Chapter 3.16 UTILITY USERS TAX

The taxes imposed and levied by the provisions of this chapter are solely for the purpose of providing revenue for the usual and current expenses of the city. The provisions of this chapter are not enacted for regulatory purposes. (Prior code § 6618)

3.16.030 Definitions.

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

A. “City” means the city of San Luis Obispo.

B. “Month” means a calendar month.

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

D. “Service supplier” means a telephone, electrical, gas, water or cable television corporation required to collect and remit a tax imposed by this chapter, and shall include the city’s water department.

E. “Service user” means a person required to pay a tax imposed by this chapter.

F. “Tax administrator” means the director of finance of the city of San Luis Obispo.

G. “Telephone corporation,” “electrical corporation,” “gas corporation,” “water corporation” and “cable television corporation” shall have the same meanings as defined in Sections 234, 218, 222, 241 and 215.5, respectively, of the Public Utilities Code of the state, as the sections existed March 4, 1972, and shall include governmental agencies or entities. (Prior code § 6601)

3.16.040 Exemptions.

Nothing in this chapter shall be construed as imposing a tax upon (1) the city, or (2) any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the state of California, or (3) the state, any county, municipal corporation, city and county, district or any political subdivision of the state. (Prior code § 6602)

3.16.050 Telephone users tax.

A. There is imposed a tax upon every person, other than a telephone corporation, using intrastate 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 such charges.

B. As used in this section, the term “charges” shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated 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 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, 1970.

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 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 1, 1972, without regard to subsection (b) thereof. (Prior code § 6603)

3.16.060 Electricity users tax.

A. There is imposed a tax upon every person, other than an electrical corporation or a gas corporation, using electrical energy in the city. The tax imposed by this section shall be at the rate of five percent of the charge made for such energy and shall be paid by the person paying such charges. “Charges,” as used in this section, includes 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.

B. As used in this section, the term “using electrical energy” shall not be construed to mean the storage of such energy by a person in a battery owned or possessed by him or her for use in an automobile or other machinery or device apart from the premises upon which the energy was received; provided, however, that the term includes 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 or governmental agency at a point within the city for resale. (Prior code § 6604)

3.16.070 Gas users tax.

A. There is imposed a tax upon every person, other than a gas corporation or an electrical corporation, using gas in the city 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 such gas and shall be paid by the person paying such charges.

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;

3. Charges for gas used in water pumping by water corporations; and

4. Charges made for gas utilized to propel motor vehicles. (Prior code § 6605)

3.16.080 Water users tax.

A. There is imposed a tax upon every person using water in the city 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 such water and shall be paid by the person paying such charges.

B. “Charges” as used in this section, includes minimum charges for service, including customer charges, service charges, standby charges, and annual and monthly charges.

C. There shall be excluded from the base on which the tax imposed in this section is computed charges made for water which is to be resold and delivered through mains or pipes and charges made for water used in the generation of electrical energy by an electrical corporation. (Prior code § 6606)

3.16.090 Cable television users tax.

There is imposed a tax upon every person using cable television service in the city. 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 such charges. (Prior code § 6607)

3.16.100 Operative date.

The utility users taxes provided for herein shall be operative from and after January 1, 1973, or at the beginning of the first regular billing period for each service user after January 1, 1973, whichever is later. (Prior code § 6608)

3.16.110 Collections.

A. Every service supplier receiving payment of charges from a service user shall collect the amount of tax imposed by this chapter from the service user.

B. The tax shall be collected insofar as practicable at the same time as and along with the collection of charges made in accordance with the regular billing practice of the service supplier. If the amount paid by a service user is less than the full amount of the charge and tax which has accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid.

C. The duty to collect the tax from service users shall commence upon the operative date of the tax as set forth in Section 3.16.100.

D. 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 code 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. The service supplier shall notify the city in writing of its intent to issue the refund and estimated amounts thereof prior to the refund date. In the event this code is repealed, the amounts of any refundable taxes will be borne by the city. (Ord. 1049 § 1, 1985: prior code § 6609)

3.16.120 Reporting and remitting.

Each service supplier shall, on or before the last day of each month, make a return to the tax administrator, on forms provided by him or her, stating the amount of taxes billed by the service supplier during the preceding month. At the time the return is filed, the full amount of the tax collected shall be remitted to the tax administrator. The tax administrator is authorized to require such further information as he or she reasonably deems necessary to determine if the tax imposed by this chapter is being levied and collected in accordance with this chapter. Returns and remittances are due immediately upon cessation of business for any reason. (Prior code § 6609.1)

3.16.130 Administrative agreements.

The tax administrator may make administrative agreements to vary the strict requirements of this chapter so that collection and remittance of any tax imposed by this chapter may be made in conformance with the billing procedures of a particular service supplier so long as the overall result of the agreements result in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of each such agreement shall be on file and available for public examination in the tax administrator’s office. (Prior code § 6609.2)

3.16.140 Interest and penalties.

A. Taxes collected from a service user by a service supplier which are not remitted to the tax administrator on or before the due date are delinquent.

B. Interest and penalties for delinquency in remittance of any tax collected shall be assessed as follows:

1. Any service supplier who fails to remit any tax imposed by this chapter within ten days after receipt of written notice from the city of such failure shall pay a penalty of ten percent of the amount of the tax.

2. If the tax administrator determines that the nonpayment of any remittance due is due to fraud, wilfulness or inexcusable neglect, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalty stated in subdivision l of this subsection.

