This chapter shall be known as the "Utility Users Tax Ordinance
of the city of Sunnyvale."
(Ord. 3102-16 § 1)
This chapter is adopted pursuant to the powers of the city of
Sunnyvale as a charter city as provided in Article IV of the city
Charter, and as authorized by Section 6 of Article XI of the Constitution
of the state of California.
(Ord. 3102-16 § 1)
Except where the context otherwise requires, the definitions
contained in this section shall govern the construction of this chapter.
The word "may" is always directory and discretionary and not mandatory;
the word "shall" is always mandatory and not directory or discretionary.
"Ancillary telecommunications services"
Ancillary telecommunication services shall mean services
that are associated with or incidental to the provision, use or enjoyment
of telecommunications services, including, but not limited to, the
following services:
(a)
"Conference bridging service"
shall mean an ancillary service that links two or more participants
of an audio or video conference call and may include the provision
of a telephone number. Conference bridging service does not include
the telecommunications services used to reach the conference bridge.
(c)
"Directory assistance"
shall mean an ancillary service of providing telephone number
information, and/or address information.
(d)
"Vertical service"
shall mean an ancillary service that is offered in connection
with one or more telecommunications services, which offers advanced
calling features that allow customers to identify callers and to manage
multiple calls and call connections, including conference bridging
services.
(e)
"Voice mail service"
shall mean an ancillary service that enables the customer
to store, send or receive recorded messages. Voice mail service does
not include any vertical services that the customer may be required
to have in order to utilize the voice mail service.
"Billing address"
shall mean the mailing address of the service user where
the service provider submits invoices or bills for payment by the
service users.
"City"
means the city of Sunnyvale, California, including all of
the territory and jurisdiction thereof as presently constituted, and
any and all of the same which shall later come into existence by any
manner or means whatsoever.
"Collector"
means the director of finance or designee of the city of
Sunnyvale.
"Director"
means the director of finance of the city of Sunnyvale.
"Person"
means any natural person, firm, all domestic, nonprofit and
foreign corporation; firm; association; syndicate; joint venture;
joint stock company; club; trust; Massachusetts or common law trust;
estate; partnership of any kind; limited liability company; cooperative;
society; and any officer, agent, receiver, trustee, guardian or other
appointed representative thereof; joint power agency, municipal district
or municipal corporation, other than the city.
"Place of primary use"
shall mean the street address representative of where the
customer's use of the telecommunications or video service primarily
occurs, which must be the residential street address or the primary
business street address of the customer.
"Post-paid telecommunication service"
shall mean the telecommunication service obtained by making
a payment on a communication-by-communication basis either through
the use of a credit card or payment mechanism such as a bank card,
travel card, credit card, or debit card, or by charge made to a service
number which is not associated with the origination or termination
of the telecommunication service.
"Prepaid telecommunication service"
shall mean the right to access telecommunication services,
which must be paid for in advance and which enables the origination
of communications using an access number or authorization code, whether
manually or electronically dialed, and shall include "prepaid mobile
telephony services" as defined in
Revenue and Taxation Code Section
42004(k).
"Private telecommunication service"
shall mean a telecommunication service that entitles the
customer to exclusive or priority use of a communications channel
or group of channels between or among termination points, regardless
of the manner in which such channel or channels are connected, and
includes switching capacity, extension lines, stations, and any other
associated services that are provided in connection with the use of
such channel or channels. A communications channel is a physical or
virtual path of communications over which signals are transmitted
between or among customer channel termination points (i.e., the location
where the customer either inputs or receives the communications).
"Service address"
shall mean the residential street address or the business
street address of the service user. For a telecommunications or video
service user, "service address" means either:
(a)
The location of the service user's telecommunication or video
equipment from which the communication originates or terminates, regardless
of where the communication is billed or paid; or
(b)
If the location in paragraph a. of this definition is unknown
(e.g., mobile telecommunications service or VoIP service), the service
address shall mean the location of the service user's place of primary
use.
For prepaid telecommunication service, "service address" means
the point of sale of the services where the point of sale is within
the city, or if unknown, the known address of the service user (e.g.,
billing address or location associated with the service number), which
locations shall be presumed to be the place of primary use.
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"Service supplier"
means any person including the city, who provides or sells
telecommunication, electric, or gas service to a user of such services
within the city. The term shall include any person required to collect,
or self-collect under this chapter, and remit a tax as imposed by
this chapter, including its billing agent in the case of electric
or gas suppliers.
