DENVER (KDVR) — The three largest cities in Colorado are changing their tax rules to make sure they aren’t collecting extra money on new fees.
Cities like Aurora, Denver and Colorado Springs are all collecting a local sales tax on the state’s newly implemented fee on retail deliveries.
“Municipalities, such as Denver. are wanting to go ahead and get the exemption done as soon as we possibly can so a great amount of time doesn’t go by before it gets exempted,” said Steve Ellington, treasurer for the City and County of Denver.
“The practice of taxing a government fee is indefensible and I don’t care how little it is or not,” Aurora Councilman-at-Large Dustin Zvonek said.
Aurora and Denver project their taxes on the 27-cent delivery fee only cost 1 cent per delivery. They said the more significant issue is the practice of taxing a fee.
Exempting taxes on fees like those for plastic bags, waste tires
Denver City Council took up a measure on Monday that’s designed to address this.
“When this ordinance passes, then any fee that gets imposed whether by the City and County of Denver or the State of Colorado, it will not be subject to sales tax,” Ellington said.
Zvonek said the same about an ordinance in Aurora.
Although the taxes on the delivery fee are what got the action going on the calls for exemptions, Aurora and Denver were already collecting sales taxes on other fees, like Denver’s 10-cent plastic bag fee and Colorado’s waste-tire fee. Both cities say it is difficult to tell how much money those taxes brought into their cities.
“We have no true, accurate way of being able to determine what the impact will be because of the way the tax returns work in the City and County of Denver. Retailers do not itemize out what the percentage was,” Ellington said.
“By exempting these fees from municipal sales tax, how much are we saving taxpayers? And the answer — they had to project it, obviously, because it’s just going into effect — but it was in excess of $200,000 a year that taxpayers would have been taxed on the fee but for our exemption,” Zvonek said.
Both Denver and Aurora were able to pass their ordinances unopposed during preliminary votes. A spokesperson for the City of Colorado Springs said they are drafting their proposal and hope to have it passed by the end of the year.
Source: Rocky Mountain News