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HomeMy WebLinkAboutordinance.council.055-07ORDINANCE NO. 55 SERIES OF 2007 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING TITLE 23 OF THE ASPEN MUNICIPAL CODE BY ADDING A NEW CHAPTER 23.52, ENTITLED "USE TAX" TO ADOPT A NEW 2.1% USE TAX ON CONSTRUCTION AND BUILDING MATERIALS, AND SETTING FORTH DETAILS IN REGARDS THERETO. WHEREAS, at an election held on November 6, 2007, the voters of the City of Aspen approved the following ballot question: SHALL THE CITY OF ASPEN TAXES BE INCREASED UP TO $1,722,000 FOR THE FIRST FULL FISCAL YEAR (2008) AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY THEREAFTER BY A NEW 2.1% USE TAX ON CONSTRUCTION AND BUILDING MATERIALS; PROVIDED THAT THE FIRST ONE HUNDRED THOUSAND DOLLARS ($100,000) OF EACH BUILDING PERMIT VALUATION SHALL BE EXEMPT FROM USE TAX; AND SHALL CITY OF ASPEN TAXES BE INCREASED BY AN ESTIMATED $870,989 FOR THE FHtST FISCAL YEAR (2010) AND BY SUCH AMOUNTS AS MAY BE GENERATED ANNUALLY THEREAFTER BY A NEW 0.15% SALES TAX BECOMING EFFECTIVE UPON EXPIRATION OF THE CURRENT 0.25% SALES TAX; AND, PROVIDED FURTHER THAT THE REVENUES DERNED FROM SUCH SALES AND USE TAXES SHALL BE USED TO PAY THE COST OF OPERATION, MAINTENANCE, CAPITAL REPLACEMENT, AND IMPROVEMENT OF THE CITY TRANSIT SERVICE AND PEDESTRIAN AMENITIES; AND, PROVIDED FURTHER THAT THE FULL AMOUNT OF REVENUES DERIVED FROM THE SALES AND USE TAXES MAY BE RETAINED AND EXPENDED BY THE CITY NOTWITHSTANDING ANY STATE REVENUE OR EXPENDITURE LIMITATION, INCLUDING THE LIMITATION CONTAINED IN ARTICLE X, SECTION 2Q, OF THE COLORADO CONSTITUTION? *Use tax is collected on building materials purchased outside of the city and brought into the city for use; and WHEREAS, the City Council desires to levy an additional sales tax of 0.15% upon the expiration of the current 0.25% sales tax and a use tax on construction and building materials of 2.1 %. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, THAT: Section 1. Title 23 of the Aspen Municipal Code is hereby amended by the addition of a new Chapter 23.52 entitle "Use Tax." Chapter 23.52 Use Tax Sec. 23.52.1 Legislative Intent. H.B. 1007, enacted by the Fifty-fifth Colorado General Assembly and approved by the Governor on June 6, 1985, sets forth procedures for the collection of sales and use taxes_by home rule cities. This Chapter contains provisions which are consistent with some of those set forth in H.B. 1007. The City Council finds that Article XX of the Colorado Constitution grants plenary power to home rule cities to levy and collect taxes within the City limits. The City Council does not endorse restrictions on the taxing power of home rule cities. Thus, it is the intent of the City Council in enacting provisions consistent with H.B. 1007 to assist the business community, but not in any way to prejudice the City's right to fully exercise its Constitutional authority to levy and collect taxes within its boundaries. Sec. 23.52.2 Words and Phrases Defined: Unless the context clearly indicates otherwise, the following words and phrases as used in this Chapter shall have the following meaning: Tax means the use tax due from a consumer or the sales tax due from a retailer or the sum of both due from a retailer who also consumes. Use Tax means the tax paid or required to be paid by a consumer for using, storing, distributing or otherwise consuming inside the corporate limits of the City of Aspen construction materials as defined in this chapter that are acquired inside or outside of the corporate limits of the City of Aspen upon which a City of Aspen sales tax is not paid. Sec. 23.52.3 Rate; Imposition and Collection; Distribution; Effective date A. Use Tax Levy: There is hereby levied a tax or excise upon the privilege of using, storing, distributing, or otherwise consuming in the City construction materials as defined in this chapter from sources inside or outside the City, on which the City sales tax has not been paid. For sales transacted on or after January 10, 2008, the rate levied shall be two and one tenth percent (2.1 %). B. Imposition and Collection: The tax specified in this Section is imposed upon the owner and general contractor, jointly defined as the purchaser. Any seller shall collect the tax and remit it to the City pursuant to Chapter 23.08. C. Application of funds: All funds received by the City pursuant to this Chapter (Use taxes) shall be deposited in a separate fund. The funds shall be subject to appropriation by City Council of the City, or its designee, only for the purposes to pay the cost of operation, maintenance, capital replacement, or improvement of the City transit service and pedestrian improvements; all in accordance with the purposes and limitations imposed by the ballot measure authorizing the collection of the use tax. D. Effective date: The provisions of the Chapter shall be effective upon the tenth day of 2008 (January 10, 2008) and shall continue to be levied and collected until amended or repealed by ordinance. The tax imposed in this Chapter shall be in addition to all other taxes imposed bylaw. Sec. 23.52.4 Exemptions; Applicability. The following list of exemptions cannot be increased by implication or similarity. In all cases, the burden of proof is upon the taxpayer to establish an exemption. The following are exempt from the use tax imposed by this Chapter: (A) The first one hundred thousand dollars ($100,000.00) of master building permit valuation; (B) The storage, use, or consumption of any tangible personal property the sale of which is subject to a retail sales tax imposed by the City; (C) The storage, use, or consumption