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HomeMy WebLinkAbout132 - 11/19/1991 - AMENDING CITY CODE PERTAINING TO SALES AND USE TAX ORDINANCE NO. 132, 1991 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 25, ARTICLE III (SALES AND USE TAX) OF THE CODE OF THE CITY OF FORT COLLINS WHEREAS, the Council of the City of Fort Collins has determined that it is in the best interest of the City to make certain changes to the City' s Sales and Use Tax Code in order to help standardize the sales and use tax codes of Colorado municipalities; and WHEREAS, the Council of the City of Fort Collins has determined that it is in the best interest of the City to maintain a Sales and Use Tax Code which is clear, concise and enforceable by making amendments to resolve inconsistencies and problems with clarity. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Chapter 25, Article III, of the Code of the City of Fort Collins is amended as follows: Section 1 . That the definitions as contained in Section 25-71 of the Code of the City are hereby repealed and reenacted to read as follows: Section 25-71. Definitions. Access Services shall mean the services furnished by a local exchange company to its customers who provide telecommunications services which allow them to provide such telecommunication services. Auction shall mean any sale where tangible personal property is sold by an auctioneer who is either the agent for the owner of such property or is in fact the owner thereof. Automotive vehicle shall mean any vehicle or device in, upon or by which any person or property is or may be transported or drawn upon a public highway, or any device used or designed for aviation or flight in the air. Automotive vehicle includes, but is not limited to, motor vehicles, trailers, semi -trailers or mobile homes. Automotive vehicle shall not include devices moved by human power or used exclusively upon stationary rails or tracks. Business shall mean all activities engaged in or caused to be engaged in with the object of gain, benefit or advantage, direct or indirect. Charitable organization shall mean any entity which: (i ) has been certified as a not-for-profit organization under Section 501(c) (3) of the internal revenue code; and (ii ) is a religious or charitable organization. As used in this definition, a "charitable organization" is an organization which exclusively, and in a manner consistent with existing laws and for the benefit of an indefinite 1 number of persons, freely and voluntarily ministers to the physical , mental or spiritual needs of persons, and which thereby lessens the burdens of government. City shall mean the municipality of Fort Collins, Colorado. City Manager shall mean the City Manager of the City of Fort Collins, Colorado. Construction equipment shall mean all pieces of portable machinery, vehicles and other types of equipment used to demolish, build, erect or otherwise demolish or construct buildings, roads, bridges or any other improvements. Construction materials shall mean tangible personal property which, when combined with other tangible personal property, loses its identity and becomes an integral and inseparable part of a completed structure or project including public and private improvements. Construction materials include, but are not limited to, such things as: asphalt, bricks, builders' hardware, caulking material , cement, concrete, conduit, electric wiring and connec- tions, fireplace inserts, electrical heating and cooling equipment, flooring, glass, gravel , insulation, lath, lead, lime, lumber, macadam, millwork, mortar, oil , paint, piping, pipe valves and pipe fittings, plaster, plumbing fixtures, putty, reinforcing mesh, road base, roofing, sand, sanitary sewer pipe, sheet metal , site lighting, steel , stone, stucco, tile, trees, shrubs and other landscaping materials, wall board, wall coping, wall paper, weather stripping, wire netting and screen, water mains and meters, and wood preserver. The above materials, when used for forms, or other items which do not remain as an integral or inseparable part of a completed structure or project are not construction materials . Consumer shall mean any individual person in the city who uses, stores, distributes or otherwise consumes in the city tangible personal property or taxable services purchased from sources inside or outside the city. Drugs dispensed in accordance with a prescription shall mean drugs dispensed in accordance with any order in writing, dated and signed by a licensed practitioner of the healing arts, or given orally by such practitioner, and immediately reduced to writing specifying the name and address of the person for whom the medicine, drug or poison is offered and directions, if any, to be placed on the label . Engaged in business in the city shall mean performing or providing services or selling, leasing, renting, delivering or installing tangible personal property 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: 2 (1) Directly, indirectly or by a subsidiary maintains a building, store, office, salesroom, warehouse or other place of business within the taxing jurisdiction; (2) Sends one 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) Maintains one or more employees, agents or commissioned sales persons on duty at a location within the taxing jurisdiction; (4) Owns, leases, rents or otherwise exercises control over real or personal property within the taxing jurisdiction; or (5) Makes more than one (1) delivery into the taxing jurisdiction within a twelve (12) month period. Exempt commercial packaging materials shall mean containers, labels and shipping cases sold to a person engaged in manufacturing, compounding, wholesaling, jobbing, retailing, packaging, distributing or bottling for sale, profit or use that meets all of the following conditions: (1) is used by the manufacturer, compounder, wholesaler, jobber, retailer, packager, distributor or bottler to contain or label the finished product; (2) is transferred by said person along with and as a part of the finished product to the purchaser; and (3) is not returnable to said person for reuse. Exempt organization license shall mean a license issued to a charitable organization, as defined in this Article, which entitles the organization to make tax-free purchases of tangible personal property or taxable services in the city. Farm close-out sale shall mean full and final disposition of all tangible personal property previously used by a farmer or rancher in farming or ranching operations which are being abandoned. Financial Officer shall mean the Financial Officer of the City of Fort Collins or such other person designated by the municipality; "Financial Officer" shall also include such person's designee. Food shall mean: food for domestic home consumption as defined in 7 U.S.C. Section 2012(g) as amended, for purposes of the federal 3 food stamp program as defined in 7 U.S.C. Section 2012(h) , as amended, except that "food" does not include prepared food or food for immediate consumption; carbonated water marketed in containers; chewing gum; seeds and plants to grow food; prepared salads and salad bars; cold sandwiches; deli trays; and food or drink vended by or through machines or non-coin operated coin-collecting food and snack devices on behalf of a vendor. Fuel shall