HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/02/2019 - ITEMS RELATED TO SALES TAX CODE UPDATESAgenda Item 8
Item # 8 Page 1
AGENDA ITEM SUMMARY July 2, 2019
City Council
STAFF
Jennifer Poznanovic, Project and Revenue Manager
Ryan Malarky, Legal
SUBJECT
Items Related to Sales Tax Code Updates.
EXECUTIVE SUMMARY
A. First Reading of Ordinance No. 085, 2019, Amending Article XVIII of Chapter 15 of the Code of the City of
Fort Collins Relating to Short-Term Rental Licenses.
B. First Reading of Ordinance No. 086, 2019, Amending Article II of Chapter 25 of the Code of the City of Fort
Collins Relating to the City’s Tax Rebate Programs.
C. First Reading of Ordinance No. 087, 2019, Amending Article III of Chapter 25 of the Code of the City of
Fort Collins Relating to the Imposition, Collection, and Enforcement of the City’s Sales and Use Taxes.
The purpose of this item is to amend City Code sections in Chapter 15 and 25 to provide clarification for
definitions and the application of various sections of the Code.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinances on First Reading.
BACKGROUND / DISCUSSION
The various Code changes being requested are as follows:
Chapter 15, Article XVIII
City Code Section 15-647 establishes the term of a Short Term Rental license and the renewal date. The one-
year term will remain the same; however, City staff desires to change the renewal date from December 31 to
June 30. This adjustment will help staff streamline year-end tax activity. Current licenses will have an extra six
months on their term as the transition occurs. A current license will expire on June 30, 2020, rather than
December 31, 2019. Prior to December 31, 2019, staff will communicate the change with licensees and will
issue updated licenses. No additional fees will be assessed for the one-time extension.
Chapter 25, Article II
City Code Sections 25-26 and 25-46 establish the definitions related to the City’s Tax Refund and Rebate
Program. City staff desires to update references to Internal Revenue Service income tax return forms to reflect
changes the IRS made for tax year 2018.
Chapter 25, Article III
Agenda Item 8
Item # 8 Page 2
City Code Section 25-75 establishes the rate of tax and distribution of the 3.85 percent total for the various
voter approved taxes. City staff desires to update the language to reflect the extension of a 0.85 percent tax
approved by the voters at the City’s regular election held on April 2, 2019. Staff is also recommending
revisions to make Section 25-75 easier to read.
City Code Section 25-128 allows a business with more than one location to file a consolidated return. Due to
staff’s desire to report by geographic location, a return for each location will be required and a consolidated
return will be prohibited. This Code update reflects what is already the current practice.
City Code Section 25-147 allows a taxpayer to apply for a refund of tax paid under dispute when claiming the
transaction was not taxable or claiming an exemption. City staff desires to update the language to include tax
paid in error or by mistake. This Code update will bring the language back in line with previous wording, which
was inadvertently removed by Ordinance No. 016, 2017.
City Code Section 25-166 outlines the confidentiality requirements for taxpayers’ financial information in
returns and other records. City staff desires to add language to allow the Financial Officer to disclose financial
information within the City organization or to City contractors in certain circumstances when reasonable
precautions and requirements are in place to prevent the disclosure of such information to the public.
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ORDINANCE NO. 085, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE XVIII OF CHAPTER 15 OF THE CODE OF THE CITY
OF FORT COLLINS RELATING TO SHORT-TERM RENTAL LICENSES
WHEREAS, on March 21, 2017, the City Council adopted Ordinance No. 045, 2017,
creating licensing regulations regarding the rental of dwelling units for periods of less than thirty
days (“Short Term Rental”) in Chapter 15 of the City Code; and
WHEREAS, those Short Term Rental regulations establish a specific term for which a
short term rental license will be valid; and
WHEREAS, since the adoption of the Short Term Rental regulations, City staff has
determined that adjusting the term of such licenses so that they expire on June 30 rather than
December 31 will assist staff with streamlining year-end tax activity; and
WHEREAS, the City Council hereby finds that the change as proposed in this Ordinance
is in the best interests of the citizens of Fort Collins and promotes health, safety and welfare of
the community by contributing to the efficient administration of the Short Term Rental licensing
system.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 15-647 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 15-647. Term of license and renewal.
