Title
Staff Report for Resolutions to Collect Communication Utility Users' Tax (UUT) and Emergency Communication System Access Tax (9-1-1) on Prepaid Wireless Service and to Authorize Examination of Prepaid Mobile Telephone Services Surcharge and Local Charge Records
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council authorize the City Manager to execute certain documents required by the California State Board of Equalization (BOE) to collect the City's Utility Users' Tax (UUT) and Emergency Communication System Access Tax (9-1-1) on prepaid wireless service, and to approve and authorize the following relating to this tax collection process:
* A resolution authorizing examination of prepaid mobile telephone services surcharge and local charge records
* A resolution authorizing the City Manager to execute an agreement with the State Board of Equalization for implementation of the Local Prepaid Mobile Telephony Services Collection Act
* A resolution to approve amendment No. 4 to the MuniServices, LLC agreement to examine BOE records relating to prepaid wireless UUT and 9-1-1 tax collections
* An amended ordinance for the temporary reduction of the single access line tax on prepaid wireless services
BACKGROUND
Traditionally, a city's UUT and 9-1-1 tax is collected by wireless service providers who include the charge on their customers' monthly invoices. In contrast to this arrangement, customers who purchase prepaid wireless services usually avoid paying any UUT or 9-1-1 tax due to collection complications. With prepaid wireless, there is no contract, no monthly invoices, and the prepaid wireless services are usually sold by retailers, not service providers themselves. It is estimated that approximately 70% of all prepaid wireless services are sold by retailers. Since these transactions bypass our local UUT and 9-1-1 tax collection channels, the City has experienced a loss of revenues as customers expand their use of p...
Click here for full text