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HomeMy WebLinkAbout097 - 09/01/2015 - AMENDING PROVISIONS IN ARTICLES III AND IV OF CITY CODE CHAPTER 25 CONCERNING THE EXEMPTION OF CHARI ORDINANCE NO. 097, 2015 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING PROVISIONS IN ARTICLES III AND IV OF CITY CODE CHAPTER 25 CONCERNING THE EXEMPTION OF CHARITABLE ORGANIZATIONS FROM THE CITY'S SALES AND USE TAXES AND LODGING TAX WHEREAS, under City Code Sections 25-73(c)(6), 25-74(b)(9) and 25-94(a), a "charitable organization," as this term is defined in Code Section 25-71, that obtains a "exempt organization license" from the City is exempt from the City's sales and uses taxes for the organization's purchases and its use in the City of tangible personal property and taxable services; and WHEREAS, Code Section 25-71 currently defines a "charitable organization' as any religious or secular entity that meets all of the following requirements: (i) it is a non-profit organization; (ii) it is recognized under the Internal Revenue Code as a Section 501(c)(3) organization; and (iii) it is an organization that "exclusively, and in a manner consistent with existing laws and for the benefit of an indefinite number of persons, freely and voluntarily ministers to the physical, mental or spiritual needs of persons, and which thereby lessens the burdens of government;" and WHEREAS, the City's past interpretation and application of this definition has resulted in 295 organizations currently having a valid exempt organization license issued by the City, which license must be renewed by the organization every three years; and WHEREAS, in a 2009 decision the Colorado Supreme Court considered this same definition of"charitable organization" used by the City of Pueblo in its sales and use tax code and interpreted and applied it much more narrowly than Fort Collins has previously done; and WHEREAS, under the Supreme Court's interpretation and application of the City's current definition, a significant number of the 295 organizations that have a exempt organization license from the City would no longer qualify for this license and, consequently, would no longer be exempt from payment of the City's sales and use taxes; and WHEREAS, in light of the Supreme Court's interpretation, City staff is recommending that the City's definition of"charitable organization" be amended to insure that the organizations in the City that currently have an exempt organization license continue to qualify for it and that the new definition allow for the ease of the City's administration in its issuance of exempt organization licenses; and WHEREAS, to accomplish this, City staff is recommending that the City's definition be amended to be consistent with the State of Colorado's definition for "charitable organization" as used in its sales and use tax statutes, and to do this by defining "charitable organizations" as any entity that has and maintains a current sales tax exemption certificate from the Colorado Department of Revenue; and - 1 - WHEREAS, at its June 13, 2015, meeting, the Council Finance Committee considered these recommendations, as well as other options presented to it by City staff, and the Committee directed staff to bring forward to City Council an ordinance that would amend the City's definition as recommended by staff; and WHEREAS, staff is also now recommending that this new definition for "charitable organization" be included and used for those "religious, charitable and eleemosynary corporations" now exempt from the City's lodging tax in City Code Section 25-243(2), so that the charitable organizations exempt from the City's lodging tax are consistent with those exempt from the City's sales and use taxes; and WHEREAS, the Council finds that it is in the best interest of the City and its citizens that the City amend its definition of"charitable organization" for sales and use tax and lodging tax purposes to be consistent with the definition used for this term by the State of Colorado in its sales and use tax statutes. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the definition of"charitable organization" contained in Section 25-71 of the Code of the City of Fort Collins is hereby amended to read as follows: Charitable organization shall mean any entity that has and maintains a current sales tax exemption certificate from the Colorado Department of Revenue. Section 2. That Section 25-94(b) of the Code of the City of Fort Collins is hereby amended to read as follows: (b) The application for an exempt organization license shall include copies of the organization's current certificate of incorporation, bylaws, financial statements showing sources of revenues and expenditures, and the organization's current sales tax exemption certificate from the Colorado Department of Revenue and, if the organization has been issued one, a copy of the Internal Revenue Service's letter of determination recognizing the organization as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Section 3. That Section 25-241 of the Code of the City of Fort Collins is hereby amended by the addition of the defined tern "charitable organization" to read as follows: Charitable organization shall mean any entity that has and maintains a current sales tax exemption certificate from the Colorado Department of Revenue. Section 4. That Section 25-243(2) of the Code of the City of Fort Collins is hereby amended to read as follows: - 2 - Sec. 25-243. Transactions exempt from tax. The following lodging transactions are exempt from taxation under this Article: (2) All lodging accommodations provided to charitable organizations. Introduced, considered favorably on first reading, and ordered published this 18th day of August, A.D. 2015, and to be presented for final passage on the 1st day of September, A.D. 2015. e CD Mayor ATTEST: City Clerk Passed and adopted on final reading on the 1st day of September, A.D. 2015. Mayor ATTEST: City Clerk OF r.RTC SEAS N cO�ORADO• - 3 -