Category Archives: Legal Issues

Dec 02

Colorado cities want to tap into online sales revenue. That means the state’s messy sales tax system could get messier.

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Colorado cities want to tap into online sales revenue. That means the state’s messy sales tax system could get messier.

In South Dakota v. Wayfair, Supreme Court ruled online taxes can’t be “burdensome” for interstate sales, but Colorado’s complex system will put the ruling to the test

As state regulators scramble to expand online sales taxes in the wake of a landmark U.S. Supreme Court decision, Colorado’s largest cities could suddenly find themselves missing out on a new funding spigot worth millions of dollars each year.

But if they try to get their piece of a growing tax pie — Denver alone could reap more than $5 million each year — experts say they’re just as likely to find themselves in federal court.

The net result could be a hybrid system unlike any other in the country: one that would effectively require out-of-state businesses to collect some sales taxes but not others.

The U.S. Supreme Court in June overturned a de facto ban on interstate online sales taxes, ruling in South Dakota v. Wayfair that a state can require online retailers to collect and remit sales taxes regardless of whether they have a physical presence there.

The catch: states aren’t allowed to put an excessive burden on interstate businesses. And where South Dakota’s system was designed to be simple and user-friendly, Colorado’s is notoriously complicated and cumbersome — so much so that tax experts across the country believe it’s the most likely test case for the lingering question from the Wayfair case: What exactly constitutes an excessive burden?

The question has complicated Colorado’s efforts to expand online sales taxes to out-of-state retailers. And it has left top policymakers, advocacy groups and business coalitions urging patience. Continue reading →

Nov 26

PLF opposes illegal taxes in Colorado

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PLF opposes illegal taxes in Colorado

The Colorado Secretary of State has been illegally charging businesses millions of dollars in unnecessary filing fees every year. Rather than refund those excess fees, the secretary funneled the money into his general budget, converting the fees into general tax revenue in violation of the state’s Taxpayer’s Bill of Rights. The National Federation of Independent Business sued to stop the unconstitutional fees, and the case is now before the Colorado Supreme Court.

PLF partnered with three other liberty organizations in this friend of the court brief, making two important arguments:

  • First, PLF urged the Colorado Supreme Court to do away with the “beyond a reasonable doubt” standard for unconstitutional laws, because it neuters the court’s ability to strike down unconstitutional laws and allows many unconstitutional laws to remain on the books.
  • Second, PLF argued that the amount of a fee cannot exceed the cost of providing the service or regulation funded by the charge. Here, 90% of the business “fees” fund services and regulations totally unrelated to businesses.

Weekly litigation report: Private property rights and illegal taxation

Sep 10

Hospital Provider lawsuit Sept 2018 development

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The TABOR Foundation may have seen the final task for one of our lawsuits completed last Thursday, at least at the District Court level.  Our supporters will undoubtedly remember that we are suing the State government about how it implemented a new $600 million/year bed tax without first obtaining voter approval, as required by the Taxpayer’s Bill of Rights.  The money is funding the Hospital Provider program.  The Foundation had to enhance the scope of the lawsuit after SB17-267 passed.  That egregiously bad legislation moved the Hospital Provider program off the books, as well as cobbling together transportation plans, changing Medicaid reimbursement, sale & leaseback of state buildings, a net $400 million increase in the fiscal spending cap, increasing State debt by $2 Billion  and more (so much for the single-subject mandate).

 

What happened last week, and where does the lawsuit stand?

 

All written arguments and counter-arguments have been submitted (“the case is fully briefed”) for the Summary Judgment phase.  The Judge still owes a ruling on the Motion to Dismiss made by the State’s attorneys.

 

Although not a standard action in Colorado, we had a formal Hearing last week for both sides to present their arguments for the Summary Judgment.  Each side was given roughly an hour to present its arguments, and there were questions from Judge Buchanan.  Lee Steven, the lead attorney from Cause of Action Institute, was the legal representative from our side there.  The Foundation’s Chairman, Penn Pfiffner, was present to represent the Plaintiffs.

