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2016 LEGISLATIVE PLATFORM SCORECARD <br />Sales Tax <br />(Finance and Management Services Agency) <br />Monitor anticipated Professional Services Tax <br />Bill (Senator Hertzberg) replacing previous <br />Senate Bill 8 which would likewise seek to <br />extend the California state sales tax to impose a <br />tax on services to increase revenues. Local <br />jurisdictions would not be authorized to <br />increase sales tax on services, as they are <br />currently able to do. The additional revenues <br />would be collected by the state, and the funds <br />allocated to local government. Health care <br />services, education services and small <br />businesses with under $100,000 of gross sales <br />would be exempt from the sales tax on services. <br />The intent of the legislation is to generate an <br />estimated $10 billion to be used for K -14 <br />education, UC /CSU systems. The bill's other <br />possible impacts are that it may provide <br />additional revenues to local governments and <br />possibly lower personal income tax rates. <br />• (FMSA) SB 1445 was introduced <br />February 19, 2016 as a spot bill to carry <br />forward the prior session's unsuccessful <br />SB 8 sales tax restructuring bill. It was <br />referred to the Committee on <br />Government & Finance and remained <br />there in suspense until it was reported <br />out from committee without further <br />action on November 30, 2016. <br />Internet Tax Freedom Forever Act <br />(Finance and Management Services Agency) <br />On February 11, 2016 federal legislation, <br />opposed by the City and California League of <br />Cities, making the 18 year temporary <br />moratorium on taxation of internet access <br />permanent was appended to the Trade <br />Facilitation and Trade Enforcement Act and <br />passed. <br />To address defective definitional language <br />incorporated in Permanent Internet Tax <br />Freedom Act which could negatively impact the <br />City's telecommunication services Utility Users' <br />Tax (UUT), staff recommends the City adopt a <br />comprehensive administrative ruling and <br />interpretation of the City's UUT Code regarding <br />the bundling of taxable and non - taxable <br />telecommunication services, including internet <br />access. Staff is currently working with the City's <br />Professional UUT Consultants to arrive at a <br />suitable administrative ruling and interpretation <br />to be reviewed by the City Attorney and <br />administratively adopted by the Executive <br />Director of Finance and Management Services <br />before August 31, 2016. <br />• (FMSA) To address defective definitional <br />language incorporated into federal law <br />with the passage of the Permanent <br />Internet Tax Freedom Act (PIFA), City <br />staff working together with the City s <br />Professional Utility Users' tax Consultant, <br />MuniServices, successfully developed a <br />comprehensive administrative ruling and <br />interpretation of the City's Utility Users' <br />Tax Code regarding the bundling of <br />taxable and non - taxable tele- <br />communication services, including <br />internet access. Acting at the same time <br />as over 60 California cities, Santa Ana's <br />administrative ruling was approved by <br />the City Attorney and administratively <br />adopted by the Executive Director of <br />Finance and Management Services on <br />December 22, 2016. <br />CITY OF SANTA ANA <br />16 <br />65B -41 <br />