Tag Archives: Measure J

City announces they’ve instructed cell phone companies to stop taking tax – check your bills to make sure!

29 Jan

I see the Measure J refunds story is in the “most read” section of the Enterprise Record  today, but I posted it here just in case you missed it – read below.

I see a couple of problems in the story – for one thing, Ashley Gebb is a sloppy reporter. There she says, “Nearly 54 percent of residents voted in November to not update the city’s phone user tax”.  No no Dear, it was 54 % of the city’s VOTERS, not residents, duh. Does she understand how voting works?  Sorry to be a nit-picker, but this is the same gal that lectured me on the proper mis-use of the word “average“.  I notice she dropped that word from the part about billing amounts. In her pre-election story she said the “average”  bill in Chico was $50. When I questioned her about that, she came back like, “Oh silly, I didn’t mean mathematical average, I just meant, you know, AVERAGE!”

Another bit that bothers me is where Hennessy says folks will have to provide not only proof they were billed for the tax, but proof they PAID the tax? Of course, that should come up on the next bill, but what about your last bill? You need to wait until you get the following bill, that says you paid your previous bill? For Chrissake Jennifer, LET IT GO!  This whole thing reminds me of “Repo Man” – the old movie with Emilio Estevez. 

But, the good news is, ” the city has notified wireless phone companies to no longer collect the tax.”

Now, there’s some news! But I’d like to hear from those of you, who, like Jim in Chico, have seen the tax on their billing, who can check to make sure it’s gone. Let me know. 

Here’s Gebbs’ story:

Measure J-related phone tax refunds now available in Chico

By ASHLEY GEBB-Staff Writer
Posted:   01/29/2013 12:00:00 AM PST
 

CHICO — Chico residents can now apply for refunds for phone taxes paid to the city during the previous 12 months. 

Due to the failure of Measure J, the city is offering residents refunds for any utility user taxes paid for cellphones or Voice over Internet Protocol services within a year of application. 

Nearly 54 percent of residents voted in November to not update the city’s phone user tax to include modern technology such as cellphones, and the city has notified wireless phone companies to no longer collect the tax.

“If an individual showed documentation they were billed a tax and it was paid, we will issue them a refund,” said Finance Director Jennifer Hennessy on Wednesday.

The 5 percent phone tax would equate to about $2.50 of a monthly $50 bill or $5 of a monthly $100 bill.

Since November, any phone tax revenue that has come in has been placed in an account earmarked for refunds. If any remains after one year, the revenue may be placed in the general fund.

As for how many people may apply, “I have no idea,” Hennessy said. The potential fiscal impact is about $900,000 if all phone tax collected were to be reimbursed.

The City Council has not yet addressed what it will do to compensate for the loss in revenue, which supported the general fund.

Residents will need to provide documentation, including their cellphone bill and proof the bill was paid. Refunds will be issued beginning Feb. 21 and be mailed to the name and address on the bill.

Residents may not claim refunds for amounts previously refunded through the city’s utility tax refund program for income-qualified individuals. Verizon Wireless and MetroPCS customers are also not eligible because the providers did not collect the tax in the last 12 months.The refund application is the only way for the city to issue reimbursements, Hennessy said. The tax payments it received from phone companies are a lump sum, with no indication of who paid, for what and how much.Applications are available online and at City Hall’s Finance Department counter.

“We will be processing them as they come in and issuing refund checks,” City Attorney Lori Barker told the City Council this month. “Checks will be issued on the city’s regular cycle of processing and accounts payable.”

The City Council unanimously made final approval of the refund ordinance at its Jan. 15 meeting.

 

Connect with Ashley Gebb at 896-7768, agebb@chicoer.com, or on Twitter @AshleyGebb.

Latest news from Chula Vista – these people are fighting a battle for everybody

25 Jan

The citizens of Chula Vista are set to take their case to court February 8, asking a Superior Court judge to make the city stop taking a utility tax on their cell phones, and refund money the city has been collecting illegally for years. 

When my dad was working on the San Diego freeway, we visited him in his motel in Chula Vista – it wasn’t a bad town at all, we had a pretty nice weekend there.  I’m wishing them all the best. 

