Chapter 3.30 UTILITY TAX LAW

This chapter is adopted pursuant to the provisions of California Government Code Section 37100.5 for the purpose of providing general municipal revenue to be used for general municipal purposes. (Ord. 642 § 1, 1983)

3.30.030 Tax imposed.

There is imposed an annual utility user’s tax in the amount set forth in this chapter to raise revenues for the general governmental purposes of the city. The tax shall be levied for each fiscal year by the city unless modified by the city council in accordance with this chapter. (Ord. 642 § 1, 1983)

3.30.040 Definitions.

Except where the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter.

“City” means the city of Seaside, 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 city manager or designee of the city.

“Electrical corporation,” “gas corporation,” “telephone corporation,” “water corporation” and “cable television corporation” have the same meanings, except as provided in this section, as defined in Sections 218, 222, 234, 241, and 215-5, respectively, of the Public Utilities Code of the state. “Water corporation” shall be construed to include any organization or municipality, including, but not limited to, a mutual water company engaged in the selling or supplying of water to a service user.

“Gross family income” means income subject to federal and state income taxation, social security payments, pensions, annuities, welfare payments, gifts, inheritances, interest on tax exempt investments, and all other income regardless of source.

“In the city” means physically located, in whole or in part, within the exterior territorial limits of the city.

“Month” means a calendar month.

“Person” means any domestic and foreign corporation, association, syndicate, joint stock company, partnership of any kind, joint venture, club, Massachusetts business or common-law trust, society, individual or municipal corporation.

“Service supplier” means a person required to collect and remit a tax imposed under the provisions of this chapter.

“Service user” means a person required to pay a tax imposed under the provisions of this chapter.

“Utility tax year” means the fiscal year; provided, that the initial utility tax year shall be the effective date of the ordinance codified in this chapter through June 30, 1985, inclusive. (Ord. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.050 Conflicts.

Nothing contained in this chapter is intended to conflict with applicable rules, regulations and tariffs of any service supplier subject to the jurisdiction of the California Public Utilities Commission. In the event of any conflict, the provisions of said rules, regulations and tariffs shall control. (Ord. 642 § 1, 1983)

3.30.060 Effective date of tax.

The taxes imposed by this chapter shall be imposed on September 1, 1983, or at the beginning of the first regular billing period thereafter, which includes service only from September 1, 1983, and thereafter. (Ord. 642 § 1, 1983)

3.30.070 Tax rate.

Repealed by Ord. 1042. (Ord. 642 § 1, 1983)

3.30.080 Annual review.

Repealed by Ord. 1042. (Ord. 642 § 1, 1983)

3.30.090 Electricity user’s tax.

A. Tax Imposed. There is imposed a six percent 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 shall be levied against charges made for such energy and shall be paid by the person paying for such energy. “Charges,” as used in this section, includes 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.

B. Exclusions. As used in this section, the words “using electrical energy” shall not be construed to mean:

1. 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

2. The mere receiving of such energy by an electrical corporation or a government agency at a point within the city for resale.

C. Tax Collection. The tax imposed in this section shall be collected from the service user by the person selling the 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. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.100 Gas user’s tax.

A. Tax Imposed. There is imposed a six percent tax upon every person in the city, other than a gas corporation or an electrical corporation, using gas in the city which is delivered through mains or pipes. The tax imposed by this section shall be levied against charges made for such gas, including minimum charges for service, and shall be paid by the person paying for such gas.

B. Exclusions. As used in this section, the term “charges” shall not include charges made for gas used in the generation of electrical energy by a public utility or a governmental agency, and the term “using gas” shall not 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.

C. Tax Collection. The tax imposed in this section shall be collected from the service user by the person selling the gas. 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. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.110 Telephone user’s tax.

A. Tax Imposed. There is imposed a six percent tax upon every person in the city, other than a telephone corporation, using intrastate telephone communication services in the city. The tax imposed by this section shall be levied against charges made for such services and shall be paid by the person paying for such services.

B. Exclusions. Notwithstanding the provisions of subsection A of this section, the tax imposed under this section shall not be imposed upon any person for using intrastate telephone communication services to the extent that the amounts paid for such services are exempt from or not subject to the tax imposed under Division 2, Part 20 of the California Revenue and Taxation Code.

