SEC. 21.1.3. COMMUNICATIONS USERS TAX.

(a) “Ancillary Telecommunications Services” shall mean services that are associated with or incidental to the provision, use or enjoyment of Communications Services.

(b) “Communications Services” shall mean the transmission, conveyance, or routing of voice, audio, video communications, data or any other communications information or signals to a point, or between or among points, whatever the technology used, and whether or not that information is transmitted through interconnected service with the public switched network, or through fiber optic, coaxial cable, power line transmission, broadband, digital subscriber line or other wireless transmission. The term “Communications Services” includes transmission, conveyance, or routing in which computer processing applications are used to act on the form, code or protocol of the content for purposes of transmission, conveyance or routing without regard to whether those services are referred to as voice over internet protocol (VoIP) services or are classified by the Federal Communications Commission as enhanced or value added, and includes video and/or data services that are functionally integrated with “Communications Services”. “Communications Services” include, but are not limited to the following services, regardless of the manner or basis on which those services are calculated or billed: central office and custom calling features (including but not limited to call waiting, call forwarding, caller identification and three-way calling); local number portability; text messaging; instant messaging; Ancillary Telecommunications Services; prepaid and post-paid telecommunications services (including but not limited to prepaid calling cards); mobile telecommunications services; Private Communications Services; paging services; and 800 services (or any other toll-free numbers designated by the Federal Communications Commission). “Communications Services” does not include either digital downloads, such as downloads of books, music, ringtones, games and similar digital products, or that portion of cable or video television services subject to a cable or video television franchise fee.

(d) “Person” shall mean all individuals, domestic and foreign corporations, associations, syndicates, joint stock companies, partnerships of every kind, joint ventures, clubs, Massachusetts businesses or common law trusts, societies, and, shall include municipal corporations.

(e) “Private Communications Services” shall mean any dedicated Communications Services that entitle the user to the exclusive or priority use of communications channels.

(f) “Service User” shall mean a Person required to pay a tax imposed under the provisions of this article.

* Note: Pursuant to the passage of Proposition S in a Special Election held on February 5, 2008, Ordinance No. 179,686 was adopted by the Council of the City of Los Angeles at its meeting of March 5, 2008.

SEC. 21.1.2. CONSTITUTIONAL EXEMPTIONS.

(Amended by Ord. No. 135,276, Eff. 10/30/67.)

Nothing in this article 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 of California.

SEC. 21.1.3. COMMUNICATIONS USERS TAX.

(Title and Section Amended by Ord. No. 179,686*, Eff. 3/15/08.)

(a) There is hereby imposed a tax upon every Person with a billing or service address in the City of Los Angeles who uses Communications Services, including services for intrastate, interstate or international Communications Services, to the extent permitted by state and federal law. The tax imposed by this section shall be at the rate of nine percent of the charges made for those Communications Services and shall be paid by the Person paying for those services. However, as to the charges made for services to any independent telemarketing agency, as defined in Section 21.47(b) of this Code, incurred solely in performing the functions of an independent telemarketing agency, the tax imposed by this section shall be at the rate of five percent of the charges made for those services.

(b) The tax imposed in this section shall be collected from the Service User by the Person providing the Communications Services. The amount of tax collected from the 26th day of each Month through the 25th day of the following Month shall be remitted to the Director of Finance on or before the 26th day of the following Month, or, at the option of the Person required to collect and remit the tax, an estimated amount of tax collected, measured by the billings of the previous Month, shall be remitted to the Director of Finance on or before the 20th day of each Month.

(c) Charges subject to the Communications Users Tax include, but are not limited to, the following: connection, reconnection, termination, movement, or change of telecommunications services; late payment fees; detailed billing; voice mail and other messaging services; directory assistance; access and line charges; universal service charges; and regulatory, administrative and other cost recovery charges.

(d) Exemptions. Except as otherwise provided in this article, Communications Services shall include all Communications Services for which there is a charge, regardless of the means or technology used to provide those services. Notwithstanding the provisions of Subsection (a), the tax imposed under this section shall not be imposed upon any Person for using Communications Services under the circumstances set forth below:

1. News services. No tax shall be imposed under this section, except with respect to local telephone service, on any payment received from any Person for 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 that service is billed in writing to that Person.

