Finance Committee Meeting Materials - 07-20-2021JULY 20, 2021 - FINANCE COMMITTEE MEETING MATERIALS PAGE 1 | 1
FINANCE COMMITTEE MEETING MATERIALS
TUESDAY, JULY 20, 2021
1. STAFF UPDATES ON FINANCIAL RESULTS THROUGH JUNE
2. STAFF REPORT: USE TAX
3. STAFF PRESENTATION: USE TAX
970-748-4019 jmccracken@avon.org
TO: Honorable Mayor Smith Hymes and Council members FROM: Joel McCracken, Senior Accountant
RE: Financial Report April and May 2021 Revenues
DATE: June 17th, 2021
SUMMARY: The content of this report will reflect the revenues for sales, accommodations, tobacco and
cigarette tax for the period of April 2021. Further, revenues for real estate transfer tax and recreation
admissions & program fees for the period of May 2021 will be reported upon. This is submitted as a written
report and no action by Council is being requested.
BACKGROUND: The Town’s 2021 budget was adopted in December 2020. The percentage variance, or
comparative change is reflected in the analysis portion of this report in respect to each individual section for
the periods of April and May revenues in 2021. Tax revenues are not budgeted on a monthly basis.
However, for purposes of analysis, monthly budget variances are based on a 5-year average of actual
revenues.
ANALYSIS:
Sales Tax Revenues – April 2021
April 2021:
April sales tax revenues totaled $591,350. This is an increase of $242,161 or 69.42% compared to April
2020 sales tax revenue of $349,051.
APRIL 2020 v APRIL 2021 SALES TAX COMPARISON BY INDUSTRY
April 2020 April 2021 Increase/Decrease
Home/Garden $49,108.90 $85,218.80 $36,109.90
Grocery/Specialty/Health $129,486.41 $147,040.08 $17,553.67
Sporting Goods Retail/Rental $13,664.06 $43,904.91 $30,240.85
Miscellaneous Retail $8,150.26 $23,073.02 $14,922.76
Accommodations $6,966.81 $70,557.66 $63,590.85
Restaurants/Bars $30,312.49 $101,060.06 $70,747.57
Other $2,528.02 $7,761.64 $5,233.62
Service Related $13,288.26 $19,989.76 $6,701.50
Liquor Stores $17,470.27 $19,295.49 $1,825.22
E-Commerce Retail $8,672.89 $31,245.11 $22,572.22
Manufacturing/Wholesale $5,997.42 $6,499.80 $502.38
Construction Related Services $58,290.94 $28,011.96 ($30,278.98)
Digital Media Suppliers/Sellers $4,773.17 $7,043.71 $2,270.54
Page 2 of 7
Commercial/Industrial
Equipment $452.42 $648.43 $196.01
Special Events $27.20 $0.00 ($27.20)
TOTAL $349,189.52 $591,350.43 $242,160.91
April 2021 Proposed Budget v Actual Collections:
April 2021 sales tax revenues totaled $591,350. This is an increase of $158,428 over the proposed April
2021 estimates of $432,922. This is 36.63% over the 2021 proposed budget, which is calculated based on
a 5-year average.
APRIL 2020 v APRIL 2021 PROPOSED BUDGET v ACTUAL COLLECTIONS - SALES TAX
2021 Budget 2021 Actual Dollar Variance Percentage Variance
Sales Tax $432,821.93 $591,350.43 $158,428.50 36.63%
425,727.85 394,986.15 424,685.32 349,051.52 591,350.43
-7.22%
7.52%
-17.81%
69.42%
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2017 2018 2019 2020 2021
2017 -2021 April Sales Tax Revenue Trend
Page 3 of 7
Accommodation Tax Revenues – April 2021
April 2021:
Accommodation tax revenues totaled $73,465 for the month of April. This is an increase of $64,834 or
751.18% compared to April 2020 accommodation tax revenues, which totaled $8,631. Accommodation tax
collections by industry type for April 2021 compared to April 2020 reported a decrease for Vacation
Rentals, Time Shares and Hotels.
APRIL 2020 v APRIL 2021 ACCOMMODATION TAX COMPARISON BY INDUSTRY
April 2020 April 2021 Increase/(Decrease)
Timeshares $1,138 $18,867.24 $17,729.24
Hotels $3,619.15 $20,096.17 $16,477.02
Vacation Rentals $3,873.81 $34,501.25 $30,627.44
TOTAL $8,630.96 $73,464.66 $64,833.70
April 2021 Proposed Budget v Actual Collections:
April 2021 accommodation tax revenues totaled $73,465. This is an increase of $41,843 over the
proposed April 2021 estimates of $31,622. This is 132.32% over the 2021 proposed budget.
2021 PROPOSED BUDGET v ACTUAL COLLECTIONS - ACCOMMODATIONS TAX
2021 Budget 2021 Actual Dollar Variance Percentage Variance
Acc. Tax $31,622.14 $73,464.66 $41,842.52 $132.32
Page 4 of 7
Tobacco & Cigarette Tax Revenues – April 2021
April 2021:
Tobacco tax revenues totaled $19,194 and cigarette tax revenues totaled $18,798 for April 2021.
Compared to April 2020 revenues, this is an increase of $7,037 for tobacco tax revenues, which totaled
$12,157 and an increase of $2,610 for cigarette tax revenues, which totaled $16,188.
38,340 33,275 31,825 8,631 73,465
-13.21%-4.36%
-72.88%
751.18%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
2017 2018 2019 2020 2021
2017-2021 April Accommodation Tax Revenue
Trend
18,392 16,188 18,798
-11.98%
16.12%
14,500
15,000
15,500
16,000
16,500
17,000
17,500
18,000
18,500
19,000
2019 2020 2021
2019-2021 April Cigarette Excise Tax Revenue
Trend
Page 5 of 7
April 2021 Proposed Budget v Actual Collections:
April 2021 tobacco and cigarette tax revenues totaled $19,194 and $18,798, respectively. This is an
increase of $2,029 over the proposed April 2021 budget for tobacco tax and a decrease of $463 over for
the proposed April 2021 budget for cigarette tax estimates, which is based on a 5-year average.
2021 PROPOSED BUDGET v ACTUAL COLLECTIONS - TOBACCO AND CIGARETTE TAX REVENUES
2021 Budget 2021 Actual Dollar Variance Percentage Variance
Tobacco $17,165.34 $19,194.34 $2,029 11.82%
Cigarettes 19,261.44 $18,798 ($463.44) -2.41%
$1,565.56
NOTE: We believe the adoption of similar tobacco and cigarette taxes in neighboring jurisdiction resulted of
purchasers to Avon.
Real Estate Transfer Tax Revenues – May 2021
May 2021
May 2021 Real estate transfer tax totaled $304,523. Compared to May 2020, which totaled $100,256, this
is an increase of $204,267.
15,416 12,340 19,194
-19.95%
55.54%
-
5,000
10,000
15,000
20,000
25,000
2019 2020 2021
2019-2021 April Tobacco Tax Revenue Trend
Page 6 of 7
Recreation Center Revenues – May 2021 Admissions & Program Fees
May 2021:
Recreation admission revenues for May 2021 totaled $27,693, an increase of $26,979 compared to May
2020, which totaled $714. This is $2,241 under the original 2021 budget estimates of $29,220. Recreation
program fee revenues for May 2021 totaled $24,791. This is an increase of $17,042 compared to 2020,
which totaled $7,749. This is $5,825 under the original 2021 budget estimates, which is $30,616 which is
calculated based on a 5-year average.
$377,491 $351,237 $278,242 $100,257 $304,523
-7.47%
-26.23%
-177.53%
67.08%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
2017 2018 2019 2020 2021
Real Estate Transfer Tax May Revenue Trends
54,337 50,253 63,563 714 27,693
-8.13%20.94%
-8808.62%
97.42%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2017 2018 2019 2020 2021
Recreation Admissions May Revenue Trends
Page 7 of 7
FINANCIAL CONSIDERATIONS: This is submitted as a written report and there are no financial
considerations for Council.
RECOMMENDATION: This is submitted as a written report; therefore, I have no recommendations for
Council.
