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HomeMy WebLinkAboutORD1406ORDINANCE NO. 1406 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, RELATING TO THE TRANSACTION PRIVILEGE LICENSE TAX,COMMONLY KNOWN AS THE "SALES TAX";AMENDING THE TAX CODE O F THE CITY O F APACHE JUNCTION BY INCREASING THE RATE OF TAXATION BY TWO- TENTHS OF ONE PERCENT (.2%)FROM THE EXISTING RATE OF TWO AND TWO -TENTHS PERCENT (2.2%) TO A TOTAL OF TWO AND FOUR -TENTHS PERCENT (2.4%);DESIGNATING THE PURPOSE; DESIGNATING AN EFFECTIVE DATE; DESIGNATING A TERMINATION DATE COMMONLY KNOWN AS THE "SUNSET CLAUSE";PROVIDING FOR EXISTING CONTRACTS;PROVIDING FOR PENALTIES; REPEALING ANY CONFLICTING PROVISIONS;PROVIDING FOR SEVERABILITY; AND PROVIDING FOR NOTICE. WHEREAS, Arizona Revised Statutes § 9-240(B)(26) conveys upon the Mayor and City Council the power to levy taxes including a transaction privilege license tax,commonly known as the "sales tax"; and WHEREAS, the City of Apache Junction relies heavily on state- shared highway user revenue funds ("HURF")to pay for design, repair,construction,replacement and continuing maintenance for city roads; and WHEREAS,since fiscal year 2006-2007,the state has legislatively reduced HURF dollars to cities and towns; and WHEREAS, the condition of many city roadways are poor and are in need of maintenance,repair, design,construction and in some instances, complete replacement; and WHEREAS,the cost to make the maintenance,repairs,design, construction and replacement are escalating at a rapid rate each year that passes; and WHEREAS,having no city property tax,the City of Apache Junction relies primarily upon sales tax revenues to pay for these costs; and WHEREAS,the Mayor and City Council have determined that an increase of two -tenths of one percent (.2%)transaction privilege license tax,is necessary to sustain the quality of the ORDINANCE NO. 1406 Page 1 of 6 5 transportation grid system for community residents and visitors and enhance the public health, safety and welfare; and WHEREAS,on October 7,2014,a majority of the Mayor and City Council directed staff to prepare an ordinance for a .2% increase of the sales tax for council consideration at a public hearing on December 2, 2014, in compliance with State law and the Model City Tax Code; and WHEREAS,at public meetings on September 2,2014,September 16,2014,October 7,2014,and December 2,2014,the proposed incremental increase was fully discussed; and WHEREAS,prior public notice of the consideration of the proposed incremental increase was placed on the City's webpage and published in accordance with A.R.S. Titles 9 and 42; and WHEREAS,changes to the transaction privilege tax rate are affected by amending the Tax Code of the City of Apache Junction, and with post -adoption notification to city taxpayers and to the Arizona Department of Revenue. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA, AS FOLLOWS: SECTION I IN GENERAL A.The tax rate in each of the following sections of the city tax code is increased from the rate of two and two -tenths percent (2.2%) to two and four -tenths percent (2.4%): Section 8A-405 Section 8A-410 Section 8A-415 Section 8A-416 Section 8A-417 Section Section Section Section Section 8A-420 8A-425 8A-427 8A-430 8A-435 ORDINANCE NO. 1406 Page 2 of 6 Advertising Amusement, exhibitions, and similar Activities Construction contracting:construction contractors Construction contracting:speculative builders Construction contracting: owner -builders who are not speculative builders Feed at wholesale Job Printing Manufactured buildings Timbering and other extractions Publishing and periodibals distribution Section 8A-444 Hotels Section 8A-447 Additional tax upon transient lodging Section 8A-450 Rental, leasing, and licensing for use of tangible personal property Section 8A-455 Restaurants and bars Section 8A-475 Transporting for hire B.The tax rate in the following sections of the city tax code is increased from three and two -tenths percent (3.2%) to three and four -tenths percent (3.4%): Section 8A-470 Telecommunications services Section 8A-480 Utility services C.Section 8A-460 of the city tax code is amended to read as follows: Section 8A-460.Retail Sales:measure of tax;burden of proof; exclusions (a)The tax rate shall be at the amount equal to two and four- tenths percent (2.4%) of the gross income from the business activity upon every person engaging or continuing in the business of selling personal property at retail. (b)The burden of proving that a sale of tangible personal