 

Because it is not common to have oral argument for Summary Judgment, no clear Order was issued well in advance and as of just 10 days (+/-) before at least one of the attorneys for the Hospital Association was not sure that the Hearing had indeed been scheduled.  That’s why formal notice came up so soon before the scheduled court date.

 

The important development is that both Plaintiffs and Defendants agreed that the ruling will be on the constitutionality and on interpretation of facts already in evidence.  Therefore, it is more likely than not that the Judge will reverse (“vacate”) his Order for a five-day trial which is now scheduled to start on October 29.  He promised to make this case a high priority.  Given the circumstances, Judge Buchanan likely will release his ruling on the Motion to Dismiss and issue a final ruling on the case without any further action on the part of either Plaintiffs or Defendants.  We can be reasonably certain that the losing side will appeal.

 

At this point, all of us – Defendants, Plaintiffs, attorneys – are set for a waiting game until we learn what Court wants to do about the scheduled trial, and then for the rulings.

Penn

 

 

 

 

 

 

 

 

 

Aug 30

Nonprofit leaders back TABOR ballot issue

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Nonprofit leaders back TABOR ballot issue

County would reap benefits, they say

  • GABRIELLE PORTER
Nonprofit leaders back TABOR ballot issue

Carol Skubic, secretary and treasure, left, and Sharon Raggio, CEO of Mind Springs Health and West Springs Hospital, right, answer questions about the county’s proposed TABOR exemption outside the West Springs Hospital on Tuesday.

Chancey Bush

A ballot measure that would allow Mesa County to accept state grants as a revenue stream outside strict governmental growth limits could open potential funding sources for local projects, ranging from a psychiatric hospital facility to a new space for a nonprofit that services developmentally disabled adults, advocates said at a Tuesday press conference.

Leaders of Mind Springs Health, the Grand Junction Area Chamber of Commerce and other local organizations called the event Tuesday morning, the day after the Mesa County Commission voted to place Issue 1A on the November ballot.

The ballot issue involves Mesa County’s relationship with the Taxpayer’s Bill of Rights, which limits governmental income, including grants, unless an exception is made. Mesa County voters in November will decide whether the county can permanently make that exception for state grants, which are often applied for by nonprofits using the county government as a pass-through agency.

The still-under-construction Mind Springs Health psychiatric hospital project became a case study on the legal tangle last year when the county decided not to apply for a $5 million grant that could have made a major dent in the group’s fundraising goals in anticipation of going over TABOR limits.

“Had we been able to partner with the county as well as other communities in being able to secure some TABOR funds, that would have really put us over the top (of fundraising efforts),” said Mind Springs President and CEO Sharon Raggio at the event outside the facility.

HopeWest President and CEO Christy Whitney said she hopes voters will agree.

“There’s a lot of state money available to make some amazing things happen in Mesa County, but we have just fundamentally not been able to access it because of the really outdated view of the TABOR law,” Whitney said.

Diane Schwenke, president and CEO of the Grand Junction Area Chamber of Commerce, said both her organization and the Grand Junction Economic Partnership are behind the measure, in part because they believe that local nonprofits provide important services that serve the workforce, that the ballot measure is in “the spirit”of TABOR, and that state grants are partially funded by severance taxes that local businesses pay.

“It’s only right that those dollars can come back and help the nonprofits that are doing the good work,” Schwenke said.

http://www.gjsentinel.com/news/western_colorado/nonprofit-leaders-back-tabor-ballot-issue/article_ca9261ce-ab50-11e8-9dbe-10604b9f7e7c.html

Aug 30

Arvada, Lakewood each put spending measures on November ballot that avoid tax increases

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Arvada, Lakewood each put spending measures on November ballot that avoid tax increases

Measures would fund transportation improvements, open space purchases

By JOHN AGUILAR | jaguilar@denverpost.com | The Denver Post

PUBLISHED: August 28, 2018 at 6:11 pm |

Suburban voters west of Denver will weigh in on more than $100 million in municipal spending proposals on this fall’s ballot, with Arvada residents set to vote on two major road projects and residents in Lakewood ready to decide whether the city can hang on to extra revenues to fix roads, buy open space property and purchase law enforcement equipment.

