§ 3.20.090. Gas user tax

A. There is hereby imposed a tax upon every person, other than a telephone corporation, electrical corporation, or gas corporation, using gas in the city which is transported and delivered through a pipeline distribution system. The tax imposed by this section shall be at the rate of five percent of the charges made to for such gas, including all services related to the storage, transportation and delivery of such gas. The tax shall be collected from the service user by the service supplier or non-utility service supplier, or its billing agent.

B. As used in this section, the term "charges" shall apply to all services, components and items for gas service that are: i) necessary or common to the receipt, use or enjoyment of gas service; or, ii) currently, or historically have been, included in a single or bundled rate for gas service by a local distribution company to a class of retail customers. The term "charges" shall include, but is not limited to, the following charges:

1. The commodity charges for purchased gas, or the cost of gas owned by the service user (including the actual costs attributed to drilling, production, lifting, storage, gathering, trunkline, pipeline, and other operating costs associated with the production and delivery of such gas), which is delivered through a gas pipeline distribution system;

2. Gas transportation charges (including interstate charges to the extent not included in commodity charges);

3. Storage charges; provided, however, that the service provider shall not be required to apply the tax to any charges for gas storage services when the service provider cannot, as a practical matter, determine the jurisdiction where such stored gas in ultimately used; but it shall be the obligation of the service user to self-collect the amount of tax not applied to any charge for gas storage by the service provider and to remit the tax to the appropriate jurisdiction;

4. Capacity or demand charges, service establishment or reestablishment charges, transition charges, customer charges, minimum charges, annual and monthly charges, and any other charges which are necessary or common to the receipt, use, and enjoyment of gas service;

5. Charges, fees, or surcharges for gas services or programs, which are mandated by the California Public Utilities Commission or the Federal Energy Regulatory Commission, whether or not such charges, fees, or surcharges appear on a bundled or line item basis on the customer billing.

C. As used in this section, the term "charges" shall include the value of any other services, credits, property of every kind or nature, or other consideration provided by the service user in exchange for the gas or services related to the delivery of such gas.

D. The tax administrator, from time to time, may survey the gas service suppliers to identify the various unbundled billing components of gas retail service that they commonly provide to residential and commercial/industrial customers in the city, and the charges therefor, including those items that are mandated by state or federal regulatory agencies as a condition of providing such gas service. The tax administrator, thereafter, may issue and disseminate to such gas service suppliers an administrative ruling identifying those components and items which are: i) necessary or common to the receipt, use or enjoyment of gas service; or, ii) currently, or historically have been, included in a single or bundled rate for gas service by a local distribution company to a class of retail customers. Charges for such components and items shall be subject to the tax of subsection (A) above. This administrative ruling shall not impose a new tax, revise an existing tax or increase an existing tax.

E. There shall be excluded from the calculation of the tax imposed in this section:

1. Charges made for gas which is to be resold and delivered through a pipeline distribution system;

2. Charges made for gas used in the production of electricity by a cogenerator, an electric corporation, a public agency that supplies or sells electricity, or an exempt wholesale generator;

3. Charges made for gas used in the production or distribution of water by a public utility or governmental agency;

4. Charges for propane or other alternate hydrocarbon fuels which are sold in quantities of twenty-five (25) gallons or less to be used in motor vehicles;

5. Charges made for gas used by a non-utility service supplier to generate electricity for its own use, or for sale to others, provided the electricity so generated is subject to the tax in accordance with Section 3.20.080; and

6. Charges made for gas which is consumed after February 28, 1991, by a commercial farmer using gas for the sole purpose of pumping water for irrigating food and fiber crops raised for commercial sale, provided that said farmer has applied for and received written confirmation that the farmer's operations are commercial in nature and that the gas is used solely for the purpose of pumping water for commercial irrigation.

F. The tax that is calculated on charges for gas provided by self-production or by a non-utility supplier not under the jurisdiction of this chapter shall be collected and remitted in the manner set forth in Section 3.20.100. All other taxes on charges for gas imposed by this section shall be collected from the service user by the gas service supplier or its billing agent. The amount of tax collected in one month shall be remitted to the tax administrator, and must be received by the tax administrator on or before the last day of the following month; or, at the option of the person required to collect or remit the tax, such person shall remit an estimated amount of tax measured by the tax billed in the previous month or upon the payment pattern of the service user, which must be received by the tax administrator on or before the last day of the following month, provided that the service user shall submit an adjusted payment or request for credit, as appropriate, within sixty (60) days following each calendar quarter. The credit, if approved by the tax administrator, may be applied against any subsequent tax bill that becomes due.

(Ord. 2001-168 § 1 (part), 2001).