§ 4.40.030. Telephone users tax.

A.

There is hereby imposed a tax upon every person in the city who uses telephone communication services, including intrastate, interstate, and international telephone communication services. The tax imposed by this section shall be at the rate of eight percent of all charges made for such telephone communication services. 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, regardless of where the telephone communication service may originate, terminate, or pass through. Charges for mobile telecommunications services are subject to taxation under this chapter if the customer's place of primary use is in the city, regardless of where the mobile telecommunications service may originate, terminate, or pass through.

B.

As used in this section, the term "telephone communication services" shall not include "private mobile radio service," as defined in Part 20 of Title 47 of the Code of Federal Regulations, or "private mobile service," as defined in 47 U.S.C.A. Section 332(d)(3), which is not interconnected with the public switched network or is not provided over digital networks by which communications with a substantial portion of the public is available (e.g., voice over internet protocol or VoIP). The tax imposed under subsection A above shall not be imposed upon any person for using telecommunication services to the extent that, pursuant to Sections 4252(d) and 4253 of the Internal Revenue Code, the amounts paid for such communication services are exempt from or not subject to the tax imposed under Section 4251 of the Internal Revenue Code. In the event that the federal excise tax on "communication services" as provided in Sections 4251, 4252 and 4253 of the Internal Revenue Code is subsequently repealed, any reference in this section and in Section 4.40.020R to such law, including any related federal regulations, private letter rulings, case law, and other opinions interpreting these sections, shall refer to that body of law that existed immediately prior to May 25, 2006.

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 telephone communication services. The term "charges" shall also include charges to a service user by a hotel or motel for telephone communication services used in the city when such charges are incidental to the right of occupancy in such hotel or motel. The collection of the tax from the service user shall be the responsibility of the hotel or motel owner. "Charges" shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated telephone 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 the tax due.

D.

The tax administrator, from time to time, may issue and disseminate to telecommunication service suppliers which are subject to the tax collection requirements of this chapter, an administrative ruling identifying those telecommunication services that are subject to the tax of subsection A above. The tax administrator, from time to time, may issue and disseminate to telecommunication service suppliers which are subject to the tax collection requirements of this chapter, an administrative ruling which identifies those telephone communication services that are subject to the tax of subsection A above and/or identifies the sourcing of such services for tax administration purposes. This administrative ruling shall not impose a new tax, revise an existing tax methodology as stated in this section, or increase an existing tax, except as allowed by California Government Code Section 53750(h)(2)(A). An administrative ruling shall not constitute a new tax or an increase in an existing tax if such administrative ruling is:

1.

Consistent with the existing ordinance language; and

2.

Merely reflects a change in, clarification to, or new rendition of:

a.

The definition, interpretation, or application of substantial nexus by a court of competent jurisdiction or by preemptive state or federal law, for purposes of taxation;

b.

The sourcing of taxable transactions to further administrative efficiency and minimize multi-jurisdictional taxation; or

c.

The definition, interpretation, or application of the federal excise tax rules, regulations, and laws pertaining to "communications services" (Sections 4251, 4252 and 4253 of the Internal Revenue Code) by the Internal Revenue Service prior to May 25, 2006, or by a state or local agency that assumes an interpretative role of those rules, regulations, and laws that existed immediately prior to May 25, 2006, in the event that the federal excise tax on "communications services" is repealed.

E.

To prevent actual multi-jurisdictional taxation of telephone 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 city on such telephone communication service, 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.

F.

The tax on telephone communication services imposed by this section shall be collected from the service user by the service supplier. The amount of the 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. 2007-3 §§ 1, 2, 2007; Ord. 2004-5A Div. 1 (part), 2004.)