Memorandum

City of Lawrence                             

Parks and Recreation Department

TO:	David L. Corliss, City Manager
FROM:	Ernie Shaw, Interim Parks & Rec Director
CC:	Debbie Van Saun, Asst. City Manager Ed Mullins, Finance Director John Morris, Golf Course Supervisor
Date:	3-28-07
RE:	Sales Tax on Golf Carts Eagle Bend

Please place the following item on the City Commission consent agenda for consideration at their April 3, 2007 meeting:

Sales tax adjustment for golf course rentals at Eagle Bend.

Background Information

Staff recently received a clarification from the Department of Revenue regarding sales tax issues involving the Eagle Bend golf course.  The City of Lawrence leases golf carts from a provider and that lease arrangement is exempt from sales tax.  However, when the City in turn “leases” a cart to a golf course patron, the City needs to collect sales tax on that transaction.  Greens fees are not subject to sales tax. 

Staff Recommendation

In order to comply, and to avoid a revenue impact on the golf course fund, staff recommends an adjustment as follows:

· 9 hole golf cart rental: add sales tax; adjust from $9.00 to $10.00

· 18 hole rental: add sales tax; adjust from $14.00 to $15.00

The golf course accounting system can be adjusted in order to implement the recommended fee at Eagle Bend effective April 4, 2007.

Action Item

Authorize staff to adjust Eagle Bend golf course cart rentals to include the collection of sales tax as follows: 9 hole rental - $10.00; 18 hole rental - $15.00