ORDINANCE NO. 4728

AN ORDINANCE AMENDING AND REINSTATING SECTION 3.12.070 OF TITLE 3 OF THE GRAND JUNCTION MUNICIPAL CODE CONCERNING THE EXEMPTION FROM SALES TAX OF SELLER INSTALLED AIRCRAFT PARTS

RECITALS:

In August of 2013 the City Council adopted Ordinance 4596, a modification to the City’s tax code. The Ordinance exempted from City sales and use tax parts that are permanently affixed to or attached, by the seller, as a component part of an aircraft for a second three-year term. The change was again contemplated as an economic development incentive. The City Council determined that the incentive was necessary because of the ever increasing competition for aircraft work and should continue.

The most recent change has been in effect for three years and in accordance with the original approval within sixty days of the third anniversary of the adoption of the Ordinance the City Council committed to consider the effectiveness of the Ordinance at achieving its stated purposes. Without further action by the City Council, the terms and provisions of Ordinance 4596 shall expire on the third anniversary of the effective date thereof.

It is reported by Grand Junction Economic Partnership (GJEP) that the exemption has enhanced Grand Junction’s competitive position within the aviation industry. It is also reported that 125 employees have been added in the industry and nearly $15 million in expansion investment has occurred since 2010 and the initial adoption of the exemption. The recommendation from GJEP is that the exemption be extended once again.

Because of the very mobile nature of aircraft, the owners and operators thereof have a high degree of flexibility when it comes to contracting for repair, restoration and refurbishment of their airplanes. Grand Junction has world renowned providers of aircraft services, instrumentation installation and aircraft restoration operations. The extension of the exemption is consistent with State law and many other states.

The City Council is committed to a fair and responsible tax code. The City Council is also committed to the principles of economic development and local prosperity. Part of that commitment is the recognition that tax policy is an effective way to sustain and grow our local economy and that from time to time adjustments must be made to it for the betterment of the community. As such the extension of the exemption shall again be reviewed in three years.

The City Council finds that this ordinance is consistent with its policy and purposes and is protective of the City’s health and general welfare and

NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAND JUNCTION:

That Section 3.12.070 of the Grand Junction Municipal Code shall state as
follows:

3.12.070 Exemptions from sales tax.

The tax levied by GJMC 3.12.030(a) shall not apply to the following:

(LL) THE SALE OF TANGIBLE PERSONAL PROPERTY THAT IS TO BE PERMANENTLY AFFIXED OR ATTACHED BY THE SELLER, AS A COMPONENT PART OF AN AIRCRAFT. PARTS SOLD TO AND TO BE PERMANENTLY AFFIXED OR ATTACHED BY THE PURCHASER OR SOMEONE ON BEHALF OF THE PURCHASER, OTHER THAN THE ORIGINAL SELLER ARE NOT EXEMPT FROM TAX.

THE EXEMPTION INCLUDES BUT IS NOT LIMITED TO, PARTS FOR THE AIRCRAFT’S ENGINE(S), FUSELAGE, LANDING GEAR, INSTRUMENTATION, INTERIOR (SEATS, INTERIOR FIXTURES, FINISHES AND TRIM) AND PAINT.

Sunset Clause. Within sixty days of the third anniversary of the adoption of this ordinance the City Council shall consider the effectiveness of the ordinance at achieving its stated purposes. Without further action by the City Council, the terms and provisions of this ordinance shall expire on the third anniversary of the effective date hereof.

Introduced on first reading the 16^th day of November, 2016 and ordered published in pamphlet form.

Passed and Adopted on second reading the 7^th day of December, 2016 and ordered published in pamphlet form.

           /s/ Phyllis Norris      

           President of the City Council

ATTEST:

/s/ Stephanie Tuin      

City Clerk