Orem city officials are hoping the Utah League of Cities and Towns can help take the sales tax burden off their backs.
Two of three resolutions proposed to the league deal with the sales tax issue, or specifically SB 191 - which amended Utah Code Sections 59-12-102 and 59-12-103 to assess sales tax on admission and user fees for publicly owned recreational facilities.In addition, SB 238 removed the sales tax exemption for construction material used in projects owned and operated by local governments and school districts.
Since passage of the two bills, Orem's fees for recreation center use have consequently risen. And costs have escalated for the Children's Library addition to the Orem Library and the Senior Friendship Center.
Orem maintains that local governments own and operate public facilities such as the recreation center as a service to the community on a non-profit basis.
The operation is generally subsidized by taxes levied by the city and has been tax exempt in the past.
Orem's resolution calls for an amendment to return the city to the tax-exempt state.
According to Orem's memorandum, by forcing cities to pay sales tax on construction materials for projects owned and operated by them, it takes revenue away from cities and local governments and districts and gives it to the state.
Eighty percent of all sales tax revenue already goes directly to the state, says the memo.
"The cost to the cities, towns and schools in the state will exceed several million dollars," it reads.
Orem's resolution calls for a restoration of the tax exempt status to local governmental entities whether the work is done by independent contractors or in-house employees.
At the same time, Orem is asking for a wording change in the Utah Code Annotated Title 10, Chapter 9, Part 8 - Subdivision, including sections 10-9-808 through 10-9-810.
That would change references to "governing body" and "legislative body" to read "chief executive officer or executive body designated by the chief executive officer," giving the Planning Commission power to approve subdivisions.
Orem's City Council voted unanimously to send the trio of resolutions to the league, anticipating the league would band together in getting the amendments through the 1995 legislative process.