43,450 / 61.2% Yes votes ...... 27,492 / 38.8% No votes

See Also: Index of all Measures

In 2002 the Federal Mobile Telecommunications Sourcing Act of 2000 ("the Act") became effective. The Act allows cities to apply the UUT to all cellular calls if the customer's "primary place of use" is within Oakland. The primary place of use is the customer's billing address.

Adoption of the Act's standard would make it easier for cell phone providers to comply with the City's UUT requirements; it also would be easier for the City to monitor compliance with the requirements of the UUT. If adopted by the voters, this measure would not change the existing UUT rate of 7.5%.

s/JOHN A. RUSSO
City Attorney

SUMMARY This measure will amend Section 4.28.030 of the Oakland Municipal Code, so that providers of wireless telephonic services (cellular phones, pagers, etc.) will be required to collect the City of Oakland's Utility User's Tax ("UUT") from all customers on a consistent basis. Presently, the tax applies to only those calls that either originate or terminate in Oakland, and are made by customers whose service address is in Oakland. Since it is difficult for a provider to determine the precise location from which a call is placed, some providers are not collecting the tax in accordance with existing code provisions. As a result, the City is not receiving all the revenue to which it is entitled, and customers are not being treated consistently + some customers are paying the tax, whereas others are not. Under the proposed measure, the tax would apply to all wireless calls, regardless of where they originate or terminate, as long as the customer's business or residential address is in Oakland. This should make it easier for providers to collect the tax from all customers, and for City staff to ensure that they do.

FISCAL IMPACT Based on our analysis of data obtained by the City of Oakland's Financial Services Agency, we estimate that the City will gain approximately $1,350,000 in revenue annually through passage of this measure. The increased revenue will come from customers who are presently not paying the tax but ought to be. Although our estimates are based upon the best data available at this time, it is diffi- cult to make such estimates with precision; therefore, the actual results may vary from our estimates.

s/ROLAND E. SMITH, CPA, CFS
City Auditor

Cellular telephone companies have claimed that it is difficult to determine where cellular phone calls originate and terminate, especially since many cellular telephone providers offer monthly flat rate pricing packages. The City has experienced difficulty determining whether cellular telephone companies are paying the correct amount of Utility User's Tax.

This measure would not change the existing telephone Utility User's Tax rate of 7.5%. Instead it would calculate the UUT using the same standard the federal Mobile Telecommunications Sourcing Act of 2000 ("Act") established.

The Act allows a city to apply the UUT to all cellular telephone charges if the customer's "primary place of use" is within the City of Oakland. The primary place of use is the customer's residential or business billing address. Adoption of the federal rules would create a "level playing field" so that the City could verify that all cellular telephone providers collect the tax at the same rate.

If this measure is adopted, more of a cellular customer's calls may be subject to the UUT because the tax would apply to all charges to cellular phones with Oakland billing addresses.

s/JOHN A. RUSSO
City Attorney

League of Women Voters Written Pros & Cons

Scroll Down to Measure O. Document also includes Pros & Cons of Measure 2, Measure A, Measure E and other Oakland City Ballot Measures

LWV Oakland Pros & Cons Presentation
Wednesday, February 18, 2004 at 7 PM
EBMUD Training Room,
375 Eleventh Street.

Oakland Tribune

• Measure O could hike taxes for some cell phone users - February 15, 2004

NOW, THEREFORE, BE IT RESOLVED: In order to achieve uniformity, minimize the loss of revenue to the City of Oakland and to provide a simplified and uniform methodology for collecting the UUT on cellular telephone calls, the City Council finds and determines that the City of Oakland's Utility User's Tax ("UUT") should be amended as it applies to wireless (cellular) telephone usage so that the tax conforms to the Sourcing Rules of Section 117 of the Federal Mobile Telecommunications Sourcing Act of 2000 ("MTSA").
FURTHER RESOLVED: This new methodology for imposing the tax on the entire amount of the customer's bill subject to the MTSA represents a change in taxing methodology that must be approved by the voters pursuant to Proposition 218.
FURTHER RESOLVED: That the City Council does hereby submit to the voters at the March 2, 2004 general election the text of the proposed ordinance, which shall be as follows:

"SECTION 1. The Municipal Code is hereby amended to add, delete, or modify sections as set forth below (section numbers and titles are indicated in bold type; additions are indicated by underscoring and deletions are indicated by strike through type; portions of the regulations not cited or not shown in underscoring or strike-through type are not changed.

SECTION 2. Section 4.28.030 of the Municipal Code is hereby amended to read as follows:

4.28.030 Telephone Users Tax imposed.

A. There is imposed a tax upon every telecommunications service customer whose place of primary use is within the jurisdictional boundaries of the City of Oakland, every person with a service address in the city, other than a telephone corporation, (as defined by and licensed by the California Public Utilities Commission), using intrastate, interstate, or international telephone communication services including, but not limited to, cellular telephones and facsimile transmissions for communications originating or terminating in the city. The tax imposed by this section shall be at the rate of seven and one-half (7.50) percent of all charges made for such services and shall be paid by the person receiving such services, and collected by the provider of such services.
B. 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 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 tax due; nor shall the term "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 such section existed on July 1, 1968.
C. 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 by Section 4251 of Title 26 of the United States Code, as such section existed on July 1, 1968, without regard to subsection (b) thereof. (Prior code § 5-23.03)"

NO ARGUMENTS IN FAVOR OR AGAINST MEASURE O SUBMITTED.