city of Chula Vista
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File #: 14-0439    Name: TUT
Type: Public Hearing Status: Passed
In control: City Council
On agenda: 8/5/2014 Final action: 8/5/2014
Title: CONSIDERATION OF AN AMENDMENT TO CHAPTER 3.44 OF THE CHULA VISTA MUNICIPAL CODE REGARDING THE CITY'S TELEPHONE USERS TAX ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 3.44 OF THE CHULA VISTA MUNICIPAL CODE TO FORMALIZE A RATE REDUCTION IN THE CITY'S TELEPHONE USERS TAX ("TUT") FROM 5% TO 4.75%, TO CLARIFY THAT THE TUT APPLIES TO WIRELESS TELEPHONE USAGE, AND TO ADD STATE LAW VALIDATION PROVISIONS (FIRST READING)
Code sections: 03.44 - Utility Users’ Tax
Attachments: 1. Item 6 - NOTICE OF PUBLIC HEARING - TUT, 2. Item 6 - Ordinance, 3. Item 6 - TUT Memo from Scott Noya 7-25-2014, 4. Item 6 - Exhibit A - TUT, 5. Item 6 - Exhibit B - TUT, 6. Item 6 - Exhibit C - TUT, 7. Item 6 - Exhibit D - TUT, 8. Item 6 - Exhibit E - TUT, 9. Item 6 - Exhibit F - TUT
Related files: 14-0482
Title
CONSIDERATION OF AN AMENDMENT TO CHAPTER 3.44 OF THE CHULA VISTA MUNICIPAL CODE REGARDING THE CITY'S TELEPHONE USERS TAX

ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHAPTER 3.44 OF THE CHULA VISTA MUNICIPAL CODE TO FORMALIZE A RATE REDUCTION IN THE CITY'S TELEPHONE USERS TAX ("TUT") FROM 5% TO 4.75%, TO CLARIFY THAT THE TUT APPLIES TO WIRELESS TELEPHONE USAGE, AND TO ADD STATE LAW VALIDATION PROVISIONS (FIRST READING)

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RECOMMENDED ACTION
Recommended Action
Council hold the public hearing required under CVMC Section 3.44.150, and then, after considering all testimony presented, approve on first reading the ordinance in the form presented amending Sections 3.44.030 and 3.44.150 of the Chula Vista Municipal Code regarding the TUT.

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SUMMARY
As you know, the City recently settled a class action lawsuit challenging the City's intrastate telephone communications services tax as it applies to "wireless" telephone usage. This tax is commonly known as the "TUT". In consideration for the dismissal of the case, the City agreed to fund a limited rebate program for TUT amounts paid on wireless telephone service over a three year period, to reduce the TUT rate from 5% to 4.75% starting March 1, 2014, and to clarify the TUT's application to wireless telephone services.

To complete the implementation of the TUT settlement, and to reduce the chances of further misunderstandings regarding the TUT's lawful application to "wireless" telephone usage, this item proposes three revisions to the City's TUT ordinance. The first revision formalizes the agreed upon reduction in the TUT rate from 5% to 4.75%. (This was done administratively back in February, 2014, but still needs to be codified.) The second revision clarifies language in Section 3.44.030(B) of the City's Municipal Code regarding the applicability of the TUT to "mobile telephone service." This proposed revision makes it clear that in 1970, when the City Council excluded "mobile t...

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