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HomeMy WebLinkAbout053 - 05/17/2022 - AMENDING CITY CODE RELATING TO THE IMPOSITION, COLLECTION AND ENFORCEMENT OF THE CITY'S SALES AND USORDINANCE NO. 053, 2022 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CERTAIN SECTIONS 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 Chapter 25, Article III of the City Code, which has been significantly amended many times since its adoption in 1967; and WHEREAS, Chapter 25, Article I1, Division 3 of the City Code authorizes rebates of City sales tax impose on food to low-income residents of the City, and the City Council desires to amend the City Code to provide increased flexibility in administering the program; and WHEREAS, City staff has reviewed the Sales and Use Tax Code and has recommended revisions to clarify definitions and taxable transactions, to remove the exemption for cigarettes, to clarify that the City's disposable bag fee is not subject to tax, to raise the dollar threshold for which written settlement agreements are required, and other changes that may be characterized as clean- up items; and WHEREAS, City Council hereby finds that amending the City 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 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 25-46 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: Applicant means a person who applies to the City for a tax rebate under this Division 3. Household shall mean collectively the applicant and the following who reside with the applicant: applicant's spouse, parents, grandparents, children by birth or adoption, step children, foster children, children under legal guardianship, and any other person for whom the applicant provides a majority of the person's support for the period during which a rebate is sought. Unrelated persons who reside at the same physical address and are financially independent of each other may individually apply and each qualify as a household. The City's determination shall be final with regard to eligibility as a household. Section 3. That Section 25-48 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 25-48. Application for rebate. Application for the sales tax rebate on food shall be made on forms to be provided by the City. Only one (1) application shall be filed per household. In order to qualify for such rebate, an application must be filed with the City, and shall be for the rebate of the taxes imposed and paid on food during a twelve (12) month period to be established by the Financial Officer. In no event shall a household receive more than one rebate for said 12-month period. The Financial Officer or their designee shall prepare, adopt and make available all forms necessary to apply for this rebate, including requirements for proof of income. The application shall contain a notice that willful misstatement, falsification or omission of material fact is a violation of this Section. The applicant shall attest the application and any affidavits required therewith under penalty of perjury. Section 4. That Section 25-49 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec.25-49. Qualifications. In order to qualify for the sales tax rebate, all members of the applicant's household must have resided within the City or the City's Growth Management Area, as defined in § 1-2 and as amended, during the entirety of the 12-month period for which the rebate is sought. The applicant's household shall have a total annual income that does not exceed fifty (50) percent of the area median income for the applicable household size in the Fort Collins -Loveland metropolitan statistical area, up to a maximum household income of fifty (50) percent of the area median income for a household of eight (8), as most recently published by the United States Department of Housing and Urban Development for the 12-month period in which the tax to be rebated was imposed. Section 5. That Section 25-51 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec.25-51. Payment. The City shall make a single rebate payment to each qualified household for which an application has been properly filed by joint payment to adult members of the household and to parents or guardians on behalf of all children of the household. The method of payment shall be determined by the Financial Officer in conformity with the provisions of this Division. Section 6. That Section 25-52 of the Code of the City of Fort Collins is hereby amended to read as follows: See.25-52. Administration. The Financial Officer shall administer the program established by this Division and shall prepare a rebate application form, adopt rules and regulations and internal guidelines consistent with the provisions of this Division for the proper administration and enforcement of the same. The Financial Officer is authorized to audit and verify the applications submitted pursuant to this Division. Any rebate application form shall require the applicant to verify and sign the application under oath. The burden of proving entitlement to a rebate under this Division is on the applicant. The Financial Officer may require other reasonable information to support the rebate application Section 7. That Section 25-63 of the Code of the City of Fort Collins is hereby amended to read as follows: See.25-63. Definitions. (a) The following words, terms and phrases, when used in this Division, shall have the meanings ascribed to them in this Section: Manufacturing equipment shall mean equipment to be used in the City that is necessary and essential to the operation or performance of an integrated series of operations that places a product, article, substance, commodity, or other tangible personal property in a form, composition, or character different from that in which it was acquired, whether for sale or for use by a qualifying manufacturer. The