City Council Minutes 2005 08 02 - Laserfiche WebLink

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City Council Meeting Minutes August 2, 2005 Page 4 of 14 RESOLUTION No. 29, SERIES 2005 - A RESOLUTION REFERRING TO A VOTE OF THE REGISTERED ELECTORS OF THE CITY OF LOUISVILLE AT THE NOVEMBER 1, 2005, ELECTION A TABOR BALLOT ISSUE TO AUTHORIZE THE IMPOSITION OF THE CITY'S 3.375 PERCENT USE TAX, CURRENTLY COLLECTED UPON NONRESIDENTIAL BUILDING MATERIALS AND VEHICLES, UPON THE USE, STORAGE, DISTRIBUTION OR CONSUMPTION OF ANY ARTICLE OF TANGIBLE PERSONAL PROPERTY OR TAXABLE SERVICES PURCHASED, LEASED OR RENTED FROM SOURCES INSIDE OR OUTSIDE THE CITY, ON WHICH THE CITY SALES TAX HAS NOT BEEN PAID Mayor Sisk requested a Staff presentation. Deputy City Manager Boyd explained sales tax comprises 36% of the City's total revenue source, 4% is collected in use tax. Current use tax for Louisville is collected on automobiles and commercial building materials only, and not on the same items as are subject to sales tax. Louisville does not collect use tax due on tangible personal property withdrawn from inventory for business or personal use or on items purchased without payment of sales tax. This type of use tax is typically collected on the privilege of storing, using, or consuming tangible personal property in Colorado that has been purchased at retail but not required to be taxed. Use tax is not imposed on sales that are subject to the sales tax. Louisville's Home Rule Charter does not provide for a use tax on tangible personal property. The highlights of the resolution are as follows: . The Resolution sets out the ballot question to the registered electors of the City to vote on the adoption of a use tax on the November 1, 2005 ballot. . The Resolution explains that the 3-3/8% tax rate will be allocated to the City's Funds in the same manner as the sales tax. . The Resolution does not address specific changes to the current sales tax Ordinance 1375, Series 2002. Changes to the Ordinance are currently being drafted in anticipation of approval of the tax and will be reviewed by City Council over the next two months. . The Resolution provides City Council with the authority, to waive or reduce the amount of use tax due and payable to the City allowing them to enter into agreements for the sharing or crediting of revenues from use tax if City Council determines that such waiver is in the best interest of the City. The definition of a Use Tax: Use tax is the reciprocal of sales tax, not an additional tax. Use tax is collected or due from the consumer when the provider or seller of tangible personal property or services does not charge sales tax. In Colorado, sellers are exempt from collecting local sales tax when they do not have a business presence, or nexus, within the local city. This factor allows, and in most cases encourages, citizens and businesses to purchase goods from outside the city, for delivery into the city without payment of local tax. Based on