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Measure C Amend Utility Users Tax City of Palo Alto Majority Approval Required Pass: 16988 / 85.08% Yes votes ...... 2978 / 14.92% No votes
See Also:
Index of all Measures |
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Results as of Dec 28 11:41am, 100.0% of Precincts Reporting (41/41) |
Information shown below: Yes/No Meaning | Impartial Analysis | Arguments | Full Text | |||||
To ensure continued funding for basic and essential services such as police, fire and street maintenance and repair, shall the City of Palo Alto maintain the telecommunications portion of the Utility Users Tax while reducing the rate from 5% to 4.75%; modernize its provisions to ensure equal treatment of taxpayers regardless of telecommunications technology used; and eliminate a discounted tax rate paid by a small number of commercial large users of gas, electric and water services?
Palo Alto voters approved the UUT in 1987. Since then there have been no amendments to the ordinance. The UUT represents 7% of the City's general fund revenue. These revenues cannot be taken away by the state. They are used for general local governmental purposes such as police, fire, public works, parks and recreation, library and capital improvements. This measure would make three changes to the UUT. First, the measure would modernize the telecommunication part of the UUT to reflect changes in federal law, account for technological advances and treat all technologies equally. In recent years, many cities have modernized the telecommunications part of their UUT ordinances to respond to changes in federal law and to reflect the shift from landline telephones to digital communication technologies such as wireless and VOIP. Federal law does not permit cities to tax internet access and this measure does not alter this. Most wireless carriers are already including the telecommunications tax on users' bills. This measure is not expected to result in significant changes to customer bills. Second, the measure would reduce the telecommunications tax rate from 5% to 4.75%, for all users. Third, the measure would eliminate an existing rate discount that benefits the nine largest users of water, gas and electric utilities. These nine "large users" are big businesses or institutions. Eliminating the discount will mean the nine "large users" will pay the same rate that everyone else in Palo Alto already pays. Reducing the telecommunications tax rate from 5% to 4.75% would result in a small annual revenue reduction that is expected to be offset by revenue increases from elimination of the discount for large users of water, gas and electricity. The ordinance will become effective if a majority of those voting on the measure vote for it. A vote "For the Ordinance" will modernize the telecommunications language, reduce the telecommunications tax rate from 5%to 4.75% and eliminate the discount for large users of water, gas and electricity. A vote "Against the Ordinance" will keep the UUT as it is. Dated: August 19, 2014
/s/Molly S. Stump
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Nonpartisan Information League of Women Voters
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Arguments For Measure C | Arguments Against Measure C | ||
As a result of changes in federal law and advances in technology, Palo
Alto's current Utility Users Tax (UUT) needs to be modernized.
NOT A NEW TAX: Our current UUT was enacted in 1987. It has been a steady source of local revenue that helps Palo Alto provide a high level of services to residents. However, the tax was enacted when communication technology was much simpler and the UUT applied primarily to landline telephones. While most cell phones are already covered by the existing ordinance, certain other modern telecommunications are not. FAIR SHARE: Measure C will ensure that everyone pays, regardless of the telecommunication type or provider they choose. REDUCES RATE: Although the current rate of 5% is already below the State average of 6%, Measure C reduces the rate to 4.75%. LOCAL TAX: UUT revenues cannot be taken away by the State. This general tax has provided funds for important City services like fire and rapid emergency response, sidewalk, park, playgrounds, and athletic field maintenance. It also helped with payments to the School District for the historic lease agreement at the former Cubberley High School site which today offers recreation, playing fields, classes, child care and senior services in south Palo Alto. Most neighboring cities have already modernized their UUT language, and it's time that Palo Alto does too. A NO vote keeps the tax at current levels. Please join Palo Alto City Council and community leaders in voting YES on Measure C to modernize the UUT.
