HomeMy WebLinkAboutAgenda Statement 1981/08/04 Item 17COUNCIL AGENDA STATEMENT
Item 1~
Meeting Date 8/4/81
ITEM TITLE: Resolution~a,s~/ - Confirming the City's Policy Supporting a
Lower Business License Tax on Manufacturers
SUBMITTED BY: City Attorney (4/5ths Vote: Yes Nom)
This resolution confirms the City's policy of applying a lower
business license tax on manufacturers.
RECOMMENDATION: Approve the Resolution
BOARD/COMMISSION RECOMMENDATION: N/A
DISCUSSION:
For several years, Pacific Telephone has protested the amount of
business license tax that the City has required from them. This
protest was based on a provision of the California Constitution
which protected utilities from discriminatory tax treatment.
Pacific Telephone gave this provision a broad reading under which
it believed it could only be taxed at a rate equal to the lowest
business license tax rate in town. They, therefore, insisted that
they should be treated as manufacturers even though they engaged
in no manufacturing activities in Chula Vista.
This issue was litigated recently in the City of Livermore. Both
the City staff and Pacific Telephone agreed to abide by the decision
in the Livermore case. That decision has now been handed down and
it generally supports the City's position. James Haggerty, attorney
for Pacific Telephone, has noted one discrepancy, however, and that
is that Livermore had a resolution which specifically stated the
reason which the City of Livermore had for its different tax
treatment of different businesses. Mr. Haggerty requested that
the City pass a similar resolution before Pacific Telephone pay
the higher tax rate because he foresees a number of conflicts with
other public agencies and he wants to take a consistent position
in each case that different tax rates must be based on articulated
reasons.
Although I believe .the rationale for differential tax treatment
is sustainable and it is the position we have always maintained,
I see no problem in adopting the proposed policy statement which
will satisfy all parties and we will then continue to tax the
telephone company operation in the City of Chula Vista as we have
done in the past.
FISCAL IMPACT: N/A
Form A-113 (Rev. 11/79)