California Utility User Taxes

Utility User Taxes (UUTs) in California are taxes that cities and counties are allow to impose on the consumption of certain utility services. As of September 2008, city and county UUTs generated about $2 billion per year in tax revenues.

About 146 California cities and 4 counties have a UUT. In nearly all these cases, the UUT was adopted prior to 1996 through a vote of the city council or the County Board of Supervisors. However, after the 1996 passage of Prop 218, to pass such a tax, the voters who would be paying the tax had to approve it directly through voting on a ballot measure.

About half of all California residents pay a UUT, because although the tax only applies in a relatively small minority of California cities, the cities in which it does apply includes nearly all of the cities in the state with higher populations.

Voter approval of UUTs

From June 2002 through June 2008, 83 utility user tax measures were placed before voters by cities and counties. Two of these were county measures and 81 were for cities.

• 30 proposals were for new or increased UUTs. Only six of these proposals were approved.
• 19 of the 30 were for an increase in the UUT tax rate. Only two of those passed.
• 19 measures asked to increase an existing UUT past a built-in sunset period. 16 of those measures passed.

There has been a trend in recent years for cities with UUTs to change their ordinances to ensure that it applies to all modern forms of telecommunications (wireless and internet) and billing methods (flat rates).

• 23 cities proposed such changes between June 2002 and June 2008. 22 of those requests were approved.

• Citizens placed 14 referenda placed on the ballot seeking to repeal or alter local UUTs.

• • Seven measures seeking total repeal failed.
• Four out of five measures seeking to reduce the UUT tax rate failed.
• In Greenfield, voters reduced their UUT from 6% to 3%.
• A referendum to restrict the use of UUT revenues to law enforcement services passed in Seaside (Monterey County) in November 2002.

Taxable utilities

The list of utilities that can be taxed with a UUT includes:

• Electricity
• Gas
• Water
• Sewer
• Telephone (including cell phones and long distance services)
• Sanitation
• Cable television.

UUT tax rates

City UUTs range from a low of 1% to a high of 11%.

The rate of a UUT is set by the city in which it is levied. UUT's can be imposed:

• As a special tax.
• Earmarked for a specific purpose.
• As a general tax to be used for a variety of municipal service needs at the discretion of the city council.

The tax is levied by the city, and then collected by the relevant utility as a part of its regular billing procedure. The utility then sends the tax it has collected on behalf of the city to the city.

Some cities charge different tax rates for residential usage versus commercial usage.

Counties with a UUT

Just four of California's 58 counties levy a UUT. They are:

• Alameda. (See Alameda County Unincorporated Areas Utility Users Tax, Measure F (June 2008)).
• Los Angeles
• Sacramento
• San Francisco

UUTs and the FET

Many of the UUTs in California refer to the Federal Excise Tax (FET) in defining which utilities are covered by the tax. The FET does not cover certain telecommunications services. FET, for instance, does not cover:

• Telephone calls which are not charged based on both time and distance (those paid by coin in phone booths, for example).
• Any cell phone bills which are based on a package which provides a mix of local and long-distance calling for a flat rate. (In 2007, the IRS ruled that telephone service packages which provide a mix of local and long-distance calling for a flat rate or a fixed fee are not subject to the FET.)

When California cities realized that the wording of their UUT ordinance, by tying which utilities are covered by the tax to the FET's definition, did not allow them to extend their UUT to charging the tax on cell phone usage. Since cell phone usage is becoming more common, even replacing landline use, especially for younger people, cities feared loss of UUT revenues.

As a result, a number of city councils began putting before voters ballot measures to change the ordinance defining which telecommunications services could be taxed with their local UUT so that they could tax cell phone usage.

Election results

2013

April 9

See also April 9, 2013 ballot measures in California

Measure	County	Outcome
City of Vernon Utility Users Tax, Measure M	Los Angeles	Pending

March 5

See also March 5, 2013 ballot measures in California

Measure	County	Outcome
City of Monterey Park Utility Users Tax, Measure MP-DD	Los Angeles	a
City of Rialto Utility User Tax Extension, Measure W	San Bernardino	a

2012

November 6

See also November 6, 2012 election in California

Ten utility tax measures were on the November 6, 2012 ballot in nine different counties.