Thank you,
Joel McCracken
$44,605 $37,300 $31,336 $7,749 $24,791
-16.38%
-15.99%
-75.27%
219.94%
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
2017 2018 2019 2020 2021
Recreation Program Fees May Revenue Trends
[970] 748-4055 swright@avon.org
TO: Honorable Mayor Smith Hymes and Council members
FROM: Scott Wright, Assistant Town Manager; Paul Wisor,
Town Attorney; Eric Heil, Town Manager
RE: Use Tax on Construction Materials
DATE: July 7, 2021
SUMMARY: This report provides an overview of a potential Use Tax, including draft Ballot Language and
recommendations. Council approved the 2021 Department goals early in the year which included a Finance
Department Goal to present legal and financial analysis of Use Tax.
Finance Department, Goal #12 states, Present Legal and Financial Analysis of Use Tax:
Staff will prepare an overview of sales and use tax as commonly used throughout
Colorado, potential revenues, potential dedication of such revenues for designated
purposes such as capital improvements or community housing, and present that
information to the Finance Committee.
The 2018 Town of Avon Community Housing Plan established a goal to secure additional local funds for
housing and to seek opportunities for new funding sources. The Community Housing Plan states on P. 6
under Funding,
A two-step process is envisioned to secure additional local funds for housing. The
first step will be to review current revenue streams and determine if additional
funds can be directed to housing efforts through the annual budgeting process.
This review will begin at the end of 2018. Depending on the outcome of the first
step, the second step will be to seek opportunities for new funding sources, which
could include approaches such as increased linkage fees, regional collaboration,
and/or support for a local ballot initiative.
The purpose of this report is to introduce to Council a possible means for funding Community Housing
projects through the assessment of a use tax on construction materials. This is submitted as a written
report and no formal action by Council is requested at this time. If Council decides that this might be a
favorable way to raise funds for this purpose it must be approved by the Town’s electorate in a TABOR
election, since implementing a use tax is a change in tax policy and increases revenue.
Critical dates pursuant to TABOR include the following:
(1) August 10. Last regularly scheduled Town Council meeting to introduce first reading of an
ordinance to refer ballot question and self-execute implementation of use tax upon
approval.
(2) August 24 Last regularly scheduled Town Council meeting in which to adopt a resolution
certifying ballot content to the County Clerk and Recorder.
(3) September 3. Last day to certify the ballot content to the County Clerk and Recorder.
(4) November 2. Election day.
BACKGROUND: In 2002 a 4% construction use tax was submitted to the Town of Avon electors by the
Avon Town Council. The tax was to be "spent solely for transportation and recreation capital projects and
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services and infrastructure related thereto." The ballot question failed to pass by a vote of 379 in favor and
573 against (See Attachment A).
ANALYSIS: Use taxes are levied on the consumption of tangible personal property within a city or county
for which no sales or use tax has been previously paid. A use tax differs from a sales tax in that the
purchaser (as opposed to the retailer) is generally held responsible for paying the use tax. Use taxes are
considered complimentary to a sales tax and are applied in the jurisdiction where the product or materials
are used rather than where purchased. Use taxes are typically assessed at the same rate as the sales tax
that would have been owed and generally the taxability of the goods or services is the same.
The State of Colorado imposes both a sales tax and a use tax. The use tax is imposed as a complement to
Colorado sales tax, and is meant to capture revenue on transactions that are not subject to a sales tax as
well as transactions which are more efficient and effective to impose and collect the use tax rather than the
sales tax. The use tax is imposed for the privilege of storing, using, or consuming tangible personal
property in Colorado. In general, whenever a purchaser acquires tangible personal property without paying
sales tax at the time of the sale, they must pay consumer use tax directly to the Department of Revenue. If
an item is exempt from sales tax, it is generally exempt from use tax as well. The Colorado use tax rate is
2.9%, the same as the sales tax rate in Colorado, and use tax is calculated in the same manner as sales
tax.
There are generally three types of use taxes that may be imposed on purchasers:
(1) A Consumer Use Tax;
(2) A Motor Vehicle Use Tax;
(3) A Construction Use Tax levied on building materials.
Consumer Use Tax. The first type of use tax - a consumer use tax - is defined as a "companion" tax for
purchases made where sales tax is not charged. In Colorado, this companion tax is called a consumer use
tax. Typically, a consumer use tax is imposed on transactions that are subject to sales tax, but tax was not
charged. Usually, this occurs when items are purchased out-of-state, ordered through the mail, over the
Internet, or by phone from another state. It is imposed on the use, storage, or consumption of tangible
personal property in the state. The use tax often applies when a company makes a purchase from an out-
of-state seller that is not required to collect sales tax in the purchaser’s state.
Consumer use taxes are imposed by state and local governments for two reasons — to prevent someone
from evading a sales tax by buying goods or taxable services from a non-taxing state and shipping them
into the state that imposes the sales tax. In addition, the use tax protects retailers located in the state or
municipality because it removes the incentive for consumers to shop outside that locality in order to avoid
paying the sales tax.
On June 21, 2018, the United States Supreme Court ruled in a 5-4 decision in South Dakota v. Wayfair,
Inc., et al, that states can generally require an out-of-state seller to collect and remit sales tax on sales to
in-state consumers even if the seller has no physical presence in the consumer's state. Because of this
decision, we do not consider future lost sales taxes from out-of-state retail sales to be material enough to
consider a consumer use tax ballot question. We do not recommend Council consider a Consumer Use
Tax.
Motor Vehicle Use Tax. In general, motor vehicle sales are subject to all state and local sales taxes that
apply within the jurisdiction where the sale occurred. However, in most jurisdictions, sales are exempt from
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the local sales tax if the motor vehicle is registered outside of Town. If the vehicle sale is exempt as
described above, the purchaser must pay applicable use tax imposed by the municipality or county in which
the vehicle is registered. If there is no use tax imposed, then the only tax paid is at the State level. Any
applicable use taxes must be paid to the county clerk prior to titling and registration. From a practical
standpoint, jurisdictions that do not have a motor vehicle use tax are unlikely to have new and used
automobile dealerships because a resident purchasing a vehicle within that jurisdiction would have to pay
sales tax vs. purchasing the vehicle outside of the jurisdiction.
Use taxes on motor vehicles can raise a substantial amount of tax. A Motor Vehicle Use Tax would be a
new tax for Avon residents purchasing a vehicle. We do not recommend Council consider a Consumer
Use Tax.
Construction Materials Use Tax. The Town of Avon currently imposes a sales tax on building materials.
The administrative burden of collection is high and not entirely effective because Avon must collect the
sales tax from vendors of construction materials and not the contractors or property owners. Many of the
construction materials are purchased outside of the Town. In the case of materials purchased outside of
Town and brought into Town by the purchaser (owner, general contractor or sub-contractors), the Town
has lost out on the sales tax for those items because it is paid at the location of the retailer.
In the case of materials purchased outside of Town and then delivered by the retailer to the job site, sales
would not be collected by the retailer and the purchaser should remit the sales tax to the Town. However,
due to the “on-your-honor” methodology, the large number of contractors and companies involved, the
amount of records involved, and determining who is ultimately responsible for the tax (the owner, general
contractor or subs), this methodology is very inefficient.
A construction use tax is a form of use tax levied on building materials. The use tax is collected at the time
a building permit is issued. The use tax amount is determined by multiplying the use tax rate by the cost of
the building materials using a predetermined formula. A common method is to determine that the cost of
building materials to be fifty percent (50%) of the total valuation of the construction project. The builder
then provides the building permit to the materials supplier to prove that use tax has already been paid, and
then is exempt from paying a corresponding municipal sales tax in other locations.
A large number of cities and counties in Colorado levy a use tax on building materials including Eagle,
Gypsum, Vail, Steamboat Springs and Grand Junction. See the comparison tables in the presentation.
The benefits of a use tax on construction materials include the following:
(1) fairness in the imposition of the tax;
(2) elimination of unfair competition using tax rates as a reason to shop outside of Avon;
(3) easing of the administrative burden of collection;
(4) nexus of construction to community housing needs;
FINANCIAL CONSIDERATIONS: Based on the Town’s 10-year average of the total value of building
construction of $32,772,355, a 4% use tax on construction materials would have generated an average of
$655,447 per annum in revenue. It should be noted that because the Town (excluding The Village (at
Avon)) has only a few remaining vacant parcels for large potential developments remaining, the level of use
tax from the past ten years might not be an accurate representation of the potential use tax that might be
realized in the future. Redevelopment of East Avon Town Center and other underdeveloped properties in
the Town core may provide additional use tax revenues.