mean gas, electricity, nuclear, steam, coal , wood, fuel oil or coke. Gross sales shall mean the total amount received in money, credit, property or other consideration valued in money for all sales, leases, or rentals of tangible personal property or services. License shall mean a City of Fort Collins sales and use tax license. Linen services shall mean services involving provision and cleaning of linens, including but not limited to rags, uniforms, coveralls and diapers. Local exchange company shall mean any person which provides public telephone or telecommunication exchange access lines, mobile telecommunication or channels necessary to effect the transfer of two-way voice or data grade information between the final user and the local telecommunication network. Lodging services shall mean the furnishing of rooms or accommoda- tions by any person, partnership, association, corporation, estate or any other combination of individuals by whatever name known to a person who for a consideration uses, possesses, or has the right to use or possess any room in a hotel , inn, bed and breakfast residence, apartment hotel , lodging house, motor hotel , guest house, guest ranch, trailer coach, mobile home, auto camp, or trailer court, park or similar establishment, for a period of less than thirty (30) days under any concession, permit, right of access, license to use, or other agreement or otherwise. Medical supplies shall mean drugs, prosthetic medical and dental appliances and special beds for patients with neuromuscular or similar debilitating ailments, when sold for the direct, personal use of a specific individual in accordance with a prescription or other written directive issued by a licensed practitioner of medicine, dentistry or podiatry; corrective eyeglass lenses (including eyeglass frames) and corrective contract lenses, when sold for the direct, personal use of a specific individual in accordance with a prescription or other written directive issued by a licensed practitioner of medicine or optometry; wheelchairs, and crutches, when sold for the direct, personal use of a specific individual ; oxygen and hemodialysis products for use by a medical patient, hearing aids, hearing aid batteries, insulin, insulin 4 measuring and injecting devices, glucose to be used for treatment of insulin reactions, and human whole blood, plasma, blood products and derivatives. This exemption excludes items purchased for use by medical and dental practitioners or medical facilities in providing their services, even though certain of those items may be packaged for single use by individual patients after which the item would be discarded. Mobile machinery and self-propelled construction equipment shall mean those vehicles, self-propelled or otherwise, which are not designed primarily for the transportation of persons or cargo over the public highways, and those motor vehicles which may have originally been designed for the transportation of persons or cargo but which have been redesigned or modified by the mounting thereon of special equipment or machinery, and which may be only inciden- tally operated or moved over the public highways. This definition includes but is not limited to wheeled vehicles commonly used in the construction, maintenance, and repair of roadways, the drilling of wells and the digging of ditches. Newspaper shall mean a publication, printed on newsprint, intended for general circulation, and published regularly at short intervals, containing information and editorials on current events and news of general interest. The term "newspaper" does not include: magazines, trade publications or journals, credit bulletins, advertising inserts, circulares, directories, maps, racing programs, reprints, newspaper clipping and mailing services or listings, publications that include an updating or revision service or books or pocket editions of books. Pay television shall include, but not be limited to, cable, microwave or other television service for which a charge is imposed. Person shall mean any individual , firm, partnership, joint venture, corporation, estate or trust, receiver, trustee, assignee, lessee or any person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise or any group or combination acting as a unit. Prepared food or food for immediate consumption shall mean food or drink served or furnished in or by restaurants, cafes, lunch counters, cafeterias, hotels, drug stores, social clubs, night- clubs, cabarets, resorts, snack bars, caterers, carryout shops and other places of business at which prepared food or drink, prepared salads in salad bars, cold sandwiches or deli trays are regularly sold, including sales from grocery stores and delicatessens, from pushcarts, motor vehicles and other mobile facilities and vending machines. Preprinted newspaper supplements shall mean inserts, attachments or supplements circulated in newspapers that: (i ) are primarily 5 devoted to advertising; and (ii) the distribution, insertion or attachment of which is commonly paid for by the advertiser. Prescription drugs for animals shall mean drugs dispensed in accordance with any order in writing, dated and signed by a licensed practitioner of the healing arts for animals, or given orally by a practitioner, specifying the animal for which the medicine or drug is offered and directions, if any, to be placed on the label . Price or purchase price shall mean the price to the consumer, exclusive of any direct tax imposed by the federal government or by this Article, and, in the case of all retail sales involving the exchange of property, also exclusive of the fair market value of the property exchanged at the same time and place of the exchange, if: (1) Such exchanged property is to be sold thereafter in the usual course of the retailer's business, or (2) Such exchanged property is a vehicle and is exchanged for another vehicle and both vehicles are subject to licensing, registration or certification under the laws of this state, including, but not limited to, vehicles operating upon public highways, off-highway recreation vehicles, watercraft, and aircraft. Any money or other consideration paid over and above the value of the exchanged property is subject to tax. Price or purchase price includes: (1) The amount of money received or due in cash and credits. (2) Property at fair market value taken in exchange but not for resale in the usual course of the retailer' s business. (3) Any consideration valued in money, such as trading stamps or coupons whereby the manufacturer or someone else reimburses the retailer for part of the purchase price and other media of exchange. (4) The total price charged on credit sales including finance charges which are not separately stated. An amount charged as interest on the unpaid balance of the purchase price is not part of the purchase price unless the amount added to the purchase price is included in the principal amount of a promissory note; except the interest or carrying charge set out separately from the unpaid balance of the purchase price on the face of the note is not part of the purchase price. An amount charged for insurance on the property sold and separately stated is not part of the purchase price. 