Exh 7B
AGENDA ITEM #7B
,. AUGUST 26, 2002
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CITY OF ATLANTIC BEACH...
R : ~ _ CITY COMMISSION MEETING
~,., STAFF REPORT
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~.., AGENDA ITEM: ORDINANCE 70-02-16: AN ORDINANCE OF THE CITY
~ OF ATLANTIC BEACH, FLORIDA ADOPTING A NEW LOCAL
` ~ COIV~IUNICATI4NS SERVICE TAX RATE; PROVIDING FOR INTENT;
PROVIDING FOR. THE ADOPTION OF A NEW LOCAL
~ ~ CO1~~IUrtICATIONS SERVICE TAX RATE;: PROVIDING FOR NOTICE TO
THE DEPARTMENT OF REVENUE; PROVIDING FOR SEVERABILITY;
r~* PROVIDING FOR AN EFFECTIVE DATE.
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SUBMITTED BY: Nelson Van Liere, Finance Director
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~ DATE: Au ust 14, 2002
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B,ACKGI20UND: The Florida Legislature passed the "Communications Services Tax
t Simplification Law" creating chapter. 202, Florida Statutes. This law was
intended to create a tax reporting system that was more streamlined by allowing
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~ -the state to collect and then remit to the municipalities. The rates were
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`determined by the state based on revenues being received at the time. In the City
of Atlantic Beach, we had in place a 10% tax rate on the basic land-line phone
~"" service provided by Bell South Most jurisdictions had previously converted to a
7% tax on all communications services, a larger, faster. growing tax base. This
means that when the City of Atlantic Beach changed to the new rates as
"~' determined by the state, we also changed to a new tax base including far more
services than before. As a result, the City is now receiving much more revenues
than the state had estimated. A portion of the. new law would require those
,~"" municipalities that adopted state provided rates, to adjust those rates after an
evaluation period to a new rate based on a revenue neutral formula.
Unfortunately.for the City of Atlantic Beach, this revenue neutral cap as
calculated would mean we would be .required to lower our rates substantially and
our revenues for the General Fund would decrease. To avoid being subject to a
cap, which would be low compared to other cities, we can adopt a new rate by
ordinance. The rate recommended is the state maximum rate of 5.10% and is also
-the same rate adopted by Jacksonville and Jacksonville Beach It seems ,
appropriate that the customer base for this area be charged the same rates for the
same services.
,,~ BUDGET: The proposed budget of $425,000 for FY-03 was' based on the assumption
that we would be subject to the state imposed cap. However, bypassing this
`~ ordinance at the same rate as Jacksonville and Jacksonville Beach, we can expect
~., considerable more revenues.. The tax base is still being refined, but we may
receive as much as $625,400,
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~. AGENDA ITEM #7B
AUGUST 26, 2002.
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. Ordinance 70-02-16
"~' AN ORDINANCE OF THE CITY OF ATLANTIC BEACH,
~_, FLORIDA _ ADOPTING A NEW LOCAL
COMMUNICATIONS SERVICE TAX RATE; PROVIDING
~" FOR INTENT; PROVIDING FOR THE ADOPTION OF A
4 ~ NEW LOCAL COMMUNICATIONS SERVICE TAX RATE;
PROVIDING FOR NOTICE TO THE DEPARTMENT OF
REVENUE; PROVIDING FOR SEVERABILITY
~~ ' PROVIDING FOR AN EFFECTIVE DATE.
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WHEREAS, during the 2000 Regular Session, .the Florida Legislature passed
„~„ the "Communications Services Tax Simplification Law", creating Chapter
202, Florida Statutes; and
,~„ WHEREAS, section 202.20(1)(a), Florida Statutes, set the local
communications services tax conversion rate for the City of Atlantic
Beach, Florida for the period October I, 2OOl through September 30,2002
~, at 6.40%; and
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WI3EREAS, section 202.20(1)(b), Florida Statutes, set the local
'--, communications service tax rate for the City of Atlantic Beach, Florida
t beginning October 1, 2002 at 6.02%; and
~+ WHEREAS, section 202.19(2), Florida Statutes, authorizes the City of Atlantic
Beach to adopt a local communications services tax at a rate of up to
5.1 %. This rate does not include the add-on of up to .12% for
°~ municipalities which choose not to levy permit fees, nor does the xate
supersede conversion or emergency rates authorized by section 202.20,
Florida Statutes, which may be in excess of the maximum rate; and
', WHEREAS, the City Commission of the City of Atlantic Beach, Florida desires
to adopt a lower local communications service tax rate,
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NOW THEREFORE, BE IT ENACTED BY THE CITY COMMISSIONON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH,
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., FLORIDA: that;
SECTION 1. Intent
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It is the intent of the City of Atlantic Beach Florida to adapt a lower new
local communications service tax rate.
