048 of 2004 - Establishing a tax on the gross receipts of telecommunications service providers; relating to cell p . 0 04-1
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ORDINANCE NO.
No. 48 of 2004
(Enacting New Chapter 3.10 of the SALT LAKE CITY CODE
Regarding the Municipal Telecommunications License Tax, and
Repealing Sections 3.09.010 through 3.09.090, 5.04.170 and
5.04.080 of the SALT LAKE CITY CODE, Relating to the Cell Phone
Tax and the 6%Franchise Tax)
AN ORDINANCE ESTABLISHING A TAX ON THE GROSS
RECEIPTS OF TELECOMMUNICATIONS SERVICE
PROVIDERS; SETTING THE RATE FOR SUCH TAX;
ESTABLISHING THE EFFECTIVE DATE OF THE TAX; AND
REPEALING SECTIONS 3.09.010 THROUGH 3.09.090,
5.04.170 AND 5.04.080 OF THE SALT LAKE CITY CODE,
RELATING TO THE CELL PHONE TAX AND THE 6%
FRANCHISE TAX
* * *
WHEREAS, Salt Lake City,Utah(the "City"), pursuant to Utah Code Sections 10-1-401
et seq. may levy a tax on the gross receipts of telecommunication service providers; and
WHEREAS, the City has determined the need for such a tax as a source of general fund
revenue; and
WHEREAS, the City has previously raised general fund revenue from taxes or fees from
certain telecommunication providers under authority of Utah Code Sections 10-1-203 or 11-26-1
et seq., and now wishes to repeal those taxes or fees,
NOW, THEREFORE, BE IT ORDAINED by the City Council of Salt Lake City, Utah,
as follows:
SECTION 1. That Sections 3.10.010 through 3.10.090 of the Salt Lake City Code,
relating to the municipal telecommunications license tax, are hereby enacted to read as follows:
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3.10.010 Definitions.
As used in this ordinance:
(1) "City" means Salt Lake City, Utah.
(2) "Commission"means the State Tax Commission.
(3) (a) Subject to subsections (3) (b) and (c), "customer" means the person who is
obligated under a contract with a telecommunications provider to pay for telecommunications
service received under the contract.
(b) For purposes of this ordinance, "customer" means:
(i) the person who is obligated under a contract with a
telecommunications provider to pay for telecommunications service received
under the contract; or
(ii) if the end user is not the person described in subsection(3) (b) (i),
the end user of telecommunications service.
(c) "Customer" does not include a reseller:
(i) of telecommunications service; or
(ii) for mobile telecommunications service, of a serving carrier under
an agreement to serve the customer outside the telecommunications provider's
licensed service area.
(4) (a) "End user"means the person who uses a telecommunications service.
(b) For purposes of telecommunications service provided to a person who is
not an individual, "end user" means the individual who uses the telecommunications
service on behalf of the person who is provided the telecommunications service.
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(5) "Gross Receipts attributed to the city"means those gross receipts from a
transaction for telecommunications service that is located within the city for the purposes of sales
and use taxes under Utah Code Title 59, Chapter 12, Sales and Use Tax Act and determined in
accordance with Utah Code Section 59-12-207.
(6) "Gross receipts from telecommunications service"means the revenue that a
telecommunications provider receives for telecommunications service rendered except for
amounts collected or paid as:
(a) a tax, fee, or charge:
(i) imposed by a governmental entity;
(ii) separately identified as a tax, fee, or charge in the transaction with
the customer for the telecommunications service; and
(iii) imposed only on a telecommunications provider;
(b) sales and use taxes collected by the telecommunications provider from a
customer under Utah Code Title 59, Chapter 12, Sales and Use Tax Act; or
(c) interest, a fee, or a charge that is charged by a telecommunications
provider on a customer for failure to pay for telecommunications service when payment
is due.
"Gross receipts from telecommunications services" shall include gross receipts from non-
telecommunication services within the meaning of, and to the extent authorized by, Utah Code
Section 10-1-410.
(7) "Mobile telecommunications service" is as defined in the Mobile
Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
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(8) "Place of primary use":
(a) for telecommunications service other than mobile telecommunications
service, means the street address representative of where the customer's use of the
telecommunications service primarily occurs, which shall be:
(i) the residential street address of the customer; or
(ii) the primary business street address of the customer; or
(b) for mobile telecommunications service, is as defined in the Mobile
Telecommunications Sourcing Act, 4 U.S.C. Sec. 124.
(9) Notwithstanding where a call is billed or paid, "service address" means:
(a) if the location described in this Subsection(9) (a) is known, the location of the
telecommunications equipment:
(i) to which a call is charged; and
(ii) from which the call originates or terminates;
(b) if the location described in subsection(9) (a) is not known but the location
described in this subsection(9) (b) is known, the location of the origination point of the
signal of the telecommunications service first identified by:
(i) the telecommunications system of the telecommunications
provider; or
(ii) if the system used to transport the signal is not a system of the
telecommunications provider, information received by the telecommunications
provider from its service provider; or
(c) if the locations described in subsection (9) (a) or(b) are not known, the
location of a customer's place of primary use.