2. International, etc., organizations. No tax shall be imposed under this section on any payment received for 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. Service members in combat zone. No tax shall be imposed under this section on any payment received for any toll telephone service, which originates within a combat zone, as defined in Section 112 of Title 26 of the United States Code, from a member of the Armed Forces of the United States performing service in the combat zone, as determined under Section 112 of Title 26 of the United States Code.

4. Items otherwise taxed. Only one payment of tax under this section shall be required with respect to the tax on any service.

5. Common carriers and communications companies. 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.

6. Installation charges. No tax shall be imposed under this section on any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to the installation.

7. Nonprofit hospitals. No tax shall be imposed under this section on any amount paid by a nonprofit hospital for services furnished to that organization. For purposes of this exemption, the term “nonprofit hospital” means a hospital referred to in Section 170(b)(1)(A)(iii) of Title 26 of the United States Code, which is exempt from federal income tax under Section 501(a) of Title 26 of the United States Code.

8. State and local governments. No tax shall be imposed under this section upon any payment received for services or facilities furnished to the government of any State, or any of its political subdivisions, or the District of Columbia.

9. Nonprofit educational organizations. No tax shall be imposed under this section on any amount paid by a nonprofit educational organization for services or facilities furnished to that organization. For purposes of this exemption, the term “nonprofit educational organization” means an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, which is exempt from federal income tax under Section 501(a) of Title 26 of the United States Code. The term also includes a school operated as an activity of an organization described in Section 501(c)(3) of Title 26 of the United States Code, which is exempt from federal income tax under Section 501(a) of Title 26 of the United States Code, if that school normally maintains a regular facility 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.

(e) To prevent actual multiple taxation of any Communications Services that are subject to tax under Subsection (a) of this section, any Service User, upon proof that the Service User owed and has paid a tax in another taxing jurisdiction on the Communications Services, shall be allowed a credit against the tax imposed in Subsection (a) to the extent of the amount of the tax properly due and paid in the other taxing jurisdiction. However, no credit may be allowed for any tax paid to another taxing jurisdiction on any call to the extent that the call may not, under the Constitution and statutes of the United States, be made the subject of taxation by the other taxing jurisdiction. Nor shall the amount of credit exceed the tax owed to the City under this section.

(f) Any person claiming to be an independent telemarketing agency, which has charges subject to tax at the five percent rate, shall file an application for rate adjustment with the Director of Finance. This application shall be made on forms provided by the Director of Finance and shall recite facts under oath which qualify the applicant for the five percent tax rate. Notwithstanding any other provision of this article, the five percent rate shall apply only to charges for services that were necessarily incurred solely and exclusively for telemarketing activities. The burden of maintaining records and establishing that this charge is subject to tax at the five percent rate shall be on the applicant. Charges for all other services shall be subject to tax at the nine percent rate.

(g) 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 communications 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 Communications Services used by a Person with a service or billing 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 communications 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) If a non-taxable service and a taxable service are billed together under a single charge, the entire charge shall be deemed taxable unless the service supplier or taxpayer reasonably identifies actual charges for services not subject to the tax. The service supplier or taxpayer seeking a reduction has the burden of proving the proper valuation and apportionment of taxable and non-taxable charges based upon books and records that are kept in the regular course of business and in a manner consistent with generally accepted accounting principles.

SEC. 21.1.4. ELECTRICITY USERS TAX.

(Amended by Ord. No. 142,333, Eff. 9/30/71, Oper. 10/1/71.)

(a) There is hereby imposed a tax upon every person in the City of Los Angeles using electrical energy in the City of Los Angeles. The tax imposed by this section shall be at the rate of 10 percent of the charges made for such energy and shall be paid by the person paying for such energy, provided, however, that commercial or industrial users of electrical energy shall be subject to tax and a tax is hereby imposed upon them at the rate of 12.5 percent of the charges made for such energy, but as to any non-profit educational institution, as defined in Subdivision 3 of Subsection (c) of Section 21.190 of this Code, the tax imposed by this section shall be at the rate of 10 percent of the charges made for such energy. (Second Sentence Amended by Ord. No. 171,436, Eff. 1/10/97.) “Charges” as used in this section, shall 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.

