Title
An Ordinance Creating Section 452 (Eligible Affordable Housing Projects) of Part 4 (Exempt Transactions, Commodities and Persons; Deductions) of Article 7 (Sales And Use Tax) of Chapter 2 (Business Licensing, Liquor Regulation and Taxation) of The Code of the City Of Colorado Springs 2001, as amended, pertaining to Eligible Affordable Housing Projects
Presenter:
Charae McDaniel, Chief Financial Officer
Body
Summary:
In 2022, City Council approved adding a new section to the Sales Tax Code that allows the owner of an Affordable Housing multi-family project to qualify for a refund of City taxes paid for the purchase or use of construction materials.
The Ordinance being considered currently would add a new section in the Sales Tax Code to create an exemption for Affordable Housing Projects that are wholly or partially owned by a housing authority or an entity in which a housing authority has a direct ownership interest. Eligible projects can be rental housing or for-sale housing that meets the Affordable Housing income thresholds.
Affordable Housing Projects that are solely owned by a developer and the Housing Authority is not involved may still qualify for the refund but would not be eligible for the exemption.
Background:
The Ordinance creates an Eligible Affordable Housing exemption for sales and use tax on construction and building materials, as defined in section 2.7.104, fixtures, and appliances purchased, used, or consumed for and during the construction of the eligible project (collectively "qualifying material"), which aligns directly with the State of Colorado's Affordable Housing exemption. The sales and use tax exemption would be allowed for affordable housing projects owned by, leased to, or under construction by an entity that is wholly or partially owned directly by either a housing authority or an entity in which a housing authority has a direct ownership interest. An eligible project could be rental housing or for-sale hou...
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