6 (5) Installation, delivery and wheeling-in charges included in the purchase price and not separately stated. (6) Transportation and other charges to effect delivery of tangible personal property to the purchaser. (7) Indirect federal manufacturers' excise taxes, such as taxes on automobiles, tires and floor stock. (8) The gross purchased price of articles sold after manufacturing or after having been made to order, including the gross value of all the materials used, labor and service performed and the profit thereon. Price or purchase price shall not include: (1) Any sales or use tax imposed by the State of Colorado or by any political subdivision thereof. (2) The fair market value of property exchanged if such property is to be sold thereafter in the retailers usual course of business. This is not limited to exchanges in Colorado. Out of state trade-in' s are an allowable adjustment to the purchase price. (3) Discounts from the original price if such discount and the corresponding decrease in sales tax due is actually passed on to the purchaser. An anticipated discount to be allowed for payment on or before a given date is not an allowable adjustment to the purchase price in reporting gross sales. Private communication services shall mean telecommunications services furnished to a subscriber, which entitles the subscriber to exclusive or priority use of any communication channel or groups of channels, or to the exclusive or priority use of any interstate inter-communications system of the subscriber' s stations. Prosthetic devices shall mean any artificial limb, part, device or appliance for human use which aids or replaces a bodily function; is designed, manufactured, altered or adjusted to fit a particular individual ; and is prescribed by a licensed practitioner of the healing arts. Prosthetic devices include but are not limited to prescribed auditory, ophthalmic or ocular, cardiac, dental , therapeutic, or orthopedic devices or appliances, oxygen concentra- tors and oxygen with related accessories. Purchase or sale shall mean the acquisition for any consideration by any person of tangible personal property or taxable services that are purchased, leased, rented, sold, used, stored, distributed, or consumed, but excludes a bona fide gift of property or services . 7 These terms include capital leases, installment and credit sales, and property and services acquired by: (1) Transfer, either conditionally or absolutely, of title or possession or both to tangible personal property; (2) A lease, lease-purchase agreement, rental or grant of a license, including royalty agreements, to use tangible personal property or taxable services; (3) Performance of taxable services; or (4) Barter or exchange for other property or services including coupons. The terms "purchase" and "sale" do not include: (1) A division of partnership assets among the partners according to their interests in the partnership; (2) The formation of a corporation by the owners of a business and the transfer of their business assets to the corporation in exchange for all the corporation's outstanding stock, except qualifying shares, in proportion to the assets contributed; (3) The transfer of assets of shareholders in the formation or dissolution of professional corporations; (4) The dissolution and the pro rata distribution of the corporation's assets to its stockholders; (5) A transfer of a partnership interest; (6) The transfer in a reorganization qualifying under Section 368(a) (1) of the "Internal Revenue Code of 1954" , as amended; (7) The formation of a partnership by the transfer of assets to the partnership or transfers to a partnership in exchange for proportionate interests in the partnership; (8) The repossession of personal property by a chattel mortgage holder or foreclosure by a lienholder; (9) The transfer of assets from a parent corporation to a subsidiary corporation or corporations which are owned at least eighty percent by the parent corporation, which transfer is solely in exchange for stock or securities of the subsidiary corporation; 8 (10) The transfer of assets from a subsidiary corporation or corporations which are owned at least eighty (80) percent by the parent corporation to a parent corporation or to another subsidiary which is owned at least eighty (80) percent by the parent corporation, which transfer is solely in exchange for stock or securities of the parent corporation or the subsidiary which received the assets; (11) The transfer of assets between parent and closely held subsidiary corporations, or between subsidiary corpora- tions closely held by the same parent corporation, or between corporations which are owned by the same shareholders in identical percentage of stock ownership amounts, computed on a share-by-share basis, when a tax imposed by this Article was paid by the transferor corporation at the time it acquired such assets, except to the extent that there is an increase in the fair market value of such assets resulting from the manufac- turing, fabricating, or physical changing of the assets by the transferor corporation. To such an extent any transfer referred to in this paragraph (11) shall constitute a sale. For the purpose of this paragraph (11) , a closely held subsidiary corporation is one in which the parent corporation owns stock possessing at least eighty (80) percent of the total combined voting power of all classes of stock entitled to vote and owns at least eighty (80) percent of the total number of shares of all other classes of stock. Purchaser shall mean any person to whom a taxable service has been rendered or who has leased or purchased at retail tangible personal property which is used, stored, distributed or consumed in the city upon which a tax is imposed by this Article. Recreation services shall mean all services relating to athletic or entertainment participation events including but not limited to pool , golf, billiards, skating, tennis, bowling, health/athletic club memberships, coin-operated amusement devices, video games and video club memberships. Retail sales shall mean all sales except wholesale sales. Retai]er shall mean any person selling, leasing or renting tangible personal property or services at retail . Retailer shall include any: (1) Auctioneer; (2) Salesperson, representative, peddler or canvasser, who makes sales as a direct or indirect agent of or obtains 9 such property or services sold from a dealer, distribu- tor, supervisor or employer; (3) Charitable organization or governmental entity which makes sales of tangible personal property to the public, notwithstanding the fact that the merchandise may have been acquired by gift or donation or that the proceeds are to be used for charitable or governmental purposes . Return shall mean the sales and use tax reporting form used to report sales and use tax. Sales tax shall mean the tax to be collected and remitted by a retailer on sales taxed under this Code. Security system services shall mean electronic security system services. Such term does not include non-electronic security services such as consulting or human or guard dog patrol services. Sound system services shall mean sound system services involving provision of broadcast or pre-recorded audio programming to a building or portion thereof. Such term does not include installa- tion of sound systems where the entire system becomes the property of the building owner or the sound