As used in this section, the term “charges” shall not include charges for services paid for by inserting coins in coin-operated telephones except that where such coin-operated 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 tax due; nor shall the term “charges” include charges for any type of service or equipment furnished by a service supplier subject to public utility regulation during any period in which the same or similar services or equipment are also available for sale or lease from persons other than a service supplier subject to the public utility regulation; nor shall the words “telephone communication services” include land mobile services or maritime mobile services as defined in Section 2.1 of Title 47 of the Code of Federal Regulations, as said section existed on January 1, 1970. The term “telephone communication services” refers to that service which provides access to a telephone system and the privilege of telephonic quality communication with substantially all persons having telephone stations which are part of the telephone system. The telephone user’s tax is intended to, and does, apply to all charges billed to a telephone account having a situs in the city, irrespective of whether a particular communication service originates and/or terminates within the city.

C. Tax Collection. The tax imposed by this section shall be collected from the service user by the person providing the intrastate telephone communication services, or the person receiving payment for such services. The amount of tax collected in one month shall be remitted to the collector on or before the last 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 tax billed in the previous month, shall be remitted to the tax collector on or before the last day of each month. (Ord. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.120 Water user’s tax.

A. Tax Imposed. There is imposed a six percent tax upon every person in the city, other than a water corporation, using water in the city which is delivered through mains or pipes. The tax imposed by this section shall be levied against charges made for such water, and shall be paid by the person paying for such water.

B. Tax Collection. The tax imposed in this section shall be collected from the service user by the person selling the water. The amount collected in one month shall be remitted to the collector on or before the last day of the following month. (Ord. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.130 Cable television user’s tax.

A. Tax Imposed. There is imposed a six percent tax upon every person in the city, other than a cable television corporation, using cable television services in the city. The tax imposed by this section shall be pursuant to the rate established by resolution levied against the charges made for such services, and shall be paid by the person paying for such services.

B. Tax Collection. The tax imposed by this section shall be collected from the service user by the person providing the cable television service. 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. 1042 § 2 (Att. B), 2017; Ord. 642 § 1, 1983)

3.30.140 Collection of taxes.

A. Suit by City. 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 collector shall be deemed a debt owed to the city by the person required to collect and remit. 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.

B. Duty to Collect – Procedures. The duty to collect and remit the taxes imposed by this chapter shall be performed as follows:

1. The tax shall be collected insofar as practicable at the same time as and along with the charges made in accordance with regular billing practice of the service supplier. Except in those cases where a service user pays the full amount of the charges but does not pay any portion of a tax imposed by this chapter, or where a service user has notified a service supplier that he is refusing to pay a tax imposed by this chapter which the service supplier is required to collect, if the amount paid by a service user is less than the full amount of the charge and tax which has accrued for the billing period, a proportionate share of both the charge and the tax shall be deemed to have been paid.

2. The duty to collect tax from a service user shall commence with the beginning of the first regular billing period applicable to that person which starts on or after the operative date of this chapter. Where a person receives more than one billing, one or more being for different periods than another, the duty to collect shall arise separately for each billing period.

C. Powers and Duties of Collector. The collector shall have the power and duty and is directed to enforce each and all of the provisions of this chapter. The collector shall have power to adopt rules and regulations not inconsistent with the provisions of this chapter for the purpose of carrying out and enforcing the payment, collection and remittance of the taxes imposed in this chapter; and a copy of the rules and regulations shall be on file and available for public examination in the collector’s office.

D. Administrative Agreements. The collector may make administrative agreements to vary the strict requirements of this chapter so that collection and remittance on any tax imposed in this chapter may be made in conformance with the billing procedures of a particular service supplier so long as the overall result of the agreements results in collection of the tax in conformance with the general purpose and scope of this chapter. A copy of each agreement shall be on file and available for public examination in the collector’s office. (Ord. 642 § 1, 1983)

3.30.150 Delinquent taxes – Service supplier.

A. Delinquent. Taxes collected from a service user which are not remitted to the collector on or before the due dates provided in this chapter are delinquent.

B. Penalty. In addition to remitting the amount of the tax, any service supplier who fails to remit any tax imposed by this chapter within the time required and upon ten days’ written notice to the service supplier of its failure to remit shall pay a penalty of ten percent of the amount of the tax which shall be added on the last day of each month following the date on which remittance was due until the tax and penalties are remitted.

C. Fraud – Penalty. If the collector determines that the nonpayment by any service supplier of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added to the penalty imposed by subsection B of this section.

D. Interest. In addition to the penalties imposed by subsections B and C of this section, any service supplier who fails to remit any tax imposed by this chapter shall pay interest at the rate of one percent per month, or fraction thereof, on the amount of the tax exclusive of penalties, from the date on which the remittance first became delinquent until paid.

