Discussion and possible action on any and all matters regarding the Second Reading of Ordinance No. 354.  An ordinance of the Mayor and City Council of the City of San Luis, Arizona, amending the Tax Code of the City of San Luis by adding Subsection 7A-460(d) relating to the sales tax rate for Retail Sales of Tangible Personal Property; adding Subsection 7A-610(e) relating to the use Tax Rate for Purchases of Tangible Personal Property; establishing an effective date; repealing Ordinance No. 348; repealing any conflicting provisions; and providing for severability.  (Kay M. Macuil, City Attorney)

A. Approval of Second Reading of Ordinance 354 by title only
B. Approval and adoption of Ordinance 354

City Council passed Ordinance No. 348,  amending the San Luis Tax Code and  providing for a tiered sales tax rate of 1.5% on single items costing $2,500.00 or more while the sales tax on remaining items of lesser value have no change at 4%.  This item has returned to City Council due to  technical changes required by the Arizona Department of Revenue (ADOR).  These changes do not change the substance of the ordinance creating a tiered tax.  However, a new Ordinance No. 354 is required to replace Ordinance No.348 so that there is no confusion.

Under State Law, City Tax Codes must go through review by ADOR for uniformity through-out the State.  This is done so that those who are subject to taxes in multiple cities can more easily understand their tax responsibilities with every City having the same organization of their tax codes.

Tax Codes differ from any type of City Code due to State law requiring a review by ADOR and requiring 60 days (rather than 30 days) after passage before the law becomes effective.  When Ordinance No. 348 was submitted to ADOR, the review required that the section numbers be changed and that a section be added to comply with Federal Interstate Commerce requirements to include use tax on tangible personal property and have the same tiered tax rate.

The City of San Luis' membership in the Arizona League of Cities and Towns entitles the City of San Luis to their expert assistance with Tax Code issues.  Tax Policy Analyst, Lee Grafstrom, made sure the use tax language will pass the ADOR review.

The City of San Luis has contracted with Tax Specialist Albert Holler to keep the City of San Luis Tax Code up to date with the ADOR changes that are required from time to time due to State Legislative action.  Mr. Holler made sure the code sections used would pass the ADOR review.
 
This item has been properly noticed in the newspaper as required under Arizona law.  After the Second Reading  and passage of the current ordinance, this ordinance will be effective on August 1, 2016.

A. I MOVE TO APPROVE THE SECOND READING OF ORDINANCE NO. 354 BY TITLE ONLY.
B. I MOVE TO APPROVE AND ADOPT ORDINANCE NO. 354.