Pass: 10,625 / 63.36% Yes votes ...... 6,143 / 36.64% No votes

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Measure C7 is intended to address potential problems with the current 1970 tax ordinance. Like many similar utility users tax ordinances throughout California, Ventura's current ordinance was written before the introduction of new communications technologies, such as cellular phones and broadband service over private networks, including voice-over-internet protocol. The telephone tax was based, in relevant part, on many of the definitions and concepts in federal law such as the federal excise tax (FET). Subsequent changes to federal law, including a recent change in the IRS interpretation of the FET on long distance service, could result in inconsistent imposition and collection of the tax among various users and potential litigation by service providers.

Besides reducing the tax rate from 5% to 4.5%, Measure C7 eliminates references to the FET as the basis for collection of a telephone tax and expands the types of taxable communication services to cover the newer communications and video technologies not covered by the current ordinances. Instead of just functioning as a "telephone" or "cable TV" tax, Measure C7 would apply to charges for the use of "Communication Services" which include various types of "telecommunication services" and "video services" as defined in the Measure. As a result, the 4.5% tax would be broader based in generally applying to all types of communication and video services regardless of the technology used.

The Measure would not tax digital downloads such as books, music, ringtones, games, and similar digital products. Nor would it apply to coin-operated communication service, or Wi-Fi or other forms of Internet access. However, the Measure is worded to allow it to apply to future communications technologies, or to existing technologies that may become subject to local taxation. For example, although federal law does not presently allow local taxation of direct broadcast satellite TV service, it would be subject to the Measure, "to the extent federal law permits ... now or in the future."

Like the current telephone and cable taxes, the communication users tax would be collected from the "service user" (i.e., the customer) by the "service supplier" (the entity or person that provides the communication service). Service suppliers would have to begin collecting the communication users tax as soon as feasible but no later than April 1, 2008. Service suppliers can collect, and service users can pay, either the current tax or the new communication users tax during this transition period prior to April 1, 2008, to satisfy their tax obligation.

Also, as with the current telephone and cable TV taxes, the communications users' tax would be a general tax, with its proceeds deposited into the City's general fund. Such funds are available to the City for all of its programs. The above statement is an impartial analysis of Measure "C7." The full text of the ordinance is printed in the sample ballot pamphlet.

Section 9280 of the California Elections Code requires the City Attorney to prepare an impartial analysis of each City measure appearing on the ballot.

City of San Buenaventura