/s/Richard Rosenbaum
/s/ Liz Kniss
/s/Carolyn Tucher
/s/ Lydia Kou
/s/Greg Scharff
Proponents say "Our current UUT was enacted in 1987" as though that's a reason to extend it. The Federal government imposed a 3% excise tax in 1898 to pay for the Spanish-American war. That tax ended in 2006 and so should Palo Altos' utility tax. High taxes are causing businesses and employees to leave California by the droves (over 1,500,000 people left in the last 10 years). One more tax will be just one more reason for businesses to leave California. The governor of Texas has run radio and TV ADS in California urging businesses to leave California and move to Texas. And a number of high profile companies have done just that. Tax proponents want to charge commercial customers a higher rate. But, all businesses have to pass all costs of doing business onto their customers, either locally here in Palo Alto or to other customers from around the world. So, taxes on businesses are just a hidden tax on their customers, including you. If so, lets defeat this "hidden" tax increase and send a message to the City Council to cut at least 2% fat from their bloated budget. Please visit our website: http://www.SVTaxpayers.org/palo-alto-utilitytax
/s/Mark W.A. Hinkle
/s/ Edward Leo Wimmers | As a taxpayer, you pay for services provided by the City via a number of different taxes, one of them being a Utility User Tax. As an individual, if you want a service or product, you would expect to have to pay for it with your money. Being a person of good conscience, you wouldn't force anyone else to pay for the goods and services you want. Right? And you wouldn't hire someone else to steal money to pay for those goods and services. Right? But, isn't that what a Utility Tax essentially does? Through taxation, aren't you hiring someone (government agents) to force other people to pay for goods and services you want? And if it is wrong for you as an individual to take money from others, against their will, isn't also wrong to hire someone to do essentially the same thing on your behalf? The Palo Alto Utility User Tax wants to increase the tax on "someone else" so they can continue to provide you with services you presumably want, i.e. police, fire, libraries, etc. They want to charge commercial customers a higher rate. But, all businesses have to pass all costs of doing business onto their customers, either locally here in Palo Alto or to other customers from around the world. So, taxes on businesses are just a hidden tax on their customers, including you. The proponents say "The telecommunications portion of the total UUT revenue is $2.8 million annually or nearly 2 percent of the general fund revenue". Do you think there's more than 2% waste in the City Government's operations? If so, lets defeat this "hidden" tax increase and send a message to the City Council to cut at least 2% fat from their bloated budget. Please visit our website: http://www.SVTaxpayers.org/palo-alto-utilitytax
/s/Mark W.A. Hinkle
/s/ Edward Leo Wimmers
This is not a new tax, a NO vote keeps the tax as-is. A YES vote reduces the tax from 5% to 4.75%. This tax has been a long-time source of funds for high quality Palo Alto services, totaling over $3 million in 2014. A YES vote means all users pay their fair share. Neighboring cities have already updated their ordinance language. Its time Palo Alto did too. Vote YES and support Measure C
/s/Carolyn Tucher
/s/Greg Scharff
/s/ Liz Kniss |
Full Text of Measure C |
The People of the City of Palo Alto do ordain as follows: SECTION 1. Chapter 2.35 of the Palo Alto Municipal Code is hereby amended by amending Chapter 2.35 as follows:
2.35.010 Short title. 2.35.010 Short title.
This chapter shall be known as the "Utility Users Tax." 2.35.020 Tax imposed.
There is established and imposed, commencing on the effective
date of the ordinance codified in this chapter, a utility users tax at the rate
set forth in this chapter. 2.35.030 Disposition of tax revenue.
The tax imposed by this chapter is for the purpose of raising
revenues for the general governmental purposes of the city. All of the
proceeds from the tax imposed by this chapter shall be placed in the city's
general fund. 2.35.040 Definitions. (a) Except where context otherwise requires, the definitions given in this section govern the construction of this chapter:
(1) "City" means the city of Palo Alto. 2.35.050 Constitutional exemption.
