Exemptions

$50,000 EXEMPTION
The proposed Use Tax on Construction Materials exempts projects that are $50,000 or less in a calendar year. This exemption is intended to exclude home improvement projects and other small projects from paying the Use Tax. This exemption is much higher than exemptions in other communities (Vail has a $10,000 exemption).

UNIFORMITY WITH OTHER JURISDICTIONS: All other towns in Eagle County have a Use Tax on construction materials which matches the sales tax in those towns. Adoption of a Use Tax in Avon will establish uniformity with other towns in Eagle County.

CAPTURING REVENUES FROM LARGE PROJECTS: Large construction projects are increasing in the Town of Avon. A Use Tax on construction materials will capture more tax revenues from large construction projects which will in turn help the Town pay for community housing, including the acquisition of land for housing, construction of housing, extension of public infrastructure to serve community housing development, purchase of deed restrictions, down payment assistance programs, partnerships with public and private entities to develop community housing.

PAYMENT DEFERRAL FOR SINGLE-FAMILY AND DUPLEX: The Use Tax on Construction Materials allows Single-Family and Duplex construction projects to defer of payment of the Use Tax until the issuance of a Temporary Certificate of Occupancy or Certificate of Occupancy. This is intended to reduce the amount of upfront construction financing required for individual residential projects.

EXEMPTION FOR COMMUNITY HOUSING PROJECTS: The Use Tax on Construction Materials would not apply to Community Housing projects, and therefore will not increase the cost for Community Housing projects in Avon.

VILLAGE (AT AVON): The existing Development Agreement with Traer Creek LLC states that if a Use Tax is adopted then the revenues would be credited and pledged to Traer Creek Metropolitan District to finance public improvements in the Village (at Avon). The Development Agreement commits the Town of Avon to provide a credit of Town’s taxes until debts for public infrastructure are paid off. The adoption of a Use Tax can be expected to generate significantly more revenue from new construction than the imposition of the Sales Tax on construction materials; therefore, additional revenues from a Use Tax would accelerate the repayment of debt obligations backed by Town of Avon tax credits and reduce the timeframe for when the Town may begin collecting sales tax, accommodations tax and real estate transfer tax in the Village (at Avon).

FINANCIAL ANALYSIS: The following chart depicts Use Tax that would have been collected over the last 10 years.