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Home My WebLink AboutORD742ORDINANCE NO.742 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,RELATING TO THE PRIVILEGE LICENSE TAX;ADOPTING "THE 1990 AMENDMENTS TO THE CITY TAX CODE OF THE CITY OF APACHE JUNCTION,ARIZONA"BY REFERENCE AND FIXING THE EFFECTIVE DATE THEREOF; REPEALING ANY CONFLICTING PROVISIONS;PROVIDING FOR SEVERABILITY;AND PROVIDING PENALTIES. 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 1990 Amendments to the City Tax Code of the City of Apache Junction,Arizona,"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.90-18 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 on August 1,1990. SECTION III REPEALING ANY CONFLICTING 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in conflict with the provisions of this ordinance or any part of the code adopted herein by reference are hereby repealed.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 IV PROVIDING FOR SEVERABILITY I f any section,subsection,sentence,phrase,clause or portion of this ordinance or any part of the 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 V PENALTY PROVISION Any person found guilty of violating any provision of these amend- ments 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 hereinabove described,and in compliance with Article 1-8(A)of the City Code. ORDINANCE NO.742 PAGE ONE OF TWO PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION,ARIZONA,THIS 19TH DAY OF JUNE ,1990. SIGNED AND ATTESTED TO THIS 20TH DAY OF ATTEST: KATHLEEN CONNELLY City Clerk APPROVED AS TO FORM: Da 9 Ae.e AL-EX(A-NIE\l City Attorney ORDINANCE NO.742 PAGE TWO OF TWO JUNf 1990. METH BLUNTSCHLY Mayor Section 1. "speculative "Speculative (1) A PUBLIC RECORD OF THE CITY OF APACHE JUNCTION 1990 AMENDMENTS TO THE CITY TAX CODE Section 8A-100 of the city tax code is amended by amending the definition of builder" and inserting a new definition of "substantially complete" to read: Speculative Builder"means EITHER: 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 OF LE OF SUCH HOMES; OR (B)IMPFFOVED RESIDENTIAL OR COMMERCIAL LOTS WITHOUT A STRUCTURE; OR 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 COMPLETION1-ee or (B)before the expiration of twenty-four (24) months after the improvements of the real property sold are substantially complete.and-Hie-eenstreetien-ef (2) eeetft3eneY'A- "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. Section 2.Section 8A-310 of the city tax code is amended by adding a new subsection (j) to read: (j)(RESERVED) Section 3.Section 8A -415(c) of the city tax code is amended to read: Sec. 8A-415.Construction contracting:prime CONSTRUCTION contractors. (c)"Subcontractor"means a construction contractor performing work for either: (1)a construction contractor who has provided the subcontractor with a written declaration that he Is liable for the tax for the project and has provided the subcontractor -*-•--' ' •--- --•his City Privilege License number. (2)an owner -builder who has provided the subcontractor with a written declaration that: (A)the owner -builder is improving the property for sale; and (B)the owner -builder is liable for the tax for such construction contracting activity; and (C)the owner -builder has provided the contractor beth-llie-AFizeila--Traneeetien Privitege-61eense-noniber-and his City Privilege License number. BOW EtFiti ENEN3 EINI4SEI Elf--RHE SUBCONTRACTOR ALSO INCLUDES A CONSTRUCTION CONTRACTOR PERFORMING WORK FOR ANOTHER SUBCONTRACTOR AS DEFINED ABOVE. Section 4.Reg. 8A-415.1 of the city tax code is amended to read: Reg. 8A-415.1.Distinction between the categories of construction contracting. For the purposes of this Chapter, transactions involving improvements to,or sales of,real property are designated into one of the following categories, and these categorizations shall apply,whether or not a person designates himself as a contractor,construction manager, developer, or otherwise: (a)A person performing improvements to real property is tone of the following: (1)an "Owner -Builder"when the work -is performed by the owner or lessor or lessee- In -possession.An "owner -builder" may also be a "speculative builder". (2)a "Primp CONSTRUCTION Contractor"when performing work for the owner or lessor or lessee -in -possession of the real property, unless that person has provided a written declaration stating that: (A)the owner -builder is improving the property for sale; and (B)the owner -builder is liable for the tax for such construction contracting activity; and (C)the owner -builder has provided the contractor betli-his-AhEORa--Trededelleh Pfivilege-Tax-L-leecce-humbef-and his City Privilege License number. (3)a "Subcontractor"AS PROVIDED IN SECTION 8A-415 (C). whed-ceherming-werk for either: hie-Gity-Pfivitege-kieerise-humbef: (b)An owner or lessor ("owner -builder") of improved real property is one of the following: -(1)a "Speculative Builder"AS PROVIDED IN SECTION 8A-100; OR it-lie-selle-suell BfeBEiff eempleted; Flifif41+1 EIVEIFFIEW (2)an "owner builder who is not a speculative builder" in all other cases. (c)The terms "owner", "lessor", and "lessee -in -possession" shall be deemed to Include any authorized agent for such person. Section 5.Section 8A -416(b) of the city tax code is amended to read: Sec. 8A-416.Construction contracting:speculative builders. (b)Exclusions. (1)In cases Involving reconstruction contracting, the speculative builder may exclude from gross income the prior value allowed for reconstruction contracting in determining his taxable gross income, as provided by Regulation. (2)Neither the cost nor the fair market value of the land which constitutes part of the Improved real property sold may be excluded or deducted from gross Income subject to the tax imposed by this Section. (3)(Reserved) (4)A speculative builder may exclude gross income from the sale of partially improved residential real property as defined in (a)(4) above to another speculative builder only if all of the following conditions are satisfied: (A)The speculative builder purchasing the partially improved residential real property has both a valid City and privilege license for construction contracting as a speculative builder; and (B)At the time of the transaction,the purchaser provides the seller with a properly completed written declaration that the purchaser assumes liability for and will pay all privilege taxes which would otherwise be due the City enel--ille-state at the time of sale of the partially Improved residential real property; and (C)The seller also: (I)maintains proper records of such transactions in a manner similar to the requirements provided in this chapter relating to sales for resale; and (ii)retains a copy of the written declaration provided by the buyer for the transaction; and (iii)is properly licensed with the City as a speculative builder and provides the City with the written declaration attached to the City privilege tax return where he claims the exclusion. Section 6.Article IV of the city tax code is amended by adding Section 8A-444 to read: Sec. 8A-444.HOTELS. THE TAX RATE SHALL BE AT AN AMOUNT EQUAL TO TWO PERCENT (2%) OF THE GROSS INCOME FROM THE BUSINESS ACTIVITY UPON EVERY PERSON ENGAGING OR CONTINUING IN THE BUSINESS OF OPERATING A HOTEL CHARGING FOR LODGING AND/OR LODGING SPACE FURNISHED TO ANY: (a)PERSON. (b)(RESERVED) Section 7.Section 8A-445 of the city tax code is amended by adding new subsections a)and (k) to read: Sec. 8A-445.Rental, leasing, and licensing for use of real property. 0)EXEMPT FROM THE TAX IMPOSED BY THIS SECTION IS GROSS INCOME DERIVED FROM THE ACTIVITIES TAXABLE UNDER SECTION 8A-444 OF THIS CODE. (RESERVED) Section 8.Article IV of the city tax code is amended by adding a new Section 8A-452 to read: Sec. 8A-452.(RESERVED) Section 9.Article IV of the city tax code is amended by adding a new Section 8A-485 to read: Sec. 8A-485.(RESERVED) Section 10.Regulation 8A -110.1(a) of the clty tax code is amended to read: Reg.8A-110.1.Income -producing capital equipment: in general. (a)The term "Income -producing capital equipment' applies only when purchaser or lemor LESSEE is directly using such equipment primarily for the purpose of directly producing Income In his normal course of business.For example: (1)Rental of a printing press to a job printer would qualify.Rental of the same equipment to a trade school or an airline company would not qualify. (2)A lease of an electric generator rated at 75KV to an electric utility company or a manufacturer or Job printer would qualify.The same lease to a telecommunications company or an irrigation district would not qualify. Section 11.Regulations- Privilege and Excise Taxes of the city tax code is amended by adding a new Regulation 8A-300.2 to read: Reg. 8A-300.2.(RESERVED)