3. In addition to the penalties imposed in this subsection, any service supplier who fails to timely remit any tax imposed by this chapter, shall pay interest at the rate of one-half of one percent per month, or fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

4. Every penalty imposed upon a service supplier, and such interest as accrues, under the provisions of this subsection shall become a part of the tax required to be remitted. (Prior code § 6609.3)

3.16.150 Actions to collect.

Any tax required to be paid by a service user under the provisions of this chapter shall be deemed a debt owed by the service user to the city. Any such tax collected from a service user which has not been remitted to the tax administrator shall be deemed a debt owed to the city by the service supplier. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. (Prior code § 6610)

3.16.160 Refusal of service supplier to collect and report tax—Determination of tax by tax administrator.

If any service supplier shall refuse to make within the time provided in this chapter any report and remittance of the tax or any portion thereof required by this chapter, the tax administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as he or she procures such facts and information he or she shall estimate the tax and shall assess against such service supplier the tax, interest and penalties provided for by this chapter. The tax administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the service supplier so assessed at his or her last known place of address. Such service supplier may within ten days after the serving or mailing of such notice, make application in writing to the tax administrator for a hearing on the amount assessed. If application by the service supplier for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the tax administrator shall become final and conclusive and immediately due and payable. If such application is made, the tax administrator shall give not less than five days written notice in the manner prescribed in this section to the service supplier to show cause at a time and place fixed in the notice why the amount specified therein should not be fixed for such tax, interest and penalties. At such hearing, the service supplier may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing, the tax administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the service supplier in the manner prescribed in this section of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen days unless an appeal is taken as provided in Section 3.16.180. (Prior code § 66 l I)

3.16.170 Nonpayment tax by service user—Administrative remedy.

A. Whenever the tax administrator believes that a service user has deliberately failed to pay the amount of any users tax imposed by this chapter, he or she may relieve the service supplier of the obligation to collect the tax from the service user for specified billing periods; provided, that if a service user has failed to pay the amount of the tax to a service supplier for a period of four consecutive billing periods, the tax administrator shall relieve such service supplier of the obligation to collect the tax from the service user for the billing periods.

B. The tax administrator shall notify the service user that he or she has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes. The notice shall be served on the service user by handing it to him or her personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the service supplier, or, should the service user have changed his or her address, to his or her last known address. If a service user fails to remit the tax to the tax administrator within fifteen days from the date of the service upon him or her, which shall be the date of mailing if service is not accomplished in person, a penalty of ten percent of the amount of the tax set forth in the notice shall be imposed, but not less than ten dollars, and shall become part of the tax required by this chapter to be paid. (Prior code § 6612)

3.16.180 Appeal.

Any person aggrieved by any decision of the tax administrator may appeal to the city council by filing a notice of appeal with the city clerk and the tax administrator within fifteen days of the service or mailing of the decision. The council shall fix a time and place for hearing such appeal, and the city clerk shall give notice in writing to such person at his or her last known place of address. Any amount found by the council to be owed by the service user shall be due and payable in full at once. (Prior code § 6613)

3.16.190 Recordkeeping.

It shall be the duty of every service supplier required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as such service supplier may have been required to collect and remit to the city, which records the tax administrator shall have the right to inspect at all reasonable times. (Prior code § 6614)

3.16.200 Refunds—Overpayments.

A. Filing Claim. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in subsections B and C of this section, provided a claim in writing therefor, stating under penally of perjury the specific grounds upon which the claim is founded, is filed with the tax administrator within three years of the date of payment. The claim shall be on forms furnished by the tax administrator.

B. Refund to Service Supplier. A service supplier may claim a refund or take as credit against taxes collected and remitted an amount overpaid, paid more than once, or erroneously or illegally collected or received, when it is established that the service user from whom the tax has been collected did not owe the tax; provided, however, that no such refund or a credit shall be allowed unless the amount of the tax so collected has either been refunded to the service user or credited to charges subsequently payable by him or her.

C. Refund to Service User. Any service user may obtain a refund of taxes overpaid, or paid more than once, or erroneously or illegally collected or received by the city, by filing a claim in the manner provided in subsection A of this section, but only when service user having paid the tax to the service supplier establishes to the satisfaction of the tax administrator that the service user has been unable to obtain a refund from the service supplier who collected the tax.

D. Proof Required. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records showing entitlement thereto. (Prior code § 6615)

3.16.210 Refunds—Low-income retirement homes.

A. If a billing for utility services includes charges for two or more households situated within nonprofit retirement facilities (1) which are operated solely for the accommodation of persons with low incomes and (2) which qualify for the welfare exemption set forth in the California Revenue and Taxation Code, and if the charges for such se, vices are paid by the operators of the retirement facilities, the operators shall be entitled to an annual refund of all taxes paid under the provisions of this chapter.

B. The procedure for obtaining such refunds shall be established by the tax administrator in substantial conformance with the applicable provisions of Prior Code Section 6616. The tax administrator may require whatever proof he or she deems necessary to establish an operator’s qualifications for a refund, and he or she shall deny a refund if such qualifications are not established to his or her satisfaction.

C. Nothing in this section shall be construed to prohibit persons residing in the retirement facilities from obtaining a refund under the provisions of Prior Code Section 6616 for utility services which are billed through separate billings applicable only to the household in which such person resides, the charges for which are paid by such person. (Prior code § 6616.1)

3.16.220 California Public Utilities Commission jurisdiction.

Nothing contained in this chapter is intended to conflict with applicable rules, regulations and tariffs of any service supplier subject to the jurisdiction of the California Public Utilities Commission. In the event of any conflict, the provisions of the rules, regulations and tariffs shall control. (Prior code § 6617)