TO THE OFFICE OF THE CITY ATTORNEY FOR
4 PURPOSES OF PREPARATION OF AN IMPARTIAL ANALYSIS.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
6 OF SAN BERNARDINO AS FOLLOWS:
7 SECTION 1. Recitals.
8 A. Pursuant to Section 9222 of the Elections Code of the State of California, the
9 legislative body of a city may submit to the voters, without a petition therefor, a proposition for the
10 repeal, amendment, or enactment of any ordinance, to be voted upon at any succeeding regular or
11 special city election.
12 B. Pursuant to this authority, the Mayor and Common Council have adopted this
13 resolution submitting to the voters of the City of San Bernardino for their approval or disapproval
14 an ordinance entitled the"Service User's Tax Reduction and Modernization Act,"which,if approved
15 by the voters, would reduce from 7.83% to 7.75% the taxes currently collected under the Service
16 User's Tax of Chapter 3.44 of the San Bernardino Municipal Code.
17 SECTION 2. Submittal to Electors. The ordinance attached hereto as Exhibit "A" is
18 submitted to the qualified electors of the City of San Bernardino for their approval or disapproval
19 at the consolidated special municipal election to be held in conjunction with the Presidential Primary
20 election on Tuesday, February 5, 2008.
21 SECTION 3. Measure. The measure to be voted on at the consolidated special municipal
22 election as it is to appear on the ballot shall be as follows:
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I RESOLUTION OF THE CITY OF SAN BERNARDINO SUBMITTING TO THE
2 QUALIFIED ELECTORS OF SAID CITY FOR THEIR APPROVAL THE"SERVICE
USER'S TAX REDUCTION AND MODERNIZATION ACT"; TRANSMISSION OF THE
3 PROPOSED BALLOT MEASURE TO THE OFFICE OF THE CITY ATTORNEY FOR
4 PURPOSES OF PREPARATION OF AN IMPARTIAL ANALYSIS.
5 MEASURE
6 Shall the ordinance adding Chapter 3.46 to the YES [ ]
Municipal Code be approved, reducing the
7 existing service user's tax(utility user's tax)rate NO [ ]
from 7.83% to 7.75% and modernizing the
g ordinance?
9
The measure shall be designated on the ballot by a letter printed on the left margin of the
10
11 square containing the description of the measure as provided by law.
12 SECTION 4. Transmission of Proposed Ballot Measure Documents. Pursuant to the
Elections Code of the State of California,the City Clerk is hereby directed to transmit a copy of the
13
14 ballot measure, and all other necessary documents, to the office of the City Attorney for purposes
15 of preparation of an Impartial Analysis.
16 SECTION 5. Filing of Resolution. The City Clerk of the City of San Bernardino is
17 directed to file a certified copy of this Resolution with the Board of Supervisors of the County of
18 San Bernardino and to file a copy of this Resolution with the Registrar of Voters.
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FACALKINS\Resol utions\UUTServiceUsersTaxReductionAct.ImpartialAnalysis.Res.wpd Page 2
I RESOLUTION OF THE CITY OF SAN BERNARDINO SUBMITTING TO THE
2 QUALIFIED ELECTORS OF SAID CITY FOR THEIR APPROVAL THE"SERVICE
USER'S TAX REDUCTION AND MODERNIZATION ACT"; TRANSMISSION OF THE
3 PROPOSED BALLOT MEASURE TO THE OFFICE OF THE CITY ATTORNEY FOR
4 PURPOSES OF PREPARATION OF AN IMPARTIAL ANALYSIS.
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
6 Common Council of the City of San Bernardino at a meeting thereof, held on the_day
7 of , 2007, by the following vote, to wit:
8 COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT
9 ESTRADA
10 BAXTER
11 BRINKER
12 DERRY
13 KELLEY
14 JOHNSON
15 MC CAMMACK
16
17 Rachel Clark, City Clerk
18 The foregoing Resolution is hereby approved this_day of , 2007.
19
20
21 PATRICK J. MORRIS, Mayor
22 City of San Bernardino
23 Approved as to form:
24 JAMES F. PENMAN,
City Atforney
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EMIL-
1 RESOLUTION NO. COPY
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO PLACING THE "SERVICE USER'S TAX REDUCTION AND
3 MODERNIZATION ACT" ON THE BALLOT FOR A SPECIAL MUNICIPAL ELECTION
TO BE CONSOLIDATED WITH THE FEBRUARY 5, 2008 PRESIDENTIAL PRIMARY
4 ELECTION; DIRECTION TO THE CITY CLERK TO TRANSMIT A COPY TO THE
BOARD OF SUPERVISORS OF COUNTY OF SAN BERNARDINO AND TO FILE A COPY
5 WITH THE REGISTRAR OF VOTERS.
6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
7 OF SAN BERNARDINO AS FOLLOWS:
8 SECTION 1. Recitals.
9 A. Pursuant to Section 9222 of the Elections Code of the State of California, the
10 legislative body of a city may submit to the voters,without a petition therefor, a proposition for the
11 repeal, amendment, or enactment of any ordinance, to be voted upon at any succeeding regular or
12 special city election.
13 B. Pursuant to this authority,the Mayor and Common Council have adopted Resolution
14 No. submitting to the voters of the City of San Bernardino for their approval or
15 disapproval of an ordinance entitled the "Service User's Tax Reduction and Modernization Act,"
16 which, if approved by the voters, would reduce from 7.83% to 7.75% the taxes currently collected
17 under the Service User's Tax of Chapter 3.44 of the San Bernardino Municipal Code.
18 SECTION 2. Consolidated Special Municipal Election. A consolidated special municipal
19 election will be held in the City of San Bernardino in conjunction with the Presidential Primary
20 election on Tuesday,February 5, 2008, for the purpose of submitting to the qualified electors of the
21 City, for their approval or disapproval, the ordinance as set forth in Exhibit "A" attached hereto.
22 SECTION 3. Measure. The measure to be voted on at the regularly scheduled consolidated
23 general municipal election as it is to appear on the ballot shall be as follows:
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FA CALKiNS\Resolutions,UUT.Sery iceUsers Tax Red uctionAct.Transmittal to County.wpd Page 1
I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO PLACING THE "SERVICE USER'S TAX REDUCTION AND
MODERNIZATION ACT" ON THE BALLOT FOR A SPECIAL MUNICIPAL ELECTION
3 TO BE CONSOLIDATED WITH THE FEBRUARY 5, 2008 PRESIDENTIAL PRIMARY
4 ELECTION; DIRECTION TO THE CITY CLERK TO TRANSMIT A COPY TO THE
BOARD OF SUPERVISORS OF COUNTY OF SAN BERNARDINO AND TO FILE A COPY
5 WITH THE REGISTRAR OF VOTERS.
6
7 MEASURE
-
8 Shall the ordinance adding Chapter 3.46 to the YES []
Municipal Code be approved, reducing the
existing service user's tax(utility user's tax)rate NO []
9 from 7.83% to 7.75% and modernizing the
10 ordinance?
11 The measure shall be designated on the ballot by a letter printed on the left margin of the
12 square containing the description of the measure as provided by law.
13 SECTION 4. Canvass of Returns. The Registrar of Voters of the County of
14 San Bernardino is hereby authorized to canvass the returns of the consolidated special municipal
15 election so called and to conduct the consolidated special municipal election in all respects as if there
16 were only one election with only one form of ballot. Results of the consolidated special municipal
17 election shall be certified to the Mayor and Common Council of the City of San Bernardino.
