HomeMy WebLinkAbout109 - 06/16/1998 - CONTINUING A TEMPORARY MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM FOR FORT COLLINS MANUFACTURERS ORDINANCE NO. 109, l 998
OF THE COUNCIL OF THE CITY OF FORT COLLINS
CONTINUING A TEMPORARY MANUFACTURING EQUIPMENT
USE TAX REBATE PROGRAM
FOR FORT COLLINS MANUFACTURERS
WHEREAS, the City Council authorized a Temporary Manufacturing Equipment Use Tax
Rebate Program (the "Rebate Program") through the adoption of Ordinance No. 29, 1996; and
WHEREAS, the Rebate Program was authorized for the limited period of calendar years
1996 and 1997; and
WHEREAS,it is the City Council's desire to continue the Rebate Program for calendar year
1998,unless otherwise modified and extended, while the Council evaluates the Rebate Program as
well as other components of the City's Economic Policy with a concern for tax and fee fairness and
effectiveness of economic development incentive policies and programs; and
WHEREAS, it is the intent of the City Council to modify the Rebate Program for 1998 to
incorporate administrative and program scope changes that have been recommended by City staff,
and to continue the Rebate Program as described in Exhibit "A", attached hereto and incorporated
herein by this reference.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That a revised Manufacturing Equipment Use Tax Rebate Program (the
"Revised Rebate Program"), as described in Exhibit"A", attached hereto and incorporated herein
by this reference, is hereby adopted and extended for calendar year 1998 or until such earlier date
as the Rebate Program may be modified, extended or terminated by the Council.
Section 2. That the Revised Rebate Program shall be further reviewed in conjunction
with the City's Economic Policy in the overall concern of tax fairness and effectiveness.
Section 3. That the Council may at any time modify, extend or terminate the Revised
Rebate Program.
Section 4. That the City Manager shall continue to monitor the Revised Rebate Program
and its projected costs and impacts on a monthly basis throughout 1998, and if the City Manager
determines from that review,or from any other information,that the Revised Rebate Program poses
a financial,environmental or other threat to the well-being of the City,the City Manager shall report
such determination to the Council.
Section 5. That the provisions of this ordinance shall not be construed as establishing
any right or entitlement to a rebate of any taxes on the part of any applicant and that the actual rebate
of use taxes under such Revised Rebate Program shall be entirely discretionary with the City Council
and shall be subject to the appropriation of funds for such purpose.
Introduced,considered favorably on first reading,and ordered published this 2nd da ,
A.D. 1998, and to be presented for final passage on the 16th day ofd�tffe; A.D. 199$�"
ayor 1
ATTEST:
4U
City Clerk
Passed and adopted on final reading this 16th day of June, A.D. 1998.
Mayor oT,-! 1�rii
ATTEST:
J �
City Clerk
Exhibit A
CITY OF FORT COLLINS
MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM
I. DEFINITIONS
The following definitions shall apply in the administration of this temporary
program:
A. Manufacturing shall mean the operation of producing, in an industrial
setting, a new product, article, substance or commodity, different from
and having a distinctive name, character, or use from raw or prepared
materials. Manufacturing shall not include: publishing; ready-mixed
concrete production; logging; mining; farming; construction by
contractors; wood preserving; electroplating, plating, metal heat treating,
and polishing for the trade; lapidary work for the trade, fabricating of
signs and advertising displays; milk bottling and pasteurizing; various
service industries to the manufacturing trade such as typesetting,
engraving, plate printing, and preparing electrotyping and stereotype
plates. Manufacturing shall not include product research and
development and testing.
B. Manufacturing equipment shall mean the equipment used by a
manufacturer in the manufacturing process as defined above.
Manufacturing equipment shall not include climate control equipment.
C. Full time equivalent (FTE) shall mean a full time employee or the
equivalent thereof. This definition includes seasonal, temporary,
permanent, and contractual employees of the company and all
employees of contract employment agencies who perform temporary
manufacturing services for the applying company.
II. QUALIFICATIONS
A. Only firms engaged in the manufacturing process, as defined herein, are
eligible for the manufacturing use tax rebate.
B. The manufacturing operations of such firm must have existed in the City
of Fort Collins for at least a three year period prior to application.
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C. Only purchases of machinery by a person engaged in manufacturing to
be used in the City of Fort Collins directly and exclusively by such person
in the manufacture of tangible personal property, for sale or profit, are
eligible for the rebate.
D. All purchases by manufacturing firms will be subject to the full 3.0%
sales and use tax rate. A rebate will only be granted upon application
and approval of the specific manufacturing equipment purchases for
which a rebate is requested.
E. The rebate shall apply only to purchases where a 3.0% use tax has been
paid directly to the City of Fort Collins by the manufacturing firm
requesting the rebate.
