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HomeMy WebLinkAboutORD1179ORDINANCE NO.1179 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,RELATING TO THE PRIVILEGE LICENSE TAX;ADOPTING "THE 2002 AMENDMENTS TO THE TAX CODE OF THE CITY OF APACHE JUNCTION" BY REFERENCE;ESTABLISHING AN EFFECTIVE DATE;PROVIDING FOR SEVERABILITY;PROVIDING FOR PENALTIES FOR VIOLATIONS;AND DECLARING AN EMERGENCY. BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,AS FOLLOWS: SECTION I IN GENERAL That certain document known as "The 2002 Amendments to the Tax Code of the City of Apache Junction",three copies of which are on file in the office of the city clerk of the City of Apache Junction,Arizona,which document was made a public record by Resolution No.03-09 of the City of Apache Junction,Arizona,is hereby referred to,adopted and made a part hereof as i f fully set out in this ordinance. SECTION I I EFFECTIVE DATE The provisions of this ordinance and the public record adopted herein are effective from and after May 6,2003. SECTION III PROVIDING FOR SEVERABILITY If any section,subsection,sentence,clause,phrase or portion of this ordinance or any part of these amendments to the tax code adopted herein by reference is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction,such decision shall not affect the validity of the remaining portions thereof. SECTION IV PENALTIES Any person found guilty of violating any provision of these amendments to the tax code shall be guilty of a class one misdemeanor.Each.day that a violation continues shall be a separate offense punishable as herein above described. ORDINANCE NO.1179 PAGE 1 OF 2 SECTION V EMERGENCY CLAUSE The immediate operation of the provisions of this Ordinance is necessary for the immediate preservation of the public peace,health or safety and an emergency is hereby declared to exist since these provisions need to be in effect statewide throughout other communities no later than June 1,2003;and this Ordinance shall be in full force and effect from and after its passage,adoption and approval by the Mayor and Council;and further this Ordinance shall not be subject to the referendum provisions under A.R.S.§19-143(B). PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA,THIS 6TH .DAY OF MAY - SIGNED AND ATTESTED TO THIS 6TH --DAY OF ,2003. DOUGLAS C9LEMAN Mayor ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: dar---435-03 RICHARD J.STERN .City Attorney ORDINANCE NO.1179 PAGE 2 OF 2 2002 AMENDMENTS TO THE TAX CODE OF THE CITY OF APACHE JUNCTION Section 1.Section 8A-100 of the Tax Code of the City of Apache Junction is amended to read: Sec. 8A-100. General definitions. For the purposes of this Chapter, the following definitions apply: "Assembler"means a person who unites or combines products, wares, or articles of manufacture so as to produce a change in form or substance of such items without changing or altering component parts. "Broker"means any person engaged or continuing in business who acts for another for a consideration in the conduct of a business activity taxable under this Chapter, and who receives for his principal all or part of the gross income from the taxable activity. "Business"means all activities or acts, personal or corporate, engaged in and caused to be engaged in with the object of gain, benefit, or advantage, either direct or indirect, but not casual activities or sales. "Business Day"means any day of the week when the Tax Collector's office is open for the public to conduct the Tax Collector's business. "Casual Activity or Sale"means a transaction of an isolated nature made by a person who neither represents himself to be nor is engaged in a business subject to a tax imposed by this Chapter. However, no sale, rental, license for use, or lease transaction concerning real property nor any activity entered into by a business taxable by this Chapter shall be treated, or be exempt, as casual. This definition shall include sales of used capital assets, provided that the volume and frequency of such sales do not indicate that the seller regularly engages in selling such property. "Combined Taxes"means the sum of all applicable Arizona Transaction Privilege and Use Taxes; all applicable transportation taxes imposed upon gross income by this County as authorized by Article III, Chapter 6, Title 42, Arizona Revised Statutes; and all applicable taxes imposed by this Chapter. "Commercial Property"is any real property, or portion of such property, used for any purpose other than lodging or lodging space, including structures built for lodging but used otherwise, such as model homes, apartments used as offices, etc. "Communications Channel"means any line, wire, cable, microwave, radio signal, light beam, telephone, telegraph, or any other electromagnetic means of moving a message. "Construction Contracting"refers to the activity of a construction contractor. "Construction Contractor"means a person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish any building, highway, road, railroad, excavation, or other structure, project, development, or improvement to real property, or to do any part thereof. "Construction contractor" includes subcontractors, specialty contractors, prime contractors, and any person receiving consideration for the general