system service is for presenta- tion of live performances. Storage shall mean any keeping or retention of or exercise of dominion or control over tangible personal property within the city. Tangible personal property shall mean corporeal personal property. Tax shall mean the use tax due from a consumer or the sales tax due from a retailer or the sum of both due from a retailer who also consumes. Tax deficiency shall mean any amount of tax that is not reported or not paid on or before the due date. Taxable sales shall mean gross sales less any exemptions and deductions specified in this Code. Taxable services shall mean services subject to tax pursuant to this Code. Taxpayer shall mean any person obligated to collect and/or pay tax under the terms of this Code. Telecommunication service shall mean the transmission of any two- way interactive electromagnetic communications, including but not limited to, voice, image, data and any other information by the use of any means but not limited to wire, cable, fiber optical cable, 10 microwave, radio wave or any combinations of such media. "Telecom- munication service" includes but is not limited to basic local telephone service, toll telephone service and teletypewriter service, including but not limited to residential and business service, directory assistance, cellular mobile telephone or telecommunication service, specialized mobile radio and two-way pagers and paging service, including any form of mobile two-way communication. "Telecommunication service" does not include separately stated non transmission services which constitute computer processing applications used to act on the information to be transmitted. Total tax liability shall mean the total of all tax, penalties or interest owed by a taxpayer and shall include sales tax collected in excess of such tax computed on total sales. Use shall mean the exercise for any length of time by any person within the city of any right, power or dominion over tangible personal property under a lease or when purchased at retail , either within or without the city, from a retailer or any other person. Use tax shall mean the tax paid or required to be paid by a consumer for using, storing, distributing or otherwise consuming tangible personal property or taxable services inside the city. WATS1800 service shall mean any outbound or inbound interstate- wide area telecommunications service or other similar service which entitles the subscriber, upon payment of a periodic charge, based upon a flat amount and/or usage, to make or receive a large volume of telephonic communication to or from persons having telephone or radio telephone stations in specified areas which are outside the telephone system area in which the subscriber's station is located. Wholesale sales shall mean sales to licensed retailers, jobbers, dealers or wholesalers for resale. Sales by wholesalers to consumers are not wholesale sales. Sales by wholesalers to non- licensed retailers are not wholesale sales. Wholesaler shall mean any person selling to retailers, jobbers, dealers, or other wholesalers, for resale, and not for storage, use, consumption, or distribution. Section 2. That Chapter 25 of the Code of the City is hereby amended so that the term "vendor" is replaced by the term "retailer" in the following sections: Section 25-72(b) Section 25-73(a) Section 25-73(c) (2) Section 25-74(a) Section 25-74(b) (6) Section 25-75(b) 11 Section 25-116(a) Section 25-116(b) Section 25-117 Section 25-118(a) Section 25-118(b) Section 25-121 Section 25-123(a) Section 25-123(b) Section 25-123(c) Section 25-123(d) Section 25-123(e) Section 25-124(a) Section 25-124(b) Section 25-125 Section 25-128 Section 25-146 Section 25-189(a) Section 25-222(a) Section 25-222(b) Section 25-222(g) Section 3. That Chapter 25 of the Code of the City is hereby amended so that the term "user(s)" is replaced by the term "consumer(s) " in the following sections: Section 25-74(b) (1) Section 25-146 Section 25-222(a) Section 4. That Section 25-72(b) of the Code of the City is hereby amended to read as follows: Sec. Legislative intent. (b) The sales tax is a transaction tax levied upon all sales and purchases of tangible personal property and taxable services sold or purchased by persons in the city and is collected by the vendor and remitted to the city. The use tax is levied upon the privilege of persons in the city to store, use, distribute or consume tangible personal property located in the city and taxable services purchased or sold at retail and furnished within the city, whether purchased or sold inside or outside the city, and not subject to the sales tax imposed by this Article. The use tax is remitted to the city by the persons storing, using, distributing or consuming the tangible personal property or taxable services. The use tax is a complement to the sales tax, and its purposes are to equalize competition between in-city and out-of-city vendors of tangible personal property and service and to eliminate incentives for city residents to leave the city to purchase tangible personal property and taxable services. 12 Section 5. That Section 25-73(a) of the Code of the City is hereby amended to read as follows: Sec. 25-73. Imposition of the sales tax. (a) There is hereby levied and there shall be collected and paid a sales tax on the full purchase price paid or charged for tangible personal property and taxable services sold or purchased at retail by every person exercising a taxable privilege in the city by the sale or purchase of such property and services. The sales tax is levied on all sales and purchases of tangible personal property or taxable services except those specifically exempted and is collected by the vendor and remitted to the city. Section 6. That the following subsections of Section 25-73(b) of the Code of the City are hereby amended and added, with the remaining subsections to be renumbered accordingly, to read as follows: Sec. 25-73. Imposition of the sales tax. (b) (1) On the purchase price paid or charged for all sales and purchases of tangible personal property at retail , regardless of whether such property has been included in a previous taxable transaction; (7) Upon the entire amount charged to any person or persons for lodging services; (8) Upon the amount paid for all prepared food or food for immediate consumption, including cover charges, as defined in this Article; (10) Upon pay, cable or subscription television and sound system services, as defined in this Article; and (11) Upon all sales of preprinted newspaper supplements, as defined in this Article. Section 7. That the following subsections of Section 25-73(c) of the Code of the City are hereby amended and added to read as follows: Sec. 25-73. Imposition of the sales tax. (c) (9) All sales of drugs dispensed in accordance with a prescription, all sales of prescription drugs for animals (except prescription pet food) , all sales of prosthetic devices and all sales of medical supplies, as defined in this Article; (11) All charges for lodging services pursuant to a written lease for a period of at least thirty (30) consecutive days; 13 (16) All sales of construction materials, as defined in this Article, if such materials are picked up by the purchaser and if the purchaser of such materials presents to the vendor a building