(a) Establishment of telecommunications users' tax. There is hereby imposed a tax upon every person in the City using telecommunication services. The tax imposed by this section shall be at the rate of 3.95% of the charges made for such services and shall be collected from the service user by the telecommunication services supplier or its billing agent. There is a rebuttable presumption that telecommunication services, which are billed to a billing or service address in the City, are used, in whole or in part, within the City's boundaries, and such services are subject to 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 the tax. As used in this section, the term “charges” shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the telecommunication services.
(b) Substantial nexus and minimum contacts. For purposes of imposing a tax or establishing a duty to collect and remit a tax under this section, “substantial nexus” and “minimum contacts” shall be construed broadly in favor of the imposition, collection and/or remittance of the tax to the fullest extent permitted by State and Federal law, and as it may change from time to time by judicial interpretation or by statutory enactment.
(c) Sourcing rules. Mobile telecommunications service shall be sourced in accordance with the sourcing rules set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124). The Tax Administrator may issue and disseminate to telecommunication service suppliers that are subject to the tax collection requirements of this chapter, sourcing rules for the taxation of other telecommunication services, including but not limited to post-paid telecommunication services, prepaid telecommunication services, and private tele- communication services, provided that such rules are based upon custom and common practice that further administrative efficiency and minimize multi- jurisdictional taxation.
(d) Authority for administrative rulings. The Tax Administrator may, from time to time, issue and disseminate to telecommunication service suppliers that are subject to the tax collection requirements of this section an administrative ruling identifying those communication services that are subject to the tax of subsection (a) above. This administrative ruling shall be consistent with legal nexus rules, regulations, and laws pertaining to telecommunication services. To the extent that the Tax Administrator determines that the tax imposed under this section shall not be collected in full for any period of time, such a determination falls within the Tax Administrator's discretion to settle disputes. The Tax Administrator's exercise of forbearance under this subsection does not constitute a change in taxing methodology for purposes of Government Code Section 53750, and the City does not waive or abrogate its ability to impose the telecommunication users' tax in full.
(e) Specific inclusions in telecommunication services. As used in this section, the term “telecommunication services” shall include, but are not limited to, charges for the following: connection, reconnection, termination, movement, or change of telecommunication services; late payment fees; detailed billing; central office and custom calling features (including but not limited to call waiting, call forwarding, caller identification 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 charges; local number portability charges; and text and instant messaging.
(f) Specific exclusions from telecommunications services. As used in this section, the term “telecommunication services” shall not include digital downloads that are not “ancillary telecommunication services,” such as music, ringtones, games, and similar digital products. Telecommunication services shall not include telecommunication services that are dedicated to or used exclusively for internet access.
(g) Exemptions. The following shall be exempt from the tax imposed by this section:
(1) State and local governments. Charges for services or facilities furnished to the government of any state, or any political subdivision thereof, or the District of Columbia.
(2) Installation. The installation of any instrument, wire, pole, switchboard, apparatus or equipment as is properly attributable to such installation.
(h) Multi-jurisdictional taxation. To prevent actual multi-jurisdictional taxation of tele- communication services subject to tax under this section, any service user, upon proof to the Tax Administrator that the service user has previously paid the same tax in another state or local jurisdiction on such telecommunication services, shall be allowed a credit against the tax imposed to the extent of the amount of such tax legally imposed in such other state or local jurisdiction; provided, however, the amount of credit shall not exceed the tax owed to the City under this section.
(i) Collection of telecommunication users' tax. The telecommunication users' tax imposed by this section shall be collected from the service user by the service supplier. The amount of tax collected in one month shall be remitted to the Tax Administrator, and must be received by the Tax Administrator on or before the twentieth day of the following month.
(Ord. 177, passed 11-6-2018)