(a) Licenses issued pursuant to this Article shall be valid from the time of issuance
through December 31 the following June 30 of the same calendar year. Licenses
must be renewed annually and a renewed license shall be valid for an
additionalthe period from January 1 July 1 through December 31 the subsequent
June 30.
. . .
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Introduced, considered favorably on first reading, and ordered published this 2nd day of
July, A.D. 2019, and to be presented for final passage on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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ORDINANCE NO. 086, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE II OF CHAPTER 25 OF THE CODE OF THE CITY
OF FORT COLLINS RELATING TO THE CITY’S TAX REBATE PROGRAMS
WHEREAS, Division 2 in Article II of City Code Chapter 25 authorizes a refund
program to provide relief from property taxes for low-income elderly persons and disabled
persons residing in the City (the “Property Tax Refund Program”); and
WHEREAS, Division 3 in Article II of City Code Chapter 25 authorizes a rebate on the
City’s sales tax charged on food purchased by low-income persons residing in the City (the
“Sales Tax Rebate Program”); and
WHEREAS, the Property Tax Refund Program serves the public purpose of relieving
qualified low-income elderly persons and disabled persons from the City’s portion of the ad
valorem taxes applicable to their dwellings; and
WHEREAS, the Sales Tax Rebate Program serves the public purpose of assisting certain
low-income individuals in better affording the necessities of life related to food; and
WHEREAS, as part of the application process for both programs, an applicant is required
to provide income information, and the City Code directs an applicant to provide information
contained in Internal Revenue Service Forms 1040, 1040A, 1040EZ, and 1040NR; and
WHEREAS, the Internal Revenue Service (“I.R.S.”) updated its Form 1040 for tax year
2018 by consolidating the former Forms 1040, 1040A and 1040EZ; and
WHEREAS, City staff has recommended that references in the Code to specific I.R.S.
forms be updated to reflect the changes the I.R.S. made for tax year 2018; and
WHEREAS, the City Council hereby finds that amending the Property Tax Refund
Program and the Sales Tax Rebate Program as proposed in this Ordinance is in the best interests
of the City and its taxpayers and promotes the health, safety and welfare of the community by
establishing accurate requirements for the Programs.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 25-26 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 25-26. Definitions.
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The following words, terms and phrases, when used in this Division, shall have the
meanings ascribed to them in this Section:
. . .
Income shall mean:
(1) total income of an individual as shown on the individual's federal income
tax form on the line noted for the applicable form, as set forth in the chart
below, or if the individual is not required to file any of thesesuch tax
forms with the Internal Revenue Service, the amount that would be so
reported in the most applicable form if the individual was required to file;
and
(2) plus any nontaxable income including, without limitation, individual
retirement account distributions (not including rollovers), pensions and
annuities, social security benefits, disability benefits, worker's
compensation benefits and any other nontaxable income:
I.R.S. Form 1040 Line 226 “Total Income”
I.R.S. Form 1040A Line 15 “Total Income”
I.R.S. Form 1040EZ Line 4 “Adjusted Gross Income”
I.R.S. Form 1040NR Line 23 “Total Effectively
Connected Income”
Section 3. That Section 25-46 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 25-46. Definitions.
The following words, terms and phrases, when used in this Division, shall have the
meanings ascribed to them in this Section:
. . .