permit or other documentation acceptable to the city evidencing that a local sales or use tax has been paid or is required to be paid; (17) All sales of tangible personal property or taxable services which transaction was previously subjected to a sale or use tax lawfully imposed on the purchaser or user by another statutory or home rule municipality in the state at a rate equal to or greater than the rate stated in § 25-75 and such tax was collected. If the rate of the sales tax paid to such municipalities is less than the rate stated in § 25-75, the difference between the tax due under this Article and the tax paid previously shall be remitted to the Financial Officer; (19) All sales of exempt commercial packaging materials, as defined in this Article; (20) All sales of newsprint and printers' ink used to print newspapers and all sales and purchases of newspapers, as defined in this Article; Section 8. That Sections 25-73(d) (2) and 25-73(d) (3) of the Code of the City are hereby amended to read as follows: Sec. 25-73. Imposition of the sales tax. (d) (2) No sales or use tax shall apply to the sale of food purchased with food stamps. For the purposes of this subsection (2) , food shall have the same meaning as provided in 7 U.S.C. Section 2012(g) and as amended. (3) No sales or use tax shall apply to the sale of food purchased with funds provided by the special supplemental food program for women, infants and children, 42 U.S.C. , Section 1786. For the purposes of this subsection (3) , food shall have the same meaning as provided in 42 U.S.C. Section 1786, and as amended. Section 9. That the following subsections of Section 25-74(b) of the Code of the City are hereby amended to read as follows: Sec. 25-74. Imposition of the use tax. (b) (7) Tangible personal property of a person engaged in the business of manufacturing or compounding for sale, profit or use any product, which tangible personal 14 property becomes an ingredient or component part of the product which is manufactured or compounded. (8) Fuel , as defined in this Article, for use in a continuing activity of producing tangible personal property or taxable services, including but not limited to processing, manufacturing, mining, refining, irrigation, telecommunication services and street and railroad transportation services; (13) Drugs dispensed in accordance with a prescription, prescription drugs for animals (excluding prescription pet food) , prosthetic devices, and medical supplies, as defined in this Article; (14) The storage of construction materials. Section 10. That Section 25-94(c) of the Code of the City is hereby amended to read as follows: Sec. 25-94. Exempt organization license; application procedure. (c) Upon receipt of an application, the Financial Officer shall examine the same and shall give written notice to the applicant of his or her decision thereon. An applicant whose application has been denied may, within twenty (20) days after such decision is mailed, petition the Financial Officer for a hearing on the claim. The Financial Officer shall notify the applicant in writing of the time and place of the hearing. After such hearing, the Financial Officer shall make such order in the matter as he or she deems just and proper and shall furnish a copy of such final order to the applicant. Section 11 . That Section 25-96 of the Code of the City is hereby amended to read as follows: Sec. 25-96. Appeal of revocation. Any finding and order of the Financial Officer revoking the license of any person shall be subject to review by Larimer County District Court. The procedure for review shall be in accordance with Rule 106 of the Colorado Rules of Civil Procedure. Section 12. That Section 25 subtitle for Division 3 is hereby amended to read as follows: DIVISION 3. TAXPAYER RESPONSIBILITIES Section 13. That the subtitle for Section 25-117 of the Code of the City is hereby amended to read as follows: Sec. 25-117. Tax money in possession of retailer held in trust. 15 Section 14. That the subtitle for Section 25-119 of the Code of the City is hereby amended to read as follows: Sec. 25-119. Tax on construction materials and supplies. Section 15. That Section 25-119 of the Code of the City is hereby amended to read as follows: (a) Any person who shall build, construct, reconstruct, alter, expand, modify or improve any building, dwelling or other structure or improvement to real property in the city and who shall purchase or acquire fixtures, minerals or any other construction materials and supplies used therefor or any tangible personal property used therein from sources within or without the city and the owner of the real property shall be jointly and severally responsible for paying the tax set out in this Article. Prior to the issuance of a building permit, an amount of tax to be held on deposit shall be estimated by determining the building value for permit purposes and multiplying that value by a percentage prescribed by the Financial Officer, which amount shall be collected by the city through the owner or contractor. Upon payment of such sales or use tax deposit, the city shall issue a sales or use tax deposit receipt identifying the address for which the purchase is being made and the city building permit number. It shall be the duty of the owner and/or contractor and subcontractors who are hired to do the above stated work or any portion thereof to submit a project cost report to the Financial Officer, on forms authorized by the Financial Officer, stating the actual amounts of any purchases of fixtures, minerals or any other construction materials and supplies or tangible personal property for such work and to remit any tax due in excess of the sales or use tax deposit. In any case, the general contractor and/or owner will be held liable for the payment of all taxes for such materials. (b) The owner and/or contractor shall keep and preserve all invoices, receipts and statements showing such purchases of constru- ction materials and supplies and tangible personal property for a period of three (3) years after completion of construction. The city may, within the three-year period, conduct an audit of such records of the owner and/or contractor and any other relevant information to verify the actual cost of the construction materials and supplies and tangible personal property used therein to determine the actual tax due. If the actual tax due is more than that paid by the taxpayer, the Financial Officer shall serve a notice of determination, assessment and demand for payment on the taxpayer notifying him or her of the deficiency including penalty and interest. Service of such notice and payment of the assessed amount shall be made in accordance with Sec. 25-186. Section 16. That Section 25-120(d) of the Code of the City is hereby amended to read as follows: 16 Sec. 25-120. Proration of use tax on certain construction equipment. (d) If the equipment declaration is given as provided in (c) above, then as to any item of construction equipment for which the purchase price was under Two Thousand Five Hundred Dollars ($2, 500. ) which was brought into the city temporarily for use on a construction project, it shall be presumed that the item was purchased in a jurisdiction having a local sales or use tax as high as the rate stated in § 25-75 and that such local sales or