"Service user"
means a person required to pay a tax imposed under the provisions
of this chapter.
"Telecommunication services"
means the transmission, conveyance, or routing of voice,
data, audio, video, or any other information or signals to a point,
or between or among points, whatever the technology used, and includes
broadband service (e.g., digital subscriber line (DSL), fiber optic,
coaxial cable, and wireless broadband, including Wi-Fi, WiMAX, and
Wireless MESH) to the extent federal and/or state law permits taxation
of such broadband services, now or in the future. The term "telecommunications
service" includes such 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 such service is referred to as
voice over internet protocol (VoIP) services or is classified by the
Federal Communications Commission as enhanced or value added, and
includes video and/or data service that is functionally integrated
with "telecommunication services." Telecommunications services include,
but are not limited to, the following services, regardless of the
manner or basis on which such services are calculated or billed: ancillary
telecommunication services; intrastate, interstate and international
telecommunication services; all forms of VoIP service; mobile telecommunications
service; prepaid telecommunication service; post-paid telecommunication
service; private telecommunication service; paging service; 800 service
(or any other toll-free numbers designated by the Federal Communications
Commission); 900 service (or any other similar numbers designated
by the Federal Communications Commission for services whereby subscribers
who call in to prerecorded or live service).
"800 service"
means a "telecommunications service" that allows a caller
to dial a toll-free number without incurring a charge for the call.
The service is typically marketed under the name "800," "855," "866,"
"877," and "888" toll-free calling, and any subsequent numbers designated
by the Federal Communications Commission.
"900 service"
means an inbound toll "telecommunications service" purchased
by a subscriber that allows the subscriber's customers to call in
to the subscriber's prerecorded announcement or live service. "900
service" does not include the charge for: collection services provided
by the seller of the "telecommunications services" to the subscriber,
or service or product sold by the subscriber to the subscriber's customer.
The service is typically marketed under the name "900" service, and
any subsequent numbers designated by the Federal Communications Commission.
(Ord. 3102-16 § 1)
The taxes initially imposed by this chapter at the rate of one
percent became operative as of July 1, 1969. The taxes at the rate
of two percent imposed by this chapter as amended by Ordinance No.
1774-75 became operative as of August 1, 1975. The increases in utility
user tax rates authorized by the voters on November 4, 1997 will become
effective only if there are reductions in the electrical utility rates
charged to customers and if, after public hearings are held, the increases
are subsequently adopted by the city council by ordinance.
(Ord. 3102-16 § 1)
There is hereby imposed a tax upon every person in the city, other than an electrical corporation or a gas corporation, using electrical energy in the city. The tax imposed by this section and Sections
3.12.080 and
3.12.090 shall be at the rate of two percent of the charges made for such energy, including minimum charges for service but excluding charges for electrical energy supplied to street lights, and shall be paid by the person paying for such energy unless the city council by ordinance increases the rates to offset decreased charges resulting from electrical rate deregulation to no more than the amounts specified below, with an overall rate cap for all ratepayers of three percent.
For large commercial/agricultural ratepayers:
Earliest Effective Date
|
Maximum Rate Increase
|
Maximum Total Tax Rate
|
---|
January 1, 2002
|
1.00%
|
3.00%
|
For residential/small commercial ratepayers:
Earliest Effective Date
|
Maximum Rate Increase
|
Maximum Total Tax Rate
|
---|
January 1, 1998
|
.33
|
2.33%
|
April 1, 2002
|
.33
|
2.66%
|
January 1, 2008
|
.33
|
3.00%
|
(Ord. 3102-16 § 1)
As used in Sections
3.12.070 and
3.12.090, the words "using electrical energy" do not mean:
(a) The
storage of such energy by a person in a battery owned or possessed
by him 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; or
(b) The
mere receiving of such energy by an electrical corporation or a governmental
agency at a point within the city for resale to service users.
(Ord. 3102-16 § 1)
The tax imposed in this section, Sections
3.12.070 and
3.12.080 shall be collected from the service user by the person selling such electrical energy. The amount of tax collected in one month shall be remitted to the collector on or before the last day of the following month.
(Ord. 3102-16 § 1)
There is hereby imposed a tax upon every person in the city, other than a gas corporation or an electric corporation, using gas in the city which is delivered through mains or pipes. The tax imposed by this section and Sections
3.12.110 and
3.12.120 shall be at the rate of two percent of the charges made for such gas, including minimum charges for service but excluding charges for gas service to street lights, and shall be paid by the person paying for such gas.
