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Board of County Commissioners <br />July 9, 2013 <br />Page Two <br />To mitigate this tax burden, Verotown has requested that the Third Amendment be revised to allow <br />Verotown to distribute 30% of its taxable income to its partners/members, thereby providing them with <br />funds to pay the taxes. The figure of 30% is a rough estimate of the amount of taxes that each <br />partner/member will pay on his or her share of the income. <br />County staff understands and appreciates this issue, and agrees that Verotown should be allowed to <br />distribute funds to its partners/members so they can pay income taxes on their allocated share of the net <br />income. County staff also notes that this concept — distributing funds to pay taxes on allocated, but not <br />distributed, income — is not unique to Verotown. Many entities which are required by tax laws to allocate <br />income to its owners — such as partnerships, sub -S corporations, limited liability companies, etc. — follow <br />the same practice. <br />Because Verotown has never signed the Third Amendment approved by the Board on June 4, the process <br />to implement the change simply involves Board approval of a new version of the Third Amendment <br />incorporating the change, and signature of the new version by both parties. <br />A copy of the new version of the Third Amendment, with the change in section 11 highlighted, is <br />attached. <br />RECOMMENDATION. <br />The County Attorney's Office and administrative staff recommend that the Board approve the new version <br />of the Third Amendment to Facility Lease Agreement, and authorize the Chairman to sign it on behalf of <br />the Board. <br />ATTACHMENT(S). <br />Proposed Third Amendment to Facility Lease Agreement <br />ASP: LAC <br />F..IAttorneyVlndnIGENERALIB C CIAgendo MemoslDodgen— (VBM IO.do <br />134 <br />