supervision and/or coordination of such a construction project except for remediation contracting.This definition shall govern without regard to whether or not the construction contractor is acting in fulfillment of a contract. "Delivery (of Notice) by the Tax Collector"means "receipt (of notice) by the taxpayer". "Delivery. Installation, or Other Direct Customer Services"means services or labor, excluding repair labor, provided by a taxpayer to or for his customer at the time of transfer of tangible personal property; provided further that the charge for such labor or service is separately billed to the customer and maintained separately 1 in the taxpayer's books and records. "Engaging",when used with reference to engaging or continuing in.business, includes the exercise of corporate or franchise powers. "Equivalent Excise Tax"means either: (1)a Privilege or Use Tax levied by another Arizona municipality upon the transaction in question, and paid either to such Arizona municipality directly or to the vendor; or (2)an excise tax levied by a political subdivision of a state other than Arizona Upon the transaction in question, and paid either to such jurisdiction directly or to the vendor; or (3)an excise tax levied by a Native American Government organized under the laws of the federal government upon the transaction in question, and paid either to such jurisdiction directly or to the vendor. "Federal Government"means the United States Government, its departments and agencies; but not including national banks or federally chartered or insured banks, savings and loan institutions, or credit unions. "Food" means any items intended for human Consumption as defined by rules and regulations adopted by the Department of Revenue, State of Arizona, pursuant to A.R.S. Section 42-5106. Under no circumstances shall "food" include alcoholic beverages or tobacco, or food items purchased for use in conversion to any form of alcohol by distillation, fermentation, brewing, or other process. "Hotel" means any public or private hotel, inn, hostelry, tourist home, house, motel, rooming house, apartment house, trailer, or other lodging place within the City offering lodging, wherein the owner thereof, for compensation, furnishes lodging to any transient, except foster homes, rest homes, sheltered care homes, nursing homes, or primary health care facilities. "Job Printing"means the activity of copying or reproducing an article by any means, process, or method. "Job printing" includes engraving of printing plates, embossing, copying, micrographics, and photo reproduction. "Lessee"includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter. "Lessor"includes the equivalent person in a rental or licensing agreement for all purposes of this Chapter. "Licensing (for Use)"means any agreement between the user ("licensee") and the owner or the owner's agent ("licensor") for the use of the licensor's property whereby the licensor receives consideration, where such agreement does not qualify as a "sale" or "lease" or "rental" agreement. "Lodging (Lodging Space)"means any room or apartment in a hotel or any other provider of rooms, trailer spaces,or other residential dwelling spaces;or the furnishings or services and accommodations accompanying the use and possession of said dwelling space, including storage or parking space for the property of said tenant. "Manufactured Buildings"means a manufactured home, mobile home or factory built building, as defined in A.R.S. Section 41-2142. "Manufacturer"means a person engaged or continuing in the business of fabricating, producing, or manufacturing products, wares, or articles for use from other forms of tangible personal property, imparting to such new forms, qualities, properties, and combinations. "Minim and Metallurgical Supplies"means all tangible personal property acquired by persons engaged in activities defined in Section 8A-432 for such use. This definition shall not include: (1)janitorial equipment and supplies. (2)office equipment, office furniture, and office supplies. (3)motor vehicles licensed for use upon the highways of the State. 2 "Modifier"means a person who reworks, changes, or adds to products, wares, or articles of manufacture. "Nonprofit Entity"means any entity organized and operated exclusively for charitable purposes, or operated by the Federal Government, the State, or any political subdivision of the State. "Occupancy (of Real Property)"means any occupancy or use, or any right to occupy or use, real property including any improvements, rights, or interests in such property. "Out -of -City Sale"means the sale of tangible personal property and job printing if all of the following occur: (1)transference of title and possession occur without the City; and (2)the stock from which such personal property was taken was not within the corporate limits of the City; and (3)the order is received at a permanent business location of the seller located outside the City; which location is used for the substantial and regular conduct of such business spies activity. In no event shall the place of business of the buyer be determinative of the situs of the receipt of the order. For the purpose of this definition it does not matter that all other indicia of business occur within the