ITEM TITLE:
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Consider approving Council Policy 04-07: Allocation of a portion of City’s use tax to support PROPEL 2040 Projects.
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INITIATOR: Mayor Stan Booker
STAFF INFORMATION SOURCE: Rebecca Johnson, Finance Director
Timothy Wilson, Deputy City Attorney
BACKGROUND: On August 27, 2024, the citizens of Lawton approved an ordinance amending the City’s sales tax code, said ordinance levying and extending an existing excise tax of two and one-eighth (2.125%) (the “Propel 2040 Sales Tax”) in addition to all other excise taxes assessed and levied by the City of Lawton, Oklahoma and all other taxing authorities, upon the gross proceeds or gross receipts derived from all sales taxable under the sales tax laws of the State of Oklahoma; providing for extending the term of the existing excise tax from terminating on December 2034, to a new termination date ending December 31, 2040, with the exception of a one percent (1.00%) existing excise tax which shall be permanent for an indefinite period; providing that the excise tax levied by the amended Paragraph (D) under Section 10-2-205 of Article 10-2 of Chapter 10, Lawton City Code, 2015, shall be cumulative to all other excise taxes levied by Chapter 10 or any other taxing authority.
In addition to sales tax, the City also has a use tax that is simultaneously collected with all sales tax collections and levied at the same rate as sales tax levied. City’s use tax is set out in Article 10-8 of Chapter 10 of Lawton City Code. The PROPEL 2040 projects were planned to be funded using revenue from both the PROPEL 2040 Sales Tax and the use tax levied and collected in connection with the PROPEL 2040 Sales Tax at the same percentage as the PROPEL 2040 Sales Tax. Without the allocation of a portion of the use tax, there will be insufficient funds for the PROPEL 2040 projects. The proposed policy directs staff, in addition to allocating to Propel 2040 projects the revenue from the tax of two and one-eighth percent (2.125%) sales tax (the “PROPEL 2040 Sales Tax”) approved by the citizens of Lawton, which is done outside of this policy, to also allocate to Propel 2040 projects the City’s Use Tax that is collected and levied in connection with the PROPEL 2040 Sales Tax collected for the PROPEL 2040 projects at the same percentage as the PROPEL 2040 Sales Tax from the city’s annual use tax revenue. Specifically, it is the intent of this policy that the amounts collected from the use tax levied and collected in connection with the PROPEL 2040 Sales Tax at the same percentage of two and one-eighth percent (2.125%) as the PROPEL 2040 Sales Tax also be allocated to Propel 2040 projects. This directive for use tax allocation shall commence for applicable use tax revenue received beginning October 2024 and continue thereafter until this policy is amended or repealed by city council.
EXHIBIT: Council Policy 04-07: Allocation of a portion of City’s use tax to support PROPEL 2040 projects.
KEY ISSUES: N/A
FUNDING SOURCE: City Use Tax
STAFF RECOMMENDED COUNCIL ACTION: Approve Council Policy 04-07.