HomeMy WebLinkAbout1997-02-05 Minutes numberedDate:
To:
From:
Re:
City of Iowa City
MEMORANDUM
February 28, 1997
Mayor and City Council
City Clerk
Council Work Session: February 5, 1997 - Joint meeting with Johnson County officials
concerning local option sales tax
Iowa City: Novick, Baker, Lehman, Norton, Thornberry. Staff: Atkins, Woito, Karr, Yucuis
Cedar Rapids: Bob McMahan
Coralville: Fausett, Herwig, Schnake
Johnson County Board of Supervisors: Jordahl, Stutsman
North Liberty: 'Doermann
Solon: Croy, Studt
University Heights: Swanson.
Others: Susan Horowitz, Jim Jacobson (CR Gazette), Brain Sharp (IC Press Citizen). ~
Tapes: 97-24, all.
Local Ol~tion Sales Tax Presentation 97-24 $1
Don Burr, Iowa Department of Revenue, presented information.
Burr stated his role is to present the rules and regulations of local option sales tax. Burr noted
that the Secretary of State administers the Local Option election procedures.
Burr explained the majority of voters in an election must approve the local option sales tax, it is
the majority rules. There are two ways the local option sales tax is placed on a ballot:
1. A petition is presented to the county board of supervisors.
It must be signed by the eligible voters of the whole county - the number of
signatures must be equal to 5% of the people in the county who voted in the last
preceding state election.
2. A motion that is adopted by the board of supervisors for the unincorporated area or by the
.city council.
The governing body must represent at least half of the population of that county.
2
Burr said the local option sales tax can be voted on in two different elections: the general election
or a special election. The vote cannot be held any sooner than 60 days after the notice of the
ballot proposition is published in the newspaper. Burr explained to repeal the tax, an election may
be called in the same manner (a general or special election) and under the same conditions as
the election which approved the tax. Burr noted that in all of the cities that have passed the local
option sales tax, it has been at the maximum 1% rate.
Burr reviewed the regulations regarding cities contiguous to each other. Burr said that all cities
contiguous to each other are treated as one large incorporated area; it is possible that one of
those cities do not have to vote the local option sales tax in, it can be separate, or if the local
option sales tax is voted in, the city could come back later and request that they not be in it.
Burr explained what must be placed on the local option sales tax ballot. The ballot must specify
the following:
type of tax, local option sales tax
the rate cannot be more than 1%
the date it will be imposed
the approximate amount of local option tax revenue that will be used for property tax
relief. That doesn't mean there has to be any property tax relief
the specific purpose of which the local option sales tax is going to be used
A sunset clause may be placed on the ballot.
Burr stated the local option sales tax is imposed in the same manner as sales tax. The
exceptions to that are motor fuel and special fuels, room rental subject to the local option Hotel
Motel Tax, sales of equipment by the State Department of Transportation, sales of natural gas
or electric energy subject to city or county imposed franchise fee or users fee, sale of lottery
tickets and receipts of other games of chance conducted by the State Lottery, and the sale of
direct to homes satellite service.
Burr explained the distribution formula is based on two items: population and the property tax
base.
-75% of it is based on the population of that city, 25% is based on property tax relief.
-Property tax is figured from July 1, 1982 through June, 1985.
-The population is based on the last federal census that was taken.
Burr said after the local option sales tax has been passed, it is up to the city or county to make
sure the Iowa Department of Revenue is notified within ten days and the Department of Revenue
will mail out all of the mailings and administer the tax.
A question and answer period followed.
County Attachment: Local Option Sales Tax "The Most Frequently Asked' Questions and
Answers"
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