Title
Utility User Tax Assessment for DirecTV, LLC
End
FileID
File ID: 2026-01533
End
Location
Location: Citywide
End
Recommendation
Recommendation: Conduct a public hearing and, upon conclusion, pass a Motion to confirm the Utility User Tax assessment for DirecTV, LLC.
End
Contact
Contact: Bryan Howard, Finance Manager, (916) 808-4847, bdhoward@cityofsacramento.org; Cham Tu, Program Manager, (916) 808-7540, ctu@cityofsacramento.org; Department of Finance
End
Presenter
Presenter: Bryan Howard, Finance Manager, (916) 808-4847, bdhoward@cityofsacramento.org; Department of Finance
End
Attachments
Attachments:
1-Description/Analysis
2-Utility User Tax Assessment for DirecTV, LLC
3-DirecTV, LLC Audit Report (Redacted)
End
Description/Analysis
IssueDetail
Issue Detail: The Revenue Division in the Department of Finance is responsible for administering the City of Sacramento (City) Utility User Tax (UUT) in accordance with parameters set forth in Sacramento City Code (SCC) Chapter 3.32. To ensure compliance with the City’s UUT, the Revenue Division audits UUT remitters for all periods within the statute of limitations.
UUT is charged by utility service providers to customers in the City at rates specified in SCC Chapter 3.32. UUT collected in one month shall be remitted to the City on or before the last day of the following month (for example, UUT collected by a service provider from their customers in the month of November is due on or before December 31st).
|
The City’s UUT rates are as follows: |
|
|
Communications User Tax |
7.0% |
|
Electricity User Tax |
7.5% |
|
Gas User Tax |
7.5% |
|
Cable Television User Tax |
7.5% |
If the UUT is not remitted to the City timely, then the UUT is considered delinquent. Delinquent UUT is subject to a 15% penalty applied to the UUT principal amount for the taxing period. An additional 1% per month, or fraction thereof, exclusive of penalties, is imposed on delinquent UUT from the date the penalty is imposed to the date upon which the UUT and any applicable penalties are paid. Any accrued penalties and interest become part of the UUT.
UUT Audit:
The City contracts with Neumo, LLC (Neumo), formerly known as Avenu Insights & Analytics, LLC, to perform the audit analysis. Over the course of the audit, Neumo acts as the City’s authorized agent to conduct compliance auditing service and determine compliance with the City’s UUT. The information obtained through the course of the audit is used solely to evaluate the utility service provider audit subject’s administration and compliance of UUT remittances and payments with the City’s UUT ordinance. Neumo’s contract with the City was obtained through a competitive bid process.
DirecTV, LLC Audit Assessment:
On March 24, 2023, the City commissioned an audit of DirecTV, LLC to examine their records and evaluate their compliance with the Communications User Tax of the UUT for the period of January 1, 2021 through December 31, 2023. The audit was concluded and resulted in a UUT assessed amount of $5,705, inclusive of penalties and interest.
|
Utility User Tax Review Period: January 1, 2021 through December 31, 2023 |
|
UUT Due |
$ 3,833 |
|
UUT Penalties |
$ 575 |
|
UUT Interest |
$ 1,297 |
|
Total Due |
$ 5,705 |
Neumo recalculated DirectTV, LLC’s UUT across four sample months, and that analysis determined a cumulative underpayment of UUT. The underpayment of UUT could not be explained by DirecTV, LLC and no documentation was provided to substantiate the underpayment. The monthly error in UUT remittance resulted in an average underpayment error rate of 0.16%. The error rate of 0.16% was applied to all periods under review, and it was determined DirecTV, LLC underpaid the City $3,833 in UUT for all periods under examination. A 15% penalty was applied, resulting in a UUT penalty of $575, and interest was applied, resulting in interest due of $1,297. The total due to the City from DirecTV, LLC as a result of the audit is $5,705.
Staff recommends the UUT Appeals Board confirm the assessment.
End
PolicyConsiderations
Policy Considerations: The UUT audit was conducted in accordance with SCC Chapter 3.32. SCC Chapter 3.32.140 requires UUT assessments to be referred to the UUT Appeals Board for confirmation or modification and affords any interested party having any objection an opportunity to appear and be heard at the hearing, provided the objection is filed in writing with the City Clerk prior to the time set for the hearing. The decision of the Board shall be final and conclusive.
End
EconomicImpacts
Economic Impacts: City UUT revenue are general fund revenues.
End
EnvironmentalConsiderations
Environmental Considerations: California Environmental Quality Act (CEQA): This action concerns administrative activities that will not have any significant effect on the environment and that do not constitute a “project” as defined by CEQA (CEQA Guidelines sections 15378(b)(2) and 15378(b)(4) and are not subject to the provisions of CEQA (CEQA Guidelines section 15060(c)(3)).
End
Sustainability
Sustainability: Not applicable.
End
Commission/Committee Action
Commission/Committee Action: Not applicable.
End
RationaleforRecommendation
Rationale for Recommendation: A comprehensive review of DirecTV, LLC’s records resulted in the identification of under reported of UUT for the audited tax periods. The audit was conducted in accordance with SCC Chapter 3.32 and industry standard audit practices.
End
FinancialConsiderations
Financial Considerations: The cost of the audit of DirecTV, LLC was funded by the Citywide and Community Support - Major Tax Revenues operating budget. Confirmation of the UUT assessment will result in $5,705 UUT compliance revenues.
End
LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
End