Council signals support to draft 6% cable utility tax; staff to return with ordinance
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Summary
Council directed staff to prepare an ordinance for a potential 6% utility tax on cable services (estimated $720,000 revenue at 6%); staff noted federal constraints limit taxation of Internet‑based streaming services and that the tax cannot be unduly discriminatory.
The council discussed and signaled support Dec. 2 for staff to draft an ordinance that would impose a utility tax on cable services, with a staff recommendation presented for a 6% rate.
Assistant City Manager Shannon Kelly Fong recapped previous council work sessions and the statutory framework, noting local utility tax rules require non‑discriminatory application and that comparable jurisdictions generally levy about 6% on cable. Draft revenue estimates presented showed approximately $720,000 in additional general‑fund revenue at a 6% rate (with 2% and 4% illustrative alternatives producing roughly $240,000 and $480,000 respectively). Staff clarified federal limitations on taxing Internet communications and streaming services and said the city cannot impose such taxes where preempted; sales‑tax treatment of subscription streaming is a separate state sales-tax matter.
Council members generally expressed support for staff returning with draft ordinance language for a Dec. 16 meeting; no ordinance was adopted on Dec. 2. Staff will prepare a draft and legal language consistent with state and federal constraints for council consideration.
