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HomeMy WebLinkAbout08377ORDINANCE NO. 8377 AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING THEREFROM NONPROFIT SCHOOLS. WHEREAS, the State of Colorado and other Colorado home rule municipalities have enacted specific exemptions to the payment of sales and use tax by nonprofit schools; and WHEREAS, the creation of a specific but limited tax exemption with respect to the payment of sales and use taxes for nonprofit schools would be in the best interest of the City and its citizens; and WHEREAS, the granting of the sales and use tax exemption set forth in this Ordinance makes uniform the provisions of said Chapter 4 with the laws of the State of Colorado in accordance with the authority granted to City Council pursuant to Section 4 of Ordinance No. 3160, passed and approved by a vote of the people on November 6, 1967. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: (brackets indicate matter being deleted, underscoring indicates new matter being added) SECTION 1. Subsection 14-4-21(29) of Chapter 4 of Title XIV of the Pueblo Municipal Code, as amended, is amended to read as follows: Sec. 14-4-21. Definitions. When not clearly otherwise indicated by the context, the following words and phrases, as used in this Chapter, shall have the following meanings: . . . (29) Retailer means any person selling, leasing or renting tangible personal property or services at retail. Retailer shall include any: a. Auctioneer; b. Salesperson, representative, peddler or canvasser, who makes sales as a direct or indirect agent of or obtains such property or services sold from a dealer, distributor, supervisor or employer; , school c. Charitable organization, or government entity which makes sales of tangible personal property to the public, notwithstanding the fact that the merchandise sold may have been acquired by gift or , school donation or that the proceeds are to be used for charitable, or governmental purposes. . . . SECTION 2. Section 14-4-21 of Chapter 4 of Title XIV of the Pueblo Municipal Code, as amended, is amended by the addition of a new subsection (31.5) to read as follows: Sec. 14-4-21. Definitions. When not clearly otherwise indicated by the context, the following words and phrases, as used in this Chapter, shall have the following meanings: . . . (31.5) means an educational institution not held or conducted for School private gain or profit, having a curriculum comparable to grade, grammar, junior high, high school, or college, or any combination thereof, requiring daily attendance, having an enrollment of at least forty students, and charging a tuition fee. . . . SECTION 3. Section 14-4-76 of Chapter 4 of Title XIV of the Pueblo Municipal Code, as amended, is amended by the addition of a new subsection (20) to read as follows: Sec. 14-4-76. Items Exempt. The following classes of tangible personal property are exempt from taxation under this Chapter: . . . (20) Sales to schools in the conduct of their educational functions and activities, which schools, at the time of sale or purchase, present satisfactory evidence of being issued a current tax exempt license for the City to the vendor or retailer, and he or she shall record such license number in documents relating to the transaction in support of the exemption claimed. SECTION 4. Section 14-4-77 of Chapter 4 of Title XIV of the Pueblo Municipal Code, as amended, is amended by the addition of a new subsection (16) to read as follows: Sec. 14-4-77. Items exempt from use tax. This tax or excise of the storage, consumption and use of tangible personal property is hereby declared to be supplementary to the City tax on retail sales as provided in this Chapter and shall not apply: . . . (16) To the storage, use, or consumption of tangible personal property by schools in the conduct of their educational functions and activities. SECTION 5. This Ordinance shall become effective upon final passage and approval. INTRODUCED: July 25, 2011 BY: Leroy Garcia COUNCILPERSON PASSED AND APPROVED: August 8, 2011 Background Paper for Proposed ORDINANCE DATE: AGENDA ITEM # R-4 July 25, 2011 DEPARTMENT: Finance Department Sam Azad, Director of Finance TITLE AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING THEREFROM NONPROFIT SCHOOLS. ISSUE Should an exemption from sales and use tax for nonprofit schools be enacted? RECOMMENDATION City staff recommends that the proposed Ordinance creating an exemption for nonprofit schools be passed and approved. BACKGROUND The State of Colorado and other Colorado home rule municipalities have enacted specific exemptions to the payment of sales and use tax by nonprofit schools. This exemption would extend to schools which, although nonprofit, may not meet the definitional requirements to qualify for exemption as a charitable organization. The scope of the exemption would be limited to educational institutions which: (a) are not held or conducted for private gain or profit; (b) have a curriculum comparable to grade, grammar, junior high, high school, or college, or any combination thereof; (c) have daily attendance (d) have an enrollment of at least forty students; and (e) charge a tuition fee as opposed to an hourly fee or other form of time billing arrangement for services. The proposed exemption would not extend to the purchase or use of tangible personal property by a qualifying school for purposes other than the school's educational functions and activities and would not extend to sales of tangible personal property made by the qualifying school to the public. The proposed Ordinance would require a qualifying school to obtain a City exempt license and present same when making purchases. This requirement is also imposed upon exempt charitable organizations and is deemed necessary by the Finance Director to assure compliance with the sales and use tax code of the City (the “Code”). The granting of this exemption is permitted by and consistent with Section 4 of Ordinance No. 3160 which empowers City Council to amend any portion of the Code in order to make uniform the provisions of the Code with the laws of the State of Colorado. FINANCIAL IMPACT None