(Ord. 3102-16 § 1)
(a) Include
charges made for gas used in the generation of electrical energy by
a public utility or a governmental agency; or
(b) Be
construed to mean the mere receiving of such gas by a gas corporation
or governmental agency at a point within the city for resale to service
users.
(Ord. 3102-16 § 1)
The tax imposed in this section, Sections
3.12.100 and
3.12.110 shall be collected from the service user by the person selling the gas. The amount collected in one month shall be remitted to the collector on or before the last day of the following month.
(Ord. 3102-16 § 1)
If any non-taxable service charges are combined with and not
separately stated from taxable service charges on the customer bill
or invoice of a service supplier, the combined charge is subject to
tax unless the service supplier is able to establish reasonable values
for the portions of the combined charge that are nontaxable and taxable.
If the service supplier offers a combination of taxable and non-taxable
services, and the charges are separately stated, the service supplier
shall assign reasonable values for the taxable and non-taxable services.
In assigning reasonable values for taxable and non-taxable services
under this section, the service supplier may use reasonable and verifiable
standards such as: (1) the books and records kept in the regular course
of business and in accordance with generally accepted accounting principles
(not created and maintained for tax purposes); (2) the market value
of such taxable and non-taxable services when offered on a stand-alone
basis by the supplier or its competitors; or (3) other similar evidence
of value. The service supplier has the burden of proving to the satisfaction
of the tax administrator the reasonable valuation and proper apportionment
of taxable and non-taxable charges under this section.
(Ord. 3102-16 § 1)
For purposes of imposing a tax or establishing a duty to collect
and remit a tax under this chapter, "substantial nexus," "substantial
economic presence," 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 telecommunication service (including
VoIP) 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 chapter. A service supplier
shall be deemed to have sufficient activity in the city for tax collection
and remittance purposes if its activities include, but are not limited
to, any of the following: maintains or has within the city, directly
or through an agent, affiliate or subsidiary, a place of business
of any nature; solicits business in the city by employees, independent
contractors, resellers, agents, affiliates or other representatives;
solicits business in the city on a continuous, regular, seasonal or
systematic basis by means of advertising that is broadcast or relayed
from a transmitter with the city or distributed from a location with
the city; or advertises in newspapers or other periodicals printed
and published within the city or through materials distributed in
the city by means other than the United States mail; or if there are
activities performed in the city on behalf of the service supplier
that are significantly associated with the service supplier's ability
to establish and maintain a market in the city for the provision of
utility services that are subject to a tax under this chapter (e.g.,
an affiliated person or independent contractor engaging in activities
in the city that inure to the benefit of the service supplier in its
development or maintenance of a market for its services in the city,
including by directly or indirectly referring potential customers,
whether by a link on an Internet website or otherwise, to the service
supplier).
(Ord. 3102-16 § 1)
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 person required to collect and remit and shall
no longer be a debt of the service user. 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,
including penalties and interest as provided for in this chapter,
along with any collection costs incurred by the city as a result of
the person's noncompliance with this chapter, including, but not limited
to, reasonable attorney's fees. In the event that a service user or
service supplier owing a tax under this chapter files bankruptcy,
then such debt to the city shall be deemed an unsecured priority excise
tax obligation under 11 U.S.C.A. Section 507(a)(8)(C). Service suppliers
who seek to collect charges for service in bankruptcy proceedings
shall also include in any such claim the amount of taxes due the city
for those services, unless the tax administrator determines that such
duty is in conflict with any federal or state law, rule, or regulation
or that such action would be administratively impractical.
(Ord. 3102-16 § 1)
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 or
credited as provided in this section:
(a) The
tax administrator may refund any tax that has been overpaid or paid
more than once or has been erroneously or illegally collected or received
by the tax administrator under this chapter, provided that no refund
shall be paid under the provisions of this section unless the claimant
or his or her guardian, conservator, executor, or administrator has
submitted a written claim to the tax administrator within one year
of the overpayment or erroneous or illegal collection of said tax.
Such claim must clearly establish claimant's right to the refund by
written records showing entitlement thereto. To the extent allowed
by law, nothing herein shall permit the filing of a claim on behalf
of a class or group of taxpayers unless each member of the class has
submitted a written claim under penalty of perjury as provided by
this section.
