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Committee forwards ordinance clarifying San Francisco's utility users tax on phone service after IRS reinterpretation
Summary
The Budget and Finance Committee forwarded an ordinance the city says clarifies the utility users tax treatment of telephone services after an IRS reinterpretation; the city attorney said the change is revenue-neutral and clarifies refund procedure under section 6.15. A taxpayer advocate raised concerns about refund access for seniors and low-income residents.
The Budget and Finance Committee of the San Francisco Board of Supervisors voted on a motion to forward an ordinance that clarifies how the city's utility users tax applies to telephone services, saying the change responds to a recent federal reinterpretation and is intended to be revenue-neutral.
Supervisor Ross Mercarini, the ordinance's author, said the measure is "a response to changes that are happening federally" and that the city is "monitoring" revenue fluctuations tied to an IRS reinterpretation. He told the committee this is intended as a municipal clarification, not a new tax: "this is not at all implementing a tax, but simply clarifying existing law."
Deputy City Attorney Julie Van Nostrand told the committee the city concluded a clarification was important after an IRS reinterpretation. On refunds she said the ordinance explicitly references the city's existing refund procedure: "The refund procedure is clarifying that the reference should be under 6.15, which the current ordinance references, but without directly stating the section. That section will make all refunds consistent..." Van Nostrand added the change removes an extra step that previously could have required a ratepayer to go first to the carrier to seek a refund.
Barbara Mascunis, executive director of the San Francisco Taxpayers Union, urged caution and asked how the change would affect ratepayers who have overpaid. "It would seem that it would complicate the process of getting a refund," she said, and warned that shifting the burden of applying for refunds to individuals could "disproportionately affect seniors and low income people who might not have access to the Internet."
Van Nostrand responded that the city's advertised process for claiming tax refunds remains published on the controller's website and that the ordinance intends to streamline, not curtail, access to refunds.
After brief discussion, the committee agreed to forward the ordinance to the full Board of Supervisors as a committee report with recommendation, without objection.
The committee is expected to place the ordinance before the full Board for further consideration as part of the Board's regular agenda.