18 SECTION 5. Notice of Election. The City Clerk is hereby directed to publish a notice of
19 the consolidated special municipal election which shall contain the following:
20 A. The time of the election;
21 B. The hours the polls will be open;
22 C. That the last day for receipt of primary arguments for or against the measure has been
23 established as 5:00 p.m.on November 15,2007,in the City Clerk's Office, Second Floor,City Hall,
24 300 North "D" Street, San Bernardino, California;
25 D. That the last day for receipt of rebuttal arguments is 5:00 p.m.on November 26,2007,
26 in the City Clerk's Office at the above location.
27 E. The text of the measure.
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I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO PLACING THE "SERVICE USER'S TAX REDUCTION AND
MODERNIZATION ACT"ON THE BALLOT FOR A SPECIAL MUNICIPAL ELECTION
3 TO BE CONSOLIDATED WITH THE FEBRUARY 5, 2008 PRESIDENTIAL PRIMARY
4 ELECTION; DIRECTION TO THE CITY CLERK TO TRANSMIT A COPY TO THE
BOARD OF SUPERVISORS OF COUNTY OF SAN BERNARDINO AND TO FILE A COPY
5 WITH THE REGISTRAR OF VOTERS.
6 The City Clerk is directed to make arrangements to accept arguments and to arrange for
7 sample ballots,in accordance with the appropriate sections of the California Elections Code, which
g shall include the entire text of the ordinance to be approved or disapproved by the voters which, if
9 approved by the voters, would reduce from 7.83% to 7.75% the taxes collected under the Service
10 User's Tax of Chapter 3.44 of the San Bernardino Municipal Code.
11 SECTION 6. Conduct of Election. The consolidated special municipal election so called
12 shall be held in such precincts and at such polling places as shall be determined by the Registrar of
13 Voters of the County of San Bernardino. The Board of Supervisors of the County of San Bernardino
14 is hereby requested to issue instructions to the Registrar of Voters to take all steps necessary for the
15 holding of the consolidated special municipal election.
16 SECTION 7. Filing of Resolution. The City Clerk of the City of San Bernardino is directed
17 to file a certified copy of this Resolution with the Board of Supervisors of the County of
18 San Bernardino and to file a copy of this Resolution with the Registrar of Voters.
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I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO PLACING THE SERVICE USERS TAX REDUCTION AND
MODERNIZATION ACT"ON THE BALLOT FOR A SPECIAL MUNICIPAL ELECTION
3 TO BE CONSOLIDATED WITH THE FEBRUARY 5, 2008 PRESIDENTIAL PRIMARY
4 ELECTION; DIRECTION TO THE CITY CLERK TO TRANSMIT A COPY TO THE
BOARD OF SUPERVISORS OF COUNTY OF SAN BERNARDINO AND TO FILE A COPY
5 WITH THE REGISTRAR OF VOTERS.
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a meeting thereof,held on the_day
g of 2007, by the following vote, to wit:
9 COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT
10 ESTRADA
11 BAXTER
12 BRINKER
13 DERRY
14 KELLEY
15 JOHNSON _
16 MC CAMMACK
17
18 Rachel Clark, City Clerk
19
The foregoing Resolution is hereby approved this _day of 32007.
20
21
22
PATRICK J. MORRIS, Mayor
23 City of San Bernardino
24 Approved as to form:
25 JAMES F. PENMAN,
City Attorney
26
27 By: 446�� r ��
28
FACALKINS\Resolutions\UUT.ServiceUsersTaxReductionAct.Transmittal to County.wpd Page 4
I RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO PLACING THE "SERVICE USER'S TAX REDUCTION AND
MODERNIZATION ACT" ON THE BALLOT FOR A SPECIAL MUNICIPAL ELECTION
3 TO BE CONSOLIDATED WITH THE FEBRUARY 5, 2008 PRESIDENTIAL PRIMARY
4 ELECTION; DIRECTION TO THE CITY CLERK TO TRANSMIT A COPY TO THE
BOARD OF SUPERVISORS OF COUNTY OF SAN BERNARDINO AND TO FILE A COPY
5 WITH THE REGISTRAR OF VOTERS.
I
6 sample ballots,in accordance with the appropriate sections of the California Elections Code, which
7 shall include the entire text of the ordinance to be approved or disapproved by the voters which, if
g approved by the voters, would reduce from 7.83% to 7.75% the taxes collected under the Service
9 User's Tax of Chapter 3.44 of the San Bernardino Municipal Code.
10 SECTION 6. Conduct of Election. The consolidated special municipal election so called
11 shall be held in such precincts and at such polling places as shall be determined by the Registrar of
12 Voters of the County of San Bernardino. The Board of Supervisors of the County of San Bernardino
13 is hereby requested to issue instructions to the Registrar of Voters to take all steps necessary for the
14 holding of the consolidated special municipal election.
15 SECTION 8. Filing of Resolution. The City Clerk ofthe City of San Bernardino is directed
16 to file a certified copy of this Resolution with the Board of Supervisors of the County of
17 San Bernardino and to file a copy of this Resolution with the Registrar of Voters.
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F:\CALKINS\Resolutions\UUT.ServiceUsersTaxReductionAct.Transmittal to Countympd Page 3
I AN ORDINANCE OF THE CITY OF SAN BERNARDINO ADDING CHAPTER 3.46
TO TITLE 3 OF THE SAN BERNARDINO MUNICIPAL CODE WITH RESPECT TO THE
2 SERVICE USER'S TAX REDUCTION AND MODERNIZATION ACT AND AMENDING
SECTIONS 3.44.050 AND 3.44.060 OF SAID CODE REDUCING THE ELECTRICITY
3 USERS TAX AND THE GAS USERS TAX.
4 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO DO
5 ORDAIN AS FOLLOWS:
6 SECTION 1: Chapter 3.46 of the Municipal Code is hereby added to Title 3 of the San
7 Bernardino Municipal Code and shall read as follows:
8 CHAPTER 3.46
9 SERVICE USER'S TAX REDUCTION AND MODERNIZATION ACT
10 3.46.010 Short Title.
3.46.020 Definitions.
11 3.46.030 Constitutional, Statutory, and Other Exemptions.
3.46.040 Communication User's Tax
12 3.46.050 Bundling Taxable Items with Non-taxable Items
3.46.060 Substantial Nexus /Minimum Contacts.
13 3.46.070 Duty to Collect--Procedures.
3.46.080 Collection Penalties - Service Suppliers.
14 3.46.090 Actions to Collect.
3.46.100 Deficiency Determination and Assessment- Tax Application Errors.
15 3.46.110 Administrative Remedy- Non-Paying Service Users.
3.46.120 Additional Powers and Duties of the Tax Administrator.
16 3.46.130 Records.
3.46.140 Refunds.
17 3.46.150 Appeals.
3.46.160 Notice No Injunction/Writ of Mandate.
18 3.46.170 Notice of Changes to Ordinance.
3.46.180 Future Amendment to Cited Statute.
19 3.46.190 Independent Audit of Tax Collection,Exemption,Remittance,and Expenditure.
3.46.200 No Increase in Tax Percentage or Change in Methodology Without Voter
20 Approval.
3.46.210 Remedies Cumulative.
21 3.46.220 Interaction with Prior Tax.
3.46.230 Violation - Penalty.
22
3.46.010 Short Title.
23
This Chapter shall be known as the"Service User's Tax Reduction and Modernization Act"
24 of the City of San Bernardino.
25 3.46.020 Definitions.
26 The following words and phrases whenever used in this Chapter shall be construed as defined
in this section.
