Is the utility
user tax new?
Yes. Measure K, establishing a Utility User Tax for the City
of Menlo Park, was passed in the General Election of November
7, 2006.
Who must pay
the utility user tax?
Utility users pay the tax to the utility services suppliers,
who assess the tax on their customer bills, collect the tax and
remit it to the City.
Who is exempt
from the utility user tax?
Federal, state and local government departments, bureaus and
agencies do not have to pay the tax. State law exempts insurance
companies and insurance brokers (but not agents) and federal credit
unions from the tax. In addition, individuals that qualify, and
have been accepted, for the California
Alternate Rates for Energy Program (CARE) are exempt from
the tax.
How much is the tax?
The tax is 3.5% of the charges billed to the utility user for
electric, gas, and water services. The tax is 2.5% of telecommunication
and video services.
Effective October 1, 2007 the tax rates are reduced to 1.0% of the charges
billed to the utility user for electric, gas, and water services and 1.0% of
telecommunication and video services..
Is there a
maximum tax that can be paid?
Yes. A utility user is limited to combined electric, gas and
water utility user taxes (a "cap") of $12,000 per year.
How is the
maximum tax, or "cap" applied?
A customer who has electric, gas and water utility bills that
typically exceed $120,000 annually should apply for the maximum
tax by pre-paying the cap amount (Maximum
Tax Prepayment) 45 days prior to the utility user tax period.
Upon receipt of the pre-payment and the application, the City
will inform the service provider that the customer should be excluded
from further UUT assessments for the remainder of the tax period.
If I overpay,
how do I receive a refund?
In any case of overpayment of the tax, a claim for refund must
be made , within one year of the tax period, providing complete
documentation of the amount overpaid (Claim
for Excess Tax Paid).
This is a relativly new taxWhen does
it start?
The new UUT will be assessed on utilities and services provided
to consumers beginning April 1, 2007. Starting July 1,2007, the UUT tax year will be the same as the City's fiscal year, i.e. July 1 through June 30
Where can
I get more information?
If you have any questions regarding the City's Utility User
Tax, you can contact the City's Finance Office (see contact info
at right).
What are the
duties of utility/service providers with customers in Menlo Park?
- To accurately assess and collect
the utility user tax from the users;
- To file a return and remit the
tax to the City of Menlo Park; and
- To keep for three (3) years all
records necessary to determine the amount of such tax that the
utility/service provider may have been required to collect and
remit.
When must
the utility user tax be remitted?
The service supplier must remit the full amount of the tax
collected for each month to the City on or before the last day
of the following month. The return must be in the format supplied
by the City (Remittance Form).
What if the
utility supplier fails or refuses to collect the tax from the
utility user?
The utility/service supplier will be liable for the tax and
for penalties (15% of the total tax due) and interest (at the
rate of ¾% per month until paid).
How long do
records need to be kept?
Each person required to collect and remit the UUT must keep
records for a period of 3 years. The City has the right to inspect
these records at all reasonable times.
Where can
I get more information?
If you have any questions regarding the City's Utility User
Tax, you can contact the City's Finance Office (see contact info
at right).
Is the utility
user tax new?
Yes. Measure K, establishing a Utility User Tax for the City
of Menlo Park, was passed in the General Election of November
7, 2006.
What is the
purpose of the tax?
The purpose of the UUT is to address an ongoing budget imbalance
within the City's General Fund. Proceeds of the tax will fund
general city services including police, emergency preparedness,
street and storm drain maintenance and libraries.
Will the tax
ever be increased?
The utility user tax cannot be increased without the voter-approved
passage of a new ordinance. However, the City Council may temporarily
reduce the tax percentage for up to one year, if it is determined
that the reduction will not adversely affect the City's financial
health.
How long will
the tax be in effect?
The City Council will review the need for the utility user
tax every two years. If it is determined that the tax is not necessary
for the financial health of the City, the tax will be terminated
on December 31st of the year in which the City Council renders
that decision.
