What are utility taxes and franchise fees, and why does the City of Clearwater levy them?
A utility tax is a tax levied on utility bills, to be paid by the utility purchaser. It is similar to a sales tax, except it only applies to utility bills and not to any other purchases. The franchise fee is a charge levied by the City on a utility to operate within the City and to use the City rights-of-way and other properties for locating pipes, wire, etc. The state allows utilities to pass on the franchise fee directly to customers on their bills. The City of Clearwater, like most cities in Florida, relies very heavily on utility taxes and franchise fees for revenues rather than on the property tax, which is usually much lower than property taxes levied in other states.
