Skip to code content (skip section selection)
A. There is hereby imposed a tax upon every person who uses communication services in the city, including intrastate, interstate (including calls to the District of Columbia), and international communication services, to the extent permitted by state and federal law. The tax imposed by this section shall be at the rate of eleven percent (11%) of the charges made for such communication services, and shall be collected from the service user by the service supplier or its billing agent to the extent allowed by law, the tax on communication services shall apply to a service user if the billing or service address of the service user is within the city’s boundaries.
B. Except as otherwise provided herein, COMMUNICATION SERVICES shall include all COMMUNICATION SERVICES for which there is a charge, regardless of the means or technology used to provide such services. The tax imposed under subsection A. above shall not be imposed upon any person for using the following communication services:
1. Except with respect to local telephone service, services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press or by means of radio broadcasting, if the charge for such service is billed in writing to such person.
2. Services furnished to a public international organization in which the United States participates pursuant to treaty or Act of Congress, or to the American National Red Cross.
3. Any toll telephone service that originates within a combat zone and is from a member of the Armed Forces of the United States performing service in such combat zone; provided a certificate, setting forth such facts as the Secretary of the United States Treasury may by regulations prescribe, is furnished to the person receiving such payment.
4. No tax shall be imposed under this section on the amount paid for any communications services, to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business.
5. The installation of any instrument, wire, pole, switchboard, apparatus or equipment as is properly attributable to such installation.
6. Amounts paid by a nonprofit hospital for services furnished to such organization. For purposes of this exemption, the term NONPROFIT HOSPITAL means a hospital referred to in Section 170(b)(1)(A)(iii) of the Internal Revenue Code, which is exempt from federal income tax under Section 501 (a) of the Internal Revenue Code.
7. Services or facilities furnished to the government of any state, or any political subdivision thereof.
8. Services or facilities paid for by a nonprofit educational organization and furnished to such organization. For purposes of this subsection, the term NONPROFIT EDUCATIONAL ORGANIZATION means an educational organization described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code, which is exempt from income tax under Section 501(a) of the same code. The term also includes a school operated as an activity of an organization described in Section 501(c)(3) of the Internal Revenue Code, which is exempt from income tax under Section 501(a) of the same code, if such school normally maintains a regular faculty and curriculum, and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on.
9. Items otherwise taxed. Only one payment of tax under this section shall be required with respect to the tax on any service.
C. 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 communication services.
D. Charges for video services that are taxable under this section include, but are not limited to, charges for the following:
1. Franchise fees and access fees (PEG), whether designated on the customer's bill or not;
2 Initial installation of equipment necessary for provision and receipt of video services;
3. All programming services (e.g., basic services, premium services, audio services, video games, pay-per-view services, and electronic program guide services);
4. Equipment leases (e.g., converters, remote devices);
5. Service calls, service protection plans, name changes, changes of service, and special services (e.g., no promotional mail); and
6. The leasing of channel access (e.g., home shopping) to the extent that the service user is subject to an additional direct or indirect charge for programming or communications over the leased channel; provided that, in the absence of evidence of direct payment by the service user, the indirect payment of the service user(s), which is subject to the utility users’ tax, shall be deemed to be the lease payment to the video service supplier by the party leasing the channel access.
E. The Tax Administrator shall, from time to time, survey the video service suppliers in the city to identify the various components of the video service that are being offered to customers within the city, and the charges therefor. The Tax Administrator may, thereafter, issue and disseminate to such video service suppliers an administrative ruling identifying those components: i) that are necessary or common to the receipt, use and enjoyment of video services; or ii) that currently are, or historically have been, included in a bundled rate for video service by a local distribution company. Charges for such components shall be subject to the tax of subsection A. above.
F. To prevent actual multi-jurisdictional taxation of communication services subject to tax under this section, any service user, upon proof to the Tax Administrator that the service user owed and has previously paid the same tax in another state or city on such communication 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 city; provided, however, the amount of credit shall not exceed the tax owed to the city under this section.
G. For purposes of imposing a tax or establishing a duty to collect and remit a tax under this subchapter, "substantial nexus" and "minimum contacts" shall be construed broadly in favor of the imposition, collection and/or remittance of the utility users’ 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. Any communication services used by a person with a service address in the city, shall be subject to a rebuttable presumption that "substantial nexus/minimum contacts" exists for purposes of imposing a tax, or establishing a duty to collect and remit a tax, under this section. For communication services for which there is no billing address or primary physical location for the provision of services, the service address shall mean the point of sale of the services.
H. The tax on communication services imposed by this section shall be collected from the service user by the service supplier. In the case of video services, the service user shall be deemed to be the purchaser of the bulk video services (e.g., an apartment owner), unless such services are resold to individual users, in which case the service user shall be the ultimate purchaser of the video services. 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. If a service supplier of communication services 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 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 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 Administrator, is necessary to verify the proper application, calculation, collection and/or remittance of such tax to the city.
I. The Tax Administrator may, from time to time, issue and disseminate to service suppliers 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 communication 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 prosecutorial forbearance under this subchapter does not constitute a change in taxing methodology for purposes of Cal. Gov’t Code § 53750, and the city does not waive or abrogate its ability to impose the communication users' tax in full as a result of entering into such administrative agreements.
('65 Code, § 33B-3) (Ord. No. CS-621 § 1 (part); Ord. No. CS-829 § 1; Ord. No. 84-011 § 1; Ord. No. 88-013 § 1; Ord. No. 94-022 §§ 1-4 ; Am. Ord. No. 2000-001§ 1 (part); Ord. No. 2006-005 § 1; Ord. No. 2006-007 § 1; Ord. No. 2008-007½ § 2)