City, including, but not limited to, accounting, invoicing, payments, centralized purchasing, and supply to out -of -City storehouses and out -of -City retail branch outlets from a primary storehouse within the City. "Out -of -State Sale"means the sale of tangible personal property and job' printing if all of the following occur: (1)The order is placed from without the State of Arizona; and (2)the order is placed by other than a resident of the State to be determined in a manner similar to "resides within the City"; and (3 )the property is delivered to the buyer at a location outside, the State; and (4)the property is purchased for use outside the State. "Owner -Builder"means an owner or lessor of real property who, by himself or by or through others, constructs or has constructed or reconstructs or has reconstructed any improvement to real property. "Person"means an individual, firm, partnership, joint venture, association, corporation, estate, trust, receiver, syndicate, broker, the Federal Government, this State, or any political subdivision or agency of this State. For the purposes of this Chapter, a person shall be considered a distinct and separate person from any general • or limited partnership or joint venture or other association with which such person is affiliated. A subsidiary corporation shall be considered a separate person from its parent corporation for purposes of taxation of transactions with its parent corporation. "Prosthetic"means any of the following tangible personal property if such items are prescribed or recommended by a licensed podiatrist, chiropractor, dentist, physician or surgeon, naturopath, optometrist, osteopathic physician or surgeon, psychologist, hearing aid dispenser, physician assistant, nurse practitioner or veterinarian: (1)any man-made device for support or replacement of a part of the body, or to increase acuity of one of the senses. Such items include: prescription eyeglasses; contact lenses; hearing aids; artificial limbs or teeth; neck, back, arm, leg, or similar braces. (2)insulin, insulin syringes, and glucose test strips sold with or without a prescription. (3)hospital beds, crutches, wheelchairs, similar home health aids, or corrective shoes. (4)drugs or medicine, including oxygen. (5)equipment used to generate, monitor, or provide health support systems, such as respiratory equipment, oxygen concentrator, dialysis machine. (6)durable medical equipment which has a federal health care financing administration common procedure code, is designated reimbursable by Medicare, can withstand repeated use, is primarily and customarily used to serve a medical purpose, is generally not useful to a person in the absence of illness or injury and is appropriate for use in the home. "Qualifying Community Health Center" (a)means an entity that is recognized as nonprofit under SECTION 501(c)(3) of the United States 3 Internal Revenue Code, that is a community -based, primary care clinic that has a community -based board of directors and that is either: (1)the sole provider of primary care in the community. (2)a nonhospital affiliated clinic that is located in a federally designated medically underserved area in this State. (b)INCLUDES CLINICS THAT ARE BEING CONSTRUCTED AS QUALIFYING COMMUNITY HEALTH CENTERS. "Qualifying Health Care Organization"means an entity that is recognized as nonprofit under Section 501(c) of the United States Internal Revenue Code and that uses, SAVES OR INVESTS at least eighty percent (80%) of all monies that it receives from all sources each year only for health and medical related educational and charitable services, as documented by annual financial audits prepared by an independent certified public accountant, performed according to generally accepted accounting standards and filed annually with the Arizona Department of Revenue.MONIES THAT ARE USED, SAVED OR INVESTED TO LEASE, PURCHASE OR CONSTRUCT A FACILITY FOR HEALTH AND MEDICAL RELATED EDUCATION AND CHARITABLE SERVICES ARE INCLUDED IN THE EIGHTY PERCENT (80%) REQUIREMENT. "Qualifying Hospital"means ANY OF THE FOLLOWING: (1)a licensed hospital which is organized and operated exclusively for charitable purposes, no part of the net earnings of which inures to the behefit of ahy private shareholder or individual. (2)a licensed nursing care institution or a licensed residential care institution or a residential care facility operated in conjunction with a licensed nursing Care institution or a licensed kidney dialysis center, which provides medical services, nursing services or health related services and is not used or held for profit.