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(10) (a) Subject to subsections (10) (b) and(10) (c), "telecommunications
provider" means a person that:
(i) owns, controls, operates, or manages a telecommunications
service; or
(ii) engages in an activity described in subsection(10) (a) (i) for the
shared use with or resale to any person of the telecommunications service.
(b) A person described in subsection(10) (a) is a telecommunications
provider whether or not the Public Service Commission of Utah regulates:
(i) that person; or
(ii) the telecommunications service that the person owns, controls,
operates, or manages.
(c) "Telecommunications provider" does not include an aggregator as defined
in Utah Code Section 54-8b-2.
(11) "Telecommunications service" means:
(a) telephone service, as defined in Utah Code Section 59-12-102, other than
mobile telecommunications service, that originates and terminates within the boundaries
of this state; and
(b) mobile telecommunications service, as defined in Utah Code Section 59-
12-102:
(i) that originates and terminates within the boundaries of one state;
and .
(ii) only to the extent permitted by the Mobile Telecommunications
Sourcing Act, 4 U.S.C. Sec. 116 et seq.
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3.10.020 Levy of tax.
There is hereby levied a municipal telecommunications license tax on the gross receipts
from telecommunications service attributed to the city in accordance with Utah Code Section 10-
1-407.
3.10.030 Rate.
The rate of the tax levy shall be 4.0% of the telecommunication provider's gross receipts
from telecommunications service that are attributed to the city in accordance with Utah Code
Section 10-1-407. If the location of a transaction is determined to be other than the city, then the
rate imposed on the gross receipts for telecommunications service shall be determined pursuant
to the provisions of Utah Code Section 10-1-407.
3.10.040 Rate Limitation and Exemption Therefrom.
The rate of this levy shall not exceed 4% of the telecommunication provider's gross
receipts from telecommunication service attributed to the city unless a higher rate is approved by
a majority vote of the voters in the city that vote in:
(a) a municipal general election;
(b) a regular general election; or
(c) a local special election.
3.10.050 Effective Date of Tax Levy.
This tax shall be levied beginning July 1, 2004.
3.10.060 Changes in Rate or Repeal of the Tax.
This ordinance is subject to the requirements of Utah Code Section 10-1-403. If the tax
rate is changed or the tax is repealed, then the appropriate notice shall be given as provided in
Utah Code Section 10-1-403.
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3.10.070 Interlocal Agreement for Collection of the Tax.
On or before the effective date of this ordinance, the city shall enter into a uniform
interlocal agreement with the Commission as described in Utah Code Section 10-1-405 for the
collection, enforcement, and administration of the municipal telecommunications license tax.
3.10.080 Procedures for Taxes Erroneously Recovered from Customers.
Pursuant to the provisions of Utah Code Section 10-1-408, a customer may not bring a
cause of action against a telecommunications provider on the grounds that the
telecommunications provider erroneously recovered from the customer the municipal
telecommunication license tax except as provided in Utah Code Section 10-1-408.
3.10.090 Repeal of Inconsistent Taxes and Fees.
Any tax or fee previously enacted by the city under authority of Utah Code Section 10-1-
203 or Utah Code Title 11, Chapter 26, Local Taxation of Utilities Limitation, is hereby
repealed.
Nothing in this ordinance shall be interpreted to repeal any ordinance or fee which
provides that the city may recover from a telecommunications provider the management costs of
the city caused by the activities of the telecommunications provider in the rights-of-way of the
city, if the fee is imposed in accordance with Utah Code Section 72-7-102 and is not related to
the city's loss of use of a highway as a result of the activities of the telecommunications provider
in a right-of-way, or increased deterioration of a highway as a result of the activities of the
telecommunications provider in a right-of—way,nor does this ordinance limit the city's right to
charge fees or taxes on persons that are not subject to the municipal telecommunications license
tax under this ordinance and locate telecommunications facilities, as defined in Utah Code
Section 72-7-108, in the city.
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SECTION 2. That Sections 3.09.010 through 3.09.090 of the Salt Lake City Code are
hereby repealed.
SECTION 3. That Sections 5.04.170 and 5.04.180 of the Salt Lake City Code are
hereby repealed.
SECTION 4. All references herein to sections of the Utah Code shall include successors
to such referenced sections.
SECTION 5. That this ordinance shall take effect on the date of its first publication.
Passed by the City Council of Salt Lake City, Utah this 17thday of June
2004.
CHAIRPERSON
ATTEST:
44
04/1 /.1,k4covv)
CHIEF DEPUTY Cr IVY rCORDER
Transmitted to Mayor on v c►'
Mayor's Action: Approved. Vetoed.
YOR
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O
CHIEF DEPUTY Y ORDER
(SEAL)
Bill No. 48 of 2004. Salt .la e OVEDAtTQ boys Offic,
Published: June 29, 2004 4:,(0 at tj .y er •- •
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