use tax was previously paid. In such case, the burden of proof in any proceeding before the city, the Financial Officer or the District Court, shall be on the city to prove such local sales or use tax was not paid. Section 17. That the subtitle for Section 25-123 of the Code is hereby amended to read as follows: Sec. 25-123. Remittance of sales tax collected by retailer. Section 18. That Sections 25-123(a) and (e) of the Code of the City are hereby amended to read as follows: Sec. 25-123. Remittance of sales tax collected by retailer. (a) Retailers shall remit to the city taxes collected pursuant to this Article. The burden of proving that any retailer is exempt from collecting or paying sales tax shall be on the retailer under such reasonable requirements of proof as the Financial Officer may prescribe. (e) If any amount of sales tax is not remitted on or before the date due, penalties and interest as set forth in § 25-186(a) shall be paid by the retailer for the period from the date due to the date paid. Section 19. That Sections 25-124(a) and (c) of the Code of the City are hereby amended to read as follows: Sec. 25-124. Remittance of use tax. (a) Every person who operates or maintains a business in the city, and who purchases or leases tangible personal property for use, storage, distribution or consumption in the city in connection with the business and taxable hereunder, and who has not paid the tax imposed by this Article to a vendor required or authorized to collect the same, shall make a return and pay the tax due to the Financial Officer, on or before the twentieth day of each calendar month following the month in which such purchase or lease was consummated or such later date as is approved by the Financial Officer. The burden of proving that any person is exempt from 17 paying the use tax shall be on such person under such reasonable requirements of proof as the Financial Officer may prescribe. (c) If any amount of use tax is not remitted on or before the date due, penalties and interest as set forth in § 25-186(a) shall be paid by the taxpayer for the period from the date due to the date paid. Section 20. That Section 25-126 of the Code of the City is hereby amended to read as follows: Sec. 25-126. Remittance of tax on other than a monthly basis. (a) If the accounting method regularly employed by the taxpayer in the transaction of his or her business or other conditions are such that reports of sales and/or use tax made on a calendar month basis will impose unnecessary hardship on the taxpayer, the Financial Officer may, upon written request of the taxpayer, accept returns at such intervals as will , in the Financial Officer' s opinion, better suit the convenience of the taxpayer and will not jeopardize the collection of the tax. (b) The Financial Officer may require a bond or other financial guarantee to secure payment of the tax on such less frequent basis and may revoke permission to pay the tax on such basis if payment of the tax due becomes delinquent. (c) Unless otherwise approved by the Financial Officer, taxpayers must file returns and pay taxes as follows: (1) A taxpayer whose monthly tax due is less than Twenty- five Dollars ($25. ) may file returns and pay tax, annually, quarterly, or monthly; (2) A taxpayer whose monthly tax due is less than Fifty Dollars ($50. ) may file returns and pay tax, quarterly or monthly. (3) A taxpayer whose monthly tax due is Fifty Dollars ($50. ) or more shall file and pay tax monthly. (4) The reporting period for a final return shall end on the date of the transfer of ownership of a business. (5) The reporting period for an initial use tax return shall be the calendar month of the date of sale of the business if the business was purchased or opening day of business if the business is new. (6) The reporting period for a retailer selling tangible personal property at a temporary location or a special 18 event inside the city shall end on the day the temporary location closes or the special event concludes. Section 21 . That Section 25-147(4) of the Code of the City is hereby amended to read as follows: Sec. 25-147. Procedures for refund of disputed tax. (4) Hearing. An applicant whose application for a refund has been denied may, within twenty (20) days after such decision is mailed, petition the Financial Officer for a hearing on the claim. The Financial Officer shall notify the applicant in writing of the time and place of the hearing. After such hearing, the Financial Officer shall make such order in the matter as he or she deems just and proper and shall furnish a copy of such final order to the applicant. The time period set forth in this Section, may, in the absolute discretion of the Financial Officer, be waived for good cause on written application of the applicant. Section 22. That Section 25-168 of the Code of the City is hereby amended to read as follows: Sec. 25-168. Examination of returns; recomputation, credits, deficiencies. As soon as practical after a return is filed, the Financial Officer shall examine it. If it appears that the correct amount of tax to be remitted may be greater or less than that shown in the return, the tax shall be recomputed by the Financial Officer. If the amount paid exceeds that which is due, the excess shall be refunded or credited against any subsequent remittance from the taxpayer. If the amount paid is less than the amount due and any part of the deficiency is due to negligence or intentional disregard of the provisions of this Article or of authorized rules and regulations of the city with knowledge thereof but without intent to defraud, the amount of the deficiency, together with a penalty of ten (10) percent of the amount of the deficiency plus interest on both the deficiency and the penalty at the rate imposed under Section 25-188 from the date the return and the tax was due, shall be due and payable by the taxpayer within twenty (20) days after written notice and demand is mailed to the taxpayer by the Financial Officer. If any part of the deficiency is due to fraud with the intent to evade the tax, then there shall be added a penalty of one hundred (100) percent of the deficiency and in such case, the amount of the deficiency, the penalty and interest calculated as stated above shall be due and payable by the taxpayer within twenty (20) days after written notice and demand is mailed to the taxpayer by the Financial Officer and an additional amount of three (3) percent per month on such amount shall be added from the date the return and tax was due until paid. 19 Section 23. That Chapter 25 of the Code of the City is hereby amended by the addition of the following section to be numbered Section 25-173, and to read as follows: Sec. 25-173. Coordinated audit. (a) Any taxpayer licensed in the city pursuant to Sec. 25-91 and holding a similar sales tax license in at least four (4) other Colorado municipalities that administer their own sales tax collection, may request a coordinated audit as provided herein. (b) Within fourteen (14) days of receipt of notice of an intended audit by any municipality that administers its own sales tax collection, the taxpayer may provide to the Financial Officer of the city, by certified mail , return receipt requested, a written request for a coordinated audit indicating the municipality from which the