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` AGENDA ITEM #7B
AUGUST 26, 2002
ORDINANCE 70-02-16
CITY OF ATLANTIC BEACH
......PAGE TWO
SECTION 2. Adoption of the Local Communications Service Tax Rate
The local communications service tax conversion rate established under
` section 202.20, Florida Statutes, for the City of Atlantic Beach is presently
6.40%. Beginning October 1, 2002 the rate is scheduled to be changed
statutorily to 5.90%. The local communications services tax rate for the
` ; '' City of Atlantic Beach, Florida is hereby changed to 5.10%. This changed
rate does not include the add-on of .12% as authorized by section 337,
~^ Florida Statutes. In the Aggregate, the total rate is to be 5.22% effective
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f ; January 1,..2003....
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` SECTION 3. NOTICE TO THE DEPARTMENT OF REVENUE _
~"" The City of Atlantic Beach, Florida directs that notice of the above tax
decrease be provided to the Department of Revenue by September 1,
2002.
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SECTION 4. SEVERABILITY
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The provisions of this ordinance are declared to be severable and if any
section, sentence, clause or phrase of this ordinance shall, for any reason,
be held to be invalid or unconstitutional, such decision shall not affect the
E ~ validity of the remaining sections, sentences, clauses and phrases of this
ordinance, but the same shall remain in effect, it being the legislative
:intent that this ordinance shall stand notwithstandingthe invalidity of any
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`'`° SECTION 5. REPEALER
`" All ordinances in conflict herewith are, to the extent of such conflict,
T ' hereby repealed.
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SECTION 6. EFFECTIVE DATE....
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~ This ordinance shall take effect immediately upon its passage by the City
~' Commission of the City of Atlantic Beach, Florida.
~ ; Passed by the City Commission on first reading this day of August
2002.
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AGENDA ITEM #7B
AUGUST 26, 2002
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r-• ORDINANCE 70-02-16
CITY OF ATLANTIC BEACH
PAGE THREE
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Passed by the. City Commission on second .reading this day of
August 2002.
John S. Meserve
'""" Mayor /Presiding Officer
Approved as to Form and Correctness
Alan C. Jensen, Esquire
~"" City Attorney
ATTEST:
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Maureen King, CMC
t^' -City Clerk
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....~ ~ AGENDA ITEM #7B
AUGUST 26, 2002
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~,,, Local Communjcatlons Selrvices,Tax ~ ° Rat ~2'
Notification of Tax Rate Change -
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• oc aEVeNUE THIS ApEA FOR DOR USE ONLY
"^ Mall to: faeCe~oed:
REVENUE ACCOUNTING
COMMUNICATIONS SERVICES TAX Approved:
tROR1DA DEPARTMENT OF REVENUE 6r
PO BOX 8808
TALLAHASSEE FL 3?314.6809 Oate:
NOTE: A copy of ttte ordinance authorizing the rate change is required before such change will became effective.
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Submitted by: ~ ~ `, ' ~ .
Name of Jurisdiction
Exlating tax rate New authorized tax rate
Effective date (new rate) Repeal date (new rate)
Gontact person for rate changes:
Name . Telephone number
Tide E-mad adWeae
Streeup0 Sox C1ty/5tsoa2lP
Signahire Title
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PrIrN name Date
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Inatructlona for Completing Form DR-700021
Governing authorities must use Form DR-700021 to the Department of the new tax rate immediately
notify the Department of tax rate changes. A copy upon its adoption, The emergency ordinance or
of the ordinance authorizing the change is also resolution shall specify the eltectlvs date for the
required beta~e such change will become effective. adjusted rate, which shall be no less than fi0 days
~ after the date of adoption of the ordinance or
Rate Changes resolution; and shall be effective with respect to
taxable services induded on bins that are dated on
Pursuant to section 202.20(2), Florida Statutes, for the first day of a month Subsequent to the expiration
the period October 1, 2001 through September 30, of the 60-day. period.
2002, the goveming authority may adjust the rate of
the logl communications services tax through an Pursuant to s. 202.21, F.S., far annual rate
emergency ordinance or resolution for the periods changes, the goveming authariry shat! notify the
ending December 31.2001; March 31, 2002; June Department by September 1 prior to the January 1
30, 2002; and/or September 30, 2002 My effective date.
goveming authority that adjusts its rate shall notify.