May 01

When a Tax Increase Isn’t a New Tax

When a Tax Increase Isn’t a New Tax

High court rules incidental, minimal tax revenue increase doesn’t violate TABOR

Pernell v. People
What might have been a precedent-setting decision in Colorado criminal case law instead became a ruling on harmless error, as the Colorado Supreme Court determined.

According to the Colorado Supreme Court, legislation that causes an incidental and de minimis increase in tax revenue does not amount to a “new tax” or “tax policy change” under the Taxpayer Bill of Rights, and consequently doesn’t require voter approval.

The decision issued April 23 in TABOR Foundation v. Regional Transportation District settles a 2013 lawsuit against RTD, Scientific and Cultural Facilities District and Colorado Department of Revenue that claimed House Bill 13-1272 violated TABOR because it resulted in a revenue increase without voter consent. The legislature passed the bill to realign sales taxes levied by RTD and SCFD with the state sales tax. Although the districts and state share a taxable base tangible personal property — the taxes levied had diverged over the years due to various differing exemptions.

House Bill 1272 removed exemptions from the districts’ taxes on sales of cigarettes, direct-mail advertising materials, candy, soft drinks, and nonessential food containers. Its passage resulted in a projected tax revenue increase of 0.6 percent for the districts, which amounted to less than 1 percent of SCFD’s budget and one thousandth of RTD’s budget. The TABOR Foundation sued the districts, claiming the removal of exemptions constituted a “new tax” or “tax policy change” because they resulted in the districts taxing things they had not before.

But the Supreme Court disagreed, and upheld the districts’ analysis of House Bill 1272’s purpose to simplify tax collections and ease administrative confusions associated with the exemption divergences. The court concluded the revenue increase was incidental and de minimis, so it did not violate TABOR.

To read this story and other complete articles featured in the April 30, 2017 print edition of Law Week Colorado, copies are available for purchase online.

May 01

Colorado’s Supreme Court has once again weakened taxpayers’ rights

Colorado’s Supreme Court has once again weakened taxpayers’ rights

© Getty

The Colorado Supreme Court has issued another in a long string of rulings weakening the state’s Taxpayer Bill of Rights — the part of the Colorado constitution called “TABOR.”

The voters adopted TABOR in 1992 to protect Colorado’s fiscal and economic health. TABOR guarantees the rights of citizens to vote on certain hikes in government spending, taxes, and debt. Unfortunately, each anti-TABOR court decision has become precedent for further anti-TABOR decisions. The Colorado courts are bootstrapping themselves toward ultimate destruction of Coloradans’ right to keep their state fiscally safe.

In TABOR Foundation v. Regional Transportation District, citizens argued that a law standardizing sales tax exemptions should have been presented to the voters. The citizens pointed out that the measure was not revenue-neutral. Rather, it was what TABOR calls a “tax revenue gain.”

 

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Apr 24

Colorado Supreme Court: Some Small Tax Changes Are OK Without Voter Approval

Colorado Supreme Court: Some Small Tax Changes Are OK Without Voter Approval

An RTD bus sits idle at Alameda Station, just off the Denver neighborhoods of Baker and West Washington Park.

Jim Hill/CPR News

The Colorado Supreme Court on Monday upheld the constitutionality of a state law that added sales taxes to some items to benefit public transportation and cultural groups in metropolitan Denver without voter approval.

The ruling by the state’s highest court rejected a lawsuit from the TABOR Foundation, a taxpayer advocacy group that alleged the Regional Transportation District and a cultural district were violating Colorado’s Taxpayer’s Bill of Rights, or TABOR, which requires voter approval for any tax hike.

The lawsuit stemmed from a 2013 measure passed by lawmakers allowing the districts to collect taxes on items previously exempt from local sales taxes, such as candy, soft drinks, cigarettes and food containers.

The court ruled that the new taxes represented such a minor change to tax policy that they did not require voter approval.

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Apr 24

Colorado Supreme Court upholds legality of taxes for special districts, like RTD TABOR requires voter approval for any tax hike

Colorado Supreme Court upholds legality of taxes for special districts, like RTD

TABOR requires voter approval for any tax hike

RTD's G Line testing in Olde ...
Andy Cross, The Denver Post

RTD’s G Line testing in Olde Town Arvada Jan. 02, 2018. The Colorado Supreme Court has upheld the legality of sales taxes that are collected by two special districts in metropolitan Denver.

PUBLISHED:  | UPDATED: 

The ruling by the state’s highest court rejected a lawsuit from the TABOR Foundation, a taxpayer advocacy group that alleged the Regional Transportation District and a cultural district were violating Colorado’s Taxpayer’s Bill of Rights, or TABOR, which requires voter approval for any tax hike.

The lawsuit stemmed from a 2013 measure passed by lawmakers allowing the districts to collect taxes on items previously exempt from local sales taxes, such as candy, soft drinks, cigarettes and food containers.

The court ruled that the new taxes represented such a minor change to tax policy that they did not require voter approval.

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Apr 11

Study: Colorado has sixth lowest tax burden in U.S.

Study: Colorado has sixth lowest tax burden in U.S.

FILE - Denver, CO
Denver, Colorado

jackanerd | Shutterstock.com

Colorado’s state and local tax burden was the sixth lowest in the U.S. in fiscal 2016, according to a recent report produced Key Policy Data (KPD), a joint venture between Public Choice Analytics and Visigov.

The report relies on an income-based analysis dividing the state’s total tax collections by its private sector personal income. The national average using this methodology was an overall local and state tax burden of 14.3 percent of income; Colorado’s was 11.8.

