HomeMy WebLinkAbout07101ORDINANCE NO. 7101
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE
RELATING TO SALES AND USE TAX, PROVIDING EXEMPTIONS FOR AIRCRAFT OF
COMMERCIAL AIRLINES, AND PROVIDING FOR A CREDIT AGAINST SALES AND USE
TAXES LEVIED AND IMPOSED ON THE SALE, USE, STORAGE OR CONSUMPTION OF
AIRCRAFT BY A CHARTER AIR CARRIER PROVIDING CHARTER AIR TRANSPORTATION AT
THE PUEBLO MEMORIAL AIRPORT
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
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The City Council hereby finds and declares that it would be in the best interest of the City
and its residents to (a) provide an economic incentive to encourage and expand the use and
development of the aviation area of the Pueblo Memorial Airport by charter air carriers providing
charter air transportation at the Pueblo Memorial Airport, and thereby increase opportunities for
employment for the citizens of the City, and (b) to amend Chapter 4 of Title XIV of the Pueblo
Municipal Code to make uniform the provisions thereof with the laws of the State of Colorado.
SECTION 2
Section 76 of Chapter 4 of Title XIV of the Pueblo Municipal Code relating to items exempt
from sales tax is hereby amended by the addition of the following new subsection (16):
All sales of aircraft used or purchased for use in interstate commerce by a
commercial airline
u "Commercial airline" means an airline carrying freight or passengers
on regularly scheduled flights for a fee, but does not include a charter air carrier
providing charter air transportation.
SECTION 3
Section 77 of Chapter 4 of Title XIV of the Pueblo Municipal Code relating to items exempt
from use tax is hereby amended by the addition of the following new subsection (12):
u To the storage, use or consumption of aircraft used or purchased for use in
interstate commerce by a commercial airline.
(a) "Commercial airline" means an airline carrying freight or passengers
on regularly scheduled flights for a fee, but does not include a charter air carrier
providing charter air transportation.
SECTION 4
Chapter 4 of Title XIV of the Pueblo Municipal Code is hereby amended by the addition of
the following new section 99:
Sec. 14 -4 -99. Credit for charter air carrier aircraft.
fM The sale, storage, use or consumption of aircraft used, purchased or
leased for use by a charter air carrier providing charter air transportation at the aviation
area of the airport is subject to sales and use taxes under this Chapter.
In order to provide incentives for charter air carriers providing charter
air transportation to expand and to locate at the aviation area of the airport, to encourage
the use and development of the aviation area of the airport by charter air carriers, and to
encourage more employment opportunities for residents of the City, there is hereby created
a sales and use tax credit as set forth in subsection (c) below.
(c) For calendar years commencing on or after January 1, 1999 there
shall be allowed a credit against sales and use tax on the sale use, storage or consumption
of aircraft by a charter air carrier providing charter air transportation at the aviation area of
the airport in an amount equal to two- thirds of the sales and use tax levied and imposed
upon such aircraft under this Chapter. This exemption shall not apply to parts and
accessories when installed on aircraft at the airport.
SECTION 5
If any provision of this Ordinance or Section 14 -4 -99 of the Pueblo Municipal Code hereby
adopted is determined by a court of competent jurisdiction to be invalid, such determination shall
not invalidate the remaining provisions thereof.
SECTION 6
This Ordinance shall become effective upon final passage and approval.
INTRODUCED January 12, 2004
BY Michael Occhiato
Councilperson
APPROVED:
PRESI ENT OF CITY COUNCIL
ATTESTED BY:
CITY CLERK
PASSED AND APPROVED January 26, 2004
ED
Background Paper for Proposed
ORDINANCE
AGENDA ITEM #1_7
DATE: January 12, 2004
DEPARTMENT: Law Department
TITLE
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO
MUNICIPAL CODE RELATING TO SALES AND USE TAX, PROVIDING
EXEMPTIONS FOR AIRCRAFT OF COMMERCIAL AIRLINES, AND PROVIDING
FOR A CREDIT AGAINST SALES AND USE TAXES LEVIED AND IMPOSED ON
THE SALE, USE, STORAGE OR CONSUMPTION OF AIRCRAFT BYA CHARTER
AIR CARRIER PROVIDING CHARTER AIR TRANSPORTATION AT THE PUEBLO
MEMORIAL AIRPORT
ISSUE
Should the City Council adopt an ordinance providing for a credit against use and
sales taxes imposed on aircraft used by a charter air carrier providing charter air
transportation at the aviation area of the Airport?
RECOMMENDATION
None.
BACKGROUND
The City's sales and use tax ordinance was adopted by a vote of the people and
may not be amended except by voter approval unless otherwise provided in the
ordinance. The ordinance provides that the City Council is empowered to amend
any section of the ordinance in order to make uniform the provisions of the
ordinance with the laws of the State of Colorado, provided that no such amendment
shall permit the taxing of food and food products or of medicine sold under
physician's prescription.
The State of Colorado exempts from sales and use tax "aircraft used or purchased
for use in interstate commerce by a commercial airline." Sections 39-26 -
114(1)(a)(XXII) and 39- 26- 203(1)(aa) C.R.S. "Commercial airline" is defined as an
airline carrying freight or passengers on regularly scheduled flights for a fee.
Colorado Code of Regulations (39)- 26- 114.1(a)(XXII).
The City Council may lawfully exempt aircraft used or purchased for use in
interstate commerce by a commercial airline, but may not exempt aircraft used or
purchased for use by a charter air carrier providing charter air transportation, unless
such exemption would otherwise make uniform City's sales and use tax with the
laws of the state of Colorado.
The Colorado Urban and Rural Enterprise Zone Act ( "Act ") (Section 39 -30 -101, et
seq., C.R.S.) authorizes municipalities to negotiate with any taxpayer who qualifies
for credit pursuant to section 39 -30 -105, who establishes a new business facility
within an enterprise zone, or who expands an existing facility within an enterprise
zone, the expansion of which constitutes a new business facility, a refund of sales
taxes levied bythe municipality for the purchaseof equipment, machinery, machine
tools, or supplies used in the taxpayer's business in the enterprise zone. Section
39 -30- 107.5, C.R.S.
Consistent with the foregoing concept and in an attempt to make uniform the
provisions of the City's sales and use tax with the laws of the State of Colorado, City
Council may consider adopting an ordinance creating an economic incentive to
encourage and expand the use and development of the aviation area of the Pueblo
Memorial Airport by charter air carriers providing charter air transportation at the
aviation area of the airport, and provide more opportunities for employment. Such
economic incentive may be in the form of sales and use tax credit against sales and
use taxes levied on aircraft used, purchased, or leased for use by a charter air
carrier providing charter air transportation at the aviation area of the Airport.
The Ordinance exempts from sales and use tax aircraft used or purchased for use
in interstate commerce by a commercial airline carrying freight or passengers on
regularly scheduled flights and creates a credit in an amount equal to two- thirds of
the sales and use tax imposed on aircraft used by a charter air carrier providing
charter air transportation at the aviation area of the Airport. The credit would be
applicable for calendar years commencing on or after January 1, 1999.
FINANCIAL IMPACT
The credit would be applicable to all aircraft used by charter air carriers providing
charter air transportation at the aviation area of the Airport. Currently, Travelaire
Services, Inc. is the only air carrier providing charter air transportation atthe aviation
area at the Airport. The City has imposed a use tax on its aircraft which is being
contested in the Pueblo County District Court. The credit would reduce the use tax
imposed during the audit period upon Travelaire Service, Inc. aircraft from $144,025
to $48,008.
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