Each ballot measure was sent to the Nov. 6 ballot Monday night by a vote of the city council in its community. Neither would raise taxes.

Lakewood’s measure asks voters if the city can retain and spend $12.5 million in revenues it collected in 2017 that exceed what the Taxpayer Bill of Rights, or TABOR, permits governments in Colorado to keep. The measure also asks if the city can do the same with any excess money it collects through fiscal year 2025. Continue reading →

Aug 30

Poudre Valley Fire Protection District, Community Meetings Aug. 30/Sept. 4

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Poudre Valley Fire Protection District, Community Meetings Aug. 30/Sept. 4

August 29, 2018 Theresa Rose News 0
The PVFPD stands to lose at least $860,000 per year, on an ongoing basis starting in 2020.
Poudre Fire Authority Logo

Madeline Noblett, Public Affairs and Communication Manager

Residents and owners of property within the Poudre Valley Fire Protection District are invited to two upcoming public meetings at which officials will provide information about a possible ballot question voters may be asked to consider for November’s mid-term election.

The meetings are 6:30 to 7:30 p.m. and open to the public. The first meeting is Aug. 30 in Laporte at Station 7, 2817 N. Overland Trail. The second meeting is Sept. 4 in Timnath at Station 8, 4800 Signal Tree Drive, in the station’s community room. There is no need to RSVP.

The Poudre Valley Fire Protection District Board is considering a ballot question that would ask district residents and property owners to annually adjust the District-assessed mill levy – a term referring to the property tax rate – so the district may maintain its current level of funding. City of Fort Collins residents would not vote on the possible question.

The Poudre Valley Fire Protection District, or PVFPD, encompasses the Town of Timnath, the communities of Laporte and Bellvue, Horsetooth Reservoir, Redstone Canyon, and areas of unincorporated Larimer and Weld counties. Poudre Fire Authority was established in 1981 through an Intergovernmental Agreement between the PVFPD and the City of Fort Collins. Simply put, PFA’s firefighters provide services to people within Fort Collins and the PVFPD.

Because of a collision between the Gallagher Amendment and the Taxpayer Bill of Rights, or TABOR, the PVFPD stands to lose at least $860,000 per year, on an ongoing basis starting in 2020. At this time, the PVFPD can’t specify how this would impact the District; that’s ultimately up to the PVFPD Board to decide. However, board members would likely have to consider a range of options that could include closing a fire station or eliminating positions. To learn more about the intersection of TABOR and Gallagher, watch this video from the nonprofit non-partisan Colorado Fiscal Institute: http://youtu.be/BXbrsdQQrZ8

Approved in 1992, TABOR demands that Colorado voters approve all tax increases. The Gallagher Amendment stipulates that residential property taxes are capped at 45 percent of the state’s total property tax revenue, while non-residential property taxes comprise the other 55 percent. Non-residential property is taxed at 29 percent of its value. Residential property is currently taxed at 7.2 percent, but the residential rate can fluctuate to maintain the 45-55 split. It may go down to 6.11 percent, which could lead to the loss in revenue for the PVFPD.

http://northfortynews.com/poudre-valley-fire-protection-district-community-meetings-aug-30-sept-4/

Aug 06

Legal battles continue over Taxpayer Bill of Rights, hospital fees, transportation taxes

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egal battles continue over Taxpayer Bill of Rights, hospital fees, transportation taxes

FILE - Colorado State Capitol
The Colorado State Capitol in Denver, Colorado.

Shutterstock photo

On Nov. 3, 1992, Colorado voters approved a constitutional amendment which stipulates that lawmakers seeking to raise taxes or issue debt must first ask voters for permission.

Called the Taxpayer Bill of Rights, or TABOR, it took effect Dec. 31, 1992, and was designed to serve as another check against the growth of government. It requires that any increase in overall revenue from taxes not exceed the rates of inflation and population growth.