KPD compared the burden of tax systems across states by measuring tax collections against the size of the economy. It defines this as the “total private sector share of personal income, which is personal income minus government compensation and personal current transfer receipts” such as Social Security, Medicare and Medicaid.

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Jan 30

Legislators find way to restore pot-tax funding to RTD, museums

Legislators find way to restore pot-tax funding to RTD, museums

A RTD train sits at the corporate office, located between the Evans and Broadway stations.

By Ed Sealover  –  Reporter, Denver Business Journal

Jan 30, 2018

Regional Transportation District trains, Scientific and Cultural Facilities District museums and other beneficiaries of special-district funding soon will be on a path to again receive the revenues from retail marijuana sales that they’d been losing since July.

Colorado senators on Tuesday approved a “fix” for the language that has left those districts unable to collect sales taxes for cannabis sales within their district since shortly after an omnibus funding bill from the 2017 session was signed into law. Affected organizations have warned that while the problem has not led to program cuts yet, it could do so in the future if it’s not remedied.

The fix to the error made in Senate Bill 267 is not one with unanimous support, having passed to the House Tuesday on a final vote of 24-10. Republican leaders warned not only that they feel the bill is unconstitutional, but that districts that re-start the collection of marijuana taxes without a vote of the people may be challenged in court.

Still, the organizations likely to begin receiving more money in the near future cheered Thursday’s vote to pass Senate Bill 88 out of the Republican-majority Senate and onto the Democrat-led House, where leaders have expressed support for the fix.

“Right now we’ve been able to absorb that loss of revenue. But long-term it’s definitely going to affect what we’re able to do,” said Scott Reed, assistant general manager for communications at RTD, which has lost about $500,000 a month. “This is a step in the right direction to correct the inadvertent mistake from Senate Bill 267.” Continue reading

Oct 04

Republicans block pot-tax fix in Colorado Legislature’s special session

By   –  Reporter, Denver Business Journal
 Updated 

Colorado state Senate Republicans killed a second attempt Tuesday to re-establish a tax that could cost special districts some $6.9 million this fiscal year and then adjourned what might have been the least productive special session in the history of the state Legislature.

The final gavel, which came down at 2:23 p.m., ended two official days and several unofficial weeks of wrangling over whether the Legislature could fix an error it made in Senate 267 — the omnibus bill from the 2017 regular legislative session that boosted transportation funding, reduced business personal property taxes and freed up room under the state’s revenue cap by turning the hospital provider fee into an enterprise fund.

The error occurred when the bill inadvertently eliminated the ability for special districts to levy sales taxes on retail marijuana — a change that most affected the Regional Transportation District, which is slated to lose $6 million through June 30 because of it.

Legislative Democrats, with the backing of Gov. John Hickenlooper, offered two bills during the two-day special session that sought to clarify that special districts do have the ability to collect sales taxes on that uniquely Colorado project.

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Oct 03

Rifts develop quickly during Colorado legislative special session

By
 –  Reporter, Denver Business Journal

Day one of the Colorado legislative special session ended with House Democrats advancing a bill to fix a mistake that could cost special districts as much as $6.9 million this year — but providing little reason to be optimistic that the measure can make it through the Republican-led Senate.

Legislators are grappling with a drafting error in the signature bill of the 2017 session that removed the ability of special districts to charge sales tax on retail marijuana, a gaffe that could leave districts a combined $6.9 million short on revenue this year if not fixed. The vast majority of that shortage — about $6 million — would be incurred by the Regional Transportation District that provides public transit in the Denver area.

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Oct 02

Colorado Legislature’s special session this week could aid special districts — or go up in flames

By
 –  Reporter, Denver Business Journal

Gov. John Hickenlooper called a special legislative in mid-September, arguing it was the “most expedient way” to fix an error in the centerpiece bill of 2017 that will cost a number of special districts, including Denver’s Scientific and Cultural Facilities District hundreds of thousands of dollars in funding.

But what may have seemed a simple and expedient way to restore funding that those districts expected to get has turned into a political firestorm that, in all likelihood, will not get solved in the abbreviated session.

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Jul 10

MSLF speaks about TABOR on Friday, July 17th

Democrats want to get rid of the Taxpayer’s Bill of Rights.
How does TABOR protect your personal and business interests?
Is there a legal difference between a “tax” and a “fee”?
What difference does it make to your bottom line?

William Perry Pendley is president of Mountain States Legal Foundation (MSLF), which defends constitutional liberties and the rule of law. His book, Sagebrush Rebel, Reagan’s Battle with Environmental Extremists and Why It Matters Today continues to draw rave reviews.

MSLF filed four lawsuits in defense of the Taxpayer’s Bill of Rights (TABOR). One was rejected by the Colorado Supreme Court, but two remain alive, and another was filed just days ago. Two of the cases ask the Supreme Court of Colorado to rule on whether the words “tax” and “fee” have legal meanings, or can they be used interchangeably to collect revenue without the consent of voters?
You need not be a member to attend. Lunch is $25 for non-members, $20 for members and $10 for students. A portion of the lunch fee goes toward the CRBC Small Donor Committee or the CRBC Political Committee to support Republican candidates in the 2016 elections.

RSVP@smallbizgop.com (not required, but appreciated).
Colorado Republican Business Coalition Monthly Luncheon
Friday, July 17 from 11:30am – 1pm
Brooklyn’s at the Pepsi Center
941 Auraria Parkway, Denver

www.smallbizgop.com