(b) The
submission of a written claim, which is acted upon by the city council,
shall be a prerequisite to a suit thereon. (See Section 935 of the
California
Government Code). The tax administrator, or the city council
where the claim is in excess of four thousand nine hundred ninety-five
dollars shall act upon the refund claim within the time period set
forth in
Government Code Section 912.4. If the city council fails
or refuses to act on a refund claim within the time prescribed by
Government Section 912.4, the claim shall be deemed to have been rejected
by the city council on the last day of the period within which the
city council was required to act upon the claim as provided in Government
Code Section 912.4. The tax administrator shall give notice of the
action in a form that substantially complies with that set forth in
Government Code Section 913.
(c) Notwithstanding the notice provisions of subsection
(a) of this section, the tax administrator may, at his or her discretion, give written permission to a service supplier, who has collected and remitted any amount of tax in excess of the amount of tax imposed by this chapter, to claim credit for such overpayment against the amount of tax which is due the city upon a subsequent monthly return(s) to the tax administrator, provided that, prior to taking such credit by the service supplier: (1) such credit is claimed in a return dated no later than one year from the date of overpayment or erroneous collection of said tax; (2) the tax administrator is satisfied that the underlying basis and amount of such credit has been reasonably established; and (3) in the case of an overpayment by a service user to the service supplier that has been remitted to the city, the tax administrator has received proof, to his or her satisfaction, that the overpayment has been refunded by the service supplier to the service user in an amount equal to the requested credit.
(Ord. 3102-16 § 1)
No injunction or writ of mandate or other legal or equitable
process shall issue in any suit, action, or proceeding in any court
against this city or against any officer of the city to prevent or
enjoin the collection under this chapter of any tax or any amount
of tax required to be collected and/or remitted.
(Ord. 3102-16 § 1)
All remedies and penalties prescribed by this chapter or which
are available under any other provision of law or equity, including,
but not limited to, the California False Claims Act (
Government Code
Section 12650 et seq.) and the California Unfair Practices Act (Business
and Professions Code Section 17070 et seq.), are cumulative. The use
of one or more remedies by the city shall not bar the use of any other
remedy for the purpose of enforcing the provisions of this chapter.
(Ord. 3102-16 § 1)
If a tax under this chapter is added, repealed, increased, reduced,
or the tax base is changed, the tax administrator shall follow the
notice requirements of
Public Utilities Code Section 799.
(Ord. 3102-16 § 1)
Unless specifically provided otherwise, any reference to a state
or federal statute in this chapter shall mean such statute as it may
be amended from time to time. To the extent that the city's authorization
to collect or impose any tax imposed under this chapter is expanded
or limited as a result of an amendment or new enactment of a state
or federal law, no amendment or modification of this chapter shall
be required to conform the tax to those changes, and the tax shall
be imposed and collected to the full extent of the authorization up
to the full amount of the tax imposed under this chapter.
(Ord. 3102-16 § 1)
The city shall annually verify that the taxes owed under this
section have been properly applied, exempted, collected, and remitted
in accordance with this section, and properly expended according to
applicable municipal law. The annual verification shall be performed
by a qualified independent third party and the review shall employ
reasonable, cost-effective steps to assure compliance, including the
use of sampling audits. The verification shall not be required of
tax remitters where the cost of the verification may exceed the tax
revenues to be reviewed.
(Ord. 3102-16 § 1)
This chapter of the Sunnyvale Municipal Code may be repealed
or amended by the city council without a vote of the People. However,
as required by Chapter XIIIC of the California Constitution, voter
approval is required for any amendment provision that would increase
the rate of any tax levied pursuant to this chapter; provided, however,
the following actions shall not constitute an increase of the rate
of a tax:
(a) The
restoration of the rate of the tax to a rate that is no higher than
that set by this chapter, if the city council has acted to reduce
the rate of the tax;
(b) An
action that interprets or clarifies the methodology of the tax, or
any definition applicable to the tax, so long as such interpretation
or clarification (even if contrary to some prior interpretation or
clarification) is not inconsistent with the language of this chapter;
(c) The
establishment a class of persons that is exempt or excepted from the
tax or the discontinuation of any such exemption or exception (other
than the discontinuation of an exemption or exception specifically
set forth in this chapter); and
(d) The
collection of the tax imposed by this chapter, even if the city had,
for some period of time, failed to collect the tax.
(Ord. 3102-16 § 1)