HomeMy WebLinkAbout178 - 12/07/1999 - CONTINUING A TEMPORARY MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM FOR FORT COLLINS MANUFACTURERS ORDINANCE NO. 178, 1999
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, such Rebate Program was authorized for calendar years 1996, 1997,and 1998;
and
WHEREAS, it is the intent of the City Council to continue the Temporary Manufacturing
Equipment Use Tax Rebate Program(the"Rebate Program")for the period January 1,2000 through
December 31, 2000 unless otherwise modified and extended.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City of Fort Collins Manufacturing Equipment Use Tax Rebate
Program(the "Rebate Program"),a copy of which is attached hereto and incorporated herein by this
reference as Exhibit "A", is in the best interests of the City; and extends the Rebate Program for
calendar year 2000 or until such earlier date as the Rebate Program may be modified, extended or
terminated by the Council.
Section 2. That the Council may at any time modify, extend or terminate the Rebate
Program.
Section 3. That the City Manager shall continue to monitor the Rebate Program and its
projected costs and impacts throughout 2000,and if the City Manager determines from that review,
or from any other information, that the 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 4. That the Rebate Program may be discontinued, at the discretion of the
Council, upon a finding that the expenditures associated with the Program are contrary to the
financial well-being of the City or upon a finding the Program is not compatible with the City's
Economic Policy.
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 Rebate Program shall be entirely discretionary with the City Council and
shall be subject to the appropriation of funds for such purpose.
Introduced and considered favorably on first reading and ordered published this 16th day of
November,A.D. 1999,and to be presented for final passage on the 7th day of December,A.D. 1999.
May or
ATTEST:
City Clerk
Passed and adopted on final reading this 7th day of December, A.D. 1999.
MaN or
ATTEST:
City Clerk
EXHIBIT "A"
CITY OF FORT COLLINS
MANUFACTURING EQUIPMENT USE TAX REBATE PROGRAM
FEBRUARY 16, 1999
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. 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.
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C. All purchases by manufactu;ing firms will be subject to the full City sales and
use tax rate. A rebate will oily be granted upon application and approval of the
specific manufacturing equipment purchases for which a rebate is requested.
D. The rebate shall apply only to purchases where a full City 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 twelve (12) 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.
E. Sales or use taxes paid to another taxing jurisdiction for purchases of
manufacturing equipment are not eligible for the rebate.
F. 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.
G. Manufacturing equipment that is leased shall be subject to the full City 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.
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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 Use Tax Rebate
Manufacturing Equipment Rate Paid Percentage Maximum Rebate
$ 0 to $5,000,000 3.00% 2.00% $100,000
$5,000,001 to $15,000,000 3.00% 1.00% $100,000
$15,000,001 to $50,000,000 3.00% 0.00% None
$50,000,001 and over 3.00% 2.00% $2,200,000
Total Maximum Rebate $2,400,000
Note: The percentage of tax paid and the percentage of rebate allowable are subject to adjustment should the
City's tax rate change during this program.
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 the
growth in the company's FTEs in Fort Collins exceeds 10% in that year.
D. All rebates will be reduced by the proportional amount of any voter-approved
dedicated taxes, currently 25% of the use taxes imposed, but no such reduction
will affect the applicable maximum rate.
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
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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.
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. It is the City's intent that all rebates will be paid by December 31 of the
year the rebate request is made given that all documentation is provided.
6. 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.
7. 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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