CHAPTER 34B
UTILITY TAX

Sections:

34B.1    Purpose.

34B.2    Definitions.

34B.3    Exemptions and procedures for exemptions.

34B.4    Telephone users tax.

34B.4-1    Cellular telephone users tax.

34B.5    Electricity users tax.

34B.6    Gas users tax.

34B.7    Water users tax.

34B.8    Cable television users tax.

34B.9    Interest and penalty.

34B.10    Actions to collect.

34B.11    Duty to collect—Procedures.

34B.12    Additional powers and duties of tax administrator.

34B.13    Assessment—Administrative remedy.

34B.14    Records.

34B.15    Severability.

34B.16    Effective date.

34B.17    Report and review.

34B.18    Tax rate.

34B.1 Purpose.

In order to meet the financial concerns of the city and to pay for its usual and current expenses in each fiscal year hereafter, a utility tax, as follows, is imposed. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.2 Definitions.

The following words and phrases whenever used in this chapter shall be construed as defined in this section.

(a)    “City” means the city of South Pasadena.

(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 or individuals.

(d)    “Service supplier” means a utility company which receives taxes paid and remits same as imposed by this chapter.

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

(f)    “State” means the state of California.

(g)    “Tax administrator” means the finance director of the city.

(h)    “Telephone corporation,” “electrical corporation,” “gas corporation” and “water corporation” shall have the same meanings as defined in Sections 234, 218, 222 and 241, respectively, of the Public Utilities Code of the state except, “electrical corporation,” “gas corporation” and “water corporation” shall also be construed to include any municipality or franchised agency engaged in selling or supplying of electrical power, gas or water to a service user. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.3 Exemptions and procedures for exemptions.

(a)    Nothing in this chapter shall be construed as imposing a tax upon 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, such as public schools and exempted churches and religious organizations.

(b)    There is exempted from the tax imposed by this chapter, all service users who have an income, adjusted for family size, at or below eighty percent of the area median income as determined under the Section 8, Income Limits for Los Angeles County, as published by the U.S. Department of Housing and Urban Development and applicable to the Community Development Block Grant Programs.

(c)    There is exempted from the tax imposed by this chapter, all service users who are veterans who have a one hundred percent disability as verified by the Veterans Administration.

(d)    The city council reserves the power to, by order or resolution, establish other classes of persons or classes of utility service otherwise subject to payment of a tax imposed by this chapter and provide that such classes or persons or service shall be exempt, in whole or in part, from such tax.

(e)    The tax administrator shall prepare a list of the persons exempt from the provisions of this chapter by virtue of this section and furnish a copy thereof to each service supplier.

(f)    The tax administrator shall adopt rules and regulations not inconsistent with the provisions of this chapter to carry out any grant of exemption authorized by the city council pursuant to this section. The tax administrator shall require such information as necessary, including, but not limited to, personal identification and verified federal and state income tax returns, to qualify a service user for such exemption.

(g)    This exemption shall not apply retroactively. Service users shall only be entitled to an exemption after filing the required information and the receipt of notification of exemption from the tax administrator. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.4 Telephone users tax.

(a)    There is imposed a tax on the amounts paid for any intrastate telephone services by every person in the city using such services. The tax imposed by this section shall be at the rate of eight percent of the charges made for such services and shall be paid by the person paying for such services. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent.

(b)    As used in this section, the term “charges” does not include charges for services paid for by inserting coins in coin-operated telephones, except that where such coin-operated 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 does the term “charges” include charges for any type of service or equipment furnished by a service supplied subject to public utility regulation during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulations. The term “telephone communication services” refers to that service which provides access to a telephone system and the privilege of telephone-quality communication with substantially all persons having telephone stations which are part of such telephone system. The telephone users tax is intended to, and does, apply to the charges billed to a telephone account having situs in the city, irrespective of whether a particular communication service originates and/or terminates within the city.

(c)    The tax imposed by this section shall be collected from the service user by the person providing the intrastate telephone communications services, or the person receiving payment for such services. The amount of the tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month. (Ord. No. 2007, § 1; Ord. No. 2020, §§ 1, 2; Ord. No. 2024, § 1; Ord. No. 2044, § 1; Ord. No. 2152 § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 1, 2007; Ord. No. 2224, § 1, 2011.)