The term “commercial or industrial users” as used in this section, is intended to include, but shall not be limited to, any person who qualifies as a “commercial or industrial” consumer of electrical energy within the electric rate schedules of the Department of Water and Power of the City of Los Angeles or the tariff schedules of the Southern California Edison company, provided however, a user of electrical energy shall not be considered a “commercial or industrial user” of any electrical energy supplied to a single family accommodation separately metered or for energy to two or more individual family accommodations supplied as a unit, upon application under the provisions of the Department’s Domestic Service Schedule D–1, devoted primarily to domestic, residential, household and related purposes, as distinguished from commercial, professional, and industrial purposes.

(b) As used in this section, the term “using electrical energy” shall not be construed to mean that storage of such energy by a person in a battery owned or possessed by the person 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 the mere receiving of such energy by an electric public utility or government agency at a point within the City of Los Angeles for resale. (Amended by Ord. No. 135,276, Eff. 10/30/67.)

(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 from the 26th day of each month through the 25th day of the following month shall be remitted to the Director of Finance on or before the 26th day of such following month, or, at the option of the person required to collect and remit the tax, an estimated amount of tax collected in each month shall be remitted to the Director of Finance on or before the 26th day of such month. (Amended by Ord. No. 156,573, Eff. 5/10/82)

SEC. 21.1.5. GAS USER TAX.

(a) (Amended by Ord. No. 169,245, Eff. 1/15/94.) There is hereby imposed a tax upon every person in the City of Los Angeles using in the City gas which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of 10 percent of the charges made for such gas and shall be paid by the person paying for such gas, provided, however, that as to any non-profit educational institution, as defined in subdivision 3 of Subsection (c) of Section 21.190 of this Code, the tax imposed by this section shall be at the rate of 5 percent of the charges made for such gas. (Second Sentence Amended by Ord. No. 171,436, Eff. 1/10/97.) When gas is transported by, but not purchased from, a transporter, the charges subject to tax shall be measured by (1) the transportation cost and (2) the cost of the transported gas, which shall be based on the volume of gas transported multiplied by the core subscription weighted average cost of gas for the calendar month immediately preceding the calendar month in which the billing period terminates.

Notwithstanding the foregoing, the tax on the cost of transported gas may be determined by applying the tax rate to the actual purchase cost, either by the service user applying to the Director of Finance for a refund or the Director of Finance billing the service user, for the amount which represents the difference between the tax paid by the service user to the transporter and the tax determined by the actual purchase cost of the gas. In a claim for refund, the service user shall provide the Director of Finance with satisfactory evidence of the quantity and cost of the gas purchased from a party other than the transporter. When the Director of Finance believes that direct collection of the tax from the service user is in the best interest of the City, as provided in Subsection (b) of Section 21.1.10 of this Code, the transporter, upon request from the Director of Finance, shall furnish the Director of Finance, with respect to each service user for whom gas is transported, the name, mailing address, service address, gas meter number, transportation cost, volume of gas transported and the core subscription weighted average cost of gas for the calendar month immediately preceding the calendar month in which the billing period terminates. This information shall be confidential and shall be used only for the purpose of administering the tax.

(b) There shall be excluded from the base on which the tax imposed in this section is computed charges made for gas which is to be resold and delivered through main or pipes, charges made for gas sold for use in the generation of electrical energy by a public utility or a governmental agency; and charges made by a gas public utility for gas used and consumed in the conduct of the business of as public utilities. (Amended by Ord. No. 135,276, Eff. 10/30/67.)

(c) The tax imposed in this section shall be collected from the service user by the person selling gas or, when gas is purchased from and transported by separate persons, the tax shall be collected by the transporter. (1st Sentence Amended by Ord. No. 169,245, Eff. 1/15/94.) The amount of tax collected from the 26th day of each month through the 25th day of the following month shall be remitted to the Director of Finance on or before the 26th day of such following month, or, at the option of the person required to collect and remit the tax, an estimated amount of tax collected, measured by the billings of the previous month, shall be remitted to the Director of Finance on or before the 26th day of each month. (Amended by Ord. No. 156,573, Eff. 5/10/82.)