Page 4 of 4
The timing of the remittance of a use tax versus what was actually collected in sales tax on construction
materials makes it very difficult to compare fiscal years. However, an average of the past seven years
indicates that the Town has actually collected an average of $399,446 per year with 2020 collections at
$537,553 representing almost 6% of total sales tax collections.
Village At Avon (Traer Creek Metro District). The Consolidated Amended and Restated Annexation and
Development Agreement (“CARADA”) specifically contemplates that the Town may, at some point, impose
a use tax. In the event a use tax is imposed, a corresponding “use tax credit” will automatically be applied
to any transaction subject to the use tax. The CARADA also contemplates that Traer Creek may impose a
building materials fee if the Town imposes a use tax. The CARADA is silent as to whether the building
materials fee must be used for the same purposes as the use tax. The CARADA does provide the Town
must coordinate with Traer Creek regarding the implementation of any use tax, so the Town will need to
further explore the building materials fee with Traer Creek.
SAMPLE BALLOT LANGUAGE: Sample ballot language is included with this Report which would dedicate
100% of the revenues of a Use Tax to the Community Housing Fund. The use of these funds is broadly
written to encompass all potential investments and expenditures related to Community Housing.
OPTIONS: As an option to the sample ballot language contained in Attachment B, Council may consider
retaining a portion of the use tax in the General Fund to be used for any legal purpose as a way to offset
the amount of sales tax on construction materials that will no longer be collected in that manner. As
discussed above, that amount in 2020 equates to approximately 6% of gross sales tax revenues or a total
of $537,553.
Another option regarding the use tax on construction materials would include not specifically earmarking
the funds and leave the appropriation of the funds up to the discretion of the Town Council.
RECOMMENDATION: We recommend that Council provide direction regarding the possible adoption,
either by resolution or by ordinance, of a construction materials use tax ballot question to be certified to the
Eagle County Clerk and Recorder for inclusion in the November 2, 2021 general election. Direction should
include addressing the options above.
TOWN MANAGER’S RECOMMENDATION: I recommend that Council consider approving the ballot
question as presented with 100% of the revenues to be dedicated to Community Housing. In my
experience working with ballot questions for new taxes, voters will more likely support a new tax that is
dedicated to a pressing community need. Presenting the Use Tax as a new tax to support Community
Housing is simple and easy for the general public to understand and I expect would resonate with the
community based on the current housing shortage. The Sales Tax on construction materials collected in
2020 amounts to 2.9% of the General Fund operating revenues. Considering the magnitude and scope of
housing as well as the need to generate significant sums to leverage with regional partners and state and
federal grant funds, Council should be striving for annual revenues to be dedicated or allocated towards
Community Housing in the range of $1 million to $2 million.
Thank you, Scott, Paul and Eric
ATTACHMENTS:
Attachment A - Ordinance No. 2002-18
Attachment B - Sample Use Tax Ballot Question
TOWN OF AVON
ORDINANCE NO. 02-18
SERIES OF 2002
AN ORDINANCE ADDING A USE TAX ON
CONSTRUCTION MATERIALS.
BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF AVON,
COLORADO:
Section 1. Chapter 3.08 of the Avon Municipal Code is amended as follows:
a) Title. The title of chapter 3.08 is amended to state "SALES AND USE TAX."
b) 43.08.020. Taxable items. A new subpart D. is added to state as follows:
D. Upon the purchase price paid for or the acquisition costs of
construction materials brought within the boundaries of the town for the
purpose of being used to build, construct, reconstruct, alter, expand, modify or
improve any building, dwelling or other structure or improvement to real
property in the town."
c) 43.08.030. Sales tax levy.
i) The title of §3.08.030 is changed to state "Sales and use tax levy."
ii) Section 3.08.030C is repealed and reenacted to state as follow:
The retailer shall add the sales tax imposed hereto to the sale or charge of the
item sold, showing such tax as a separate and distinct item, and, when added,
such tax shall constitute a part of such price or charge, shall be a debt from the
purchaser to the retailer until paid and shall be recoverable at law in the same
manner as other debts."
iii) A new subpart E. is added to state as follows:
E. (1) A use tax of four percent is imposed upon the purchase price paid for
or the acquisition costs of construction materials brought within the
boundaries of the town for the purpose of being used to build, construct,
reconstruct, alter, expand, modify or improve any building, dwelling or other
structure or improvement to real property in the town.
1
ATTACHMENT A
2)(a) Any person who shall build or improve any dwelling or other
structure or improvement to realty within the town, including underground
improvements, and who shall purchase the necessary construction materials
needed therefor from any source inside or outside of the town, shall remit to
the Finance Director prior to the issuance of any building permit for such
improvement full payment of the use tax, to be calculated as provided herein.
The full amount of the use tax shall be due and payable at the time that the
applicable building permit is issued. The estimate of the cost of the
construction materials shall be determined by the Town Building Official in
the manner set forth below, and the amount of the tax shall be subject to
adjustment if the actual cost of the construction materials needed for the
improvement is either less than or greater than the estimate. Upon payment of
the use tax, the Finance Director shall issue the taxpayer a receipt identifying
the property that is the subject of the tax and the building permit number.
b) For the purpose of calculating the amount of the use tax as
provided for herein, the value of the construction materials in the
improvement shall be estimated to be equal to fifty percent of the total value
of the improvement as determined by the Building Official for building permit
purposes. The use tax obligation shall be an amount equal to four percent of
such estimated value of the construction materials.
c) If it is determined by the Finance Director through audit or other
means that the actual cost of the construction materials for the improvement is
greater than the estimate on which the tax was based, and that additional tax is
owing, then the Finance Director shall make a demand to the taxpayer for the
additional use tax owed together with interest calculated pursuant to §
3.08.353; provided, in no case may the Finance Director make a claim for
amounts due more than three years after a certificate of occupancy or final
inspection approval has been issued by the town for the improvement. A
taxpayer's failure to honor the Finance Director's claim for additional tax due,
as set forth in this paragraph, shall constitute a violation of this chapter.
3) All use tax funds collected by the Town in accordance with the
provisions of this chapter shall be appropriated and spent solely for
transportation and recreation capital projects and services and infrastructure
related thereto."
d) & 3.08.320. Sales tax - Credit for sales or use taxes previously paid to
another municipality.
i) The title of § 3.08.320 is changed to state "Sales and use tax - Credit
for sales or use taxes previously paid to another municipality."
ii) Section 3.08.320 is repealed and reenacted to state as follow:
2
ATTACHMENT A
For transactions consummated on or after January 1, 1986, the town's sales tax shall
not apply to the sale of tangible property at retail or the furnishing of services if the
transaction was previously subjected to a sales or use tax lawfully imposed on the
purchaser or user by another statutory or home rule municipality equal to or in excess
of that provided for in Section 3.08.030. A credit shall be granted against the town's
lawfully imposed local sales or use tax previously paid by the purchaser or user to the
previous statutory or home rule municipality. The amount of the credit shall not
exceed the town's sales or use tax imposed pursuant to Section 3.08.030."
Section 2. Section 3.08.035 of the Avon Municipal Code is amended as follows:
3.08.035 Tax Credit. Notwithstanding any other provisions of this chapter, there
shall be granted to each person owing 1) the sales tax on sales consummated within
The Village (at Avon) or 2) the use tax on the purchase price paid or the acquisition
costs of construction materials brought within the boundaries of the Town for the
purpose of being used to build, construct, reconstruct, alter, expand, modify or
improve any building, dwelling or other structure or improvement to real property
within The Village (at Avon) a temporary tax credit against collection of the tax equal
to the amount of any retail sales or use fee paid by or on behalf of such person. The
amount of the credit shall not exceed the amount of the tax. No such credit shall shall
be granted subsequent to termination of the collection of the retail sales fees and use
fees terminate pursuant to the Annexation and Development Agreement for The
Village (at Avon). Neither the ability of the Town to grant the temporary tax credit
nor the termination of the credit shall constitute a tax increase, the imposition of a
new tax or a tax policy change."
Section 3. Election and Effective Date.