• ' • - (3)a hospital, nursing care institution or residential care institution which is operated by the federal government, this State or•a, political subdivision of this State. (4)A FACILITY THAT IS UNDER CONSTRUCTION AND THAT ON COMPLETION WILL BE A FACILITY UNDER SUBDIVISION (1), (2) OR (3) OF THIS PARAGRAPH. "Receipt (of Notice) by the Taxpayer"means the earlier of actual receipt or the first attempted delivery by certified United States mail to the taxpayer's address of record with the Tax Collector. "Remediation"means those actions that are reasonable, necessary, cost-effective and technically feasible in the event of the release or threat of release of hazardous substances into the environment such that the waters of the State are or may be affected, such actions as may be necessary to monitor, assess and evaluate such release or threat of release, actions of remediation, removal or disposal of hazardous substances or taking such other actions as may be necessary to prevent, minimize or mitigate damage to the public health or welfare or to the waters of the State which may otherwise result from a release or threat of release of a hazardous substance that will or may affect the waters of the State.Remediation activities include the use of biostimulation with indigenous microbes and bioaugmentation using microbes that are nonpathogenic, nonopportunistic and that are naturally occurring.Remediation activities may include community information and participation costs and providing an alternative drinking water supply. "Rental Equipment"means tangible personal property sold, rented, leased, or licensed to customers to the extent that the item is actually used by the customer for rental, lease, or license to others; provided that: (1)(Reserved) (2)the vendee is regularly engaged in the business of renting, leasing, or licensing such property for a consideration; and (3)the item so claimed as "rental equipment" is not used by the person claiming the exemption for any purpose other than rental, lease, or license for compensation, to an extent greater than fifteen percent (15%) of its actual use. "Rental Supply"means an expendable or nonexpendable repair or replacement part sold to become part of "rental equipment", provided that: (1)the documentation relating to each purchased item so claimed specifically itemizes to the 4 (2) (3) or vendor the actual item of "rental equipment" to which the purchased item is intended to be attached as a repair or replacement part; the vendee is regularly engaged in the business of renting, leasing, or licensing such property for a consideration; and the item so claimed as "rental equipment" is not used by the person claiming the exemption for any purpose other than rental, lease, or license for compensation, to an extent greater than fifteen percent (15%) of its actual use. "Repairer"means a person who restores or renews products, wares, or articles of manufacture. "Resides within the City"means in cases other than individuals, whose legal addresses are determinative of residence, the engaging, continuing, or conducting of regular business activity within the City. "Restaurant"means any business activity where articles of food, drink, or condiment are customarily prepared or served to patrons for consumption on or off the premises, also including bars, cocktail lounges, the dining rooms of hotels, and all caterers.For the purposes of this Chapter, a "fast food" business, which includes street vendors and mobile vendors selling in public areas or at entertainment or sports or similar events, who prepares or sells food or drink for consumption on or off the premises is considered a "restaurant", and not a "retailer". "Retail Sale (Sale at Retail)"means the sale of tangible personal property, except the sale of tangible person property to a person regularly engaged in the business of selling such property. "Retailer"means any person engaged or continuing in the business of sales of tangible personal property at retail. '"Sale" means any transfer of title or possession, or both, exchange, barter, conditional or otherwise, in any manner or by any means whatsoever, including consignment transactions and auctions, of property for a consideration. "Sale" includes any transaction whereby the possession of such property is transferred but the seller retains the title as security for the payment of the price. "Sale" also includes the fabrication of tangible personal property for consumers who, in whole or in part, furnish either directly or indirectly the materials used in such fabrication work. "Speculative Builder"means either: (1)an owner -builder who sells or contracts to sell, at anytime, improved real property (as provided in Section 8A-416) consisting of: A)custom, model, or inventory homes, regardless of the stage of completion of such homes; or B)improved residential or commercial lots without a structure; or (2)an owner -builder who sells or contracts to sell improved real property, other than improved real property specified in subsection (1) above: A)prior to completion; or B)before the expiration of twenty-four (24) months after the improvements of the real property sold are substantially complete. "Substantially Complete"means the construction contracting or reconstruction contracting: (1)has passed final inspection or its equivalent; or (2)certificate of occupancy or its equivalent has been issued; or (3)is ready for immediate occupancy or use. "Supplier"means any person who rents, leases, licenses, or makes sales of tangible personal property within the City, either directly to the consumer or customer or to wholesalers, jobbers, fabricators, manufacturers, modifiers, assemblers, repairers, or those engaged in the business of providing services which involve the use, sale, rental, lease, or license of tangible personal property. "Tax Collector"means the Revenue Officer/City Clerk or their designee or agent for all purposes