(d) There shall be exempt from the base on which the tax imposed in this section is computed charges made for gas used for non-utility purposes. For the purposes of this subsection, the term “gas used for non-utility purposes” shall mean gas used as a raw material in a manufactured product, and shall exclude gas used to produce light, heat or power. Any service user claiming an exemption under this subsection shall file an application with the Director of Finance for such exemption. Such application shall be made upon forms supplied by the Director of Finance and shall recite under oath facts which qualify the applicant for an exemption. The Director of Finance shall review each such application, certify as exempt such service determined to qualify therefor and notify each affected service supplier that such exemption has been approved, stating the name of the applicant, the address to which such exempt service is being supplied, the account number, if any, and such other information as may be necessary for the service supplier to remove the exempt service from the tax billing procedure. Upon receipt of such notice, the service supplier shall not be required to continue to bill any further tax imposed by this section for such exempt service until given further notice by the Director of Finance. (Added by Ord. No. 171,119, Eff. 7/21/96, Oper. 1/1/96.)

(e) Notwithstanding the provisions of Subsection (a) of this section and Section 21.1.8(b) of this article, the collection rate of the tax imposed in Subsection (a) of this section at the rate of 10 percent shall be reduced temporarily for residential users to 6 percent for the first four regular billing periods ending on or after December 1, 2001, and on or before April 15, 2002. For all subsequent regular billing periods, the collection rate for residential users shall revert to the 10 percent rate imposed in Subsection (a) of this section. (Added by Ord. No. 174,205, Eff. 9/29/01.)

(f) Notwithstanding the provisions of Subsection (a) of this section and Section 21.1.8(b) of this article, the collection rate of tax imposed in Subsection (a) of this section shall be reduced temporarily to abate a total amount of gas user taxes of $24,174,176.69. To effectuate this abatement, the rate set forth in Subsection (a) of this section shall be lowered temporarily to a rate of 9.91% of the charges made within the meaning of Subsection (a); provided, however, that as to any non-profit educational institution, as defined in Section 21.49(c)3.(iii) of this Code, the collection rate of tax imposed by this section shall be lowered temporarily to a rate of 4.46%. The amount abated is the difference between the taxes that would be collected pursuant to the rates set forth in Subsection (a) and the taxes that would be collected pursuant to the rates set forth in this Subsection (f). The rates set forth in this Subsection (f) shall apply to all charges for gas within the meaning of Subsection (a) of this section collected, following the completion of the abatement attributable to Lavinsky v. City of Los Angeles, through the earlier of July 1, 2026, or the first day of the first month after which the City has abated taxes equal to or exceeding $24,174,176.69, whichever date occurs first (Abatement Period). Should this subsection fail to abate an amount equal to $24,174,176.69 in taxes by July 1, 2026, the Abatement Period shall be extended until the first month after July 1, 2026 after which the City has abated taxes equal to or exceeding $24,174,176.69. The rates set forth in Subsection (a) of this section shall apply to all periods except for the Abatement Period described under this Subsection (f). The person selling gas or transporter shall not be liable for failing to collect the difference between the tax rate set forth in Subsection (a) of this section and the tax rate set forth in this Subsection (f) until 60 days after the required notice is provided. (Added by Ord. No. 188,223, Eff. 6/16/24.)

SEC. 21.1.6. INTEREST AND PENALTY.

(a) Taxes collected from a service user which are not remitted to the Director of Finance on or before the due dates provided in this article are delinquent.

(b) interest and penalties for delinquency in remittance of any tax collected, or any deficiency determination shall attach and be paid by the person required to collect and remit at the rates and in the same manner as is provided in Sec. 21.05 of this chapter for delinquency in payment of Business Tax.

(c) The Director of Finance shall have power to impose additional penalties upon persons required to collect and remit taxes under the provisions of this article for fraud and negligence in reporting and remitting in the same manner and at the same rates as are provided in Sec. 21.05 of this chapter for such penalties upon persons required to pay Business Tax.

(d) (Amended by Ord. No. 174,085, Eff. 8/19/01.) For collection purposes only, every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be remitted.

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