Income shall mean:
(1) total income of an individual as shown on the individual's federal income
tax form on the line noted for the applicable form, as set forth in the chart
below, or if the individual is not required to file any of thesesuch tax
forms with the Internal Revenue Service, the amount that would be so
reported in the most applicable form if the individual was required to file;
and
(2) plus any nontaxable income including, without limitation, individual
retirement account distributions (not including rollovers), pensions and
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annuities, social security benefits, disability benefits, worker's
compensation benefits and any other nontaxable income:
I.R.S. Form 1040 Line 226 “Total Income”
I.R.S. Form 1040A Line 15 “Total Income”
I.R.S. Form 1040EZ Line 4 “Adjusted Gross Income”
I.R.S. Form 1040NR Line 23 “Total Effectively
Connected Income”
Introduced, considered favorably on first reading, and ordered published this 2nd day of
July, A.D. 2019, and to be presented for final passage on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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ORDINANCE NO. 087, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING ARTICLE III OF CHAPTER 25 OF THE CODE OF THE CITY
OF FORT COLLINS RELATING TO THE IMPOSITION, COLLECTION
AND ENFORCEMENT OF THE CITY’S SALES AND USE TAXES
WHEREAS, Article XX, Section 6.g. of the Colorado Constitution grants to the City of
Fort Collins, as a home rule municipality, all powers necessary to levy and collect taxes for
municipal purposes, subject to any limitations in the Colorado Constitution; and
WHEREAS, on November 16, 1967, the City Council, in the exercise of its home rule
taxing powers, adopted Ordinance No. 058, 1967, to levy, collect and enforce beginning on
January 1, 1968, a sales and use tax on the purchase of tangible personal property sold at retail in
the City and on certain taxable services provided in the City (the “Sales and Use Tax Code”);
and
WHEREAS, the Sales and Use Tax Code is currently found in Article III of City Code
Chapter 25, which has been significantly amended many times since its adoption in 1967; and
WHEREAS, City staff has reviewed Article III and has recommended revisions to clarify
the rate of tax imposed, including updating the rate of tax to include the extension of the eighty-
five one-hundredths (0.85) percent tax approved by the voters at the City’s regular election held
on April 2, 2019; and
WHEREAS, City staff has also recommended revisions to require retailers doing
business at more than one location to file a separate return for each location, to clarify that the
refund procedures apply to taxes paid in error or by mistake, and to provide that taxpayer
financial information may be shared within the City organization or with City contractors if
reasonable precautions are in place to prevent disclosure of such information to the public; and
WHEREAS, the City Council hereby finds that amending the Sales and Use Tax Code as
proposed in this Ordinance is in the best interests of the City and its taxpayers and promotes the
health, safety and welfare of the community by providing for the accurate and efficient
imposition, collection and enforcement of the City’s sales and use taxes.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 25-75 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 25-75. Rate of tax.
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(a) The amount of tax hereby levied is three and eight-five hundredths (3.85) percent
of the purchase price of tangible personal property or and taxable services except
that the amount of use tax levied on manufacturing equipment is three (3) percent
of the purchase price. This tax is composed of a rate of two and twenty-five
hundredths (2.25) percent that does not expire and is not restricted in the use of its
proceeds and the remaining rate of one and sixty hundredths (1.60) percent is
comprised of the following voter-approved taxes:
(1) A Twentytwenty-five one-hundredths (0.25) percent of such amount is a
tax which shallthat expires at midnight on December 31, 2030, the proceeds of
which shall are to be used for the purposes of acquiring, operating and
maintaining open spaces, community separators, natural areas, wildlife habitat,
riparian areas, wetlands and valued agricultural lands, and to provide for the
appropriate use and enjoyment of these areas by the citizenry, pursuant to the
provisions of the Citizen-Initiated Ordinance No. 1, 2002.;
(2) AnotherA twenty-five one-hundredths (0.25) percent is a tax which
shallthat expires at midnight on December 31, 2025, the proceeds of which shall
are to be used for the purpose of paying the costs of planning, design, right-of-
way acquisition, incidental upgrades and other costs associated with the repair and
renovation of City streets, including, but not limited to, curbs, gutters, bridges,
sidewalks, parkways, shoulders and medians.;
(3) AnotherA twenty-five one-hundredths (0.25) percent is a tax which
shallthat expires at midnight on December 31, 2025, the proceeds of which
shallare to be used for the purpose of paying the costs of planning, design, real
property acquisition, and construction, the capital projects specified in the
"Community Capital Improvement Program" and five (5) years of operation and
maintenance for those capital projects specified in Ordinance No. 013, 2015 , all
of which shall be subject to the terms and conditions of Ordinance No. 013,
2015.; and
(4) AnotherAn eighty-five one-hundredths (0.85) percent is a tax which
shallthat expires at midnight on December 31, 2020, the proceeds of which
shallare to be used in accordance with the terms and conditions of Ordinance No.