Nothing in this chapter shall be construed as imposing a tax upon
the city of Palo Alto or any other person if imposition of such tax upon
that person would be in violation of the Constitution of the United States
or that of the state of California or any other statute or regulation that
applies to charter cities. The City may adopt an administrative policy to
implement this provision. 2.35.060 Electricity users tax. (a) There is imposed a tax upon every person in the city using electricity in the city. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such electricity by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such electricity. (b) "Charges," as used in this section, shall include charges made for metered energy and charges for service, including customer charges, service charges, standby charges, charges for temporary services, demand charges, and annual and monthly charges.
(c) As used in this section, the term "using electricity" shall not be
construed to mean the storage of such electricity 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 electricity was received;
provided, however, that the term shall include the receiving of such
electricity for the purpose of using it in the charging of batteries; nor shall
the term include the mere transmission or receiving of such electricity by
a governmental agency at a point within the city for resale. 2.35.070 Gas users tax. (a) There is imposed a tax upon every person in the city using gas in the city which is delivered through mains or pipes. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such gas by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such gas. (b) "Charges," as used in this section, shall include charges made for metered gas and charges for service, including customer charges, service charges, demand charges, standby charges, charges for temporary service, and annual and monthly charges.
(c) There shall be excluded from the base on which the tax
imposed in this section is computed charges made for gas which is to be
resold and delivered through mains or pipes and charges made for gas
to be used in the generation of electrical energy by a governmental
agency. 2.35.080 Water users tax. (a) There is imposed a tax upon every person in the city using water which is delivered through mains or pipes in the city. The tax imposed by this section shall be at the rate of five percent of the charges to a service user made for such water by a service supplier, except as provided in Section 2.35.100. Said tax shall be paid by the person paying for such water. (b) "Charges," as used in this section, shall include charges for metered water and charges for service, including customer charges, service charges, standby charges, charges for temporary service, and annual and monthly charges.
(c) There shall be excluded from the base on which the tax
imposed in this section is computed charges made for water which is to
be resold and delivered through mains or pipes and charges made for
water used in the generation of electrical energy by a governmental
agency.
2.35.090 Telecommunications
(a) There is imposed a tax upon every person in the city, using
(b) As used in this section, the term "charges" shall not include
charges for services paid for by inserting coins in a coin-operated
telephone except that where such coin-operated services are 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
(c) The
(d) The term "telephone communication services" means (e) The tax imposed by this section applies to all telephone communication services however charged or billed, including, but not limited to prepaid services, post-paid services, 800 services (or any other toll-free numbers), or 900 services. (f) The tax imposed by this section applies to ancillary telephone communication services, which are those services that enable or enhance access to telephone communication services. Ancillary telephone communication services include, but are not limited to, charges for connection, reconnection, termination, movement, or change of telephone communication services; detailed billing; central office and custom calling features (including but not limited to call waiting, call forwarding, caller identification and three-way calling); voice mail and other messaging services; directory assistance; access and line charges; local number portability charges; text and instant messaging; and conference calls. (g) "Mobile telecommunication service" means commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations and as set forth in the Mobile Telecommunications Sourcing Act (4 U.S.C. Section 124) and the regulations thereunder. (h) "Place of primary use" means the street address representative of where the customer's use of the telephone communications service primarily occurs, which must be the residential street address or the primary business street address of the customer. (i) "Service address" means either (1) the location of the service user's telephone communication equipment from which the communication originates or terminates, regardless of where the communication is billed or paid; or (2) if the location of the equipment is unknown (e.g., mobile telecommunication service or VoIP service), the service address means the location of the service user's place of primary use; or (3) for prepaid telephone communication 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. (j) There is a rebuttable presumption that a telephone communication service, which is billed to a billing or service address in the city, is used, in whole or in part, within the city's boundaries, and such service is subject to taxation under this section. There is also a rebuttable presumption that a prepaid telephone communication service sold within the city is primarily used, in whole or in part, within the city and is therefore subject to taxation under this section. 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. 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 service.