27
A. "Ancillary telecommunication services"means services that are associated with or incidental
28 to the provision,use or enjoyment of telecommunications services,including but not limited
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionl.wpd Page I
Exhibit "A"
1 to the following services:
2 (1) "conference bridging service" means an ancillary service that links two or
more participants of an audio or video conference call and may include the
3 provision of a telephone number. Conference bridging service does not
include the telecommunications services used to reach the conference bridge;
4
(2) "detailed telecommunications billing service" means an ancillary service of
5 separately stating information pertaining to individual calls on a customer's
billing statement;
6
(3) "directory assistance" means an ancillary service of providing telephone
7 number information, and/or address information;
8 (4) "vertical service"means an ancillary service that is offered in connection with
one or more telecommunications services, which offers advanced calling
9 features that allow customers to identify callers and to manage multiple calls
and call connections, including conference bridging services;
10
(5) "voice mail service"means an ancillary service that enables the customer to
11 store,send or receive recorded messages.Voice mail service does not include
any vertical services that the customer may be required to have in order to
12 utilize the voice mail service.
13 B. "Ancillary video services" means services that are associated with or incidental to the
provision or delivery of video services,including but not limited to electronic program guide
14 services,search functions,or other interactive services or communications that are associated
with or incidental to the provision, use or enjoyment of video programming.
15
C. "Billing address" shall mean the mailing address of the service user where the service
16 supplier submits invoices or bills for payment by the customer.
17 D. "City" shall mean the City of San Bernardino.
18 E. "Communication services' means: "telecommunication services", "ancillary
telecommunication services", "video services", and "ancillary video services".
19
F. "Mobile telecommunications service" has the same meaning and usage as set forth in the
20 Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations
thereunder, as the same exists or may be amended from time to time.
21
G. "Month" shall mean a calendar month.
22
H. "Paging service"means a"telecommunications service"that provides transmission of coded
23 radio signals for the purpose of activating specific pagers; such transmissions may include
messages and/or sounds.
24
I. "Person" shall mean, without limitation, any natural individual, firm, trust, common law
25 trust,estate,partnership of any kind,association,syndicate,club,joint stock company,joint
venture,limited liability company,corporation(including foreign,domestic,and non-profit),
26 municipal district or municipal corporation,cooperative,receiver,trustee,guardian,or other
representative appointed by order of any court.
27
J. "Place of primary use" means the street address representative of where the customer's use
28 of the communications service primarily occurs,which must be the residential street address
FACALKINS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction Revision I.wpd , Page
I or the primary business street address of the customer.
2 K. "Post-paid telecommunication service" means the telecommunication service obtained by
making a payment on a communication-by-communication basis either through the use of
3 a credit card or payment mechanism such as a bank card, travel card, credit card, or debit
card, or by charge made to a service number which is not associated with the origination or
4 termination of the telecommunication service.
5 L. "Prepaid telecommunication service"means the right to access telecommunication services,
which must be paid for in advance and which enables the origination of communications
6 using an access number or authorization code,whether manually or electronically dialed,and
that is sold in predetermined units or dollars of which the number declines with use in a
7 known amount.
8 M. "Private telecommunication service" means a telecommunication service that entitles the
customer to exclusive or priority use of a communications channel or group of channels
9 between or among termination points, regardless of the manner in which such channel or
channels are connected, and includes switching capacity, extension lines, stations, and any
10 other associated services that are provided in connection with the use of such channel or
channels. A communications channel is a physical or virtual path of communications over
11 which signals are transmitted between or among customer channel termination points (i.e.,
the location where the customer either inputs or receives the communications).
12
N. "Service address" means either:
13
(1) the location of the service user's communication equipment from which the
14 communication originates or terminates, regardless of where the communication is
billed or paid; or,
15
(2) if the location in subsection (1) of this definition is unknown (e.g., mobile
16 telecommunications service or VOIP service),the service address means the location
of the service user's place of primary use; and
17
(3) for prepaid telecommunication service, "service address" means the location
18 associated with the service number.
19 O. "Service supplier" shall mean any entity or person, including the City, that provides
communication service to a user of such service within the City.
20
P. "Service user"shall mean a person required to pay a tax imposed under the provisions of this
21 Chapter.
22 Q. "Service User's Tax" means the tax imposed by this Chapter 3.46.
23 R. "State" shall mean the State of California.
24 S. "Streamlined sales and use tax agreement" means the multi-state agreement commonly
known and referred to as the Streamlined Sales and Use Tax Agreement,and as it is amended
25 from time to time.
26 T. "Tax Administrator" means the Director of Finance of the City of San Bernardino or his or
her designee.
27
U. "Telecommunications services" means the transmission, conveyance, or routing of voice,
28 data,audio,video,or any other information or signals to a point,or between or among points,
FACALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionl.wpd Page 3
I whatever the technology used. The term "telecommunications services" includes such
transmission, conveyance,or routing in which computer processing applications are used to
2 act on the form,code or protocol of the content for purposes of transmission,conveyance or
routing without regard to whether such services are referred to as voice over internet protocol
3 (VoIP) services or are classified by the Federal Communications Commission as enhanced
or value added, and includes video and/or data services that is functionally integrated with
4 "telecommunication services". "Telecommunications services" include,but are not limited
to the following services, regardless of the manner or basis on which such services are
5 calculated or billed: ancillary telecommunication services; mobile telecommunications
service;prepaid telecommunication service(to the extent that it is practicable for the service
6 supplier to collect the correct tax imposed under this Chapter from the service supplier);
post-paid telecommunication service;private telecommunication service;paging service;800
7 service (or any other toll-free numbers designated by the Federal Communications
Commission); and 900 service (or any other similar numbers designated by the Federal
8 Communications Commission for services whereby subscribers who call in to pre-recorded
or live service).
9
V. "Video programming"means those programming services commonly provided to subscribers
10 by a "video service supplier" including but not limited to basic services, premium services,
audio services, video games, pay-per-view services, video on demand, origination
11 programming, or any other similar services, regardless of the content of such video
programming, or the technology used to deliver such services, and regardless of the manner
12 or basis on which such services are calculated or billed.
13 W. "Video services" means any and all services related to the providing, storing or delivering
of "video programming" (including origination programming and programming using
14 Internet Protocol, e.g.,IP-TV and IP-Video)using one or more channels by a"video service
supplier", regardless of the technology used to deliver, store or provide such services, and
15 regardless of the manner or basis on which such services are calculated or billed, and
includes data services, "telecommunication services",or interactive communication services
16 that are functionally integrated with "video services".
17 X. "Video service supplier"means any person,company,or service which provides or sells one
or more channels of video programming,or provides or sells the capability to receive one or
18 more channels of video programming, including any communications that are ancillary,
necessary or common to the provision, use or enjoyment of the video programming, to or
19 from a business or residential address in the City, where some fee is paid, whether directly
or included in dues or rental charges for that service,whether or not public rights-of-way are
20 utilized in the delivery of the video programming or communications. A "video service
supplier" includes, but is not limited to, multichannel video programming distributors (as
21 defined in 47 U.S.C. Section 522(13)); open video systems (OVS) suppliers; and suppliers
of cable television; master antenna television; satellite master antenna television;
22 multichannel multipoint distribution services (MMDS); video services using internet
protocol (e.g., EP-TV and IP-Video, which provide, among other things, broadcasting and
23 video on demand), direct broadcast satellite to the extent federal law permits taxation of its
video services, now or in the future; and other suppliers of video programming or
24 communications (including two-way communications), whatever their technology.
25 Y. "VoIP(voice over internet protocol)"means the digital process of making and receiving real-
time voice transmissions over any Internet Protocol network.