 

From the website of Casey,Perry, Schenk, Francavilla, Blatt and Penfield, LLP – the firm representing the people of Chula Vista:

http://www.caseygerry.com/news/chula-vista-fights-cell-phone-taxes-update

Chula Vista Fights Cell Phone Taxes: Update

DECEMBER 13, 2012

Chula Vista’s Cell Phone Tax Woes: Checking Up

By Will Carless

In the latest of our posts checking up on past stories, I’m taking a quick look at the legal fight over taxes on cell phone calls in Chula Vista.

The tax, introduced in 1970, charges a small fee on users of telephones, electricity and other utilities within the South Bay city. As cell phones came into popular use, Chula Vista started allowing phone companies to tax cell phone calls too, and for years it collected and spent that tax money.

The tax on cell phone calls was always on rather shaky ground. It was loosely based on Internal Revenue Service rules governing what can and can’t be taxed. But in the mid-2000s, the IRS lost a number of court cases over whether it could tax cell phone calls and, in 2006, a cell phone carrier wrote to the city of Chula Vista saying it didn’t think it still needed to collect the taxes.

But Chula Vista didn’t stop taking the tax money. The city argues that the tax is legal, though in recent years it’s been carefully stashing away the proceeds from the cell phone taxes in case it loses in court one day.

That day might be coming soon. Let’s take a look at how this has played out:

Where we left it:

The last time we wrote about this was back in June 2011. A pair of law firms had just filed suit against the city of Chula Vista over the tax.
It was a tough time for the city to get slammed with a multimillion-dollar lawsuit. Chula Vista had just gone through a couple of years of financial misery, laying off staff and closing down city services.

The city had about $5.6 million stashed away in case in was ever sued on the tax, but attorneyThomas Penfield, who is suing the district, told me at the time that he would be seeking far more in damages.

What’s happened since?

The lawsuit was certified as a class action on Sept. 14. That basically means that a judge has

ruled that the plaintiffs in the case are the members of a class of people who have a claim against the city.

The city had originally challenged the lawsuit, arguing that a class action suit couldn’t legally be used to seek a tax refund. That challenge was dismissed by Superior Court Judge Richard E. Strauss in January.

Since the case was certified, the lawyers challenging the tax have been preparing to give notice to all the Chula Vista residents who might be a member of the class action. That involves sending out postcards to residents and setting up a website on the lawsuit. If any member of the class doesn’t believe he or she is being adequately represented in the suit, that person can choose to file a separate lawsuit, Penfield said.

Chula Vista’s city attorney and outside attorneys did not respond to calls for comment. The city’s finance director, Maria Kachadoorian said via email that the city’s financial situation has improved since the dark days of 2011.

“We are seeing modest improvements in our major revenue streams and the housing market seems to be settling down,” Kachadoorian wrote. “We anticipate that we will continue to see some challenges but nothing like what we experienced over the past four years.”

What happens next?

The case is set to go to trial on Feb. 8, 2013, before Strauss. Both sides of the lawsuit have proposed a two-stage hearing process, Penfield said. First, the judge will hear arguments as to whether the tax violates the law, and if so, whether damages should be awarded. The second stage, if necessary, will deal with how much the city will have to pay in damages.

As long as the city has continued to stash away the taxes and not spend them, the overall impact to Chula Vista’s bottom line shouldn’t be too damaging. If the city wins, it could potentially have a sorely needed windfall after years of cuts.

Penfield’s firm, CaseyGerry, partnered on the lawsuit with Orange County-based Capretz & Associates. The firm’s lawyers will be paid a contingency fee if the lawsuit is successful, and Chula Vistans who have paid the taxes will be entitled to damages.

Penfield said the amount of damages, and the method by which they will be paid, will have to be worked out in court.

In this case, the payoff amount per resident is pretty small. Cell phone users were likely taxed a few dollars a month by the city and they may have to go back through their bills to establish how much they are owed.

Penfield said the city is liable for the taxes for up to one year before the lawsuit was filed. That means Chula Vista is potentially on the hook for taxes it collected going back to April 2010.

I’ll write another update when there’s a verdict.

