Sipple et al v. City of Chico – city of Chico has been accepting illegally collected utility taxes, AGAIN!

26 Nov

I was just looking over next Tuesday’s agenda and saw something interesting in the closed session schedule at  the end – since 2011 the city of Chico has been sued over “taxes erroneously paid and collected in violation of the law” .  Apparently cell phone and internet provider New Cingular has been collecting taxes for internet access and handing the money over to some 134 cities and two counties, including the city of Chico. 

Donald Sipple is the same man who sued to stop cities all over California from illegally collecting a “utility tax” off our cell phones. They’d been doing it for years, without our consent, even after a federal court ruling made it illegal.  That’s the way it is – you sue somebody, maybe you win – then you have to collect. In that case, the city of Chico decided to put a measure on the 2012 ballot, asking us to forgive  them their trespasses, and allow them to keep right on trespassing, offering to lower the tax by a puny half a percent if we’d allow them to keep collecting it. That campaign was low and dishonest, but we beat it, and the city had to hand over refunds to those who went through their ridiculous process to get them. 

Given that, I guess I shouldn’t be shocked to find out, they’ve been collecting an illegal tax on internet access, and now must be sued to comply with a court order to stop doing it and refund the money. Sipple and friends won their suit, and then went about trying to collect on behalf of their consumer clients. Only 40 “defendants” complied with the court order. Chico was among the cities that simply decided not to comply, for whatever reason. In 2011 Sipple and friends mounted another suit to collect the refunds.

At next weeks’ council meeting, behind closed doors, our new council and our revamped staff will discuss how to handle it. Almost three years after the suit was mounted in 2011. 

Here we go again.

Here’s a little something to think about – city assistant manager and former administrative services director Chris Constantin has proven himself to be a very capable finance man. Is he going to tell us he didn’t know this tax was illegal? Is he going to tell us he didn’t know the city was taking it? What about Sorensen?  


6 Responses to “Sipple et al v. City of Chico – city of Chico has been accepting illegally collected utility taxes, AGAIN!”

  1. Bob H November 27, 2014 at 6:37 pm #

    And again, you don’t know what you’re talking about. As you point, out the suit was filed in 2011. It has been on council agendas since 2011. The issue was collecting utility users tax, using the old land based service definitions, on cellular phone services, and is the issue that they tried to fix with Measure J. Once measure J was defeated the city stopped collecting the tax on cellular phone services. You link to court filings, but you obviously did not bother to read them.

    • Juanita Sumner November 28, 2014 at 5:59 am #

      Again, you come to my blog with insults – you need to do more reading Bob, this is a subsequent lawsuit, regarding INTERNET ACCESS, not cell phones. That’s already been hashed, and Chico has handed out cell phone tax rebates, so why would Sipple still be suing the city of Chico over that?

      Maybe if you’d spend more time reading up on stuff instead of just trying to knock me down, Mr. University Pension, you’d find out I’m right on this one.

  2. Bob H November 28, 2014 at 5:07 pm #

    And what was the name of the company on which the utility users tax was applied? Answer: Cingular. Which is now ATT wireless. What kind of service did they provide? Answer: Cellular service. That is what measure J was all about. Changing the wording of the utility users tax so that it would apply to wireless services, among other technologies so that they could yank us all a percentage of service costs. All of which happened long before Constantine showed up in Chico. This is all ancient history. The law suit was filed more than 4 years ago.

    • Juanita Sumner November 28, 2014 at 6:22 pm #

      thanks for commenting Bob, we’ll see what happens. But you’re right – it’s not Constantin’s fault.

  3. Juanita Sumner January 18, 2016 at 5:23 pm #

    Hey, Bob Upyours, if you’re still there – why was this issue on the December 1, 2015 agenda?

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