26
Z. "800 service" means a "telecommunications service" that allows a caller to dial a toll-free
27 number without incurring a charge for the call. The service is typically marketed under the
name "800", "855", 1186611, "877, and "888" toll-free calling, and any subsequent numbers
28 designated by the Federal Communications Commission.
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevision1.wpd Page 4
I AA. "900 service"means an inbound toll"telecommunications service"purchased by a subscriber
that allows the subscriber's customers to call in to the subscriber's prerecorded announcement
2 or live service. "900 service" does not include the charge for: collection services provided
by the seller of the "telecommunications services" to the subscriber, or service or product
3 sold by the subscriber to the subscriber's customer. The service is typically marketed under
the name "900" service, and any subsequent numbers designated by the Federal
4 Communications Commission.
5 3.46.030 Constitutional, Statutory, and Other Exemptions.
6 A. Nothing in this Chapter shall be construed as imposing a tax upon any person or service
when the imposition of such tax upon such person or service would be in violation of a
7 federal or state statute, the Constitution of the United States or the Constitution of the State
of California.
8
B. Due to the status of the San Bernardino City Unified School District as an agency established
9 by the Charter of the City of San Bernardino and due to the strong public policy in favor of
encouraging and assisting the provision of public education, public schools are hereby
10 exempted from the imposition of the Communications Users Tax.
11 C. Any service user that is exempt from the tax imposed by this Chapter pursuant to subsection
A of this section shall file an application with the Tax Administrator for an exemption;
12 provided,however,this requirement shall not apply to a service user that is a state or federal
agency or subdivision with a commonly recognized name for such service. Said application
13 shall be made upon a form approved by the Tax Administrator and shall state those facts,
declared under penalty of perjury, which qualify the applicant for an exemption, and shall
14 include the names of all communication service suppliers serving that service user.If deemed
exempt by the Tax Administrator, such service user shall give the Tax Administrator timely
15 written notice of any change in utility service suppliers so that the Tax Administrator can
properly notify the new communication service supplier of the service user's tax exempt
16 status. A service user that fails to comply with this section shall not be entitled to a refund
of such taxes collected and remitted to the Tax Administrator from such service user as a
17 result of such noncompliance. Upon request of the Tax Administrator, a service supplier or
its billing agent, shall provide a list of the names and addresses of those customers which,
18 according to its billing records, are deemed exempt from the Communication Users Tax.
19 The decision of the Tax Administrator may be appealed by filing an application with the Tax
Administrator and appeal to the City Manager. The City Manager shall give notice of, and
20 conduct an informed hearing and shall render a decision in writing. Such hearing is a
prerequisite to a suit herein.
21
D. The exemption and rebate provisions of Sections 3.44.140 and 3.44.144 of this Code shall
22 apply to this Chapter 3.46.
23 3.46.040 Communication User's Tax.
24 A. There is hereby imposed a tax upon every person in the City using communication services.
The maximum tax imposed by this section shall be at the rate of 7.75 percent(7.75%)of the
25 charges made for such services and shall be collected from the service user by the
communication services supplier or its billing agent. There is a rebuttable presumption that
26 communication services,which are billed to a billing or service address in the City,are used,
in whole or in part, within the boundaries of the City, and such services are subject to
27 taxation under this Chapter. If the billing address of the service user is different from the
service address,the service address of the service user shall be used for purposes of imposing
28 the tax. As used in this Section, the term ".charges" shall include the value of any other
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionl.wpd Page 5
I services, credits, property of every kind or nature, or other consideration provided by the
service user in exchange for the communication services.
2
B. "Mobile telecommunications service"shall be sourced in accordance with the sourcing rules
3 set forth in the Mobile Telecommunications Sourcing Act(4 U.S.C. Section 116 et. seq.)as
the same exists or may be amended from time to time. The Tax Administrator may issue and
4 disseminate to communication service suppliers, which are subject to the tax collection
requirements of this Chapter, sourcing rules for the taxation of other communication
5 services, including but not limited to post-paid communication services, prepaid
communication services, and private communication services, provided that such rules are
6 based upon custom and common practice that further administrative efficiency and minimize
multi jurisdictional taxation (e.g., Streamlined Sales and Use Tax Agreement).
7
C. The Tax Administrator may issue and disseminate to communication service suppliers,
8 which are subject to the tax collection requirements of this Chapter,an administrative ruling
identifying those communication services, or charges therefor, that are subject to or not
9 subject to the tax of subsection A above.
10 D. As used in this section, the term "telecommunication services" shall include, but are not
limited to charges for: connection, reconnection, termination, movement, or change of
11 telecommunication services; late payment fees; detailed billing; central office and custom
calling features(including but not limited to call waiting,call forwarding,caller identification
12 and three-way calling);voice mail and other messaging services;directory assistance;access
and line charges;universal service charges;regulatory,administrative and other cost recovery
I local number portability charges; and text and instant messaging.
"Telecommunication services" shall not include digital downloads that are not "ancillary
14 telecommunications services", such as books, music, ringtones, games, and similar digital
products.
15
E. Charges for communication services(video)shall include,but are not limited to,charges for
16 the following:
17 (1) regulatory fees and surcharges, franchise fees and access fees (PEG);
18 (2) franchise fees;
19 (3) initial installation of equipment necessary for provision and receipt of
communication services;
20
(4) late fees, collection fees, bad debt recoveries, and returned check fees;
21
(5) activation fees, reactivation fees, and reconnection fees;
22
(6) all video programming services (e.g., basic services, premium services, audio
23 services, video games, pay-per-view services, or on demand programming);
24 (7) ancillary programming services (e.g., electronic program guide services, search
functions, or other interactive services or communications that are ancillary,
25 necessary or common to the use or enjoyment of the video programming);
26 (8) equipment leases (e.g., converters, remote devices);
27 (9) service calls,service protection plans,name changes,changes of services,and special
services.
28
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevision l.wpd Page 6
I F. To prevent actual multi-juri sdictional taxation of communication services subject to tax
under this section,any service user,upon proof to the Tax Administrator that the service user
2 has previously paid the same tax in another state or local jurisdiction on such communication
services,shall be allowed a credit against the tax imposed to the extent of the amount of such
3 tax legally imposed in such other state or local jurisdiction;provided, however,the amount
of credit shall not exceed the tax owed to the City under this section.
4
G. The tax on communication services imposed by this section shall be collected from the
5 service user by the service supplier. The amount of tax collected in one (1)month shall be
remitted to the Tax Administrator, and must be received by the Tax Administrator on or
6 before the twentieth (20th) day of the following month.
7 3.46.050 Bundling Taxable Items with Non-Taxable Items.
8 Except as otherwise provided by applicable federal or state law, if any nontaxable charges
are combined with and not separately stated from taxable service charges on the customer bill or
9 invoice of a service supplier, the combined charge is subject to tax unless the service supplier
identifies, by reasonable and verifiable standards, the portions of the combined charge that are
10 nontaxable and taxable through the service supplier's books and records kept in the regular course
of business, and in accordance with generally accepted accounting principles, and not created and
11 maintained for tax purposes. The service supplier has the burden of proving the proper
apportionment of taxable and non-taxable charges. If the service supplier offers a combination of
12 services that include taxable and non-taxable services or products, and the charges are separately
stated, then for taxation purposes, the values assigned the taxable and non-taxable services or
13 products shall be based on its books and records kept in the regular course of business and in
accordance with generally accepted accounting principles, and not created and maintained for tax
14 purposes. The service supplier has the burden of proving the proper valuation and apportionment
of taxable and non-taxable charges.
