Avon Town Council to examine taxes on building materials | VailDaily.com

Avon Town Council to examine taxes on building materials

AVON — Use taxes are something builders encounter frequently in their line of work. The idea is, if you’re buying materials somewhere else, but using them here, then you should pay sales taxes on those items here.

Use taxes have been banned in Avon since 2002, when the town held an election on the issue, but builders doing business in town have been paying a similar tax after receiving a letter that says “The town of Avon … does not exempt construction materials from sales tax. As a contractor pulling a permit, this means that you will need to pay sales tax to your vendors for all taxable materials.”

This has led many to wonder, what’s the difference?

The Town Council plans to examine that question at their Dec. 8 meeting, but in the meantime, town attorney Eric Heil has offered the following explanation:

“If they buy an expensive X-ray machine from New York and it is a one-time purchase delivery, that would be taxable under use tax but is not taxable under sales tax, because Avon does not consider the one-time delivery to be engaged in business in town.”Eric Heil,Town attorney, Avon

“In construction law, in the section that looks at sales and use tax, they recognize there is a body of law for state law, but then there’s home rule communities governed by independent law,” Heil said. “ If the wording is different from the state law, then it could possibly be interpreted differently.”

Home Rule Community

Avon is a home rule community, and in the town’s code there is a provision that says delivery of materials to a construction site more than once per year means Avon considers that construction site to be the point of sale.

“That’s where we’re catching a lot of construction materials, because almost all of them are delivered more than once per year, and they deliver to a site, and we assess the sales tax on that and consider that to be the point of sale,” Heil said.

Heil acknowledged that this begs the question if Avon did collect use tax, what would the town be collecting on that they currently are not? He used the Centura Health medical center, currently under construction at Nottingham Road and Buck Creek Road, as an example.

“If they buy an expensive X-ray machine from New York and it is a one-time purchase delivery, that would be taxable under use tax but is not taxable under sales tax, because Avon does not consider the one-time delivery to be engaged in business in town,” Heil said.

If that X-ray were to be a some assembly required machine, however, and was delivered in two shipments, then the entire machine — both deliveries — could be subject to Avon sales tax, Heil said.

Individual Cases

The code also allows for an appeals process where anyone who doesn’t agree with the taxes can have their case looked at on an individual basis.

“I don’t think I’ve ever had to look at one in the years I’ve been working for Avon, but there is a process where if someone disagrees with how it’s being applied then they can ask that to be reviewed,” Heil said.




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