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HomeMy WebLinkAbout08475ORDINANCE NO. 8475 AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING FROM SALES TAX THE SALE OF CONSTRUCTION AND BUILDING MATERIALS USED IN THE CONSTRUCTION AND MAINTENANCE OF RAILROAD TRACKS WHEREAS, the State of Colorado has enacted a sales tax exemption with respect to the sale of construction and building materials used in the construction and maintenance of railroad tracks; and WHEREAS, the creation of a specific but limited tax exemption with respect to the sale of construction and building materials used in the construction and maintenance of railroad tracks 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. 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 (21) to read as follows: Sec. 14-4-76. Items Exempt. The following classes of tangible personal property are exempt from taxation under this Chapter: . . . (21) Sales of construction and building materials to a common carrier by rail operating in interstate or foreign commerce for use by the common carrier in construction and maintenance of its railroad tracks; however, any actual use of such construction and building materials shall, at the time of the actual use, be subject to the use tax imposed pursuant this Chapter. SECTION 2. This Ordinance shall become effective upon final passage and approval. INTRODUCED: April 9, 2012 BY: Leroy Garcia COUNCIL PERSON PASSED AND APPROVED: April 23, 2012 Background Paper for Proposed ORDINANCE DATE: April 9, 2012 AGENDA ITEM # R-3 DEPARTMENT: Department of Finance Sam Azad, Director Law Department Thomas J. Florczak, City Attorney TITLE AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX AND EXEMPTING FROM SALES TAX THE SALE OF CONSTRUCTION AND BUILDING MATERIALS USED IN THE CONSTRUCTION AND MAINTENANCE OF RAILROAD TRACKS ISSUE Should a sales tax exemption be enacted with respect to the sale of construction and building materials used in the construction and maintenance of railroad tracks? RECOMMENDATION Approve the Ordinance. BACKGROUND The State of Colorado provides for a sales tax exemption with respect to the sale of construction and building materials used in the construction and maintenance of railroad tracks. The proposed Ordinance adopts the state exemption and furthers the same policy considerations underlying the state exemption. 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 Any tax exemption has the potential to reduce the amount of general funds revenue. The exact amount associated with this exemption is indeterminable.