of any tangible personal property purchased for resale in the City of Aspen, either in its original form or as an ingredient of a manufactured or compounded product, in the regular course of a business. (D) The storage, use, or consumption of tangible personal property brought into the City of Aspen by a nonresident thereof for his or her own storage, use, or consumption while temporarily within the City of Aspen; however, this exemption does not apply to the storage, use, or consumption of tangible personal property brought into this state by a nonresident to be used in the conduct of a business in this state; (E) The storage, use, or consumption of tangible personal property by the United States government, or the State of Colorado, or its institutions, or its political subdivision in their governmental capacities only or by religious or charitable corporations in the conduct of their regular religious or charitable functions; (F) The storage, use, or consumption of tangible personal property by a person engaged in the business of manufacturing or compounding for sale, profit, or use of any article, substance, or commodity, which tangible personal property enters into the processing of or becomes an ingredient or component part of the product or service which is manufactured, compounded, or furnished, and the container, label, or the furnished shipping case thereof; (G) The use, storage, or consumption of any article of tangible personal property the sale or use of which has already been subjected to a legally imposed sales or use tax of another statutory or home rule town, city, or city and county equal to or in excess of the use tax imposed herein. A credit shall be granted against the town's use tax with respect to a person's use, storage, or consumption in the City of tangible personal property purchased by him in a previous statutory or home rule town, city, or city and county. The amount of the credit to equal the tax paid by him by reason of the imposition of a sales or use tax of the previous statutory or home rule town, city, or city and county on his purchase or use of the property. The amount of credit shall not exceed the amount of the Use Tax imposed herein. (H) The storage, use, or consumption of tangible personal property and household effects acquired outside of the town and brought into it by a nonresident acquiring residency; (I) The storage of construction and building materials; and (J) Any transaction which the City of Aspen is prohibited from taxing under the Constitution and laws of the United States of America, or under the Constitution of the State of Colorado. Sec. 23.52.5 Provisions Relative to Building Permits. (A) Every person who is required to obtain a City building permit shall remit use tax on construction materials used on that project, whether purchased from sources inside or outside the City, by one of the following methods: 1. Estimated prepayment. The estimated cost of construction materials shall be calculated by multiplying the total valuation of the construction project, entered on the building permit by the City Building Division, by fifty percent (50%). Use tax on such estimated cost of construction materials shall be paid at the time the building permit is issued. Use tax on the actual cost of materials may be subsequently determined through final reconciliation of actual tax paid to the amount of the initial deposit .Purchaser shall have 90 days beginning with the date of issuance of a Certificate of Occupancy to file a final use tax return or waive its right to final reconciliation. Purchaser's right to final reconciliation under this section shall be considered waived if a final use tax return is not so filed. If use tax is prepaid, interest on any tax deficiency related to construction materials shall be computed from the date of issuance of the certificate of occupancy. All projects permitted on or after January 10, 2008, shall be required to use this method of payment. 2. Actual cost. The actual cost of construction materials shall be reported and paid on monthly returns. If use tax is paid on an actual cost basis, interest on any tax deficiency shall be computed from the date on which tax is due. 3. Previously permitted projects: Purchasers of construction materials for projects permitted prior to the effective date of this ordinance shall have 90 days from the effective date of this ordinance to demonstrate compliance. Compliance shall be considered complete when the purchaser either provides an estimated prepayment of use taxes in accordance with paragraph (A).1 of this section, or purchaser submits an initial montly use tax return in accordance with paragraph (A). 2. of this section. (B) Nothing in this Section shall be interpreted to reallocate the responsibility for payment of use tax imposed by law. Section 2. This ordinance shall not have any effect on existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances amended as herein provided, and the same shall be construed and concluded under such prior ordinances. Section 3. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions hereof. Section 4 A public hearing on this ordinance will be held the 10~h day of December 2007, at 5:00 p.m. in the City Council chambers, 130 South Galena. INTRODUCED, READ AND ORDERED PUBLISHED as provided by law by the City Council of the City of Aspen on the 3rd day December, 2007. l ~'~ Michael C. Ireland, May r ATTEST: ,E~ Kathryn S. I ,City Clerk FINALLY adopted, passed and approved this 11th day December, 2007. '~! Michael C. Ireland, M or Kathryn S. ch, City Clerk 1PW-saved: 1 I/30/2007-1775-G:\john\word\ords\Use Taz.doc