The TABOR Foundation, which was instrumental in advancing the amendment, maintains that it has been a successful measure.

Others maintain it interferes with advancing critical public spending initiatives. Sam Mamet, the executive director of the Colorado Municipal League, opposes TABOR. Mamet argued on the 25th anniversary of TABOR that “iIt is one of the most seriously damaging things the voters of the state have done to themselves in the last 25 years, in my humble opinion.”

Since its inception 26 years ago, many attempts have been made to amend, circumvent and litigate TABOR; the foundation counts at least 80 cases between 1993 and 2017.

Pfiffner said a perfect example of this is the 2015 lawsuit it filed, TABOR Foundation, et al. v. Colorado Department of Health Care Policy & Financing, et al. regarding Colorado’s “hospital provider fee,” which it argues is an unconstitutional tax.

Continue reading →

Jul 31

Colorado expected to see $1 billion in new revenue in 2019; will taxpayers get a rebate?

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FILE - Colorado State Capitol
The Colorado State Capitol in Denver, Colorado.

Shutterstock photo

The Economic and Revenue Forecast presented to the Joint Budget Committee in June showed that the state’s general fund is projected to close out fiscal 2018 with a $1.2 billion surplus.

Since Colorado’s Taxpayer’s Bill of Rights (TABOR) places a cap on annual state tax revenue the state can keep, spend or save, many wonder whether Coloradans will actually see tax refunds in 2020.

 

Continue reading →

Jul 25

Coming up next: three local tax questions

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Coming up next: three local tax questions

  • JIM SPEHAR
“Death, taxes and childbirth! There’s never a convenient time for any of them.”

— Margaret Mitchell

We’ll soon see how far we’ve come as a community…whether the public safety tax and school bond and override successes last fall marked a welcome change in attitudes or were only a temporary aberration.

County residents will likely face in November a ballot question asking if the Mesa County can exclude state grants from revenue limits in the Taxpayer’s Bill of Rights (TABOR). In Grand Junction, voters will likely get two bites at the apple — one a proposal in November to double the city’s lodging tax and another next April to increase the sales tax to fund construction and operation of a community recreation center.

Two of the three, the ones soonest on our ballots, fall easily into the category of “no-brainers” while the third, the community center proposal, will likely generate heated back and forth between now and the city election in April.

It makes no sense, all three county commissioners argued in a public session last week, for Mesa County to not be able to accept state and federal grants for infrastructure and other purposes without busting the TABOR revenue cap but to instead have to turn down such things as a $5 million award for Mind Springs. Ironically, some grants not applied for come from federal severance taxes which flow back through the state and become subject to TABOR when passed on to local governments.

Continue reading →

Jul 25

This is why repair projects in Colorado are stuck waiting for funding

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This is why repair projects in Colorado are stuck waiting for funding

Despite 90-degree temperatures, you could feel the chill in the air as state lawmakers on both sides of the aisle got together to figure out funding for state improvement projects. The number one question from Democrats: Why wasn’t State Treasurer Walker Stapleton there?
Author: Marshall Zelinger
Published: 10:53 AM MDT July 24, 2018

The state Capitol has no air conditioning, yet there was a chilly feel during a Monday morning committee hearing on the funding of state improvement projects.

The Capital Development Committee met with the Deputy Treasurer to find out why funding isn’t in place yet for projects identified as a result of a bill signed into law in 2017.

Democrats on the committee requested that treasurer Walker Stapleton show up to answer questions.

“Why is the state treasurer not here? What does he have going on that is more important than this transaction?” asked State Rep. Chris Hansen, D-Denver.

“Since I’m the one with the details and I’m the one that’s been working on this, I’m the one that volunteered to be here today,” said Deputy Treasurer Ryan Parsell.

“I, for one, am not disappointed that the treasurer is not here. I’m glad that you are here,” said State Sen. John Cooke, R-Greeley.

Stapleton is running for governor against Congressman Jared Polis.