Under Article X, Section 20 of the Colorado Constitution, the Council refers the tax
increase provided in this ordinance to the qualified electors of the Town for approval at the
regular Town election scheduled for November 5, 2002. If approved by a majority of the
electors voting thereon, this ordinance shall become effective when the Town Clerk or other
designated election official duly files the required certificate of election, or on January 1,
2003, whichever occurs last.
Section 4. Ballot Title and Question.
The ballot title and question submitted to the electors shall be
as follows:
ATTACHMENT A
SHALL TOWN OF AVON TAXES BE INCREASED $1.6
MILLION ($1,600,000) ANNUALLY IN 2003, AND BY
WHATEVER ADDITIONAL AMOUNTS ARE RAISED
ANNUALLY THEREAFTER, BY THE IMPOSITION OF A
FOUR PERCENT (4%) USE TAX ON THE PRIVILEGE OF
USING OR CONSUMING IN THE TOWN ANY
CONSTRUCTION MATERIALS, SUCH USE TAX
REVENUES TO BE APPROPRIATED AND SPENT
SOLELY FOR TRANSPORTATION AND RECREATION
CAPITAL PROJECTS AND SERVICES AND
INFRASTRUCTURE RELATED THEREO, ALL IN
ACCORDANCE WITH ORDINANCE NO. 02-18 ADOPTED
BY THE TOWN COUNCIL; AND SHALL THE REVENUES
COLLECTED FROM SUCH TAX AND ANY EARNINGS
FROM THE INVESTMENT OF SUCH REVENUES BE
COLLECTED AND SPENT AS A VOTER APPROVED
REVENUE CHANGE AND AN EXCEPTION TO THE
LIMITS WHICH WOULD OTHERWISE APPLY UNDER
ARTICLE X, SECTION 20 OF THE COLORADO
CONSTITUTION OR ANY OTHER LAW?
INTRODUCED, APPROVED ON FIRST READING, AND ORDERED
PUBLISHED IN FULL AND POSTED, this 9th day of July, 2002, and a public hearing on
this ordinance shall be held at the regular meeting of the Town Council of the Town of Avon,
Colorado on the 27th day of August, 2002, at 5:30 p.m. in the Municipal Building of the
Town of Avon, Colorado.
TOWN OF AVON, COLORADO:
ATT
To Cl rk
yor
4
ATTACHMENT A
INTRODUCED, APPROVED ON SECOND READING, AND ORDERED
PUBLISHED AND POSTED this 27th day of August, 2002.
TOWN OF AVON, COLORADO:
Jyor
ATT
oc-
To Cl rk EARS
APPROVED AS TO FORM:
Town ttorney
ATTACHMENT A
STATE OF COLORADO )
COUNTY OF EAGLE ) SS
TOWN OF AVON
NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL
OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 27TH DAY OF AUGUST
2002, AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF
CONSIDERING THE ADOPTION OF ORDINANCE NO. 02-18, SERIES OF 2002:
AN ORDINANCE ADDING A USE TAX ON
CONSTRUCTION MATERIALS.
A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and
may be inspected during regular business hours.
Following this hearing, the Council may consider final passage of this Ordinance.
This notice is given and posted by order of the Town Council of the Town of Avon, Colorado
Dated this 23rd day of August 2002.
TOWN OF AVON, COLORADO
BY: P ! "lc/
Patty Yel envy
Town Cie&
POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON
AUGUST 23, 2002:
AVON MUNICIPAL BUILDING, MAIN LOBBY
ALPINE BANK, MAIN LOBBY
AVON RECREATION CENTER, MAIN LOBBY
CITY MARKET, MAIN LOBBY
ATTACHMENT A
STATE OF COLORADO )
COUNTY OF EAGLE ) SS
TOWN OF AVON
NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL
OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 13TH DAY OF AUGUST
2002, AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF
CONSIDERING THE ADOPTION OF ORDINANCE NO. 02-18, SERIES OF 2002:
AN ORDINANCE ADDING A USE TAX ON
CONSTRUCTION MATERIALS.
A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and
may be inspected during regular business hours.
Following this hearing, the Council may consider final passage of this Ordinance.
This notice is given and posted by order of the Town Council of the Town of Avon, Colorado
Dated this 6`" day of August, 2002.
TOWN OF AVON, COLORADO
BY: 201 /~c
Pa " cKenn
Town Clerk
POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON
AUGUST 6, 2002:
AVON MUNICIPAL BUILDING, MAIN LOBBY
ALPINE BANK, MAIN LOBBY
AVON RECREATION CENTER, MAIN LOBBY
CITY MARKET, MAIN LOBBY
ATTACHMENT A
STATE OF COLORADO )
COUNTY OF EAGLE ) SS
TOWN OF AVON
NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL
OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 23RD DAY OF JULY 2002,
AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF
CONSIDERING THE ADOPTION OF ORDINANCE NO. 02-18, SERIES OF 2002:
Ordinance 02-18, Series of 2002 - An Ordinance Adding a Use Tax on Construction
Materials
A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and
may be inspected during regular business hours.
Following this hearing, the Council may consider final passage of this Ordinance.
This notice is given and posted by order of the Town Council of the Town of Avon, Colorado
Dated this 19th day of July, 2002.
TOWN OF AVON, COLORADO
BY: c
Pay c envy
Town erk
POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON
JULY 19,2002:
AVON MUNICIPAL BUILDING, MAIN LOBBY
ALPINE BANK, MAIN LOBBY
AVON RECREATION CENTER, MAIN LOBBY
CITY MARKET, MAIN LOBBY
ATTACHMENT A
ORDINANCE NO. 02-18
gad
SERIES OF 2002
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF
AVON,COLORADO:
Section 1. Chapter 3.08 of the Avon Municipal Code is amended as follows:
a) Title. The title of chapter 3.08 is amended to state "SALES AND USE TAX."
b) 43.08.020. Taxable items. A new subpart D. is added to state as follows:
D. Upon the purchase price paid for or the acquisition costs of
construction materials brought within the boundaries of the town for the
purpose of being used to build, construct, reconstruct, alter, expand, modify or
improve any building, dwelling or other structure or improvement to real
property in the town."
c) 43.08.030. Sales tax levy.
i) The title of §3.08.030 is changed to state "Sales and use tax levy."
ii) Section 3.08.030C is repealed and reenacted to state as follow:
The retailer shall add the sales tax imposed hereto to the sale or charge of the
item sold, showing such tax as a separate and distinct item, and, when added,
such tax shall constitute a part of such price or charge, shall be a debt from the
purchaser to the retailer until paid, and shall be recoverable at law in the same
manner as other debts."
iii) A new subpart E. is added to state as follows:
E. (1) A tax of four percent is imposed upon the purchase price paid for or
the acquisition costs of construction materials brought within the boundaries
of the town for the purpose of being used to build, construct, reconstruct, alter,
expand, modify or improve any building, dwelling or other structure or
improvement to real property in the town.
AN ORDINANCE ADDING A USE TAX ON
CONSTRUCTION MATERIALS.
2) Any person who shall build or improve any dwelling or other structure
or improvement to realty within the town, including underground
ATTACHMENT A
improvements, and who shall purchase the necessary construction materials
needed therefore from any source inside or outside of the town, shall keep all
invoices and statements regarding such materials from both the general and
subcontractors, along with a summary sheet showing such purchases, and
shall, on or before the tenth day of each succeeding month following the start.
of construction, file a return with the Finance Director, to which he shall
attach such invoices, statements and. summary for the construction materials
purchased the previous month, and . shall thereupon pay to the Finance
Director the full amount of the use tax due thereon for the preceding month or
months. Any failure to preserve such statements and invoices, and to make
such return and payment of such use tax, shall be deemed a violation of this
chapter. The full amount of any use tax due and not paid for construction
materials shall be a lien upon the real property benefited by such
improvements, and the Finance Director is authorized to file a notice of such
lien with the County Clerk and Recorder.
