Whether the General Assembly can circumvent TABOR by expanding the taxing authority of RTD and SCFD without voter approval.
Regional Transportation District, Scientific and Cultural Facilities District, and the Colorado Department of Revenue
Colorado District Court for Jefferson County, 2013CV31974
In the 2013 legislative session, the Colorado General Assembly enacted HB13-1272, which unlawfully authorizes the Regional Transportation District (“RTD”) and the Scientific and Cultural Facilities District (“SCFD”) to levy new sales and use taxes on food, beverages, cigarettes, advertising materials, and food containers. These new taxes will be levied by RTD and SCFD, beginning January 1, 2014.
Both RTD and SCFD lobbied in support of HB13-1272. To aid its lobbying efforts, RTD identified numerous projects that would receive the increased revenues generated by the HB13-1272 taxes.
RTD and SCFD are government districts as defined by TABOR, and therefore their tax policies are subject to voter approval. Colo. Const. art. X, § 20(2)(b). Prior to the passage of HB13-1272, RTD and SCFD had no authority to levy sales and use taxes on food, beverages, cigarettes, advertising materials, and food containers, as specified in HB13-1272. HB13-1272 unlawfully creates new authority for RTD and SCFD to taxes these items.
The food tax created by HB13-1272 applies to “candy” as defined by C.R.S. § 39-26-707(1.5)(b)(I): “a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruit, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces. ‘Candy’ shall not include any preparation containing flour and shall require no refrigeration.”
The beverage tax created by HB13-1272 applies to “soft drinks” as defined by C.R.S. § 39-26-707(1.5)(b)(II): “nonalcoholic beverages that contain natural or artificial sweeteners. ‘Soft drinks’ do not include beverages that contain milk or milk products, soy, rice, or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume.”
The cigarette tax created by HB13-1272 applies to cigarettes as defined by C.R.S. § 39-28-202(4), which includes all tobacco products “likely to be offered to, or purchased by, consumers as a cigarette.”
The advertising tax created by HB13-1272 applies to “advertising materials that are distributed in Colorado by any person engaged solely and exclusively in the business of providing cooperative direct mail advertising.” C.R.S. § 39-26-102(15)(a)(I).
The food container tax created by HB13-1272 applies to “nonessential” food and beverage related items, such as utensils, napkins, grocery bags, bags for bulk produce, carryout containers for leftover food, straws, toothpicks, stirring sticks, cup sleeves, etc. C.R.S. § 39-26-707(1)(c)–(d), (2)(b)–(c); Colo. Dept. of Rev. Reg. 39-26-707.1(1)(a)(i).