34B.4-1 Cellular telephone users tax.

(a)    There is imposed a tax on the amounts paid for any cellular telephone communication services by every person who has the billing address for such services in the city. The tax imposed by this section shall be at the rate of eight percent of the total charges made for such services, including, but not limited to, access and basic monthly charges, and shall be paid by the person paying for such services. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent.

(b)    As used in this section, the term “charges” does not include charges for services paid for by inserting coins in coin-operated cellular telephones except that where such coin-operated 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 does the term “charges” include charges for any type of service or equipment furnished by a service supplied subject to public utility regulation during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to public utility regulations. The term “cellular telephone communication services” refers to that service which, by means of portable or fixed cellular radio telephones, provides access to a telephone system and the privilege of telephone-quality communication with substantially all persons having telephone stations which are part of such telephone systems. The term “cellular telephone communication services” also includes aeronautical mobile service, land mobile service, maritime mobile service, and mobile-satellite services, as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as it existed on October 1, 1992. The cellular telephone users tax is intended to, and does, apply to all charges billed to a cellular telephone account having a billing address in the city, irrespective of whether a particular communication service originates and/or terminates within the city.

(c)    The tax imposed by this section shall be collected from the service user by the person providing the cellular telephone communications services, or the person receiving payment for such services. The amount of the tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month.

(d)    Notwithstanding the provisions of subsection (a) of this section, the tax imposed under this section shall not apply to any prohibited charges for access to local emergency telephone services under California Public Utilities Code Section 2892.

(e)    To prevent actual multiple taxation of any service that is subject to tax under subsection (a) of this section and which consists of a call that originates or terminates outside the city of South Pasadena, any service user, upon proof that such service user has paid a tax in another taxing jurisdiction on such call, shall be allowed a credit against the tax imposed in subsection (a) of this section to the extent of the amount of such tax properly due and paid in such other taxing jurisdiction. However, no credit may be allowed for any tax paid to another taxing jurisdiction on any call to the extent that such call may not, under the Constitution and statutes of the United States, be made the subject of taxation by such other taxing jurisdiction. (Ord. No. 2020, § 3; Ord. No. 2024, §§ 2—4; Ord. No. 2044, § 1; Ord. No. 2152, § 2; Ord. 2156, § 1, 2007; Ord. No. 2164, § 2, 2007; Ord. No. 2224, § 2, 2011.)

34B.5 Electricity users tax.

(a)    There is imposed a tax upon every person in the city using electrical energy in the city. The tax imposed by this section shall be at the rate of eight percent of charges made for such energy and shall be paid by the person paying for such energy. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent. “Charges,” as used in this section, include charges made for:

(1)    Metered energy; and

(2)    Minimum charges for service, including customer charges, service charges, demand charges, standby charges and annual and monthly charges, fuel costs adjustments, etc.

(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 shall include the receiving of such energy for the purpose of using it in the charging of batteries; nor shall the term include electricity used and consumed by an electric public utility; nor shall the term include the mere receiving of such energy by an electric public utility or governmental agency at a point within the city for resale; or the use of such energy in the production or distribution of water by a public utility or a governmental agency.

(c)    The tax imposed in this section shall be collected from the service user by the person supplying such energy. The amount of tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month. Remittance of tax may be predicated on a formula based upon the payment pattern of the supplier’s customers. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 3, 2007; Ord. No. 2224, § 3, 2011.)

34B.6 Gas users tax.

(a)    There is imposed a tax upon every person in the city, other than a gas corporation or electrical corporation, using in the city gas which is delivered through mains and pipes. The tax imposed by this section shall be at the rate of eight percent of the charges made for such gas and shall be paid by the person paying for such gas. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent. “Charges” as used in this section shall include:

(1)    Gas which is delivered through mains and pipes; and

(2)    Minimum charges for such services, including customer charges, service charges and annual and monthly charges.