3)(a) Any person who shall build or improve any dwelling or other
structure or improvement to realty within the town, including underground
improvements, and who shall purchase the necessary construction materials
needed therefore from any source inside or outside of the town, may, at such
person's option, remit a deposit to the Finance Director prior to the issuance
of any building permit for such improvement, such deposit to insure and
indemnify the town for the amount of use tax due. The amount of the deposit
shall be based upon an estimate of the use tax to be payable on the
construction materials used for the improvement. Such estimate shall be
made, and such deposit shall be paid, at the time that the applicable building
permit is issued. The estimate of the cost of the construction materials shall
be determined by the Town Building Official, and the estimate shall be
subject to adjustment if the actual cost of the construction materials needed for
the improvement is either. less than or greater than such estimate. If the
taxpayer elects the deposit procedure set forth in this subsection (3), then the
provisions of subsection (2) hereof shall be waived. Upon payment of the
deposit as set forth herein, the Finance Director shall issue the taxpayer a
receipt identifying the property that is the subject of the deposit and the
building permit number.
b) For the purpose of calculating the amount of the deposit as
provided for herein, the value of the construction materials in the
improvement shall be estimated to be equal to fifty percent of the total value
of the improvement as determined by the Building Official for building permit
purposes. The deposit shall be in the amount of four percent of such estimated
value of the construction materials.
c) If it is determined by the Finance Director that the actual cost of
the construction materials for the improvement is.greater than the estimate
therefore, and that the amount of the use tax deposit is not sufficient to
2
ATTACHMENT A
provide for full payment of the use tax, then the Finance Director shall make a
demand to the. taxpayer for the additional use tax owed; provided, in no case
may the Finance Director make a claim for amounts due over and above the
amount of the deposit more than three years after a certificate of occupancy or
final inspection approval has been issued by the town for the improvement. A
taxpayer's failure to honor the Finance Director's claim for additional tax due,
as set forth in this paragraph, shall constitute a violation of this chapter.
d) If it is determined by the Finance Director that the deposit is
sufficient to provide for full payment of the use tax, then the deposit shall be
used to pay the amount of the use tax due. If the Finance Director determines
that the amount of the deposit is in excess of the use tax owned, then he shall
return any excess amount of the deposit to the person who made the deposit
within thirty days of such determination.
4) If a taxpayer purchases construction materials subject to the use tax
imposed herein from a vendor possessing a valid Town of Avon retail sales
tax license, and if he pays the town's sales tax at the time of purchase of such
construction materials, then he shall be entitled to a credit, to the extent of
such sales tax paid, to be applied to the amount of use tax owed.
5) Construction materials subjected at the time of purchase to a sales or use
tax lawfully imposed on the purchaser by another statutory or home rule
municipality in the State of Colorado, if taxed at a rate equal to or greater than
the four percent rate provided for herein, are exempted from the Town of
Avon's use tax. If the rate of the sales or use tax imposed by such other
Colorado statutory or home rule municipality is less than four percent, the
difference between the tax due under this chapter and the tan paid by the
purchaser shall be due to the Town of Avon, and shall be remitted to the
Finance Director.
6) All use tax funds collected by the Town in accordance with the
provisions of this chapter shall be appropriated and spent solely for
transportation and recreation capital projects and services."
d) 4 3.08.320. Sales tax - Credit for sales or use taxes previously paid to
another municipality.
i) The title of § 3.08.320 is changed to state "Sales and use tax - Credit
for sales or use taxes previously paid to another municipality."
ii) Section 3.08.320 is repealed and reenacted to state as follow:
For transactions consummated on or after January 1, 1986, the town's sales tax shall
not apply to the sale of tangible property at retail or the furnishing of services if the
transaction was previously subjected to a sales or use tax lawfully imposed on the
3
ATTACHMENT A
purchaser or user by another statutory or home rule municipality equal to or in excess
of that provided for in Section 3.08.030. A credit shall be granted against the town's
lawfully imposed local sales or use tax previously paid by the purchaser or user to the
previous statutory or home rule municipality. The amount of the credit shall not
exceed the town's sales or use tax imposed pursuant to Section 3.08.030."
Section 2. Election and Effective Date.
Under Article X, Section 20 of the Colorado Constitution, the Council refers the tax
increase provided in this ordinance to the qualified electors of the Town for approval at the
regular Town election scheduled for November 5, 2002. If approved by a majority of the
electors voting thereon, this ordinance shall become effective when the Town Clerk or other
designated election official duly files the required certificate of election, or on January 1,
2003, whichever occurs last.
Section 3. Ballot Title and Question.
The ballot title and question submitted to the electors shall be
as follows:
SHALL TOWN OF AVON TAXES BE INCREASED $1.6
MILLION ($1,600,000) ANNUALLY IN 2003, AND. BY
WHATEVER ADDITIONAL AMOUNTS ARE RAISED
ANNUALLY THEREAFTER, BY THE IMPOSITION OF A
FOUR PERCENT (4%) USE TAX ON THE PRIVILEGE OF
USING OR CONSUMING IN THE TOWN ANY
CONSTRUCTION MATERIALS, SUCH USE TAX
REVENUES TO BE APPROPRIATED AND SPENT
SOLELY FOR TRANSPORTATION AND RECREATION
CAPITAL PROJECTS AND SERVICES, ALL IN
ACCORDANCE WITH ORDINANCE NO. 01-08 ADOPTED
BY THE TOWN COUNCIL; AND SHALL THE REVENUES
COLLECTED FROM SUCH TAX AND ANY EARNINGS
FROM THE INVESTMENT OF SUCH REVENUES BE
COLLECTED AND SPENT AS A VOTER APPROVED
REVENUE CHANGE AND AN EXCEPTION TO THE
LIMITS WHICH WOULD OTHERWISE APPLY UNDER
ARTICLE X, SECTION 20 OF THE COLORADO
CONSTITUTION OR ANY OTHER LAW?
YES
4
ATTACHMENT A
NO
Section 4. Repealer.
If the electors approve this ordinance, then on the effective date specified above, all
ordinances or parts of ordinances in conflict herewith are hereby repealed, but only to the extent
of such inconsistency.
Section 5. Severability.
The provisions of this ordinance. are severable, and invalidity of any part shall not affect the
validity or effectiveness of the rest of this ordinance.
INTRODUCED, APPROVED ON FIRST READING, AND ORDERED
PUBLISHED IN FULL AND POSTED, this day of July, 2002, and a public hearing on
this ordinance shallCaie held at t e regular meeting of the Town Council of the Town of Avon,
Colorado on the a3 day of , 2002, at 5:30 p.m. in the Municipal Building of the
Town of Avon, Colorado,,,-
ATT
7,Cp`p
Town lerk
TOWN OF AVON, COLORADO:
Wor
5
ATTACHMENT A
INTRODUCED, APPROVED ON S COND READING, AND ORDERED
PUBLISHED AND POSTED this-'1 %ay of )t,,L-t , 2002.
Q-T~WN OF AVON, COLORADO:
Wor
ATT T:
o C~
To Cle
APPROVED AS TO FORM:
Town Attorney
6
ATTACHMENT A
STATE OF COLORADO )
COUNTY OF EAGLE ) SS
TOWN OF AVON )
NOTICE IS HEREBY GIVEN OF A PUBLIC HEARING BEFORE THE TOWN COUNCIL
OF THE TOWN OF AVON, COLORADO AT 5:30 P.M. ON THE 23R) DAY OF JULY 2002,
AT THE TOWN OF AVON MUNICIPAL BUILDING FOR THE PURPOSE OF
CONSIDERING THE ADOPTION OF ORDINANCE NO. 02-18, SERIES OF 2002:
Ordinance 02-18, Series of 2002 - An Ordinance Adding a Use Tax on Construction
Materials
A copy of said Ordinance is attached hereto, and is also on file at the office of the Town Clerk, and
may be inspected during regular business hours.
Following this hearing, the Council may consider final passage of this Ordinance.
