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6.2A Page 1 July 23, 2007 Subject Introduction of Ordinance No._ adding Article VIII to Chapter 32 of the Redwood City Municipal Code with respect to a Communication Users' Tax. Adoption of resolution authorizing submission of Ordinance No._ adding Article VIII to Chapter 32 of the Redwood City Municipal Code with respect to a Communication Users' Tax to the voters of the City of Redwood City at the Consolidated General Municipal Election of November 6,2007. Direct the City Attorney to prepare impartial analysis with respect to Ordinance No._. Authorize Council Members to sign ballot arguments in favor of Ordinance No. Recommendation 1. Introduce Ordinance No._ adding Article VIII to Chapter 32 of the Redwood City Municipal Code with respect to a Communication Users' Tax. 2. Adopt a resolution authorizing submission of Ordinance No._ adding Article VII' to Chapter 32 of the Redwood City Municipal Code with respect to a Communication Users' Tax to the voters of the City of Redwood City at the Consolidated General Municipal Election of November 6,2007. 3. Direct the City Attorney to prepare an impartial analysis with respect to Ordinance No. 4. Authorize Council Members to sign the ballot arguments in favor of Ordinance No. . Background At the July 9. 2007 regular city council meeting, the subject of introduction and submission of a Communications Users' Tax to the voters of Redwood City was presented to the city council. I n particular, staff explained that subsequent to the publication and distribution of the draft ordinance, certain refinements to the draft ordinance had come to their attention and should be clarified before the city council. Said refinements as described below are: 1. references to value-added non-voice data service should be deleted as this type of service is best subject to a sales tax and not a telecommunication excise tax such as a communication users' tax; 2. language should be included in the ordinance which clarifies that certain real time messaging services (e.g., paging, instant and text messaging) are taxable, while digital downloads such as music, games and ring tones are not taxable; 3. references to prepaid telecommunication services should be deleted as such services are best amenable to sales tax and not an excise tax; and 4. under certain specified circumstances, a service supplier should be allowed to take overpayments of the communication users' tax as a credit against an underpayment. The proposed ordinance, as attached hereto as Exhibit "A", reflects the above -described refinements. Also attached hereto are Exhibit "B", July 9,2007 staff report and Exhibit 1