Measure	County	Outcome
Arcata (City of), Measure I	Humboldt	a
Bellflower (City of), Measure P	Los Angeles	a
Berkeley (City of), Measure Q	Alameda	a
Chico (City of), Measure J	Butte	d
Citrus Heights, Measure K	Sacramento	d
Downey (City of), Measure D	Los Angeles	a
Los Alamitos (City of), Measure DD	Orange	a
Needles (City of), Measure T	San Bernardino	a
Pinole (City of), Measure M	Contra Costa	a
San Luis Obispo (City of), Measure D	San Luis Obispo	a

September 18

See also September 18, 2012 ballot measures in California

Measure	County	Outcome
City of Vernon, Measure A	Los Angeles	a

June 5

See also June 5, 2012 ballot measures in California

Measure	County	Outcome
Foresthill PUD, Measure C	Placer	a
Parlier, Measure S	Fresno	d
Stanton, Measure J	Orange	d

April 10

See also April 10, 2012 ballot measures in California

Measure	County	Outcome
Bradbury, Measure A	Los Angeles	d
Sierra Madre, Measure 12-1	Los Angeles	d
Sierra Madre, Measure 12-2	Los Angeles	d

2011

November 8

See also November 8, 2011 ballot measures in California

Measure	County	Outcome
Brawley, Measure K	Imperial	a
Holtville, Measure M	Imperial	d
Holtville, Measure N	Imperial	d
Holtville, Measure O	Imperial	d
Modesto, Measure N	Stanislaus	a
South Pasadena, Measure UT	Los Angeles	a

June 7

See also June 7, 2011 ballot measures in California

Measure	County	Outcome
Rio Vista Rollback, Measure A	Solano	d

2010

November 2

See also November 2, 2010 election in California

Measure	County
Albany, Measure O	Alameda	a
Bellflower, Measure A	Los Angeles	d
Chula Vista, Measure H	San Diego	d
El Segundo, Measure O	Los Angeles	d
Elk Grove, Measure J	Sacramento	a
Guadalupe, Measure P	Santa Barbara	d
Huntington Beach, Measure P	Orange	a
Indio, Measure S	Riverside	a
La Palma, Measure U	Orange	a
Lincoln, Measure K	Placer	d
Mountain View, Measure T	Santa Clara	a
Newark, Measure U	Alameda	a
Oakland, Measure W	Alameda	d
Oroville, Measure A	Butte	a
Pinole, Measure S	Contra Costa	d
Placentia, Measure W	Orange	a
Pleasant Hill, Measure T	Contra Costa	d
Pomona, Measure SP	Los Angeles	d
Port Hueneme, Measure G	Ventura	a
Rancho Cordova, Measure E	Sacramento	a
Santa Cruz City, Measure H	Santa Cruz	a
Santa Fe Springs, Measure S	Los Angeles	a

June 8

See also June 8, 2010 election in California

Measure	County	Outcome
Coachella, Measure I	Riverside	a
Mammoth Lakes, Measure U	Mono	a
Winters, Measure W	Yolo	a

April 13

See also April 13, 2010 ballot measures in California

Measure	County	Outcome
El Segundo, Measure M	Los Angeles	a

2009

November 3

See also November 3, 2009 ballot measures in California

Measure	County	Outcome
Coachella, Measure M	Riverside	d
Cupertino Measure B	Santa Clara	a
Dinuba Measure M	Tulare	a
Huntington Park Measure E	Los Angeles	a
Irwindale Measure U	Los Angeles	a
Newark, Measure L	Alameda	d
Palm Springs, Measure G	Riverside	a
Pico Rivera Measure TR	Los Angeles	a
Pomona Measure PC	Los Angeles	a
Portola Valley, Measure P	San Mateo	a
Redondo Beach UU	Los Angeles	d
Tulare Measure N	Tulare	a
Vallejo, Measure U	Solano	a

June 9

See also June 9, 2009 ballot measures in California

Measure	County	Outcome
City of Arcadia Utility Users Tax, Measure A (June 2009)	Los Angeles	a

May 19

See also May 19, 2009 ballot measures in California

Measure	County	Outcome
City of Hayward Utility Users Tax, Measure A (May 2009)	Alameda	a
City of Desert Hot Springs Utility Users Tax, Measure A (May 2009)	Riverside	a
City of Rancho Cordova Utility Users Tax, Measure B (May 2009)	Sacramento	d

March 3

See also March 3, 2009 ballot measures in California

Measure	County	Outcome
City of Bellflower Utility User Tax, Measure A (March 2009)	Los Angeles	a
City of Carson Utility User Tax, Measure C (March 2009)	Los Angeles	a
City of Gardena Utility User Tax, Measure A (March 2009)	Los Angeles	a
City of Redondo Beach Utility User Tax, Measure A (March 2009)	Los Angeles	a