15
3.46.060 Substantial Nexus /Minimum Contacts.
16
For purposes of imposing a tax or establishing a duty to collect and remit a tax under this
17 Chapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor of the
imposition, collection and/or remittance of the service user's tax to the fullest extent permitted by
18 state and federal law,and as it may change from time to time by judicial interpretation or by statutory
enactment. Any communication service (including VOIP) used by a person with a service address
19 in the City,which service is capable of terminating a call to another person on the general telephone
network, shall be subject to a rebuttable presumption that "substantial nexus/minimum contacts"
20 exists for purposes of imposing a tax, or establishing a duty to collect and remit a tax, under this
Chapter. A service supplier shall be deemed to have sufficient activity in the City for tax collection
21 and remittance purposes if its activities include, but are not limited to, any of the following:
maintains or has within the City, directly or through an agent or subsidiary, a place of business of
22 any nature; solicits business in the City by employees, independent contractors, resellers, agents or
other representatives; solicits business in the City on a continuous, regular, seasonal or systematic
23 basis by means of advertising that is broadcast or relayed from a transmitter within the City or
distributed from a location within the City; or advertises in newspapers or other periodicals printed
24 and published within the City or through materials distributed in the City by means other than the
United States mail.
25
3.46.070 Duty to Collect--Procedures.
26
A. Collection by Service Suppliers. The duty of service suppliers to collect and remit the taxes
27 imposed by the provisions of this Chapter shall be performed as follows:
28 (1) the tax shall be collected by service suppliers insofar as practicable at the same time
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevision l.wpd Page 7
I as,and along with,the collection of the charges made in accordance with the regular
billing practice of the service supplier. Where the amount paid by a service user to
2 a service supplier is less than the full amount of the charge and tax which was
accrued for the billing period, a proportionate share of both the charge and the tax
3 shall be deemed to have been paid. In those cases where a service user has notified
the service supplier of refusal to. pay the tax imposed on said charges, Section
4 3.46.090 of this Chapter shall apply;
5 (2) the duty of a service supplier to collect the tax from a service user shall commence
with the beginning of the first regular billing period applicable to the service user
6 where all charges normally included in such regular billing are subject to the
provisions of this Chapter. Where a service user receives more than one billing, one
7 or more being for different periods than another, the duty to collect shall arise
separately for each billing period.
8
B. Filing Return and Payment. Each person required by this Chapter to remit a tax shall file a
9 return to the Tax Administrator, on forms approved by the Tax Administrator,on or before
the due date. The full amount of the tax collected shall be included with the return and filed
10 with the Tax Administrator. The Tax Administrator is authorized to require such additional
information as he or she deems necessary to determine if the tax is being levied, collected,
11 and remitted in accordance with this Chapter. Returns are due immediately upon cessation
of business for any reason.Pursuant to Revenue and Taxation Code Section 7284.6,the Tax
12 Administrator, and its agents, shall maintain such filing returns as confidential information
that is exempt from the disclosure provisions of the Public Records Act of the State of
13 California. (Government Code Section 6500 et seq.)
14 3.46.080 Collection Penalties - Service Suppliers.
15 A. Taxes collected from a service user are delinquent if not received by the Tax Administrator
on or before the due date.Should the due date occur on a weekend or legal holiday,the return
16 must be received by the Tax Administrator on the first regular working day following the
weekend or legal holiday. A direct deposit, including electronic fund transfers and other
17 similar methods of electronically exchanging monies between financial accounts, made by
a service supplier in satisfaction of its obligations under this subsection shall be considered
18 timely if the transfer is initiated on or before the due date, and the transfer settles into the
City's account on the following business day.
19
B. If the person required to collect and/or remit the service user's tax fails to collect the tax(by
20 failing to properly assess the tax on one or more services or charges on the customer's billing)
or fails to remit the tax collected on or before the due date,the Tax Administrator shall attach
21 a penalty for such delinquencies or deficiencies at the rate of fifteen (15%) percent of the
total tax that is delinquent or deficient in the remittance, and shall pay interest at the rate of
22 and 75/100ths (0.75%)percent per month,or any fraction thereof,on the amount of the tax,
exclusive of penalties, from the date on which the remittance first became delinquent,until
23 paid.
24 C. The Tax Administrator shall have the power to impose additional penalties upon persons
required to collect and remit taxes pursuant to the provisions of this Chapter for fraud or
25 gross negligence in reporting or remitting at the rate of fifteen(15%)percent of the amount
of the tax collected and/or required to be remitted, or as recomputed by the Tax
26 Administrator.
27 D. For collection purposes only, every penalty imposed and such interest that is accrued under
8
the provisions of this section shall become a part of the tax herein required to be paid.
`'
L
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionI.wpd Page 8
1
i
I E. Notwithstanding the foregoing, the Tax Administrator may, in his or her discretion,modify
the due dates of this Chapter to be consistent with any uniform standards or procedures that
2 are mutually agreed upon by other public agencies imposing a service user's tax,or otherwise
legally established, to create a central payment location or mechanism.
3
3.46.090 Actions to Collect.
4
Any tax required to be paid by a service user under the provisions of this Chapter shall be
5 deemed a debt owed by the service user to the City.Any such tax collected from a service user which
has not been remitted to the Tax Administrator shall be deemed a debt owed to the City by the
6 person required to collect and remit and shall no longer be a debt of the service user. Any person
owing money to the City under the provisions of this Chapter shall be liable in an action brought in
7 the name of the City for the recovery of such amount, including penalties and interest as provided
for in this Chapter, along with any collection costs incurred by the City as a result of the person's
8 noncompliance with this Chapter, including,but not limited to, reasonable attorneys fees. Any tax
required to be collected by a service supplier or owed by a service user is an unsecured priority
9 excise tax obligation pursuant to 11 U.S.C. Section 507(a)(8)(C).
10 3.46.100 Deficiency Determination and Assessment- Tax Application Errors.
11 A. The Tax Administrator shall make a deficiency determination ifhe or she determines that any
service supplier or service user required to pay, collect, and/or remit taxes pursuant to the
12 provisions of this Chapter has failed to pay, collect, and/or remit the proper amount of tax
by improperly or failing to apply the tax to one or more taxable services or charges. Nothing
13 herein shall require that the Tax Administrator institute proceedings under this Section
3.46.100 if, in the opinion of the Tax Administrator, the cost of collection or enforcement
14 likely outweighs the tax benefit.
15 B. The Tax Administrator shall mail a notice of such deficiency determination to the person or
entity allegedly owing the tax, which notice shall refer briefly to the amount of the taxes
16 owed, plus interest at the rate of 75/100ths (0.75%) percent per month, or any fraction
thereof, on the amount of the tax from the date on which the tax should have been received
17 by the City. Within fourteen(14) calendar days after the date of service of such notice, the
person or entity allegedly owing the tax may request in writing to the Tax-Administrator for
18 a hearing on the matter.
19 C. If the person or entity allegedly owing the tax fails to request a hearing within the prescribed
time period,the amount of the deficiency determination shall become final assessment, and
20 shall immediately be due and owing to the City. If the person requests a hearing, the Tax
Administrator shall cause the matter to be set for hearing, which shall be scheduled within
21 thirty(30)days after receipt of the written request for hearing. Notice of the time and place
of the hearing shall be mailed by the Tax Administrator to such person or entity at least ten
22 (10) calendar days prior to the hearing, and, if the Tax Administrator desires said person or
entity to produce specific records at such hearing, such notice may designate the records
23 requested to be produced.