E. Penalty and Interest Part of Tax. Every penalty imposed upon a service supplier and such interest as accrues under the provisions of subsections B through D of this section, inclusive, shall become a part of the tax required to be remitted. (Ord. 642 § 1, 1983)

3.30.160 Delinquent taxes – Service user.

A. Service User – Penalty. In addition to paying the amount of the tax, any service user who fails to pay any tax imposed by this chapter within sixty days of the date of the notice of the amount of tax due from the service supplier shall pay a penalty of ten percent of the amount of the tax which shall be added on the last day of each month following the date on which payment was due until the tax and penalties are paid.

B. Fraud – Penalty. If the collector determines that the nonpayment by any service user of any tax imposed by this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalty imposed by subsection A of this section.

C. Interest. In addition to the penalties imposed by subsections A and B of this section, any service user who fails to pay any tax imposed by this chapter shall pay interest at the rate of one percent per month, or fraction thereof, exclusive of penalties from the date on which the remittance first became delinquent until paid, and a collection charge of ten dollars for each delinquent account.

D. Penalty and Interest Part of Tax. The penalties, interest and collection charges imposed in subsections A through D of this section, inclusive, shall not be collected by the service supplier but by the collector. (Ord. 642 § 1, 1983)

3.30.170 Failure to collect and report tax.

A. Collector to Estimate Tax Due. If any service supplier fails to make, within the time provided in this chapter, any report and remittance of the tax or any portion thereof required by this chapter, the collector shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the collector procures the facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any service supplier who has failed or refused to make such report and remittance, he shall proceed to determine and assess against such service supplier the tax, interest and penalties provided for by this chapter. In case such determination is made, the collector shall give a notice of the amount to be assessed by serving it personally or depositing it in the United States mail, postage prepaid, addressed to the service supplier so assessed at his last known place of address.

B. Hearing on Determination of Tax. The service supplier may within twenty days after the serving or mailing of the notice referred to in subsection A of this section make application in writing to the collector for a hearing on the amount assessed. If application by the service supplier for hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the collector shall become final and conclusive and immediately due and payable. If such application is made, the collector shall give not less than ten days’ written notice in the manner prescribed in subsection A of this section to the service supplier to show cause at a time and place fixed in the notice why the amount specified therein should not be fixed for such tax, interest and penalties. At the hearing, the service supplier may appear and offer evidence why the specified tax, interest and penalties should not be so fixed.

C. Determination of Tax Following Hearing – Notice When Due. After a hearing on the amount of tax assessed, the collector shall determine the proper tax to be remitted, and shall thereafter give written notice to the service supplier in the manner prescribed in subsection A of this section of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after fifteen days unless an appeal is taken as provided in this chapter.

D. Collection of Taxes from Service User. Whenever the collector determines that a service user has deliberately withheld the amount of any tax imposed on him by the provision of this chapter from the amounts remitted to a service supplier required to collect the tax, or that a service user has failed to pay the amount of the tax to such service supplier for a period of four or more billing periods, or whenever the collector deems it in the best interest of the city, he may relieve such service supplier of the obligation to collect taxes due under this chapter from certain named service users for specified billing periods. The collector shall notify the service user that he has assumed responsibility to collect the taxes due for the stated periods and demand payment of such taxes, plus any penalty imposed and such interest as may be due pursuant to the provisions of SMC 3.30.160. The notice shall be served on the service user by handing to him personally or by deposit of the notice in the United States mail, postage prepaid thereon, addressed to the service user at the address to which billing was made by the service supplier required to collect the tax; or, should the service user have changed his address, to his last known address. (Ord. 642 § 1, 1983)

3.30.180 Appeals.

A. Who May Appeal. Any person aggrieved by any decision of the collector pursuant to this chapter may appeal to the city council by filing a notice of appeal with the collector within fifteen days of the serving, by mail, of the decision.

B. Hearing Notice. The council shall fix a time and place for hearing such appeal. The collector shall give notice thereof in writing to such person by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to such person at his last known place of address.

C. Hearing – Determination. The council shall have authority to determine all questions raised on such appeal at the time of the hearing. No determination so made by the council shall conflict with any substantive provisions in this chapter. (Ord. 642 § 1, 1983)

3.30.190 Records.

It shall be the duty of every service supplier required to collect and remit to the city any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax that such service supplier may have been requested to collect and remit to the city, which records the collector shall have the right to inspect at all reasonable times. (Ord. 642 § 1, 1983)

3.30.200 Refunds.

A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once, or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided in this section provided a claim in writing therefor, stating under penalty or perjury the specified grounds upon which the claim is founded, is filed with the collector within three years of the date of payment. The claim shall be on forms furnished by the collector.

B. A service supplier may claim a refund or take as credit against taxes collected and remitted an amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the collector that the service user from whom the tax has been collected did not owe the tax; provided, however, that neither the refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the service user or credited to charges subsequently payable by the service user to the service supplier.