“What I’m hoping we’re not doing here is making this a political football for no apparent reason,” said Rep. Jon Becker, R-Fort Morgan.

To understand the concern with the treasurer’s office and decisions being made, you need to understand the law that created the funding mechanism for the state improvement projects.

In 2017, lawmakers passed SB 267, which removed the Hospital Provider Fee from the state’s general fund and created its own enterprise that does not count against the state’s TABOR limit. The Taxpayer Bill of Rights, which is in the state’s constitution, limits how much government can grow each year and requires the state to refund taxpayer money if it collects too much. Taking the Hospital Provider Fee out of the equation allowed the state to keep more money before hitting the limit.

SB 267 authorized the state to issue certificates of participation (COPs) to fund about $2 billion dollars in road construction projects and pay for other state building improvement projects.

COPs essentially mean the state is selling buildings it owns to get immediate funding, and then they buy the buildings back through a lease-purchase agreement.

A lawsuit challenging the legality of the Hospital Provider Fee, thus the COPs, is going to be heard in Denver District Court in October.

The COPs need to be issued between July 1 and June 30, 2019.

During a political stop last week, Stapleton was asked about not having the COPs issued as of July 1. He was quoted in Westword as saying:

“My paramount concern as the treasurer of Colorado is to make sure we’re not issuing bonds when there is economic uncertainty. Anybody in the capital markets can tell you that from an investment standpoint, when you’re issuing bonds and those bonds are being impacted by pending litigation, which we had nothing to do with, it makes investors skittish. I’m not going to issue bonds when it could negatively impact the credit of Colorado based on hair around the deal resulting from the lawsuit. It would be fiscally irresponsible for me to do so.”

Last week, a spokeswoman for the treasurer’s office told Next with Kyle Clark that the delay was because the office received bad advice from bond counsel, and finally replaced the counsel with a firm that was willing to proceed.

“Bond counsel continued to express uneasiness and discomfort with the pending litigation but asks for more time to research the issue. After that point, discussions largely occurred directly with the Attorney General’s Office and Bond Counsel. During that time, the Attorney General’s office and Treasury began to question whether Bond Counsel’s initial response was correct,” Parsell testified on Monday morning. “It became increasingly clear that bond counsel was not approaching this case with an open mind. Bond counsel was basing their viewpoint off of a 30-year-old case at the expense of precedent that had been set in the interim years. The Attorney General’s Office asked bond counsel to review newer precedent. Bond counsel refused. The Attorney General’s Office also offered Bond Counsel the opportunity to review the state’s defense of the lawsuit. Bond Counsel refused. The Attorney General’s office offered to discuss alternative legal tactics that may give bond counsel comfort. Bond counsel refused.”

List of projects to be funded with 2018-19 COPs:

The treasurer’s office plans to start issuing the COPs on Sept. 26.

‘The legislation gives the treasurer’s office the authority to issue the COPs between July 1 of 2018 and June 30 of 2019. We will meet that deadline with ample time to spare,” said Parsell.

Hansen responded that no one was suggesting the treasurer’s office was breaking the law, just that it was delaying projects 90 days that could cost the state more money.

One of the projects also expecting funding from the issuance of COPs is the widening of Interstate 25 from Castle Rock to Monument.

“Based on the communication that we’ve received from CDOT, the timeline that we have will not interrupt any construction project timing,” said Parsell.

CDOT plans to start the project in November.

What was not answered at the committee hearing was if any of the projects will start later than expected because of the funding delay, or if any of the projects will cost more because of the funding delay.

“It is difficult to ascertain whether any projects were delayed from starting since every funding recipient is aware that funding is contingent on the timing of the COP issuance. The advice I offered was to expect funding in August,” said Kori Donaldson, Legislative Council staffer for the Capital Development Committee. “We don’t have any data about costs associated with the projects starting in October rather than August.”

http://www.9news.com/article/news/local/next/this-is-why-repair-projects-in-colorado-are-stuck-waiting-for-funding/73-577000240