24 D. At the time fixed for the hearing,the Tax Administrator shall hear all relevant testimony and
evidence, including that of any other interested parties. At the discretion of the Tax
25 Administrator, the hearing may be continued from time to time for the purpose of allowing
the presentation of additional evidence. Within a reasonable time following the conclusion
26 of the hearing, the Tax Administrator shall issue a final assessment (or non-assessment),
thereafter,by confirming,modifying or rejecting the original deficiency determination, and
27 shall mail a copy of such final assessment to person or entity owing the tax. The decision
of the Tax Administrator may be appealed pursuant to Section 3.46.150 of this Chapter.
28 Filing an application with the Tax Administrator and appeal to the City Manager is a
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction Revision l.wvd Page 9
I prerequisite to a suit thereon.
2 E. Payment of the final assessment shall become delinquent if not received by the Tax
Administrator on or before the thirtieth(30th)day following the date of receipt of the notice
3 of final assessment. The penalty for delinquency shall be fifteen percent(15%)on the total
amount of the assessment, along with interest at the rate of 75/100ths (0.75%)percent per
4 month,or any fraction thereof,on the amount of the tax,exclusive of penalties, from the date
of delinquency,until paid.The applicable statute of limitations regarding a claim by the City
5 seeking payment of a tax assessed under this Chapter shall commence from the date of
delinquency as provided in this subsection E.
6
F. All notices under this section may be sent by regular mail, postage prepaid, and shall be
7 deemed received on the third calendar day following the date of mailing, as established by
a proof of mailing.
8
3.46.110 Administrative Remedy- Non-Paying Service Users.
9
A. Whenever the Tax Administrator determines that a service user has deliberately withheld the
10 amount of the tax owed by the service user from the amounts remitted to a person required
to collect the tax,or whenever the Tax Administrator deems it in the best interest of the City,
11 he or she may relieve such person of the obligation to collect the taxes due under this Chapter
from certain named service users for specific billing periods. To the extent the service user
12 has failed to pay the amount of tax owed for a period of two (2)or more billing periods,the
service supplier may,in the discretion of the Tax Administrator,be relieved of the obligation
13 to collect taxes due.The service supplier shall provide the City with the names and addresses
of such service users and the amounts of taxes owed under the provisions of this Chapter if
14 it is determined by the Tax Administrator to relieve the person required to collect the tax.
Nothing herein shall require that the Tax Administrator institute proceedings under this
15 Section 3.46.110 if, in the opinion of the Tax Administrator, the cost of collection or
enforcement likely outweighs the tax benefit.
16
B. In addition to the tax owed, the service user shall pay a delinquency penalty at the rate of
17 fifteen percent (15%) of the total tax that is owed, and shall pay interest at the rate of
75/100ths (0.75%) percent per month, or any fraction thereof, on the amount of the tax,
18 exclusive of penalties, from the due date, until paid.
19 C. The Tax Administrator shall notify the non-paying service user that the Tax Administrator
has assumed the responsibility to collect the taxes due for the stated periods and demand
20 payment of such taxes, including penalties and interest. The notice shall be served on the
service user by personal delivery or by deposit of the notice in the United States mail,
21 postage prepaid, 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 have a change of address,
22 to his or her last known address.
23 D. If the service user fails to remit the tax to the Tax Administrator within thirty(3 0)days from
the date of the service of the notice upon him or her, the Tax Administrator may impose an
24 additional penalty of fifteen percent (15%) of the amount of the total tax that is owed.
25 3.46.120 Additional Powers and Duties of the Tax Administrator.
26 A. The Tax Administrator shall have the power and duty,and is hereby directed,to enforce each
and all of the provisions of this Chapter.
27
B. The Tax Administrator may adopt administrative rules and regulations consistent with
28 provisions of this Chapter for the purpose of interpreting, clarifying, carrying out and
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionl.wpd Page 10
I enforcing the payment, collection and remittance of the taxes herein imposed. A copy of
such administrative rules and regulations shall be on file in the Tax Administrator's office.
2
C. Upon a proper showing of good cause, the Tax Administrator may make administrative
3 agreements approved by the City Attorney, with appropriate conditions, to vary from the
strict requirements of this Chapter and thereby: (1) conform to the billing procedures of a
4 particular service supplier so long as said agreements result in the collection of the tax in
conformance with the general purpose and scope of this Chapter; or, (2)to avoid a hardship
5 where the administrative costs of collection and remittance greatly outweigh the tax benefit.
6 D. The Tax Administrator may conduct an audit, to ensure proper compliance with the
requirements of this Chapter, of any person required to collect and/or remit a tax pursuant
7 to this Chapter. The Tax Administrator shall notify said person of the initiation of an audit
in writing. In the absence of fraud or other intentional misconduct,the audit period of review
8 shall not exceed a period of three (3)years next preceding the date of receipt of the written
notice by said person from the Tax Administrator. Upon completion of the audit, the Tax
9 Administrator may make a deficiency determination pursuant to Section 3.46.100 of this
Chapter for all taxes(and applicable penalties and interest)owed and not paid, as evidenced
10 by information provided by such person to the Tax Administrator. If said person is unable
or unwilling to provide sufficient records to enable the Tax Administrator to verify
I 1 compliance with this Chapter, the Tax Administrator is authorized to make a reasonable
estimate of the deficiency. Said reasonable estimate shall be entitled to a rebuttable
12 presumption of correctness.
13 E. Upon receipt of a written request of a taxpayer, and for good cause, the Tax Administrator
may extend the time for filing any statement required pursuant to this Chapter for a period
14 of not to exceed forty-five(45)days,provided that the time for filing the required statement
has not already passed when the request is received. No penalty for delinquent payment shall
15 accrue by reason of such extension. Interest shall accrue during said extension at the rate of
75/100ths (0.75%)percent per month, prorated for any portion thereof.
16
F. The Tax Administrator shall determine the eligibility of any person who asserts a right to
17 exemption from, or a refund of, the tax imposed by this Chapter.
18 G. Notwithstanding any provision in this Chapter to the contrary, the Tax Administrator with
the approval of the Mayor and Common Council may waive any penalty or interest imposed
19 upon a person required to collect and/or remit for failure to collect the tax imposed by this
Chapter if the non-collection occurred in good faith. In determining whether the
20 non-collection was in good faith,the Tax Administrator shall take into consideration industry
practice or other precedence.
21
3.46.130 Records.
22
A. It shall be the duty of every person required to collect and/or remit to the City any tax
23 imposed by this Chapter to keep and preserve, for a period of at least three (3) years, all
records as may be necessary to determine the amount of such tax as he/she may have been
24 liable for the collection of and remittance to the Tax Administrator, which records the Tax
25 Administrator shall have the right to inspect at a reasonable time.
B. The City may issue an administrative subpoena to compel a person to deliver, to the Tax
26 Administrator,copies of all records deemed necessary by the Tax Administrator to establish
compliance with this Chapter, including the delivery of records in a common electronic
27 format on readily available media if such records are kept electronically by the person in the
usual and ordinary course of business. As an alternative to delivering the subpoenaed
28 records to the Tax Administrator on or before the due date provided in the administrative
i FACALKINS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction Revision l.wpd Page l I
I subpoena, such person may provide access to such records outside the City on or before the
due date, provided that such person shall reimburse the City for all reasonable travel
2 expenses incurred by the City to inspect those records, including travel,lodging,meals,and
other similar expenses, but excluding the normal salary or hourly wages of those persons
3 designated by the City to conduct the inspection.