notice of intended audit was received and the name of the official who issued such notice. Such request shall include a list of those Colorado municipalities utilizing local collection of their sales tax in which the taxpayer holds a current sales tax license and a declaration that the taxpayer will sign a waiver of any passage-of-time based limitation upon the city's right to recover tax owed by the vendor for the audit period. (c) Except as provided in paragraph (g) , any taxpayer that submits a complete request for a coordinated audit and promptly signs a waiver of thirty-six (36) months may be audited by the city during the twelve (12) months after such request is submitted only through a coordinated audit involving all municipalities electing to participate in such an audit. (d) If the city desires to participate in the audit of a taxpayer that submits a complete request for a coordinated audit pursuant to paragraph (c) , the Financial Officer shall so notify the finance director of the municipality whose notice of audit prompted the taxpayer's request within ten (10) days after receipt of the taxpayer's request for a coordinated audit. The Financial Officer shall then cooperate with other participating municipalities in the development of arrangements for the coordinated audit, including arrangement of the time during which the coordinated audit will be conducted, the period of time to be covered by the audit, and a coordinated notice to the taxpayer of those records most likely to be required for completion of the coordinated audit. (e) If the taxpayer's request for a coordinated audit was in response to a notice of audit issued by the city, the city' s Financial Officer shall facilitate arrangements between the city and other municipalities participating in the coordinated audit unless and until an official from some other participating municipality agrees to assume this responsibility. The Financial Officer shall cooperate with other participating municipalities to, whenever practicable, minimize the number of auditors that will be present 20 on the taxpayer's premises to conduct the coordinated audit on behalf of the participating municipalities. Information obtained by or on behalf of those municipalities participating in the coordinated audit may be shared only among such participating municipalities. (f) If the taxpayer's request for a coordinated audit was in response to a notice of audit issued by the city, the city' s Financial Officer shall , once arrangements for the coordinated audit between the city and other participating municipalities are completed, provide written notice to the taxpayer of which municipalities will be participating, the period to be audited and the records most likely to be required by participating municipali - ties for completion of the coordinated audit. The Financial Officer shall also propose a schedule for the coordinated audit. (g) The coordinated audit procedure set forth in this section shall not apply: (1) When the proposed audit is a jeopardy audit; (2) To audits for which a notice of audit was given prior to the effective date of this section; (3) When a taxpayer refuses to promptly sign a waiver of thirty-six (36) months. (4) When a taxpayer fails to provide a timely and complete request for a coordinated audit as provided in paragraph (b) . Section 24. That Section 25-186 of the Code of the City is hereby amended, with appropriate relettering of remaining subsections, to read as follows: Section 25-186. Failure to make return; estimate of taxes; notices; appeal ; audit. (b) The Financial Officer shall serve upon the delinquent taxpayer personally or by first class mail directed to the last address of the taxpayer on file with the city written notice of such estimated taxes, penalty and interest. Such notice shall consti - tute a notice of determination, assessment and demand for payment and shall be due and payable within twenty (20) days from the date the notice is mailed. (c) A protest of a notice of determination, assessment and demand for payment issued to a retailer or taxpayer for failure to file a return, underpayment of tax owed or as a result of an audit shall be submitted in writing to the Financial Officer within twenty (20) days from the date the notice of assessment is mailed. Any 21 such protest shall identify the amount of tax disputed and the basis for the protest. Such protest may include a request for a hearing. (e) The Financial Officer may conduct an audit of the books and records of the taxpayer to determine the exact amount of tax due and charge the taxpayer for any amount found to be due. Section 25. That Section 24-188 of the Code of the City is hereby amended to read as follows: Sec. 25-188. Rate of interest; method of calculation. When interest is required or permitted to be charged under any provision of this Article, the annual rate of interest shall be calculated as follows: (1) Interest at a 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. (2) Interest at a rate of one (1) percent per month shall be calculated for each month or portion of a month on the total tax liability from the first installment date when a payment schedule is arranged. Section 26. That Section 25-190(b) of the Code of the City is hereby amended to read as follows: Sec. 25-190. Lien on construction improvements. (b) The Building Permits and Inspections Administrator shall not make a final inspection on or issue a certificate of occupancy for any construction project unless a person has paid or arranged with the Financial Officer to pay all taxes due under this Article on all fixtures, minerals and any other construction materials and supplies or tangible personal property used in or connected with the construction, reconstruction, alteration, expansion, modification or improvement of any building, dwelling or other structure or improvement to real property in the city. Section 27. That Section 25-191 of the Code of the City is hereby amended to read as follows: Sec. 25-191. Sale of business subject to lien. (a) Any person who sells a business or stock of goods or closes a business shall complete and file the returns required under this Article and pay the taxes, penalties and interest due within twenty (20) days of the date on which such person sold the business or stock of goods or closed the business and indicate that it is a final return, that the business is sold or closed and the name and address of the purchaser of the business, if any. 22 (b) A purchaser of a business who has acquired the furniture, fixtures and/or equipment of the business shall withhold sufficient funds from the purchase money to cover the amount of taxes, penalties and interest imposed by this Article due and unpaid until the seller provides a receipt from the Financial Officer showing that such taxes, penalties and interest have been paid. If taxes, penalties and interest imposed by this Article are due and unpaid after the twenty (20) day period herein provided, such purchaser of the business is personally liable for the payment of the taxes, penalties and interest imposed by this Article due and unpaid to the city to the same extent as the seller of the business or stock of goods. Section 28. That Section 25-194(a) (1) of the Code of the City is hereby amended to read as follows: Sec. 