1 . Firms may request a direct payment of use tax to the City under
the following conditions:
a. The direct payment arrangement may only be requested by
the manufacturer for large one-time expansion or retooling
projects.
b. All direct payment arrangements must be pre-approved by
the Financial Officer. Manufacturer's must give no less
than 60 days notice prior to execution of the agreement.
C. Direct payment arrangements must be agreed to in writing
by each retailer supplying the manufacturing equipment.
d. Any direct payment arrangements will be limited to a period
not to exceed nine months.
e. Manufacturers will be required to submit a monthly
accounting of all purchases made under the direct pay
agreement with their monthly sales and use tax return.
f. Any use of the agreement by the manufacturer after the
expiration date will result in a ten percent (10%) penalty of
the tax that was due on those purchases.
F. Sales or use taxes paid to another taxing jurisdiction for purchases of
manufacturing equipment are not eligible for the rebate.
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G. Used manufacturing equipment purchased when a business is acquired
through sale or transfer of title or possession is not eligible for the rebate
unless the purchaser has been engaged in business in the City for at least
three years. Assets acquired as a result of a merger between two firms
located in Fort Collins will be eligible for the rebate if either of the
companies has been engaged in business in Fort Collins for at least three
years.
H. Manufacturing equipment that is leased shall be subject to the full 3.0%
sales and use tax rate imposed by the City and collected by the lessor.
Sales or use tax paid to the lessor shall not be eligible for the rebate.
I. Firms must certify as to compliance with Federal, State and local laws
and regulations for the manufacturing facility located in Fort Collins.
Firms must be current with all payments to the City of Fort Collins and
firms must not be in default with any contractual agreements with the
City.
III. TIERED REBATE SCHEDULE
A. The following tiered rebate schedule will be used to determine the
amount of rebate to be granted:
CITY OF FORT COLLINS
TIERED REBATE SCHEDULE
Cost of Use Tax
Manufacturing Equipment Rate Paid Use Tax Rebate (%) Maximum Rebate
$0 to $ 5,000,000 3.0% 2.00% $ 100,000
$ 5,000,001 to $15,000,000 3.0% 1.00% $ 100,000
$15,000,001 to $50,000,000 3.0% 0.00% $ 0
$50,000,001 and over 3.0% 2.00% $2,200,000
Total maximum rebate: $2,400,000
B. The maximum rebate given to any one company for purchases of
manufacturing equipment will be $2,400,000.
C. Any company whose purchases of manufacturing equipment exceed
$50,000,000 in a calendar year, will be limited to a $200,000 rebate if
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the growth in the company's FTEs in Fort Collins exceeds 10% in that
year.
C. All rebates will be limited to 75% of the eligible purchases to allow for the
portion of the use tax that is dedicated to Streets Maintenance, Natural Areas
Acquisition and Building Community Choices.
IV. PROCEDURES
A. Prequalification
The Financial Officer shall notify those companies who were listed in the
Standard Industrial Code (SIC) classification as "manufacturers" for City
of Fort Collins sales and use tax purposes on or before January 1 , 1996
of the temporary manufacturing use tax rebate. The company wishing
to apply for a rebate under this program shall be required to complete a
prequalification form as may be required by the Financial Officer.
B. Monthly Reporting
1 . Companies that have been qualified to participate shall be required
to submit a monthly report of manufacturing equipment purchases
to the City. The report shall be in accordance with a prescribed
format and schedule set forth by the Financial Officer.
2. The reports shall be filed with the company's sales and use tax
return on the 20th of the month following date the equipment was
purchased.
3. All qualifying manufacturers shall be required to file a monthly
sales and use tax return. Quarterly and annual filings are not
allowed.
C. Year-end Rebate Process
1 . All participants must submit an application for rebate no later than
March 31 following the calendar year for which the rebate is
requested. Example: rebate requests for 1998 must be submitted
by March 31 , 1999.
2. Applications must be filed using the format prescribed by the
Financial Officer.
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3. Applications may be subject to audit as provided in Chapter 25 of
the Code of the City of Fort Collins.
4. Applicants will be notified of the amount of the rebate by mail.
5. Should a dispute arise regarding the amount of rebate allowed by
the City, the applicant may, within twenty (20) days after such
decision is mailed, petition the Financial Officer for a hearing on
the rebate claim. The Financial Officer will notify the applicant of
the time and location of the hearing. All hearings will be held in
Fort Collins.
After the hearing, the Financial Officer will make a final ruling as
he or she deems just and proper. A copy of the final ruling will be
furnished to the applicant.
6. The right of any company to apply for a rebate under this program
is not assignable. An application for rebate must be made by the
company that paid the tax.
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