Item 2G: Approval of Construction Excise Tax

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Eugene City staff has determined that it may be feasible to collect a construction excise tax on behalf of a school district but potential administrative costs are a concern. Under SB 1036, governments are allowed to retain up to 1% of the tax revenue to cover administrative costs. It is the City’s intention to recover 100% of the actual costs for administering this tax. Any administrative costs above 1% would need to be reimbursed from other school district revenues besides the construction excise tax. RELATED CITY POLICIES The City has no specific policy concerning collection of taxes for other agencies. There are precedents; the City collects Transient Room Taxes on behalf of Lane County and other local governments. COUNCIL OPTIONS The council has the following three options: 1.Direct the City Manager to engage in discussions towards an intergovernmental agreement with a school district and, if agreement is reached, to collect the tax on behalf of the district; or 2.Direct the City Manager not to engage in discussions towards an intergovernmental agreement with a school district; or 3.Take no action on this topic. CITY MANAGER’S RECOMMENDATION The City Manager recommends that the City engage in discussions towards an intergovernmental agreement regarding a construction excise tax upon request by a school district and, if agreement is reached, to collect the tax on behalf of the district. SUGGESTED MOTION Move to direct the City Manager to engage in discussions towards an intergovernmental agreement regarding a construction excise tax upon request by a school district and, if agreement is reached, to collect the tax on behalf of the district. ATTACHMENTS None. FOR MORE INFORMATION Staff Contact: Larry Hill Telephone: 682-5722 Staff E-Mail: larry.k.hill@ci.eugene.or.us F:\CMO\2008 Council Agendas\M080225\S0802252G.doc