126, 2010.
When the tax described in subsection (a)(4) above expires at midnight on
December 31, 2020, the eighty-five one-hundredths (0.85) percent tax approved at
the City’s regular election held on April 2, 2019, shall commence. Of this tax, the
rate of twenty-five one-hundredths (0.25) percent shall expire at midnight on
December 31, 2030, and its revenues shall be used to fund municipal operations
and maintenance and for any other public purposes. The remaining rate of sixty
one-hundredths (0.60) percent shall not expire and its revenues shall be used to
help sustain public safety service levels and fund municipal operations and
maintenance, and to fund any other public purposes, except fifteen and sixty one-
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hundredths (15.6) percent of these revenues shall be used to fund the fire
protection and emergency services being provided by the Poudre Fire Authority
(PFA) under the City’s existing agreement with the Poudre Valley Fire Protection
District (District), or in such other amount as the City and the District may agree,
but absent an agreement between them for PFA’s services, these revenues may be
used as determined by City Council.
. . .
Section 3. That Section 25-128 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 25-128. Consolidation of returns prohibited.
A retailer doing business in two (2) or more places or locations, whether within or
without the City, and collecting taxes hereunder may must file one (1) return covering all
for each such places or locations if there are no owners, employees, agents or
commissioned sales persons of such business on duty at any location in the City. Any
retailer conducting online sales must file a separate return covering online sales, even if
the retailer is filing a consolidated return for sales at physical locations.
Section 4. That Section 25-147 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 25-147. Procedure for refund of disputed tax.
A refund shall be made or credit allowed for the tax paid under dispute by any person
who claims that the transaction or item was not taxable, or claims an exemption as
provided in this Article, or claims that taxes were paid in error or by mistake. Such refund
shall be made by the Financial Officer after compliance with the following:
(1) Application. An application for a refund of sales or use tax paid under
dispute, or paid in error by a purchaser or user who claims an exemption under
Subsection 25-73(c) or Subsection 25-74(b), or paid in error or by mistake shall
be made within three (3) years after the date of purchase, storage, use or
consumption of the goods or services whereon an exemption is claimed. Such
applications must be accompanied by the original paid invoice or sales receipt and
must be made upon such forms as shall be prescribed and furnished by the
Financial Officer;
(2) Burden of proof. The burden of proving that any transaction or item is not
taxable, or is exempt from the tax, or that tax was paid in error or by mistake shall
be upon the person asserting such claim under such reasonable requirements of
proof as the Financial Officer may prescribe;
. . .
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Section 5. That Section 25-166 of the Code of the City of Fort Collins is hereby
amended by the addition of a new subsection (g) to read as follows:
Sec. 25-166. Preservation of returns and other records; confidentiality.
. . .
(g) Notwithstanding the provisions of this Section, the Financial Officer may disclose
financial information within the City organization or to City contractors as
required for the conduct of City business or in furtherance of City purposes and
objectives, so long as the release of the information is conditioned upon
reasonable precautions and requirements to prevent disclosure of said information
to the public.
Introduced, considered favorably on first reading, and ordered published this 2nd day of
July, A.D. 2019, and to be presented for final passage on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 16th day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk