Proposed "use tax’ riles builders
But some people who build homes –and some merchants who sell them their supplies –think the town should look elsewhere.
The ultimate decision will be up to voters, however, because the Avon Town Council is close to putting on the November ballot a 4 percent “use tax” on all building supplies used in Avon.
“All they want to do is attack development companies,” says developer Kevin Cooke, who also owns the Tile Warehouse in Edwards.
Town Councilwoman Debbie Buckley says the tax –an idea she and her colleagues rejected last summer – isn’t going to have an impact on most people in Avon.
“This to me is not a tax that’s really going to affect most people,” she says. “But the alternative, cutting services, is going to affect most people if, for instance, we have to raise bus fares or recreation center fees.”
The town of Avon, in desperate need of new sources of income to fund services like its bus system, has already slashed its budget.
Town officials say the proposed use tax, however, won’t cost builders extra money because of the way it’s structured.
Avon Finance Director Scott Wright explains how it would work.
When a builder applies for a permit, Wright says, the town assesses the total cost of the project and assumes 50 percent of that will be spent on building materials. The builder then pays 4 percent of that 50 percent and gets a receipt from the town showing he or she has paid the use tax. When the builder goes to buy materials, the builder shows the receipt when paying for them and is exempt from any local sales tax, Wright said.
“When you go and buy something and there’s a sales tax you say “I don’t have to pay it. Please take that off,'” explains Avon Town Councilman Buz Reynolds.
Avon currently doesn’t have a major hardware or building supply
store. What may be driving the council’s decision to revive the use tax is The Home Depot, set to open one of its huge building supplies stores in Avon next summer.
“It would be a big benefit to The Home Depot to put them on a level playing field,” Yoder says.
The Town Council voted grudgingly earlier this summer to start charging people to ride Avon’s previously free buses. But Town Manager Bill Efting has told council members that Avon needs more money to keep the buses running.
“If we’re going to keep up public transportation, we’re going to need some sort of dedicated funding source,” Efting said.
Councilman Pete Buckley has said he still thinks the use tax is a bad idea. He says the town should look elsewhere for more revenue.
“This tax is the wrong thing to do,” Buckley says. “The reason we’re doing it is the town is bleeding red ink.”
Instead of trying to institute a new tax, Buckley says, the town should promote more special events in the summer and winter to boost sagging revenues.
“We haven’t done our jobs, we haven’t done diligence,” he says.
A public hearing will be held Tuesday during the council’s regular meeting before council members vote on whether to put the use tax on the ballot for the November general election.
Debbie Buckley says she’ll vote to put the tax on the ballot – but she wants Avon residents to make the final decision.
“We’ve already cut in other areas, and in my opinion, this is a way to keep some tax dollars in Avon instead of sending them to Edwards,” she says. “I think we should definitely give people a chance to vote.”
Debbie Buckley says she’s particularly concerned about the bus system.
“We don’t really have a funding source,” she says. “We’ve had so many good years that we’ve managed it. Now we need a funding source if we’re going to keep up transportation.”
Cooke, meanwhile, says the use tax won’t benefit anyone.
“They’re starting their propaganda to get this approved and it’s nothing more than a 4 percent tax,” he says. “Maybe they should re-address the problems they’re having because this is not going to save them money.”
Matt Zalaznick covers public safety, Eagle County Courts and Avon/ Beaver Creek. He can be reached at 949-0555, ext. 606, or via e-mail at email@example.com.