change in form, composition, or character must result in a new product, article, substance or commodity that is different from and has a distinct name, character, or use from the raw or prepared materials. Qualifying manufacturer shall mean an industrial manufacturer who, in an industrial setting, uses manufacturing equipment to produce a new product, article, substance or commodity that is different from and has a distinctive name, character or use from the raw or prepared materials used to manufacture the product, article, substance, or commodity. (b) Any words, terms and phrases used in this Division not defined in Subsection (a) of this section shall have the meaning given to them in § 25-71. Section 8. That Section 25-71 of the Code of the City of Fort Collins is hereby amended to read as follows: -3- See.25-71. Definitions. The following words, terms and phrases, as used in this Article, shall have the following meanings: Engaged in business in the City shall mean performing or providing services or selling, leasing, renting, delivering or installing tangible personal property, products, or services for storage, use or consumption within the City. Engaged in business in the City includes, but is not limited to, any one of the following activities by a person or retailer: (1) Directly, indirectly, or by a subsidiary maintaining a building, store, office, salesroom, warehouse, or other place of business within the taxing jurisdiction; (2) Sending one (1) or more employees, agents or commissioned sales persons into the taxing jurisdiction to solicit business or to install, assemble, repair, service, or assist in the use of its products, or for demonstration or other reasons; (3) Maintaining one (1) or more employees, agents or commissioned sales persons on duty at a location within the taxing jurisdiction; (4) Owning, leasing, renting or otherwise exercising control over real or personal property within the taxing jurisdiction; (5) As a retailer, who has a physical presence in the State of Colorado, making more than one (1) retail sale of tangible personal property, products or services within a twelve (12) month period, where the property or product is delivered by any means common carrier to a location within the City, or the service rendered occurs within the City; or (6) Making retail sales sufficient to meet the definitional requirements of economic nexus as defined in this Article. Manufacturing shall mean the operation or performance of an integrated series of operations that places a product, article, substance, commodity, or other tangible personal property in a form, composition, or character different from that in which it was acquired, whether for sale or for use by a qualifying manufacturer. The change in form, composition, or character must result in a new product, article, substance or commodity that is different from and has a distinct name, character, or use from the raw or prepared materials. Section 9. That effective June 26, 2022, Section 25-73(c) of the Code of the City of Fort Collins is hereby amended by the deletion of paragraph (10) and all subsequent paragraphs shall be renumbered accordingly: III Section 10. That Section 25-73(c) of the Code of the City of Fort Collins is hereby amended by the addition of a new paragraph (26) which reads in its entirety as follows: Sec. 25-73. Imposition of the sales tax and exemptions. (c) Transactions and items exempt from the sales tax. The following shall be exempt from the sales tax: (26) The disposable bag fee established in Article XI11 of Chapter 12 of this Code, retroactive to May 1, 2022. Section 11. That effective June 26, 2022, Section 25-74(b) of the Code of the City of Fort Collins is hereby amended by the deletion of paragraph (17) and all subsequent paragraphs to be renumbered accordingly: Section 12. That Section 25-198(c) of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 25-198. Compromise and settlement by Financial Officer. (c) Whenever a settlement by the Financial Officer results in a compromise of an assessed amount of ten thousand dollars ($10,000) or more or for a potential claim the amount of which cannot be reasonably determined, a written settlement agreement between the City and the taxpayer shall be required as a condition of settlement. The fully executed settlement agreement shall be retained in the files of Financial Services together with the Financial Officer's opinion. Section 13. That Section 25-328 of the Code of the City of Fort Collins is hereby amended to read as follows: Sec. 25-328. Payment of tax. Every telephone utility company subject to this Division shall file a tax return each month with the Financial Officer on or before the twentieth day of each month for the preceding month and remit the tax due to the Financial Officer simultaneously therewith. Section 14. That Section 25-329 of the Code of the City of Fort Collins is hereby amended to read as follows -5- Sec. 25-329. Failure to pay. If any telephone utility company subject to this Division fails to pay any of the taxes due under this Division on the date that the tax is due, interest at the rate of one (1) percent per month shall be calculated for each month or portion of a month from the due date that a tax deficiency remains unpaid. The full amount of the tax together with all interest accruing shall be and is hereby declared to be a debt due and owing from such utility to the City, which shall be due and collectible from such company by civil action in any court of competent jurisdiction. Introduced, considered favorably on first reading, and ordered published this 3rd day of May, A.D. 2022, and to be presented for final passage on the 17th day of Ma , A.D. 2022. G\���OF Fo r - — ATTEST: O • •� City Clerk/ �� �� ,� �'•• Passed and adopted on final rep ATTEST: 2 )�44( City Clerk f L' «klrwy -6-