(b)    There shall be excluded from the base on which the tax imposed in this section is computed the following:

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

(2)    Charges made for and sold for use in the generation of electrical energy or for the production or distribution of water by a public utility or governmental agency;

(3)    Charges made by a gas utility for gas used and consumed in the conduct of the business of gas public utilities;

(4)    Charges made for gas used in the propulsion of motor vehicles, as that phrase is defined in the Vehicle Code of the state, utilizing natural gas; and

(5)    Charges related to late payments and returned checks.

(c)    The tax imposed by this section shall be collected from the service user by the person selling the gas. The person selling the gas shall, on or before the twentieth day of each calendar month, commencing on the twentieth day of the calendar month after the effective date of this part, make a return to the tax administrator stating the amount of taxes billed during the preceding calendar month. At the time such returns are filed, the person selling the gas shall remit tax payments to the tax administrator in accordance with the schedules established or approved by the tax administrator. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 4, 2007; Ord. no. 2224, § 4, 2011.)

34B.7 Water users tax.

(a)    There is imposed a tax upon every person in the city using water which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of eight percent of charges made for such water and shall be paid by the person paying for such water. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent. “Charges” as used in this section shall include:

(1)    Water which is delivered through mains or pipes; and

(2)    Minimum charges for service, including customer charges, service charges, demand charges, standby charges and all other annual and monthly charges.

(b)    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 by a municipal water department, public utility or a county or municipal water district for water used and consumed by such department, utility or district.

(c)    The tax imposed in this section shall be collected from the service user by the person supplying the water. The amount collected in one month shall be remitted to the tax administrator on or before the last day of following month. (Ord. No. 2007, § 1; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 5, 2007; Ord. No. 2224, § 5, 2011.)

34B.8 Cable television users tax.

(a)    There is imposed a tax upon every person in the city using cable television service in the city. The tax imposed by this section shall be at the rate of eight percent of the total charges made for such service, and shall be paid by the person paying for such service. On July 1, 2012, the aforementioned tax rate shall be reduced from eight percent to seven and one-half percent.

(b)    As used in this section, the term “charges” includes, but is not limited to, charges for installation and programming, whether the programming is a cable transmission of broadcast channels, transmission of cable-only programming, or “pay-per-view” programming.

(c)    The tax imposed by this section shall be collected from the service user by the person providing the cable television service, or the person receiving payment for such services. The amount of the tax collected in one month shall be remitted to the tax administrator on or before the last day of the following month. (Ord. No. 2020, § 5; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 6, 2007; Ord. No. 2224, § 6, 2011.)

34B.9 Interest and penalty.

(a)    Taxes collected from the service user which are not remitted to the tax administrator on or before the dates provided in this chapter are delinquent.

(b)    Interest and penalty shall accrue on delinquent accounts at the then maximum legal rate; nonpayment when due shall constitute a misdemeanor enforceable under the provisions of the city municipal code. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.10 Actions to collect.

Any such tax received from a service user which has wilfully been withheld from the tax administrator shall be deemed a debt to the city by the person required to collect and remit. Any person holding such money contrary to the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount, including, but not limited to, the award by a competent court of attorneys’ fees and court costs. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.11 Duty to collect—Procedures.

The duty to collect and remit the taxes imposed by this chapter shall be performed as follows: Notwithstanding the provisions of section 34B.6(c) of this chapter, the tax shall be collected insofar as practicable at the time and along with the charges made in accordance with the regular billing practices of the service supplier. Where the amount paid by a service user to a service supplier is less than the full amount of the charge and tax which has accrued for the billing period, such amount and any subsequent payments by a service user may be applied to the energy charge first until such charge has been fully satisfied. Any remaining balance shall be applied to the taxes due, except in those cases where a service user pays the full amount of the charges but notifies the service supplier of his or her refusal to pay the tax imposed on the charges (see section 34B.12(c) of this chapter). (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.12 Additional powers and duties of tax administrator.

(a)    The tax administrator shall have the power and duty, and is directed to enforce each and all of the provisions of this chapter.

(b)    The tax administrator shall have the power to adopt rules and regulations not inconsistent with the provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes imposed by this chapter. A copy of such rules and regulations shall be on file in the office of the tax administrator and available to the public during regular business hours.

(c)    The tax administrator may make administrative agreements to vary the strict requirements of this chapter so that collection of any tax imposed here may be made in conformance with the billing procedures of a particular service supplier so long as 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 in the tax administrator’s office.