4 C. The Tax Administrator is authorized to execute a non-disclosure agreement approved by the
City Attorney to protect the confidentiality of customer information pursuant to California
5 Revenue and Taxation Code Sections 7284.6 and 7284.7.
6 D. If a service supplier uses a billing agent or billing aggregator to bill,collect,and/or remit the
tax, the service supplier shall: i) provide to the Tax Administrator the name, address and
7 telephone number of each billing agent and billing aggregator currently authorized by the
service supplier to bill, collect, and/or remit the tax to the City; and, ii)upon request of the
8 Tax Administrator, deliver, or effect the delivery of, any information or records in the
possession of such billing agent or billing aggregator that, in the opinion of the Tax
9 Administrator, is necessary to verify the proper application, calculation, collection and/or
remittance of such tax to the City .
10
E. If any person subject to record-keeping under this section unreasonably denies the Tax
I 1 Administrator access to such records, or fails to produce the information requested in an
administrative subpoena within the time specified,then the Tax Administrator may impose
12 a penalty of$500 on such person for each day following: i) the initial date that the person
refuses to provide such access;or,ii)the due date for production of records as set forth in the
13 administrative subpoena. This penalty shall be in addition to any other penalty imposed
under this Chapter.
14
3.46.140 Refunds.
15
Whenever the amount of any tax has been overpaid or paid more than once or has been
16 erroneously or illegally collected or received by the Tax Administrator under this Chapter from a
service user or service supplier, it may be refunded as provided in this section:
17
A. The Tax Administrator may refund any tax that has been overpaid or paid more than once
18 or has been erroneously or illegally collected or received by the Tax Administrator under this
Chapter from a service user or service supplier, provided that no refund shall be paid under
19 the provisions of this section unless the claimant or his or her guardian, conservator,
executor,or administrator has submitted a written claim to the Tax Administrator within one
20 year of the overpayment or erroneous or illegal collection of said tax. Such claim must
clearly establish claimant's right to the refund bywritten records showing entitlement thereto.
21 Nothing herein shall permit the filing of a claim on behalf of a class or group of taxpayers
unless each member of the class has submitted a written claim under penalty of perjury as
22 provided by this subsection.
23 B. The filing of a written claim pursuant to Government Code Section 935 is a prerequisite to
any suit thereon. Any action brought against the City pursuant to this section shall be subject
24 to the provisions of Government Code sections 945.6 and 946. The City Manager, or the
Mayor and Common Council where the claim is in excess of ten thousand dollars($10,000),
25 shall act upon the refund claim within the time period set forth in Government Code Section
912.4. If the City Manager/Mayor and Common Council fails or refuses to act on a refund
26 claim within the time prescribed by Government Code Section 912.4, the claim shall be
deemed to have been rejected by the City Manager/Mayor and Common Council on the last
27 day of the period within which the City Manager/Mayor and Common Council was required
to act upon the claim as provided in Government Code Section 912.4. The Risk Manager
28 shall give notice of the action in a form which substantially complies with that set forth in
FXALKNS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction Revisionl.,Apd Page 12
I Government Code Section 913.
2 C. Notwithstanding the notice provisions of subsection A of this section,a service supplier that
has collected any amount of tax in excess of the amount of tax imposed by this Chapter and
3 actually due from a service user (whether due to overpayment or erroneous or illegal
collection of said tax), may refund such amount to the service user, or credit to charges
4 subsequently payable by the service user to the service supplier, and claim credit for such
overpayment against the amount of tax which is due upon any other monthly returns to the
5 Tax Administrator, provided such credit is claimed in a return dated no later than one year
from the date of overpayment or erroneous or illegal collection of said tax,and provided that
6 the Tax Administrator shall first determine the validity of the service user's claim of credit
and the underlying basis for such claim.
7
D. Notwithstanding subsections A through C above, a service supplier shall be entitled to take
8 any overpayment as a credit against an underpayment whenever such overpayment has been
received by the City within the three(3)years next preceding a deficiency determination or
9 assessment by the Tax Administrator in connection with an audit instituted by the Tax
Administrator pursuant to Section 3.46.120D. A service supplier shall not be entitled to said
10 credit unless it clearly establishes the right to the credit by written records showing
entitlement thereto. Under no circumstances shall an overpayment taken as a credit against
11 an underpayment pursuant to this subsection qualify a service supplier for a refund to which
it would not otherwise be entitled under the one-year written claim requirement of this
12 section.
13 3.46.150 Appeals
14 A. The provisions of this section apply to any decision(other than a decision relating to a refund
pursuant to Section 3.46.140 of this Chapter), deficiency determination, assessment, or
15 administrative ruling of the Tax Administrator. Any person aggrieved by any decision(other
than a decision relating to a refund pursuant to Section 3.46.140 of this Chapter),deficiency
16 determination, assessment, or administrative ruling of the Tax Administrator, shall be
required to comply with the appeals procedure of this section. Compliance with this section
17 shall be a prerequisite to a suit thereon. Nothing herein shall permit the filing of a claim or
action on behalf of a class or group of taxpayers.
18
B. If any person is aggrieved by any decision(other than a decision relating to a refund pursuant
19 to Section 3.46.140 of this Chapter),deficiency determination,assessment,or administrative
ruling of the Tax Administrator; he or she may appeal to the City Manager by filing a notice
20 of appeal with the City Clerk within fourteen(14)days of the date of the decision,deficiency
determination, assessment,administrative ruling of the Tax Administrator which aggrieved
21 the service user or service supplier.
22 C. The matter shall be scheduled for hearing before an independent hearing officer selected by
the City Manager, no more than forty-five (45) days from the receipt of the appeal. The
23 appellant shall be served with notice of the time and place of the hearing, as well as any
relevant materials, at least five (5) calendar days prior to the hearing. The hearing may be
24 continued from time to time upon mutual consent. At the time of the hearing,the appealing
party, the Tax Administrator, and any other interested person may present such relevant
25 evidence as he or she may have relating to the determination from which the appeal is taken.
26 D. Based upon the submission of such evidence and the review of the City's files, the hearing
officer shall issue a written notice and order upholding, modifying or reversing the
27 determination from which the appeal is taken. The notice shall be given within fourteen(14)
days after the conclusion of the hearing and shall state the reasons for the decision. The
28 notice shall specify that the decision is final and that any petition for judicial review shall be
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction Revisionl.,xpd Page 13
] filed within ninety(90) days from the date of the decision in accordance with Code of Civil
Procedure Section 1094.6.
2
E. All notices under this section may be sent by regular mail, postage prepaid, and shall be
3 deemed received on the third calendar day following the date of mailing, as established by
a proof of mailing.
4
3.46.160 No Injunction/Writ of Mandate.
5
No injunction or writ of mandate or other legal or equitable process shall issue in any suit,
6 action, or proceeding in any court against this City or against any officer of the City to prevent or
enjoin the collection under this Chapter of any tax or any amount of tax required to be collected
7 and/or remitted.
8 3.46.170 Notice of Changes to Ordinance.
9 If a tax under this Chapter is added repealed,increased by voter approval,reduced,or the tax
base is changed, the Tax Administrator shall follow the notice requirements of California Public
10 Utilities Code Section 799.
11 3.46.180 Future Amendment to Cited Statute.
12 Unless specifically provided otherwise, any reference to a state or federal statute in this
Chapter shall mean such statute as it may be amended from time to time.