(a) The tax rate imposed on electricity, gas and water users in Sections 2.35.060, 2.35.070 and 2.35.080 respectively shall be three percent on all utility charges to a service user exceeding the cumulative amount of $800,000.00 for water, gas and electricity or any combination thereof during any utility tax year and shall be two percent of the amount of utility charges exceeding the cumulative amount of $2,400,000.00 for water, gas or electricity or any combination thereof during any utility tax year.
(b) Commencing on July 1, 1988, and every July 1st thereafter, the
director of finance shall annually adjust the three percent and two percent
tax rate thresholds specified in subsection (a) of this section by the annual
change in the Consumer Price Index, All Urban Consumers, for the San
Francisco-Oakland-San Jose Metropolitan Area published by the Bureau
of Labor Statistics or any replacement index published by said Bureau
("Index") for the preceding year as illustrated by the following formula: For example, on July 1, 1988, the thresholds shall be adjusted by multiplying them by the April, 1988, Index divided by the April, 1987, Index.
(c) Where any person can establish to the satisfaction of the
director of finance that be is a person responsible for the payment of one
or more taxes under this chapter, he may aggregate charges for gas,
electricity or water or any combination thereof for purposes of determining
the application of the reduced rate pursuant to this section. The city
manager shall develop and publish written regulations for determining
which person(s) is a service user for the purposes of implementing the
lower rates authorized by this section. Such regulations may be
amended from time to time. 2.35.110 Council authorization to suspend collection of a portion of tax for limited periods of time. The city council may from time to time determine to collect less than the five percent tax imposed by Sections 2.35.060, 2.35.070, 2.35.080 and 2.35.090 from all service users and may suspend a portion of the maximum rates by passage of an ordinance stating: (a) The council's intention to suspend collection of a portion of said tax; (b) The duration of the suspension, which in no event shall exceed one year; (c) The exact portion of the tax, collection of which is being suspended.
This rate suspension shall apply to all service users across the board
and shall be in effect for one year from the effective date of said ordinance. 2.35.120 Collection of tax. (a) Every service supplier shall collect the amount of tax imposed by this chapter from the service user. (b) The tax shall be collected insofar as practicable at the same time as, and along with, the collection of charges made in accordance with the regular billing practice of the service supplier. Except in those cases where a service user pays the full amount of said 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 said 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 tax shall be deemed to have been paid.
(c) The duty to collect the tax from a service user shall commence
thirty days after the effective date of the ordinance codified in this chapter.
If a person receives more than one billing, one or more being for a
different period than another, the duty to collect shall arise separately for
each billing period. 2.35.130 Reporting and remitting.
Each service supplier, shall, on or before the last day of each month,
make a return to the director of finance, on forms provided by him, stating
the amount of taxes billed by the service supplier during the preceding
month. At the time the return is filed, the full amount of the tax collected
shall be remitted to the director of finance. The director of finance may
require further information in the return. Returns and remittances are due
immediately upon cessation of business for any reason. 2.35.140 Penalty for delinquency. (a) Taxes collected from a service user which are not remitted to the tax administrator on or before the due dates provided in this chapter are delinquent. (b) Penalties for delinquency in remittance of any tax collected or any deficiency in remittance, shall attach and be paid by the person required to collect and remit at the rate of ten percent of the total tax collected or imposed herein. (c) The director of finance shall have power to impose additional penalties upon persons required to collect and remit taxes under the provisions of this chapter for fraud or negligence in reporting or remitting at the rate of ten percent of the amount of the tax collected or as recomputed by the director of finance.
(d) Every penalty imposed under the provisions of this section shall
become a part of the tax required to be remitted. 2.35.150 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 as such service supplier may have been required
to collect and remit to the city, which records the director of finance shall
have the right to inspect at all reasonable times. 2.35.160 Failure to pay tax-Administrative remedy.