This notice is given and posted by order of the Town Council of the Town of Avon, Colorado
Dated this 19th day o
0 F
TOWN OF AVON, COLORADO
SEA L LBY:
Pa Mc envy
LOOA®® To k
POSTED AT THE FOLLOWING PUBLIC PLACES WITHIN THE TOWN OF AVON ON
JULY 19, 2002:
AVON MUNICIPAL BUILDING, MAIN LOBBY
ALPINE BANK, MAIN LOBBY
AVON RECREATION CENTER, MAIN LOBBY
CITY MARKET, MAIN LOBBY
ATTACHMENT A
Memo
To: Honorable Mayor and Town Council
Thru: Bill Efting, Town Manager
From: Scott Wright, Finance Director
Date: August 9, 2002
Re: Use Tax Ordinance
Summary:
On July 9, Council passed on 1st reading a use tax ordinance that levied a 4% use tax on the use,
storage, or consumption of building materials within the Town of Avon. Subsequent to the 1st reading,
there have been several reviews of the various administrative and collection provisions of the ordinance
that were prompted by the Town's Annexation and Development Agreement with the Village at (Avon)
entities. As a result of these reviews, there are changes to the ordinance for 2nd reading as
summarized below:
Section 3.08.030 E. (2) of the original ordinance regarding collection of the use tax has been
changed to reflect that only projects required to have a building permit would be required to
pay a use tax. This change eliminates the reporting and tax burden on individuals with small
home improvement projects that don't require permits and eliminates any consumer use tax
issues from the ordinance.
Sections 3.08.030 E. (2)(a), (b), and (c) of the original ordinance regarding payment of the tax
at the time a building permit is issued have been changed to reflect that the full payment of the
tax is made, rather than a deposit. This change was necessary to remain consistent with the
concept that the use tax is levied at the time a building permit is issued.
Sections 3.08.030 E. (4) and (5) have been eliminated as duplicative with existing sections of
the existing sales tax code and unnecessary due to the changes above.
Section 3.08.030 E. (3) has been changed to add language allowing the use tax funds to be
used for infrastructure related to transportation and recreation.
Section 3.08.035 has been added to grant a credit against the use tax fee collected by the
Village at (Avon) for permitted projects occurring within the Village.
Page 1
ATTACHMENT A
Town Manager Comments:
Attachments:
Ordinance No. 02-18 - Black Line Version
0 Page 2
ATTACHMENT A
ORDINANCE NO. 02-18
SERIES OF 2002
AN ORDINANCE ADDING A USE TAX ON
CONSTRUCTION MATERIALS.
NOW, THH FORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF
AVON,COLORADO:
Section 1. Chapter 3.08 of the Avon Municipal Code is amended as follows:
a) Title. The title of chapter 3.08 is amended to state "SALES AND USE TAX."
b) 43.08.020. Taxable items. A new subpart D. is added to state as follows:
D. Upon the purchase price paid for or the acquisition costs of
construction materials brought within the boundaries of the town for the
purpose of being used to build, construct, reconstruct, alter, expand, modify or
improve any building, dwelling or other structure or improvement to real
property in the town."
c) 43.08.030. Sales tax lees.
i) The title of §3.08.030 is changed to state "Sales and use tax levy."
ii) Section 3.08.030C is repealed and reenacted to state as follow:
The retailer shall add the sales tax imposed hereto to the sale or charge of the
item sold, showing such tax as a separate and distinct item, and, when added,
such tax shall constitute a part of such price or charge, shall be a debt from the
purchaser to the retailer until paid and shall be recoverable at law in the same
manner as other debts."
iii) A new subpart E. is added to state as follows:
E. (1) A use tax of four percent is imposed upon the purchase price paid for
or the acquisition costs of construction materials brought within the
boundaries of the town for the purpose of being used to build, construct,
reconstruct, alter, expand, modify or improve any building, dwelling or other
structure or improvement to real property in the town.
ATTACHMENT A
h l l k R
inveiees and sta4ements e a di s h at i l ft b th
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7
the m4h an d shall the e e a th Fi eprupnpyaenanse
th A f il t e h A M 1a r t d k i d t kmens.ny a ure e pr eserve Su nen s
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an we
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he Geunty Cler-k and Reeer-der-.
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2)(a) Any person who shall build or improve any dwelling or other
structure or improvement to realty within the town, including underground
improvements, and who shall purchase the necessary construction materials
needed therefore from any source inside or outside of the town, may, a4 sueh
p , shall remit a depesit to the Finance Director prior to the
issuance of any building permit for such improvement full payment of the use
tax, to be calculated as provided herein ,
the tew f - the ° nt of use tax a--° The full amount of the depesit use tax
shall be due and navable base' ueea an estimate of the use tam to be ~
paid, be made, and sueh depesit shall be at the time that the applicable
building permit is issued. The estimate of the cost of the construction
materials shall be determined by the Town Building Official in the manner set
forth below, and the °e amount of the tax shall be subject to adjustment
if the actual cost of the construction materials needed for the improvement is
either less than or greater than seeh the estimate. if the taxpa~,er- eleets
depesit pr-eeedufe set feAh in this s-74-4b- Se e t i An (3), then the pmvisiefls 0
subseetien (2) her-eef shall be waived-. Upon payment of the use tax depesit-as
t f fth h, the Finance Director shall issue the taxpayer a receipt
identifying the property that is the subject of the depesit tax and the building
permit number.
b) For the purpose of calculating the amount of the depesit use tax as
provided for herein, the value of the construction materials in the
improvement shall be estimated to be equal to fifty percent of the total value
of the improvement as determined by the Building Official for building permit
purposes. The depesit use tax obligation shall berme an amount of equal to
four percent of such estimated value of the construction materials.
2
ATTACHMENT A
t
c) If it is determined by the Finance Director through audit or other
means that the actual cost of the construction materials for the improvement is
greater than the estimate on which the tax was based tie, and that
additional tax is owing then nt of the use tax depe,it ; net suf- ei°nt t„
P=ovide f r- full payment of the • ° to*, then the Finance Director shall make a
demand to the taxpayer for the additional use tax owed together with interest
calculated pursuant to & 3.08.353; provided, in no case may the Finance
Director make a claim for amounts due over and above the amount of the
deposit more than three years after a certificate of occupancy or final
inspection approval has been issued by the town for the improvement. A
taxpayer's failure to honor the Finance Director's claim for additional tax due,
as set forth in this paragraph, shall constitute a violation of this chapter.
d) if it is determined b the Fi Di t A .th t th dyeereeer
ns.Ffinient to i tde file ot~'full ao th
a epoe
1.1°nit ..1. 11thri:r-ciiczacy use en
used -te the-amount ef the-use-ta if th Fide
e
Di t d tpyexunanee
that the n nt ofthe .7e se tnvesit is in xeess ofth
r-es er e er es
d th 1.h llpaeueeesa
itl,ir,_t iAy days ofn..nh deten: inn ien
nTftn.,4 1,asu~e titcS t t ttbilthr..i
d herein ff-eIsn
ri
n ve d
e e max~cruccrvrrzircc
er- n °l
s u j ,Tccc-er a c cv m--cccxeuse
fAn lidTtilvr
eta d-if hhe
n
th
va
t t
ee o esveresaa
ti f h chtthfxense~r pays oi~ne s aax e-me-pttm ase o su
eenstmetien materSAn[GI ls, then j.,he shall be entitled te-a er-edit, to-LYYl7 extente
su.eh nnl°n tn„ p i.af t o ben pl ied to theamount o f use tnv e e
straetien m5) G-bjet alateri t th ti f t
tax-lawfWl im osed
as .a
en-the umhse
e p uff asmee1~11V 11./Ml Vll{4V
b et °t te
eV 7,V VI-JGoasales
1hyp
litmuniei in the St
ap
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Geier-ado statutor e
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es er ase c~a
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y efeaeeT
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differ-enee betw t
me-Pa tere
na°,.h t d
ess an
thi h t d th
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id b heen
urehasealll be "
e ai ue
e-te the Te
s e ap er- an e
f A d h ll
tar, pa y t e
tt d t thp
1;in ° Di, °t,.
o an s a ra e o e
3) All use tax funds collected by the Town in accordance with the
provisions of this chapter shall be appropriated and spent solely for
transportation and recreation capital projects and services and infrastructure
related thereto."
d) § 3.08.320. Sales tax - Credit for sales or use taxes previously paid to
another municipality.
i) The title of § 3.08.320 is changed to state "Sales and use tax - Credit
for sales or use taxes previously paid to another municipality."
3
ATTACHMENT A
ii) Section 3.08.320 is repealed and reenacted to state as follow:
For transactions consummated on or after January 1, 1986, the town's sales tax shall
not apply to the sale of tangible property at retail or the furnishing of services if the
transaction was previously subjected to a sales or use tax lawfully imposed on the
purchaser or user by another statutory or home rule municipality equal to or in excess
of that provided for in Section 3.08.030. A credit shall be granted against the town's
lawfully imposed local sales or use tax previously paid by the purchaser or user to the
previous statutory or home rule municipality. The amount of the credit shall not
exceed the town's sales or use tax imposed pursuant to Section 3.08.030."
