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(a) Any contractor who shall build, construct, reconstruct, alter, expand, modify, or improve any building, dwelling, structure, or other improvement to real property in the city and who shall purchase or otherwise acquire the construction materials and/or fixtures used therefor or any tangible personal property used therein from any source within or without the city and the owner or lessee of the real property who contracts for such improvement to be made shall, be jointly and severally responsible for paying the sales and use tax set forth in this article.

(b) Prior to the issuance of any building or public improvement permit, an amount of tax to be held on deposit shall be computed on the basis of three and three-fourths percent of: (1) 50 percent of the total estimated cost of the building, construction, reconstruction, alteration, expansion, modification, or improvement of the building, dwelling, or structure for which the building permit is issued or the improvement for which the public improvement permit is issued, or such other percentage as may be determined by the director of public works or such director's designee; or (2) 100 percent of the total estimated cost of construction materials and/or fixtures used in the building, construction, reconstruction, alteration, expansion, modification, or improvement of the building, dwelling, or structure for which the building permit is issued or the improvement for which the public improvement permit is issued.

(c) The amount of tax to be held on deposit shall be collected by the city from the contractor, owner, or lessee. With respect to any deposit collected upon the issuance of a building permit, in no event shall the amount of tax to be held thereon be less than three and three-fourths percent of 50 percent of the permit fee determination assessment made by the chief building official pursuant to section 22-2 of this Code.

(d) Upon payment of such deposit, the city shall issue a receipt to the permit holder identifying the address of the property for which the purchase of construction materials and fixtures is made and the permit number. The receipt shall be presented to each retailer or vendor of construction materials or fixtures, who shall allow the permit holder an exemption as to any and all city sales and use tax relating to that specific permit.

(e) It shall be the duty of every retailer or vendor of construction materials or fixtures to maintain a record of each exempt sale under this section, which record shall include the permit number and a copy of the invoice for the exempt sale.

(f) Any contractor, owner, or lessee who has paid a deposit under this section shall have the right to submit to the finance director a claim for the refund of any portion of the deposit in excess of the amount of sales and use tax actually due and owing to the City. Such claim shall be subject to the provisions of section 130-62(c) regarding the refund of overpaid taxes; provided, however, that the deadline for submitting such claim shall be no later than one year following the issuance of a final certificate of occupancy or final inspection by the City of the building, dwelling, or structure for which the building permit is issued, or the improvement for which the public improvement permit is issued or, if the work authorized by such permit has not been fully performed, no later than one year following the date on which such work is abandoned or otherwise terminated. Notwithstanding any provision of this subsection to the contrary, no refund shall be issued where the claim for such refund is submitted over three years following the date on which the deposit is paid.

(g) Within 90 days following the issuance of a final certificate of occupancy or the date of the final inspection by the City of the building, dwelling, or structure for which a building permit is issued, or the improvement for which a public improvement permit is issued, each contractor, owner, or lessee who has paid a deposit under this section shall submit a project report to the City. Such report shall state the actual purchase price of any construction materials and fixtures used in the building, construction, reconstruction, alteration, expansion, modification, or improvement of such building, dwelling, structure, or improvement. At the time the report is submitted, the contractor, owner, or lessee shall remit any sales and use tax due and owing to the City in excess of the deposit. In any event, the contractor, owner, and lessee will be held jointly and severally responsible for the payment of such excess taxes.

(h) Every contractor, owner, or lessee who has paid a deposit under this section shall keep and preserve all invoices, receipts, and statements showing any or all project expenditures including, but not limited to, purchases of construction materials and fixtures for a period of three years following the issuance of a final certificate of occupancy or final inspection or, alternatively, the date on which work is abandoned or otherwise terminated. The finance director may, within that three-year period, conduct an audit of the records of the contractor, owner, or lessee to determine the amount of all the sales and use tax due and owing to the city pursuant to this article. The finance director shall collect any such tax due and owing to the city over and above the amount of the deposit in accordance with the provisions of section 130-62(d) regarding the assessment of unpaid taxes.

(i) No sales or use tax shall be charged on any construction materials or fixtures that are used to build, construct, reconstruct, alter, expand, modify, or improve any building, dwelling, structure, or other improvement to real property, if the owner or lessee of such property who contracts for such improvement to be made is:

(1) The United States government, the state, and their respective departments, institutions and political subdivisions, in their governmental capacities only,

(2) The city or any agency or department thereof; or

(3) Any charitable organization in the conduct of its regular charitable functions and activities.

(j) It shall be the duty of every contractor who has been issued a building or public improvement permit by the City, or owner or lessee of real property who contracts for the improvement authorized by such permit to be made, to pay a deposit upon any change in the exempt status of the person who has contracted for the building, construction, reconstruction, alteration, expansion, modification, or improvement of the building, dwelling, or structure for which the building permit is issued, or the improvement for which the public improvement permit is issued.

(k) Section 130-61 shall not apply to improvements to real property which are not covered by a building permit issued by the building division. Such improvements are deemed to be tangible personal property for purposes of this article. (Code 1979, § 36-19; Ord. No. 2017-13, § 2, 4-3-2017; Ord. No. 2010-39, § 2, 11-8-2010)

Editor's note: Ord. No. 2017-13, § 2, adopted Apr. 3, 2017, amended the catchline of § 130-61 to read as herein set out. Said catchline formerly read "Tax on construction materials and fixtures."