under this 5 Chapter. "Taxpayer"means any person liable for any tax under this Chapter. "Taxpayer Problem Resolution Officer"means the individual designated by the City to perform the duties identified in Sections 8A-515 and 8A-516.In cities with a population of 50,000 or more, the Taxpayer Problem Resolution Officer shall be an employee of the City.In cities with a population of less than 50,000, the Taxpayer Problem Resolution Officer need not be an employee of the City.Regardless of whether the Taxpayer Problem Resolution Officer is or is not an employee of the City, the Taxpayer Problem Resolution Officer shall have substantive knowledge of taxation. The identity of and telephone number for the Taxpayer Problem Resolution Officer can be obtained from the Tax Collector. "Telecommunication Service"means any service or activity connected with.the transmission or relay of sound, visual image, data, information, images, or material over a communications Channel or any combination of communications channels. "Utility Service"means the producing, providing, or furnishing of electricity, electric lights, current, power, gas (natural or artificial), or water to consumers or ratepayers. Section 2.Section 8A-260 of the Tax Code of the City of Apache.Junction is amended to read: Sec. 8A-260.Exclusion of fees and taxes from gross income; limitations: (a)There shall be excluded from gross income of vendors of motor vehicles those motor vehicle registration fees, license fees and taxes, dad lieu taxes imposed pursuant to Title 28, Arizona Revised Statutes in connection with the initial purchase of a motor vehicle, but only to the extent that such taxes or fees or both have been separately itemized and Collected from the purchaser of the motor vehicle by the vendor, actually remitted to the proper registering, licensing, and taxing authorities, and the provisions of Article III, regarding recordkeeping, are met.For the purpose of the exclusion provided by this subsection only, the terms vendor and vendee shall also apply to a lessor and lessee respectively, of a motor vehicle if, in addition to all other requirements of this subsection, the lease agreement specifically requires the lessee to pay such fees or taxes, and such amounts are separately itemized in the documentation provided to the lessee. (b)There shall be excluded from gross income of vendors at retail of heavy trucks and trailers, the amount attributable to Federal Excise Taxes imposed by 26 U.S.C. Section 4051, but only to the extent that the provisions of Article III, relating to recordkeeping, have been met. (c)There shall be excluded from gross income the following fees, taxes, and lieu taxes, but only to the extent that such taxes or fees or both have been separately itemized and collected from the purchaser by the vendor, actually remitted to the proper registering, licensing, and taxing authorities, and the provisions of Article III, regarding recordkeeping, are met: (1)emergency telecommunication services excise tax imposed pursuant to A.R.S. Section 42-5252. "Emergency telecommunication services" means telecommunication services or systems that use number 911 or a similarly designated telephone number for emergency calls; (2)the telecommunication devices for the deaf and the severely hearing and speech impaired excise tax imposed pursuant to A.R.S. Section 42-5252; (3)federal excise taxes on communications services as imposed by 26 U.S.C. § 4251; (4)car rental surcharge imposed pursuant to A.R.S. Section 48-4234; (5)federal excise taxes on passenger vehicles as imposed by 26 U.S.C. §4001(.01); (6)waste tire disposal fees, imposed pursuant to A.R.S. Section 44-1302:leatl-eeid-betteryiees7 1-11.Facu vu,nun. ta it, r-ull uacualui I P P ..hcL.a_en iu u.,cu u Section 40 814(B),(C). (d)There shall be excluded from gross income of -vendors of motor vehicles dealer documentation fees, but only to the extent that such fees have been separately itemized and collected from the purchaser of the motor vehicle by the vendor. Section 3.Regulation 8A-415.3 of the Tax Code of the City of Apache Junction is added to read: REG. 8A-415.3. CONSTRUCTION CONTRACTING; TAX RATE EFFECTIVE DATE. A.IN THE EVENT OF A TAX RATE CHANGE, THE RATE IMPOSED ON GROSS INCOME FROM CONSTRUCTION CONTRACTING SHALL BE COMPUTED BASED UPON THE RATE IN EFFECT WHEN THE CONTRACT WAS EXECUTED,SUBJECT TO THE "ENACTMENT DATE" AS DEFINED IN THIS SECTION. GROSS INCOME FROM A CONTRACT EXECUTED PRIOR TO THE ENACTMENT DATE SHALL NOT BE SUBJECT TO THE TAX RATE CHANGE, PROVIDED THE CONTRACT CONTAINS NO PROVISION THAT ENTITLES THE CONSTRUCTION CONTRACTOR TO RECOVER THE AMOUNT OF THE TAX. IN THE EVENT OF A RATE INCREASE, IN ORDER TO QUALIFY FOR THE LOWER RATE, THE. CONSTRUCTION CONTRACTOR SHALL,UPON REQUEST,PROVIDE SUFFICIENT DOCUMENTATION, IN A MANNER AND FORM PRESCRIBED.BY THE TAX COLLECTOR, TO VERIFY THAT A CONTRACT WAS ENTERED INTO BEFORE THE ENACTMENT DATE. C.FOR PURPOSES OF THIS SECTION, "ENACTMENT DATE" SHALL BE: (1)IN THE EVENT AN ELECTION IS HELD, THE DATE OF ELECTION. (2)IN THE EVENT NO ELECTION IS HELD, THE DATE OF FINAL ADOPTION BY THE MAYOR AND COUNCIL. (3)NOTWITHSTANDING THE ABOVE,NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PREVENT THE CITY FROM ESTABLISHING A LATER ENACTMENT DATE. 7