C. No refund shall be paid under the provisions of this section unless the claimant establishes his right thereto by written records showing entitlement thereto. (Ord. 642 § 1, 1983)

3.30.210 Exemptions.

A. Eligibility. Any service user who is sixty-five years of age or older and who is personally responsible for the payment of the utility services subject to this tax and who personally pays for those services shall be eligible for an exemption from the taxes imposed by this chapter on service supplied to the service user’s residential living quarters. Only one such residential exemption shall be allowed to any person. The person in whose name the utility services are established with the utility companies will be deemed to be the person personally responsible for purposes of this section. The provisions of this exemption shall also apply to any individual who meets the criterion of disability, as established by the Social Security Administration’s Supplemental Security Income Program for the Aged, Blind, and Disabled (Title XVI of the Social Security Act as amended), without regard to the age of the disabled individual.

B. Application. Applications for exemption may be filed with the collector at any time on such forms as he may provide.

C. Effective Date. The exemption will not be effective until seventy-five days after receipt of the application by the collector.

D. Contents of Application. Applications shall be verified by declaration under penalty of perjury and shall contain such information as may be required by the collector.

E. Review and Certification. The collector shall review each application and shall certify the service users as exempt if the eligibility requirements of subsection A of this section are met, except that no exemption shall be granted to a service user who is receiving service from a service supplier through a master meter and no exemption shall be granted with respect to any tax imposed by this chapter which is or has been paid by a public agency or where the service user receives funds from a public agency specifically for the payment of such tax.

F. Notice to Service Supplier. If a service user is certified as exempt, the collector shall promptly notify service user’s service suppliers, stating the name of the service user, 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 user from its tax billing procedure.

G. Discontinue Billing Service User. Upon receipt of such notice, the service supplier shall within sixty days discontinue billing service user for taxes imposed by this chapter, except as otherwise provided in subsection H of this section.

H. Prior Taxes to Be Collected. Taxes billed by the service supplier to the service user prior to removing the service user from its tax billing procedure shall be collected from the service user and the service user shall pay such taxes to the service supplier. Taxes billed to and paid by the service user between the time that the application for exemption is filed and the service supplier removes the service user from its taxing procedure will not be refunded to the service user.

I. Duration of Exemption. Exemptions certified by the collector shall continue so long as the facts supporting the qualification for exemption shall exist; provided, however, that the exemption shall automatically terminate with any change in the service address or residence of the exempt individual; and provided further, that such individual may nevertheless apply for a new exemption with each change of address or residence.

J. Duty to Disclose Disqualification. Any service user who has been exempt under this section shall notify the collector within ten days of any change in fact or circumstance which might disqualify the individual from receiving the exemption. It shall be a misdemeanor for any person to knowingly receive the benefits of the exemption provided by this section when the basis for such exemption does not exist or ceases to exist.

Any service supplier, who determines by any means that a new or nonexempt service user is receiving service through a meter or connection exempt by virtue of an exemption issued to a previous user or exempt user of the same meter or connection, shall immediately notify the collector of such fact and the collector shall conduct an investigation to ascertain whether or not the provisions of this section have been complied with, and where appropriate order the service supplier to commence collecting the tax from the nonexempt service user.

K. Audit by Collector. The collector shall have the power and right to demand evidence of continued eligibility of a service user for exemption under the provisions of this section. Such evidence may include, but need not be limited to, copies of business records, letters or statements from the Social Security Administration and state, county, city and private pension administrators or unemployment and welfare agencies, and such other evidence concerning the service user or other members of his household as may tend to prove or disprove such eligibility. Failure to provide such evidence as is within the control of a service user to so provide, either directly by him or by his consent or the consent of a member of his household, when such evidence is requested of the service user in writing by the collector shall be grounds for the immediate discontinuance of the service user’s eligibility for exemption under the provisions of this section. Evidence provided to the collector at his request, or voluntarily provided to him by the service user without the collector’s request, may not be used against such service user as evidence of violation of the provisions of this section. Such evidence may only be used as grounds for termination of the exemption provided for in this section.

L. Further Exemptions. Nothing in this chapter shall be construed as imposing a tax upon any person if the imposition of such tax upon that person would be in violation of the Constitution of the United States or the Constitution of the state. (Ord. 1042 § 2 (Att. B), 2017; Ord. 670 § 1, 1984; Ord. 642 § 1, 1983)

3.30.220 Severability.

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter or any part hereof is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter or any part hereof. The city council hereby declares that it would have passed each section, subsection, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases be declared unconstitutional. (Ord. 642 § 1, 1983)