25-194. Enforcing the collection of taxes due. (a) (1) When any deficiency in tax is not paid within twenty (20) days from the date of mailing of the notice of det- ermination, assessment and demand for payment and no hearing or extension has been requested in a timely manner; Section 29. That Section 25-198 of the Code of the City is hereby amended to read as follows: Sec. 25-198. Waiver of penalties by Financial Officer. The Financial Officer is hereby authorized to waive, for good cause shown, any interest, penalty or fee imposed under this Article. Section 30. That Chapter 25 of the Code of the City is hereby amended by the addition of the following section to be numbered Section 25-200, and to read as follows: Sec. 25-200. Intercity claims for recovery. The intent of this Section is to streamline and standardize procedures related to situations where tax has been remitted to the incorrect municipality. It is not intended to reduce or eliminate the responsibilities of the taxpayer or retailer to correctly pay, collect, and remit sales and use taxes to the city. (a) As used herein, "Claim for Recovery" means a claim for reimbursement of sales and use taxes paid to the wrong taxing jurisdiction. (b) When it is determined by the Financial Officer of the city that sales and use tax owed to the city has been reported and paid 23 to another municipality, the city shall promptly notify the retailer that taxes are being improperly collected and remitted, and that as of the date the notice is mailed, the retailer must cease improper tax collections and remittances. (c) The city may make a written Claim for Recovery directly to the municipality that received tax and/or penalty and/or interest owed to the city, or, in the alternative, may institute procedures for collection of the tax from the taxpayer or retailer. The decision to make a Claim for a Recovery lies in the sole discretion of the city. Any Claim for Recovery shall include a properly executed release of claim from the taxpayer and/or retailer releasing its claim to the taxes paid to the wrong municipality, evidence to substantiate the claim and a request that the municipality approve or deny, in whole or in part, the claim within ninety (90) days of its receipt. The municipality to which the city submits a Claim for Recovery may, for good cause, request an extension of time to investigate the claim, and approval of such extension by the city shall not be unreasonably withheld. (d) Within ninety (90) days after receipt of a Claim for Recovery, the city shall verify to its satisfaction whether or not all or a portion of the tax claimed was improperly received and shall notify the municipality submitting the claim in writing that the claim is either approved or denied in whole or in part, including the reasons for the decision. If the claim is approved in whole or in part, the city shall remit the undisputed amount to the municipality submitting the claim within thirty (30) days of approval . If a claim is submitted jointly by a municipality and a retailer or taxpayer, the check shall be made to the parties jointly. Denial of a Claim for Recovery may only be made for good cause. (e) The city may deny a claim on the grounds that it has previously paid a Claim for Recovery arising out of an audit of the taxpayer. (f) The period subject to a Claim for Recovery shall be limited to the thirty-six (36) month period prior to the date the municipality that was wrongly paid the tax receives the Claim for Recovery. Section 31 . That Section 25-216 of the Code of the City is hereby amended to read as follows: Sec. 25-216. Review of decisions of Financial Officer. The taxpayer may apply for a review of the decision of the Financial Officer in a hearing held pursuant to Sec. 25-169. Such review shall be in the Larimer County District Court in accordance with Rule 106 of the Colorado Rules of Civil Procedure. The review 24 must be sought not later than thirty (30) days after the date of the decision of the Financial Officer. Section 32. That Section 25-218 of the Code of the City is hereby amended to read as follows: Sec. 25-218. Notices. All written notices required to be mailed, served or given to any taxpayer under the provisions of this Article shall be hand delivered or mailed, postage prepaid, addressed to such taxpayer at the last known address of the taxpayer on file with the city and shall be deemed to have been received by the taxpayer when so mailed or delivered. Section 33. That Section 25-224 of the Code of the City is hereby amended to read as follows: Sec. 25-224. Purpose of tax; distribution of proceeds. The City Council hereby declares that the purpose of the levy of the tax imposed by this Article is for raising of funds for the payment of the expenses of operating the city and for capital improvements; and in accordance with these purposes, all of the proceeds of the tax shall be placed in and become part of the general funds of the city except as otherwise indicated in Sec. 25- 75 and except direct costs of coordinated audits, contract audits, hearings and collection agency procedures. These direct costs may be paid from the proceeds of the tax before these proceeds are placed in and become part of the city's general funds. Section 34. That Chapter 25 of the Code of the City is hereby amended by the addition of the following section to be numbered Section 25-226, and to read as follows: Section 25-226. Notice of sales and use tax ordinance amendment. (a) In order to initiate a central register of sales and use tax ordinances for municipalities that administer local sales tax collection, the Financial Officer of the city shall file with the Colorado Municipal League prior to the effective date of this section a copy of the city sales and use tax ordinance reflecting all provisions in effect on the effective date of this Section. (b) In order to keep current the central register of sales and use tax ordinances for municipalities that administer local sales tax collection, the Financial Officer of the city shall file with the Colorado Municipal League prior to the effective date of any amendment a copy of each sales and use tax ordinance amendment enacted by the city. 25 (c) Failure of the city to file such ordinance or ordinance amendment pursuant to this Section shall not invalidate any provision of the sales and use tax ordinance or any amendment thereto. Section 35. That Chapter 25 of the Code of the City is hereby amended to addition of the following section to be numbered Section 25-227, and which to read as follows: Sec. 25-227. Participation in meetings. The Financial Officer or his designee shall cooperate with and participate on an as-needed basis with a permanent statewide sales and use tax committee convened by the Colorado Municipal League which is composed of state and municipal sales and use tax and business officials. Said committee will meet for the purpose of discussing and seeking resolution to sales and use tax problems which may arise. Introduced, considered favorably on first reading, and ordered published in summary form this 5th day of November, A.D. 1991, and to be presented for final passage on the 19th day of November, A.D. 1991 . Ma or ATTEST: City Clerk Passed and adopted on final reading t is 19th day of November, A.D. 1991 . Mayor ATTEST: City ty C�� 26