Tag Archives: Donald Sipple et al vs city of Chico

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?