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Development Services > Construction > Fees > Excise Tax

Excise Tax

What is the Excise Tax?

The Road Financing Plan was developed to provide a funding mechanism for the City of Lee’s Summit’s major street network and involves three (3) revenue sources: a ½-cent transportation sales tax, a ½-cent capital improvements sales tax, and a road excise tax (or license tax). The excise tax was approved by the voters of Lee’s Summit on November 4, 1997, and became effective on April 1, 1998. This excise tax is an infrastructure impact fee on applicable new development, redevelopment, development expansion, and change of use throughout the City, as programmed in the capital improvement plan. These funds are used for streets, roads, bridges, and other transportation-related improvements, generally identified in the Thoroughfare Master Plan.

COMMERCIAL PERMIT AND EXCISE TAX APPLICATION

Excise Tax Calculation

Additional vehicle trips are calculated during the afternoon peak hour, when traffic volume on adjacent streets is highest, and street capacity is most affected. The excise tax is calculated by multiplying the number of units by the trip rate to determine the total trips generated. The total number of trips is then multiplied by the tax rate, yielding the total tax liability.

Step 1: Number of Units x Trip Rate = Total Trips

Step 2: Total Trips x Tax Rate = Total Tax Liability

To determine the number of units, you must first determine the appropriate land use for the project. The City of Lee’s Summit has adopted the most recent version of the ITE Trip Generation Manual, which covers the most common types of development in the City. For uses not listed, staff will utilize information in the ITE Manual to find a comparable use. In residential developments, vehicle trips are based on the number of living units, while commercial developments are based on units per 1,000 square feet of building area.

Fee Estimation Tool

Excise Tax Payment

For residential development, the excise tax is paid prior to or at the time of building permit issuance.

There are several options for paying the excise tax for non-residential development. These options are as follows:

  • The excise tax can be paid prior to the issuance of the building permit.
  • The excise tax payment can be deferred to a later date for non-residential uses, but must be paid before a temporary or final Certificate of Occupancy is issued for a structure.
  • The excise tax payment can be deferred until the tenant finishes permits on a shell building development.
  • The excise tax can be placed on a four (4) year payment plan. Payment plans require a bank letter of credit for the full amount due, incur interest, and may be prepaid without penalty. Contact the Development Services Staff at 816.969.1200 for additional information on this arrangement.

Excise Tax Credits

The City will determine eligibility for the requested credit. Contact Public Works staff at 816.969.1800 for additional information regarding excise tax credits.

The applicant may request a tax credit for the development based on the following categories:

A credit in the amount of the full tax will be granted for development constructed by, or by a building contractor on behalf of, a public body for its governmental use.

A credit in the amount of the full tax will be granted for development constructed by, or by a building contractor on behalf of, a school district of the state.

A credit in the amount of the full tax will be granted for the development, rebuilding, or reconstruction of an involuntarily damaged or destroyed building, provided that such building does not result in additional vehicle trips.

A credit in the amount of the full tax will be granted for development constructed by, or by a building contractor on behalf of, an entity that is not subject to any federal, state, or local taxes, including sales, income, personal property, real property, use license, and earnings taxes.

A credit equal to the full tax will be granted to a building contractor who requests a building permit required for a change of use within an existing building that does not generate more traffic than the previous use.

A partial credit will be granted to a building contractor who requests a building permit that is required for a change of use. The credit shall be granted only for the number of trips generated by the previously approved use during the p.m. peak period, and the new trips generated shall be subject to the tax.

A credit will be granted to a building contractor who requests a building permit for property redevelopment. Redevelopment shall apply to development activity that results in the demolition of one or more buildings and the subsequent construction of one or more new buildings on the property, provided that the complete building permit application for a building permit to construct the new building(s) to replace the existing building(s) is filed within six (6) months following demolition of the existing building(s). The credit shall be granted only for the number of trips generated by the previous building(s) during the p.m. peak period, and any additional trips generated by the new buildings shall be subject to the tax.