B-144190, OCT. 21, 1960

B-144190: Oct 21, 1960

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WHICH WAS ENACTED BY THE CITY ON JUNE 15. AUTHORITY TO ADD THE TAX TO THE TELEPHONE BILL IS CONTAINED IN THE ACT OF JULY 14. (3) AN AMOUNT EQUAL TO THE INCREASE IN TAXES AND OTHER PAYMENTS TO GOVERNMENTAL BODIES RESULTING FROM THE AMOUNT OF SUCH ADDITIONAL CHARGE. * * *" IN A CASE INVOLVING SIMILAR FACTS WE HELD THAT A TAX ASSESSED AGAINST A PUBLIC UTILITY COMPANY WHICH A PUBLIC UTILITIES COMMISSION DETERMINED TO BE AN OPERATING EXPENSE AND WHICH THE COMPANY WAS PERMITTED TO RECOVER BY INCLUDING THE TAX AS A SEPARATE ITEM ON ITS INVOICES TO ITS CUSTOMERS MAY BE CONSIDERED AS AN INCREASE IN RATES AUTHORIZED BY THE COMMISSION. IN THE ABSENCE OF A SHOWING THAT THE INCREASED RATE IS UNREASONABLE OR NOT UNIFORM IN ITS APPLICATION TO THE GENERAL PUBLIC.

B-144190, OCT. 21, 1960

TO ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS:

YOUR LETTER OF OCTOBER 4, 1960, ASKS WHETHER THE CHIEF PROBATION OFFICER OF THE UNITED STATES DISTRICT COURT AT EAST ST. LOUIS, ILLINOIS, PROPERLY MAY PAY AN AMOUNT THAT HAS BEEN ADDED TO HIS TELEPHONE BILL AS THE RESULT OF A "MUNICIPAL UTILITY TAX," ORDINANCE NO. 3698, WHICH WAS ENACTED BY THE CITY ON JUNE 15, 1960.

THE ORDINANCE LEVIES A TAX OF 4.48 PERCENT ON THE GROSS RECEIPTS OF THE TELEPHONE COMPANY AND, AS INDICATED ABOVE, THE COMPANY HAS ADDED SUCH AMOUNT TO THE TELEPHONE BILL. AUTHORITY TO ADD THE TAX TO THE TELEPHONE BILL IS CONTAINED IN THE ACT OF JULY 14, 1955, SET FORTH IN CHAPTER 111 2/3, SECTION 36 OF SMITH-HURD, ILLINOIS ANNOTATED STATUTES. THIS ACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

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

IN A CASE INVOLVING SIMILAR FACTS WE HELD THAT A TAX ASSESSED AGAINST A PUBLIC UTILITY COMPANY WHICH A PUBLIC UTILITIES COMMISSION DETERMINED TO BE AN OPERATING EXPENSE AND WHICH THE COMPANY WAS PERMITTED TO RECOVER BY INCLUDING THE TAX AS A SEPARATE ITEM ON ITS INVOICES TO ITS CUSTOMERS MAY BE CONSIDERED AS AN INCREASE IN RATES AUTHORIZED BY THE COMMISSION, AND THEREFORE, PROPERLY CHARGEABLE TO THE GOVERNMENT UNDER THE UTILITY SERVICE CONTRACT. SEE 32 COMP. GEN. 577.

CONSEQUENTLY, IN THE ABSENCE OF A SHOWING THAT THE INCREASED RATE IS UNREASONABLE OR NOT UNIFORM IN ITS APPLICATION TO THE GENERAL PUBLIC, THERE IS PERCEIVED NO LEGAL BASIS FOR OBJECTION TO PAYMENT THEREOF.