Segregating your phone bill – a sample Sprint bill

19 Jan

Sprint is another cellphone carrier I’ve found to collect Utility User’s Tax.  Notice, on page 5 of 5 of this sample bill, “Denver State-Community Service Taxes,” “Denver County 9-1-1,” and “Denver County-Comm Sales Tax.”  I’m assuming, if this bill were made out for a person living in the  city of Chico, it would say “City Utility User’s Tax.” 

This bill specifically refers to “mobile” service, with no reference to a landline.  

UPDATE:  Looking over these bills later, I couldn’t help but note – reread the arguments that Ann Schwab and Scott Gruendl made in favor of Measure J – they insinuate that the “average” cell bill is $50! Look at these “average” bills I’ve posted – these are based on real bills, for two to three users – $150 a month! 

Scott Gruendl is up for re-election in 2014. We need to call that little prick on his bullshit. 

Also, city manager Brian Nakamura keeps repeating, we “lost” $900,000 with the defeat of Measure J. But at last month’s Finance Committee meeting, Hennessy reported the loss for fiscal year 2011-12 was only $500,000, after  the N&R quoted her office boy Frank Fields as estimating it at $600,000 back in November.

Is our city manager just making stuff up?

Segregating your phone bill – a sample AT&T bill

19 Jan

Here below is a sample AT&T bill I found online – looks exactly like my AT&T  bills, but it’s from Texas.

Notice, on pages 2 and 3, you see various amounts attributed to  “City District telecom tax”, “City Telecom Tax”, and “Texas Telecom Tax.”   Here in California we call that “Utility Tax,”  or “Utility User’s Tax”.   City of Chico residents will see, “City” or “Local” or even “City of Chico Utility User’s Tax.”  A turd, by any other name, will still stick to your shoe.

I know, it’s seems like such a mess – but notice this bill makes it very clear that these charges are for “wireless” or cellular phones. All the charges are scrupulously separated, or “segregated”,  out.

Wireless Statement Sample

Wireless Statement Sample

Wireless Statement Sample

Wireless Statement Sample

Cell phone tax refunds now available, back to February 2012. Get ’em before the city runs out of money!

17 Jan

Before I head out to take the laundry down, I wanted to say, I got a note from Frank Fields over in the Finance Department that the cell phone tax refund info and applications have been put on the city website.  Here’s the application with all the information you need:

http://www.chico.ca.us/finance/documents/CellPhoneRefundApplication_011713.pdf

Yes, I had to bitch at him for it, and he put it up so fast I really don’t understand why it wasn’t up Wednesday by noon.

He also mentioned, they’re still trying to figure out how to notice it publicly. At what these people get paid,  they have to make everything they do look like rocket science.  I asked him to let me know, and I’ll keep watching it. 

That’s what it takes folks – gotta stay on it! 

It never ceases to amaze me the petty maneuvers they go through Downtown to drag as much $taff time out of the process as they can

10 Jan
Look what’s on next Tuesday’s council agenda:
 
2.1. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHICO AMENDING SECTION 3.56.150 OF
THE CHICO MUNICIPAL CODE REGARDING REFUNDS FOR OVERPAYMENTS AND
ERRONEOUS PAYMENTS OF UTILITY USERS’ TAXES – Final reading and adoption
Adopt –  On December 18, 2012, the Council introduced an ordinance to amend the City’s claims
procedures regarding requests for refunds of overpayments or erroneous payments of utility users’
taxes. The ordinance is now being presented for final reading and adoption by the reading of its title
only.  
 
Unfortunately, the clerk purposely loads these reports in such a manner that I can’t cut and paste from them (she says she’s afraid I’ll edit it, I swear to God, that’s what she told me), so here’s that link –
All they’re doing here is changing the charter to allow people to get a refund without having to first try to get it from the cell phone carrier – that’s what the old law said. I guess we should be glad they’re taking it up at all, but it never ceases to amaze me the petty maneuvers they go through to drag as much staff time out of this process as they can. Look at the number of documents it took just to change this minor little thing. See how many $taffers were involved!
 
There’s no information about actually collecting your rebate, I’m still waiting for staff to get back to me on that.