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Adoption of a Resolution Authorizing the City Manager to Execute an Agreement with the California State Board of Equalization (BOE) for Implementation of the Local Prepaid Mobile Telephony Services Collection Act; and Sign a Certification Regarding the City's Utility Users Tax (UUT) Ordinance; and
Adoption of a Resolution Authorizing the Examination of Prepaid Mobile Telephony Services Surcharge and Local Charge Records by City Staff. (Finance 2410)
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To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Adoption of a Resolution Authorizing the City Manager to Execute an Agreement with the California State Board of Equalization for Implementation of the Local Prepaid Mobile Telephony Services Collection Act; and Sign a Certification Regarding the City's Utility Users Tax (UUT) Ordinance; and
Adoption of a Resolution Authorizing the Examination of Prepaid Mobile Telephone Services Surcharge and Local Charge Records by City Staff.
BACKGROUND
Beginning January 1, 2016, a new state law (AB 1717) requires California retailers to impose a surcharge on purchasers of prepaid mobile telephony services (MTS), commonly known as prepaid calling cards. The MTS surcharge is collected as a percentage of the sales price of each transaction based on the point of sale. One of the components of the MTS surcharge is local Utility Users Tax (UUT), which until now, has not been collected on retail purchases of prepaid mobile telephony. Retailers collecting the tax will remit the UUT funds to the California State Board of Equalization (BOE) for distribution to the City
AB 1717 requires that cities contract with the BOE to collect these revenues on their behalf. Under this new law, all local jurisdictions must contract with the BOE to receive UUT distribution for prepaid wireless phone service. Staff recommends that Council authorize the City Manager to execute a contract and all related...
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