Section 2. Section 3.08.035 of the Avon Municipal Code is amended as follows:
3.08.035 Tax Credit. Notwithstanding any other provisions of this chapter, there
shall be granted to each person owing 1) the sales tax on sales consummated within
The Village (at Avon) or 2) the use tax on the purchase price paid or the acquisition
costs of construction materials brought within the boundaries of the Town for the
purpose of being used to build, construct, reconstruct, alter, expand, modify or
improve any building, dwelling or other structure or improvement to real property
within The Village (at Avon) a temporary tax credit against collection of the tax equal
to the amount of any retail sales or use fee paid by or on behalf of such person. The
amount of the credit shall not exceed the amount of the tax. No such credit shall shall
be granted subsequent to termination of the collection of the retail sales fees and use
fees terminate pursuant to the Annexation and Development Agreement for. The
Village (at Avon). Neither the ability of the Town to grant the temporary tax credit
nor the termination of the credit shall constitute a tax increase, the imposition of a
new tax or a tax policy change_" .
4
ATTACHMENT A
Section 2 3. Election and Effective Date.
Under Article X, Section 20 of the Colorado Constitution, the Council refers the tax
increase provided in this ordinance to the qualified electors of the Town for approval at the
regular Town election scheduled for November 5, 2002. If approved by a majority of the
electors voting thereon, this ordinance shall become effective when the Town Clerk or other
designated election official duly files the required certificate of election, or on January 1,
2003, whichever occurs last.
Section -3 4. Ballot Title and Question.
The ballot title and question submitted to the electors shall be
as follows:
SHALL TOWN OF AVON TAXES BE INCREASED $1.6
MILLION ($1,600,000) ANNUALLY IN 2003, AND BY
WHATEVER ADDITIONAL AMOUNTS ARE RAISED
ANNUALLY THEREAFTER, BY THE IMPOSITION OF A
FOUR PERCENT (4%) USE. TAX ON THE PRIVILEGE OF
USING OR CONSUMING IN THE TOWN ANY
CONSTRUCTION MATERIALS, SUCH USE TAX
REVENUES TO BE APPROPRIATED AND SPENT
SOLELY FOR TRANSPORTATION AND RECREATION
CAPITAL PROJECTS AND SERVICES AND
INFRASTRUCTURE RELATED THEREO, ALL IN
ACCORDANCE WITH ORDINANCE NO. 01 08 02-18
ADOPTED BY THE TOWN COUNCIL; AND SHALL THE
REVENUES COLLECTED FROM SUCH TAX AND ANY
EARNINGS FROM THE INVESTMENT OF SUCH
REVENUES BE COLLECTED AND SPENT AS A VOTER
APPROVED REVENUE CHANGE AND AN EXCEPTION
TO THE LIMITS WHICH WOULD OTHERWISE .APPLY
UNDER ARTICLE X, SECTION 20 OF THE COLORADO
CONSTITUTION OR ANY OTHER LAW?
5
ATTACHMENT A
if the-eleeter-s fie-this -ewee, then en the-effies4ive date spesified abeve, all
er,dinamees or- aAs of ` r-di anew in ` enfl et herewith are hereby eale a but enAy to the °40..4
The provisions of tMs " -difial}se-ar~aei bleu and invalidity of an pap shall not a ff `.t thee
INTRODUCED, APPROVED ON FIRST READING, AND ORDERED
PUBLISHED IN FULL AND POSTED, this 9th day of July, 2002, and a public hearing on
this ordinance shall be held at the regular meeting of the Town Council of the Town of Avon,
Colorado on the 23rd day of July, 2002, at 5:30 p.m. in the Municipal Building of the Town
of Avon, Colorado.
TOWN OF AVON, COLORADO:
Mayor
ATTEST:
Town Clerk
6
ATTACHMENT A
INTRODUCED, APPROVED ON SECOND READING, AND ORDERED
PUBLISHED AND POSTED this _ day of , 2002.
TOWN OF AVON, COLORADO:
Mayor
ATTEST:
Town Clerk
APPROVED AS TO FORM:
Town Attorney
7
ATTACHMENT A
SAMPLE USE TAX BALLOT QUESTION
SHALL TOWN OF AVON TAXES BE INCREASED $____ MILLION ($____________)
ANNUALLY IN 2022, AND BY WHATEVER ADDITIONAL AMOUNTS ARE RAISED
ANNUALLY THEREAFTER, BY THE IMPOSITION OF A FOUR PERCENT (4%) USE TAX
ON THE PRIVILEGE OF USING OR CONSUMING IN THE TOWN ANY CONSTRUCTION
MATERIALS, SUCH USE TAX REVENUES TO BE APPROPRIATED AND SPENT SOLELY
FOR THE PURPOSE OF FUNDING COMMUNITY HOUSING, INCLUDING THE
ACQUISITION OF LAND FOR HOUSING, CONSTRUCTION OF HOUSING, EXTENSION
OF PUBLIC INFRASTRUCTURE TO SERVE HOUSING DEVELOPMENT, PURCHASE OF
DEED RESTRICTIONS, DOWNPAYMENT ASSISTANCE PROGRAMS, AND
PARTNERSHIP WITH PUBLIC AND PRIVATE ENTITIES TO DEVELOP COMMUNITY
HOUSING, IN ACCORDANCE WITH SUCH TERMS, CONDITIONS AND POLICIES AS
MAY BE ADOPTED BY THE AVON TOWN COUNCIL, ALL IN ACCORDANCE WITH
ORDINANCE NO. 21-____ ADOPTED BY THE TOWN COUNCIL; AND SHALL THE
REVENUES COLLECTED FROM SUCH TAX AND ANY EARNINGS FROM THE
INVESTMENT OF SUCH REVENUES BE COLLECTED AND SPENT AS A VOTER
APPROVED REVENUE CHANGE AND AN EXCEPTION TO THE LIMITS WHICH WOULD
OTHERWISE APPLY UNDER ARTICLE X, SECTION 20 OF THE COLORADO
CONSTITUTION OR ANY OTHER LAW.
ATTACHMENT B
Use Tax Presentation
July 13, 2021
Purpose of Report
Community Housing Plan Goals
Seek Opportunities for New Funding Sources
Support for Local Ballot Initiatives
2021 Department Goal
Present Legal and Financial Analysis of Use Tax
Use Tax Presentation | July 13, 2021
Background
PREVIOUS INITIATIVES
●In 2002 a 4% Construction Use Tax Submitted
to TOA Voters
●Ballot Language Earmarked the Tax to be
“spent solely for transportation and recreation
capital projects and services and infrastructure
related thereto”
●Question Failed To Pass with 379 In Favor and
573 Against.
Use Tax Presentation | July 13, 2021
Analysis
Three Types of Use Tax
Consumer Use Tax
Motor Vehicle Use Tax
Construction Materials Use Tax
Consumer Use Tax
Companion Tax
State of Colorado Best Example
South Dakota v. Wayfair Supreme Court Decision Makes
this Tax Less Effective Locally
Not Recommended by Staff for Consideration
Use Tax Presentation | July 13, 2021
Analysis Con’t
MOTOR VEHICLE USE TAX
•Use Tax Would Apply to Vehicles Purchased Out-of-Town But Registered in Avon
•No Tax If Vehicle Registered Outside of Town
•Tax Must Be Paid Prior to Titling and Registration
•Jurisdictions Without a Use Tax Unlikely to Have Automotive Dealerships
•Can Raise a Substantial Amount of Revenue
•Would Be a New Tax for Avon Residents Purchasing a Vehicle
•Not Recommended by Staff for Consideration
Use Tax Presentation | July 13, 2021
Motor Vehicle Use Taxes
The following table is based on a CML list serv survey that was taken.
