Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Uniform Local Sales and Use Tax Annotations


Annotation 702.1050

702.1050 Redistribution of Local Tax—When Not Done. Uniform Local Sales and Use Tax Law section 7209 provides that the Board "may" redistribute local tax. The word "may" used in legislation is to be given its common and ordinary meaning and to be construed as permissive or conferring discretion. It is to be construed as mandatory only when it appears from the terms of the statute in which it is used that it was the clear policy and intent of the legislature to impose a duty, and not simply to confer a discretionary power. Section 7209 was enacted not to confer reallocation authority upon the Board but to put a limit on reallocations in order to avoid causing the losing city severe financial hardship. The legislative history of section 7209 indicates that the Legislature wanted the Board to have discretion in deciding whether or not to make a reallocation.

Local tax revenue should not be reallocated in circumstances where the factual and legal issues that resulted in a prior misallocation are only just now being resolved. For instance, some transactions, like Internet sales, are evolving areas with new issues arising all the time. In view of the fact that the losing city will have already spent the money previously allocated to it, reallocations should not be made under such circumstances. 10/30/02. (2003–3).