13
3.46.190 Independent Audit of Tax Collection, Exemption, Remittance, and Expenditure.
14
The City shall annually verify that the taxes owed under this Chapter have been properly
15 applied, exempted, collected, and remitted in accordance with this Chapter, and properly expended
according to applicable municipal law. The annual verification shall be performed by a qualified
16 independent third party and the review shall employ reasonable, cost-effective steps to assure
compliance, including the use of sampling audits. The verification shall not be required of tax
17 remitters where the cost of the verification may exceed the tax revenues to be reviewed.
18 3.46.200 No Increase in Tax Percentage or Change in Methodology Without Voter Approval.
19 A. Regarding Section 3.46.040 of this Chapter,the City may not increase the tax percentage or
change a methodology for calculating the tax so as to result in an increase in a tax imposed
20 on a person, without voter approval.
21 B. Notwithstanding subsection A,pursuant to Government Code Section 53750,the City may
make the following changes without voter approval:
22
(1) reduce the percentage rate, and at any time thereafter increase such percentage rate,
23 so long as the subsequent increase does not exceed the rate previously approved by
the voters in the enactment of this Chapter;
24
(2) change the methodology so as to reduce the amount of the tax being levied, and at
25 any time thereafter change the methodology, so long as the subsequent change in
methodology does not result in an increase in the amount being levied under the
26 methodology previously approved by the voters in the enactment of this Chapter;
1 27 (3) change a methodology or definition so as to avoid or eliminate a discriminatory tax
on taxpayers that are similarly situated, so long as the change does not result in an
28 increase in the amount levied on such class of similarly situated taxpayers under the
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionl.wpd Page 14
1 methodology or definition previously approved by the voters in the enactment of this
Chapter;
2
(4) establish a class of persons that is exempt or excepted from one or more taxes
3 hereunder, and at any time thereafter, discontinue such exemption or exception;
4 (5) decide that all or a part of a tax imposed under Section 3.46.040 of this Chapter
should not be enforced for administrative reasons, and at any time thereafter,decide
5 to enforce the full amount of such tax as previously approved by the voters in the
enactment of this Chapter;
6
(6) establish, and at any time thereafter change, the value and/or apportionment
7 (including a "safe harbor" percentage) of taxable and nontaxable services that are
bundled or packaged under a combined charge, in response to changes in the
8 marketing of combined services and the components thereof, or in reevaluating the
values thereof; or
9
(7) establish exemptions or lower rate percentages for industrial or economic
10 development zones or for classes of customers therein,establish rebate programs for
the purposes of encouraging economic development, and at any time thereafter,
11 discontinue such exemptions or lower rate percentages.
12 3.46.210 Remedies Cumulative.
13 All remedies and penalties prescribed by this Chapter or which are available under any other
provision of law or equity,including but not limited to the California False Claims Act(Government
14 Code Section 12650 et seq.)and the California Unfair Practices Act(Business and Professions Code
Section 17070 et seq.), are cumulative. The use of one or more remedies by the City shall not bar
15 the use of any other remedy for the purpose of enforcing the provisions of this Chapter.
16 3.46.220 Interaction with Prior Tax.
17 A. Collection of Tax by Service Providers. Service providers shall begin to collect the tax
imposed by this Chapter 3.46 as soon as feasible after the effective date of this Chapter,but
18 in no event later than permitted by Section 799 of the California Public Utilities Code.
19 B. Satisfaction of Tax Obligation by Service Users. Any person who pays the tax levied
pursuant to Section 3.46.040 of this Chapter with respect to any charge for a communication
20 service shall be deemed to have satisfied his or her obligation to pay the tax levied pursuant
to Sections 3.44.030 and 3.44.040 of this Code with respect to that charge. Likewise,prior
21 to August 1, 2008, any person who pays the tax levied pursuant to Sections 3.44.030 and
3.44.040 of this Code with respect to any charge for a service subject to taxation pursuant
22 to this Chapter shall be deemed to have satisfied his or her obligation to pay the tax levied
pursuant to Section 3.46.040 of this Chapter with respect to that charge. The intent of this
23 paragraph is to prevent the imposition of multiple taxes upon a single utility charge during
the transition period from the prior telephone and video users' tax to the new
24 communications users' tax (which transition period ends August 1, 2008) and to permit
communications service providers, during that transition period to satisfy their collection
25 obligations by collecting either tax.
26 3.46.230 Violation - Penalty.
27 Any person violating any provision of this Chapter is guilty of an infraction, which upon
conviction thereof is punishable in accordance with the provisions of Section 1.12.010 of this Code.
28
F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.ReductionRevisionLwpd Page 15
I SECTION 2. References to a 7.83 percent (7.83%) tax rate which appear at various
locations under Chapter 3.44 are hereby amended to state a tax rate of 7.75 percent (7 3/4%) as
2 follows:
3 A. The reference to ". . .7.83% percent (7.83%) . . ." appearing in the second sentence
of paragraph A of Section 3.44.050 (Electricity user's tax) is amended and replaced
4 with ". . . 7.75%percent (7.75%) . . ."
5 B. The reference to ". . .7.83% percent (7.83%) . . ." appearing in the second sentence
of paragraph A of Section 3.44.060(Gas user's tax)is amended and replaced with ".
6 . . 7.75 percent (7.75%) . . ."
7 SECTION 3. Effective Date. This chapter shall become effective immediately upon the
date that this Ordinance is confirmed and approved by the voters of the City of San Bernardino at
8 the City's Consolidated Special Municipal Election to be held on February 5, 2008.
9 SECTION 4. Severability. If any section, subsection, sentence, clause, phrase, or portion
of this Chapter is for any reason held to be invalid or unenforceable by a court of competent
10 jurisdiction,the remaining portions of this Chapter shall nonetheless remain in full force and effect.
The people hereby declare that they would have adopted each section, subsection, sentence,clause,
11 phrase,or portion of this Chapter,irrespective of the fact that any one or more sections,subsections,
sentences, clauses, phrases, or portions of this Chapter be declared invalid or unenforceable.
12
SECTION 5. Ratification of Prior Tax. The voters of the City of San Bernardino hereby
13 ratify and approve the past collection of the Service User's Tax under Chapter 3.44 of the Municipal
Code as it existed prior to the effective date of this Ordinance.
14
SECTION 6. Execution. The Mayor is hereby authorized to attest to the adoption of this
15 Ordinance by the voters of the City by signing where indicated below.
16
17
18
19
20
21
22
23
24
25 !!!
26
27
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F:\CALKINS\Ordinances\UUT-ServiceUsersTax.Ord.Reduction RevisionL"d Page 16
{ I AN ORDINANCE OF THE CITY OF SAN BERNARDINO ADDING CHAPTER 3.46
TO TITLE 3 OF THE SAN BERNARDINO MUNICIPAL CODE WITH RESPECT TO THE
2 SERVICE USER'S TAX REDUCTION AND MODERNIZATION ACT AND AMENDING
3 SECTIONS 3.44.050 AND 3.44.060 OF SAID CODE REDUCING THE ELECTRICITY
USERS TAX AND THE GAS USERS TAX.
4
5 I HEREBY CERTIFY that the foregoing Ordinance was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a meeting thereof, held on the
6
_day of , 2007, by the following vote, to wit:
7
COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT
8
ESTRADA
9
BAXTER
10
BRINK.ER
11
12 DERRY
KELLEY
13
JOHNSON
14
MC CAMMACK
15
16
17 Rachel Clark, City Clerk
18
19 The foregoing Ordinance is hereby approved this day of , 2007.
20
21 PATRICK J. MORRIS, Mayor
22 City of San Bernardino
23
24
Approved as to form:
25
.TAMES F. PENMAN
26 City Attorney
27
28
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