property is not a taxable retail' sale shall be upon the person who made the sale. (c)Exclusions.For the purpose Of this Chapter,sales of tangible personal property shall not include: (1)sales of stocks,bonds, - options,or other similar materials. (2)sales of lottery tickets or shares pursuant to Article 1, Chapter 5, Title 5, Arizona Revised Statutes. (3)sales of platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by Regulation. (4)gross income derived from the transfer of tangible personal property which is specifically included as the gross income of a business activity upon which another Section of this Article imposes a tax,shall be considered gross income of that business activity, and ORDINANCE NO. 1406 Page 3 of 6 are not includable as gross income subject to the tax imposed by this Section. (5)sales by professional or personal service occupations where such sales are inconsequential elements of the service provided. (d)Notwithstanding the provisions of subsection (a) above, when the gross income from the sale of a single item of tangible personal property exceeds two thousand dollars ($2,000), the two and four -tenths (2.4%) tax rate shall apply to the first $2,000.Above $2,000, the measure of tax shall be at a rate of one and four -tenths percent (1.4%). (e)When this City and another Arizona city or town with an equivalent excise tax could claim nexus for taxing a retail sale, the city or town where the permanent business location of the seller at which the order was received shall be deemed to have precedence, and for the purpose of this Chapter such city or town has sole and exclusive rights to such tax. (f)The appropriate tax liability for any retail sale where the order is received at a permanent business location of the seller located in this City or in an Arizona city or town that levies an equivalent excise tax shall be at the tax rate of the city or town of such seller's location. (g)Retail sales of prepaid calling cards or prepaid authorization numbers for telecommunications services, including sales of reauthorization of a prepaid card or authorization number, are subject to tax under this Section. SECTION II DESIGNATING THE PURPOSE For such period of time that the City of Apache Junction, Arizona, levies the tax as described in Section I above,the revenues collected from the incremental increase of two-tenths of one percent (.2%) from the existing two and two -tenths percent (2.2%) rate to the two and four -tenths percent (2.4%) rate shall be used for maintenance, repair, design, construction and replacement of public right-of-ways. SECTION III DESIGNATING AN EFFECTIVE DATE The provisions of this ordinance shall become effective on March 1, 2015. ORDINANCE NO. 1406 Page 4 of 6 SECTION IV DESIGNATING A TERMINATION DATE The provisions of this ordinance shall terminate,o r commonly understood t o "sunset"on March 1,2025,at which time the increased tax rate as set forth in Section I of this ordinance shall automatically revert back to two and two -tenths percent (2.2%) or whatever the effective rate is in place at that time. SECTION V PROVIDING FOR EXISTING CONTRACTS The tax imposed pursuant to this ordinance shall not apply to contracts entered into prior to March 1, 2015. SECTION VI PROVIDING FOR PENALTIES Any person found guilty of violating any provision of these amendments to the tax code shall be guilty o f a class one misdemeanor and shall be prosecuted pursuant to Article 1-8 of the Apache Junction City Code and Section 8A-580 of the Tax Code of the City of Apache Junction. SECTION VII REPEALING ANY CONCLICTING PROVISIONS All ordinances and parts of ordinances in conflict with the provisions of this ordinance or any part of the code adopted herein by reference are hereby repealed. SECTION VIII PROVIDING FOR SEVERABILITY If any section, subsection, sentence, clause, phrase or portion of this ordinance 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 IX PROVIDING FOR NOTICE Pursuant to A.R.S.§42-6053(E),staff must provide a fully executed copy of this ordinance to the Arizona Municipal Tax Code Commission and the Department of Revenue within ten days after the passage date of this ordinance. PASSED AND ADOPTED BY .THE MAYOR AND CITY c o p =OF THE CITY OF APACHE JUNCTION, ARIZONA,THIS .,;,2610 DAY- OF A.64.--A115c,e, , 2014. ORDINANCE NO. 1406 Page 5 of 6 SIGNED AND ATTESTED TO THIS DAY OF , 2014. ATTEST: : e - Z i g tr 4 KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: RICHARD JOEL STERN City Attorney ORDINANCE NO.1406 Page 6 of 6