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TC Ord. No. 2001-07 Adding a use tax on construction materialsU lzd i',-7 a "r-. c //P-t W ORDINANCE NO. 01-07 V SERIES OF 2001 AN ORDINANCE ADDING A USE TAX ON CONSTRUCTION MATERIALS. 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) &3.08.030. 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 (ii) Section 3.08.030C is repealed and reenacted to state as follow: "The retailer shall add the sales tax imposed hereto to the sale or charge of the item sold, showing such tax as a separate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. (2) 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, 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 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 tax 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 in accordance with the provisions of this chapter shall be appropriated and spent solely for transportation and recreation capital projects and services." (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: "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 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 special Town election now scheduled for November 6, 2001. If the tax increase is 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, 2002, 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 2002, 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. 01-07 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 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 , 2001, 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 _ day of 2001, at 5:30 p.m. in the Municipal Building of the Town of Avon, Colorado. TOWN OF AVON, COLORADO: ATTEST: Town Clerk Mayor 5 INTRODUCED, APPROVED ON SECOND READING, AND ORDERED PUBLISHED AND POSTED this _ day of , 2001. TOWN OF AVON, COLORADO: Mayor ATTEST: Town Clerk APPROVED AS TO FORM: Town Attorney 6