2008

November 4

See also November 4, 2008 ballot measures in California

Measure	County	Outcome
City of Cathedral City Utility Users Tax, Measure L (November 2008)	Riverside	a
Eureka Sales Tax/Utility Tax Measure D	Humboldt	a
City of Hawthorne Utility Users Tax, Measure V (November 2008)	Los Angeles	a
City of Hemet Utility Users Tax, Measure O (November 2008)	Riverside	d
Holtville Measure C, 2008	Imperial	d
City of Indio Utility Users Tax, Measure K (November 2008)	Riverside	a
City of Inglewood Utility Users Tax, Measure UUT (November 2008)	Los Angeles	a
City of Lakewood Utility Users Tax, Measure L (November 2008)	Los Angeles	a
City of Long Beach Utility Users Tax, Measure G (November 2008)	Los Angeles	a
Unincorporated Areas of the County of Los Angeles Utility Users Tax, Measure U (November 2008)	Los Angeles	a
City of Lynwood Utility Users Tax, Measures HH and II (November 2008)	Los Angeles	a
City of Moreno Valley Utility Users Tax, Measure P (November 2008)	Riverside	a
City of Morgan Hill Utility Users Tax, Measure G (November 2008)	Santa Clara	d
City of Pomona Utility Users Tax, Measure PC (November 2008)	Los Angeles	d
Rossmoor Incorporation and Utility Tax, Measures U-A, U-B and U-C (November 2008)	Orange	d
City of Sacramento Utility Users Tax, Measure O (November 2008)	Sacramento	a
San Francisco Telephone Tax, Proposition O (November 2008)	San Francisco	a
City of San Gabriel Utility Users Tax, Measure SG (November 2008)	Los Angeles	a
City of San Jose Telecommunications Taxes, Measures J and K (November 2008)	Santa Clara	a
City of San Leandro Utility Users Tax, Measure RR (November 2008)	Alameda	a
City of Santa Barbara Utility Users Tax, Measure G (November 2008)	Santa Barbara	a
County of Santa Cruz Emergency Response Fees and Taxes, Measure B (November 2008)	Santa Cruz	d
City of Santa Monica Telecommunications Tax, Measure SM (November 2008)	Los Angeles	a
City of Seaside Utility Tax Repeal, Measure E (November 2008)	Monterey	d
Sebastopol Utility User Tax, Measure M (November 2008)	Sonoma	a
Stockton Utility User Tax, Measure U (November 2008)	San Joaquin	a
City of Watsonville Telephone Tax, Measure C (November 2008)	Santa Cruz	d

June 3

See also June 3, 2008 ballot measures in California

Measure	County	Outcome
Alameda County Measure F (2008)	Alameda	a
City of Covina Utility Tax, Measure C (June 2008)	Los Angeles	a
City of Oakland Utility Users Tax, Measure J (June 2008)	Alameda	a
City of Torrance Utility Users Tax, Measure T (June 2008)	Los Angeles	a
City of Winters Utility Users Tax, Measure T (June 2008)	Yolo	a
City of McFarland Utility Users Tax, Measure E (June 2008)	Kern	d

April 8

Measure	County	Outcome
Culver City Utility Users Tax, Measure W (April 2008)	Los Angeles	a
Malibu Utility Users Tax, Measure D (April 2008)	Los Angeles	a
Sierra Madre Utility Users Tax, Measures U and UA (April 2008)	Los Angeles	a

February 5

See also February 5, 2008 ballot measures in California

Measure	County	Outcome
City of Richmond, Measure B	Contra Costa	a
City of Arcata, Measure A	Humboldt	a
City of Huntington Park, Measure B	Los Angeles	a
City of Pasadena, Measure D	Los Angeles	a
City of Los Angeles, Proposition S	Los Angeles	a
City of San Bernardino, Measure L	San Bernardino	a

External links

• CaliforniaCityFinance.Com Utility User Tax facts
• UUT Info
• CalTax May 19 local tax measures
• June 3, 2008 UUT election results
• CaliforniaCityFinance.Com Local revenue measures on the February 5, 2008 ballot
• CaliforniaCityFinance.Com Utility user taxes on November 6, 2007 ballot (scroll to page 4]
• Utility user taxes on November 7, 2006 ballot (scroll to page 18)
• Utility user taxes on November 8, 2005 ballot
• California Debt and Investment Advisory Commission, Results of the February 5 election