Motor
Motor Vehicles Vehicle
Municipal Use Tax Use Tax Imputed Sales
Jurisdiction Population Revenue Rate Taxable Sales Per Person
Town of Cedaredge 2,300 $ 95,292 2.00%$ 4,764,600 $ 2,071.57
City of Castle Pines 11,000 899,638 2.75%32,714,109 2,974.01
City of Commerce City 61,000 7,087,921 4.50%157,509,356 2,582.12
Town of Estes Park 6,300 317,941 2.00%15,897,050 2,523.34
City of Cherry Hills Village 6,641 1,061,673 3.00%35,389,100 5,328.88
City of Golden 22,015 1,116,029 3.00%37,200,967 1,689.80
City of Aurora 386,502 21,481,130 3.75%572,830,133 1,482.09
City of Manitou Springs 5,346 329,619 3.80%8,674,184 1,622.56
Town of Carbondale 6,900 534,613 3.50%15,274,657 2,213.72
City of Littleton 48,140 2,491,696 3.00%83,056,533 1,725.31
City of Centennial 110,000 5,309,401 2.50%212,376,040 1,930.69
City of Lafayette 29,587 2,171,793 3.50%62,051,229 2,097.25
Average of Respondees 3.11%$ 2,353.44 Use Tax Presentation | July 13, 2021
Motor Vehicle Use Taxes
•Projected Revenues
Based on the previous table and Avon’s approximate permanent population of 6,500,
each 1% motor vehicle use tax could generate approximately $152,945.
Use Tax Presentation | July 13, 2021
Construction Use Tax
•Use Tax Would Be Collected at Time of Building
Permit
•Tax Based on Predetermined Formula. Common
Method to Use 50% of Construction Value
•Builder Exempt from Paying Further Sales Taxes
on Materials Related to the Permit
•Avon is the Only Jurisdiction in Eagle County
Without a Construction Use Tax
Use Tax Presentation | July 13, 2021
Sales Tax | Use Tax percentages in Eagle County
Use Tax Presentation | July 13, 2021
4% | 0%
This map shows “% Sales Tax | % Use Tax” for each Town.
Town of Avon is the odd town in Eagle County with no use tax.
Eagle
4% | 4%
Minturn
4% | 4%
Vail
4% | 4%
Red Cliff
3% | 3%
Gypsum
4% | 3%
Sales Tax | Use Tax percentages
Use Tax Presentation | July 13, 2021
Town Sales Tax (city) Use Tax
Crested Butte 4.00% 4.50%1/4.00%2
Steamboat Springs 4.50% 4.50%12
Rifle 4.25% 4.25%12
Eagle 4.00% 4.00%1
Fraser 4.00% 4.00%12
Grand Lake 4.00% 4.00%12
Grandby 4.00% 4.00%12
Minturn 4.00% 4.00%1
Vail 4.00% 4.00%1
Parachute 3.75% 3.75%1
Glenwood Springs 3.70% 3.70%12
Carbondale 3.50% 3.50%12
Grand Junction 2.75% 3.25%12
Fruita 3.00% 3.00%12
Gypsum 4.00% 3.00%1
Mount Crested Butte 5.00% 3.00%1
Red Cliff 3.00% 3.00%1
Silt 3.00% 3.00%12
Alma 3.00% 2.00%2
De Beque 2.00% 2.00%1
Hayden 4.00% 2.00%1
New Castle 3.50% 2.00%1
Yampa 2.00% 2.00%12
Aspen 2.40% 0.00%
Avon 4.00% 0.00%
Blue River 2.50% 0.00%
1 Construction Materials
2 Motor Vehicles / Trailers
Breckenridge 2.50% 0.00%
Buena Vista 2.50% 0.00%
Collbran 2.00% 0.00%
Como 1.00% 0.00%
Dillon 2.50% 0.00%
Fairplay 4.00% 0.00%
Frisco 2.00% 0.00%
Gunnison 1.00% 0.00%
Hartsel 1.00% 0.00%
Hot Sulphur Springs 4.00% 0.00%
Keystone 0.75% 0.00%
Kremmling 4.00% 0.00%
Marble 2.00% 0.00%
Montezuma 2.00% 0.00%
Oak Creek 3.00% 0.00%
Palisade 2.00% 0.00%
Pitkin 3.00% 0.00%
Poncha Springs 2.00% 0.00%
Salida 3.00% 0.00%
Silverthorne 2.00% 0.00%
Snowmass Village 3.50% 0.00%
Winter Park 5.00% 0.00%
Construction Use Tax
•Advantages of a Construction Use Tax
•Helps Achieve Consistency in Imposition of Tax
•Eliminates Unfair Competition Using Tax Rates
•Eases Administrative Burden of Collection
•Nexus of Construction to Community Housing Needs
Use Tax Presentation | July 13, 2021
Construction Use Tax
•Use Tax Statistics
$32,772,355 –Ten-year Average of Total Building Construction Value
Based on Above, 4% Use Tax Would Generate $610,603 Per Annum
•Sales Tax Statistics
$399,446 -Seven-year Average of Actual Sales Taxes Collected
$537,553 Actual 2020 Sales Tax Collections, or 5.8% of Total
Use Tax Presentation | July 13, 2021
Traer Creek
•Imposition of Use Tax on building materials shall be automatically applied to any sale within
The Village (at Avon) through increase in the Credit PIF.
•The Credit PIF increase shall be proportionate to the Use Tax.
•Purchases made within The Village (at Avon) shall receive a tax credit against the Town’s
Use Tax in the amount equal to an any increase in the Credit PIF resulting from an imposition
of the Use Tax.
•The Town may amend its Municipal Code to reflect the automatic tax credit for use tax, but
such an amendment shall not be required to implement the Tax Credit.
•Prior to adopting any such use tax, the Town shall coordinate with Traer Creek regarding the
implementation the Use Tax/Credit PIF/Tax Credit.
•Increase in the Credit PIF shall not be taxable by the Town.
Use Tax Presentation | July 13, 2021
Traer Creek –Section 6.4(v) pf CARDA
Sample Ballot Question
SAMPLE BALLOT QUESTION
SHALL TOWN OF AVON TAXES BE INCREASED $____MILLION ($____________)ANNUALLY IN 2022,AND BY WHATEVER
ADDITIONAL AMOUNTS ARE RAISED ANNUALLY THEREAFTER,BY THE IMPOSITION OF A FOUR PERCENT (4%)USE TAX
ON THE PRIVILEGE OF USING OR CONSUMING IN THE TOWN ANY CONSTRUCTION MATERIALS,SUCH USE TAX REVENUES
TO BE APPROPRIATED AND SPENT SOLELY FOR THE PURPOSE OF FUNDING COMMUNITY HOUSING,INCLUDING THE
ACQUISITION OF LAND FOR HOUSING,CONSTRUCTION OF HOUSING,EXTENSION OF PUBLIC INFRASTRUCTURE TO SERVE
HOUSING DEVELOPMENT,PURCHASE OF DEED RESTRICTIONS,DOWNPAYMENT ASSISTANCE PROGRAMS,AND
PARTNERSHIP WITH PUBLIC AND PRIVATE ENTITIES TO DEVELOP COMMUNITY HOUSING,IN ACCORDANCE WITH SUCH
TERMS,CONDITIONS AND POLICIES AS MAY BE ADOPTED BY THE AVON TOWN COUNCIL,ALL IN ACCORDANCE WITH
ORDINANCE NO.21-____ADOPTED BY THE TOWN COUNCIL;AND SHALL THE REVENUES COLLECTED FROM SUCH TAX
AND ANY EARNINGS FROM THE INVESTMENT OF SUCH REVENUES BE COLLECTED AND SPENT AS A VOTER APPROVED
REVENUE CHANGE AND AN EXCEPTION TO THE LIMITS WHICH WOULD OTHERWISE APPLY UNDER ARTICLE X,SECTION
20 OF THE COLORADO CONSTITUTION OR ANY OTHER LAW.
Use Tax Presentation | July 13, 2021
Ballot Question Timeline
•Requires voter authorization under TABOR.
•Fair Campaign Practices Act limits Town’s ability promote ballot
question after ballot title is fixed
Use Tax Presentation | July 13, 2021
Aug 10 Aug 24 Nov 2Sept 3
Election DayLast day for Town
to certify the ballot
content
Last regularly
scheduled Council
Meeting to adopt
Resolution
Last day to introduce
Ordinance to refer
ballot question and
self-execute
implementation
Thank You
Use Tax Presentation | July 13, 2021
Scott Wright
Asst Town Manager and Finance Director
swright@avon.org