Whenever the director of finance determines that a service user has
deliberately withheld the amount of the tax owed by him from the amounts
remitted to a service supplier, or that a service user has failed to pay the
amount of the tax for a period or four or more billing periods, or whenever
the director of finance deems it in the best interest of the city, he shall
relieve the service supplier of the obligation to collect taxes due under
this chapter from certain named service users for specified billing periods.
The director of finance 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. The notice shall be served on the service user
by handing it 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, or, should
the service user have changed his address, to his last known address. If
a service user fails to remit the tax to the director of finance within fifteen
days from the date of the service of the notice upon him, which shall be
the date of mailing if service is not accomplished in person, a penalty of
twenty-five percent of the amount of the tax set forth in the notice shall
be imposed, but not less than $5.00. The penalty shall become part of
the tax herein required to be paid. 2.35.170 Actions to collect.
Any tax required to be paid by a service user under the provisions
of this chapter shall be 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
director of finance 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 including applicable
penalties and attorneys' fees. 2.35.180 Administrative rules, regulations and agreements.
The city manager has the authority 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 any
tax herein imposed, and the city manager may also make administrative
agreements to vary the strict requirements of this chapter so that the
collection of any tax imposed herein may be made in conformance with
the billing procedures of a particular service supplier so long as the
overall results of such agreements result in collection of the tax in
conformance with the general purpose and scope of this chapter. A copy
of such rules and regulations and a copy of any such agreement shall be
on file and available for public examination in the office of the city clerk.
Failure or refusal to comply with any such rules, regulations or
agreements promulgated under this section shall be deemed a violation
of this chapter. 2.35.190 Refunds.
(a) Claim Required. Prior to seeking judicial relief with respect to
a dispute regarding whether the amount of any tax has been
overpaid, paid more than once or erroneously or illegally
collected or received by the city under this chapter, an
aggrieved taxpayer, fee payer, service supplier, service user or
any other person must comply with the provisions of section
(b) Service Suppliers. A service supplier may claim a refund or
take as credit against taxes collected and remitted, the amount overpaid,
paid more than once, or erroneously or illegally collected or received
when it is established in a manner prescribed by the director of finance
that the service user from whom the tax has been collected did not owe
the tax; provided, however, that neither a 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. 2.35.200 Bundling Taxable Items with Nontaxable Items. If any nontaxable charges are combined with and not separately stated from taxable service charges on the customer's bill or invoice of a service supplier, the combined charges are subject to tax unless the service supplier identifies, by reasonable and verifiable standards, the portions of the combined charges that are nontaxable and taxable through the service supplier's books and records kept in the regular course of business, and in accordance with generally accepted accounting principles, and not created and maintained for tax purposes. If the service supplier offers a combination of taxable and non-taxable services, and the charges are separately stated, then for taxation purposes, the values assigned the taxable and non-taxable services shall be based on its books and records kept in the regular course of business and in accordance with generally accepted accounting principles, and not created and maintained for tax purposes. The service supplier has the burden of proving the proper valuation and apportionment of taxable and non-taxable charges. SECTION 2. General Tax. Proceeds of the tax imposed by this Ordinance shall be deposited in the general fund of the City and shall be available for any legal purpose. SECTION 3. Amendment or Repeal. The City Council may repeal Chapter 2.35 of the Palo Alto Municipal Code or amend that Chapter without a vote of the people except that any amendment to Chapter 2.35 that increases the amount or rate of tax due from any Person beyond the inflation-adjusted amounts and rates authorized by this Ordinance may not take effect unless approved by a vote of the people. SECTION 4. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The people hereby declare that they would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable. SECTION 5. Effective Date. This ordinance shall be effective only if approved by a majority of the voters and shall go into effect immediately after the vote is declared by the City Council and the duty of service providers to collect the tax shall commence as provided in California Public Utilities Code Section 799. SECTION 6. Execution. The Mayor is hereby authorized to attest to the adoption of this Ordinance by the voters of the City by signing where indicated below. |