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REQUEST FOR COUNCIL ACTION
ORDINANCE: O-2008-11
SUBJECT: Eliminating the sales tax on food for domestic home consumption and rescinding the temporary sales tax waiver within certain areas of the City and declaring an emergency.
RECOMMENDATION: Adopt the ordinance.
FUNDING SOURCE: Not applicable.
SUMMARY AND BACKGROUND OF SUBJECT MATTER: It is in the best interests of the citizens of Lakewood, and particularly the City's elderly and low-income population, to eliminate the sales tax on the sale of "food," which is defined in Section 3.01.020 of the Lakewood Municipal Code as "food for domestic home consumption," provided that the resulting loss of revenue can be at least partially offset from other sources so as not to unduly impede the City's ability to provide important and necessary services.
By Ordinance No.O-2005-26, the City Council submitted to the voters of Lakewood in 2005 a ballot issue to authorize the City to increase the sales and use tax rate from two percent to three percent, with an exemption for food, and to authorize the City to collect, retain and spend the revenues from the sales and use tax increase as a voter-approved revenue change, and to further authorize the temporary waiver of the sales tax increase within certain areas of the City.
The temporary waiver of the sales tax increase within certain areas of the City was for one year, commencing on January 1, 2006, and would automatically renew each year thereafter unless rescinded as to one or more of the subject properties by the City Council at least sixty days prior to December 31st of any given year.
The City's revenue projections show that adoption of this Ordinance eliminating the sales tax on food for domestic home consumption and simultaneously rescinding the temporary waiver of the voter-approved sales tax increase within certain areas of the City will result in a net loss of revenue to the City.
The areas of the City in which a temporary waiver of the sales tax increase
will be rescinded are, generally, Colorado Mills and Wal-Mart at Creekside.
The Ordinance is necessary for the immediate preservation of the public peace,
health or safety because of the negative impact of any delay in the effective
date of this Ordinance on merchants in the City, who will be required to recalibrate
machinery and equipment and to educate employees on the changes in the City's
sales tax law, and because of the substantial impact of the changes on the City's
2009 budget process, which is already under way. Accordingly, the Ordinance
would take effect upon the Mayor's signature.
DATE OF FIRST READING: April 28, 2008
DATE OF SECOND READING: May 12, 2008
ORIGINATED BY: Bob Murphy, Mayor
STAFF PERSON RESPONSIBLE: Larry Dorr, 303-987-7601
DOCUMENTS ATTACHED: Ordinance
O-2008-11 Amended
Memorandum
SUBMITTED BY:
Bob Murphy, Mayor
Larry Dorr, Finance Director
REVIEWED BY:
Joni Inman, Director, Mayor and City Manager's Office
Michael J. Rock, City Manager
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