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5.4A Page 3 ORDINANCE NO. AN ORDINANCE OF THE CITY OF REDWOOD CITY AMENDING SECTIONS 32.501, 32.502, AND 32.519 OF ARTICLE VII OF CHAPTER 32 OF THE REDWOOD CITY MUNICIPAL CODE REGARDING THE UTILITIES USERS TAX OF THE CITY OF REDWOOD CITY WHEREAS, since 1983, the City of Redwood City has imposed a telephone users tax on every person in the City using intrastate telephone communication services; and such revenues are critical to the public peace, health and safety in that such revenues pay the costs associated with essential municipal services such as public safety; and WHEREAS. on May 25, 2006, the Treasury Department announced in Notice 2006-50 that it will no longer apply the Federal Excise Tax (hereinafter "FEr) to long distance and bundled long distance and local services provided under a single plan that does not separately state the charges for local telephone services; and WHEREA~, the Treasury Department's May 25 Notice reversed its prior Revenue Rulings and Ipng-held interpretation of the FET, ignored its own statutory and administrative t;)undling rules, and contravened the intent and purposes of the City's ordinance in imPosing a local tax on intrastate services; and WHEREAS. City reaffirms that it will continue its long-standing practice of applying its utility users)ax to intrastate services in a manner consistent with the intent and purpose of th~' City's utility users tax Ordinance and consistent with the Internal Revenue ServiCe's interpretation of the FET prior to Notice 2006-50 issued by the Treasury Department on May 25,2006. NOW, THEREFORE, the City Council of the City of Redwood City does hereby ordain as follows: SECTION 1. That Sections 32.501,32.502 and 32.519 of Article VII of Chapter 32 of the Redwood City Municipal Code are hereby amended in their entirety to read as follows: S~c. 32.501 Definitions. E~cept where the context otherwise requires, the definitions given in this Section govern the construction of this Article: (q) " Telephone Communication Services" includes any service that is capable of transmitting telephonic quality communications with the general telephone pUblic [including the use of Internet Protocol (IP) or any other protocol]. whether provided by analog, digital, electronic. radio or similar means through "interconnected service" F:Atty/OrdlOrd.266 062906 1 j. ---,"--"""