(d)    The tax administrator shall determine the eligibility of any person who asserts a right to exemption from the tax imposed by this chapter. The tax administrator shall provide the service supplier with the name of any person who the tax administrator determines is exempt from the tax imposed by this chapter, together with the address and account number in which service is supplied to any such exempt person. The tax administrator shall notify the service supplier of the termination of any person’s right to exemption under this chapter, or the change of any address to which service is supplied to any exempt person. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.13 Assessment—Administrative remedy.

(a)    The tax administrator may make any assessment for taxes remitted by a person required to remit.

(b)    Whenever the tax administrator determines that a service user has deliberately withheld the amount of the tax owed by him or her from the amounts remitted to a person required to collect the tax, or that a service user has refused to pay the amount of tax to such person, or whenever the tax administrator deems it in the best interest of the city, the tax administrator may relieve such person of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods.

(c)    The service supplier shall provide the city with the amounts refused along with the names, addresses and reasons of the service user’s refusing to pay the tax imposed under the provisions of this chapter. Whenever the service user has failed to pay the amount of the tax for a period of two or more billing periods, the service supplier shall be relieved of the obligation to collect taxes due.

(d)    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 person required to collect the tax; or, should the service user have changed address, to the last known address. If a service user fails to remit the tax to the tax administrator within fifteen days from the date of service of the notice, which shall be the date of the mailing if service is not accomplished in person, a penalty of twenty-five percent of the amount of the tax set forth in the notice shall be imposed, but not less than five dollars. The penalty shall become part of the tax required to be paid. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.14 Records.

(a)    Whenever the amount of any tax has been overpaid or paid more than once or has been erroneously or illegally collected or received by the tax administrator under this chapter, it may be refunded as provided in this section.

(b)    Notwithstanding the provisions of subsection (a) of this section, a service supplier may claim a refund or take as credit against taxes collected and remitted, the 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 neither a refund nor 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 the service user to the person required to collect and remit. A service supplier that has collected any amount of tax in excess of the amount of tax imposed by this chapter and actually due from a service user, may refund such amount to the service user and claim a credit for such overpayment against the amount of tax which is due upon any other monthly returns; provided, such credit is claimed in a return dated no later than three years from the date of overpayment.

(c)    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.

(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 chapter on the amount of such refund charges shall also be refunded to the 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. In the event this chapter is repealed, the amounts of any refundable taxes will be borne by the city. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.15 Severability.

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter or any part thereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter or part thereof. The city council declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one of more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2156, § 1, 2007.)

34B.16 Effective date.

The eight percent utility user’s tax levied by this chapter shall remain in effect from February 1, 2008 until June 30, 2012. On July 1, 2012, the rate shall be reduced to seven and one-half percent until June 30, 2022 unless the rate of seven and one-half percent is extended by a majority of qualified electors voting at the regularly scheduled city of South Pasadena general municipal election which occurs before and closest in time to June 30, 2022. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1; Ord. No. 2104, § 1; Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 7, 2007; Ord. No. 2224, § 7, 2011.)

34B.17 Report and review.

After the effective date of this chapter and prior to the adoption by the city council of the budget of the city for each next succeeding fiscal year, the tax administrator shall annually provide a report to the city council of the revenues generated by the taxes imposed under this chapter. The city council shall review such annual report in light of the proposed budget and the limitation on the city’s revenues as provided under Article XIIIB of the California Constitution and Government Code Section 7910 (the Gann limits) to determine the necessity for continuance of such taxes to meet the usual and current expenses of the city. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1(part); Ord. No. 2156, § 1, 2007.)

34B.18 Tax rate.

In no event shall the amount of the tax rate to be levied under this chapter exceed eight percent until June 30, 2012, and seven and one-half percent after July 1, 2012, without the approval of a majority vote of the electors of the city voting upon such change at a municipal election called for such purpose in accordance with applicable law. (Ord. No. 2007, § 1; Ord. No. 2020, § 4; Ord. No. 2044, § 1(part); Ord. No. 2156, § 1, 2007; Ord. No. 2164, § 8, 2007; Ord. No. 2224, § 8, 2011.)