TABOR Foundation, a Colorado non-profit corporation; and Penn Pfiffner, Petitioners
Regional Transportation District; Lorraine Anderson, Kate Williams, Bonnie Archuleta, Paul Daniel Solano, Barbara Deadwyler, Claudia Folska, Larry Hoy, Bob Broom, Ken Mihalik, Judy Lubow, Natalie Menten, Doug Tisdale, Charles Sisk, Tina Francone, and Jeff Walker, Directors of the Regional Transportation District; Scientific and Cultural Facilities District; Kathy Imel, Damon Barry, Deborah Malden, Dan Hopkins, Rob Johnson, Kendra Black, Peggy Lehmann, Harold Logan Jr., Ann Speer, Lynn Jeffers, and Elaine Torres, Directors of the Scientific and Cultural Facilities District; Colorado Department of Revenue; and Barbara Brohl, Executive Director of the Colorado Department of Revenue. Respondents
Certiorari to the Colorado Court of Appeals Court of Appeals
Case No. 15CA582
Attorneys for Petitioners: Mountain States Legal Foundation
Steven J. Lechner Lakewood, Colorado.
Attorney for Respondents Regional Transportation District and
Directors of the Regional Transportation District: Rolf G.
Asphaug Denver, Colorado.
Attorneys for Respondents Scientific and Cultural Facilities
District and Directors of the Scientific and Cultural
Facilities District: Norton & Smith, P.C. Charles E.
Norton Denver, Colorado, Icenogle Seaver Pogue P.C. Alan D.
Pogue Denver, Colorado
Attorneys for Respondents Colorado Department of Revenue and
Barbara Brohl: Cynthia H. Coffman, Attorney General Frederick
R. Yarger, Solicitor General Claudia Brett Goldin, First
Assistant Attorney General Robert H. Dodd, Jr., Assistant
Solicitor General Denver, Colorado.
Attorneys for Amicus Curiae Colorado Municipal League: Butler
Snow LLP Martina Hinojosa Dee P. Wisor Denver, Colorado.
The Regional Transportation District and the Scientific and
Cultural Facilities District are funded by a broad sales tax
with a few exemptions. Originally, the two Districts'
sales taxes covered the same items as the State of
Colorado's general sales tax. But over the years,
lawmakers added and removed exemptions, sometimes for the
State and sometimes for the Districts. As the exemptions for
the State and the Districts gradually diverged, tax
collection became increasingly complicated for both vendors
and the revenue department. To make it easier for everyone,
the General Assembly passed House Bill 13-1272, adding and
removing exemptions on the Districts' taxes to realign
them with the State's. This yielded a projected net
increase in the Districts' annual tax revenue of 0.6%.
And it is with this projected increase in tax revenue that
this otherwise mundane plot thickens.
When the Districts began collecting the altered sales tax
without holding a vote, the TABOR Foundation sued. It argued
that the Bill created a "new tax" or effected a
"tax policy change" and therefore required voter
approval under Colorado's Taxpayer Bill of Rights, Colo.
Const. art. X, § 20(4)(a). The trial court granted the
Districts summary judgment on stipulated facts, and a
division of the court of appeals affirmed.
We clarify that legislation causing only an incidental and de
minimis tax-revenue increase does not amount to a "new
tax" or a "tax policy change." H.B. 13-1272 is
such a bill: It serves to simplify tax collection and ease
administrative burdens, and it only incidentally increases
the Districts' tax revenues by a de minimis amount.
Accordingly, we conclude that H.B. 13-1272 does not violate
the constitution, and we affirm the judgment of the court of
Facts and Procedural History
House Bill 13-1272 (the "Bill") adjusted sales tax
exemptions for the Regional Transportation District and the
Scientific and Cultural Facilities District ("RTD"
and "SCFD, " respectively, or the "Districts,
" collectively). The Bill's "intended
purpose" was to "simplify the administration and
collection of sales and use tax" for the Districts. Ch.
337, sec. 1, 2013 Colo. Sess. Laws 1964, 1964. The
legislative declaration recognized that the Districts
generally shared a sales- and use-tax base with the State:
tangible personal property. Yet certain types of property
were exempt from taxation by the Districts but not by the
State, and vice versa. The declaration explained that
applying these few disparate exemptions to an otherwise
common tax base "leads to confusion for taxpayers and .
. . is an administrative burden for vendors who collect and
remit the tax to the state." Id.
To accomplish this simplification and administrative
reduction, the Bill removed and added sales- and use-tax
exemptions for the Districts to realign the Districts'
tax base with the State's. The Bill removed exemptions
from the Districts' taxes for sales and use of
cigarettes, direct-mail advertising materials, candy, soft
drinks, and nonessential food containers. It added exemptions
from the Districts' taxes for sales and use of
low-emitting motor vehicles, power sources and their parts,
machinery, and machine tools. Just for the SCFD, the Bill
added an exemption for vending-machine sales of food.
The Staff Fiscal Note for the Bill projected that the
exemption changes would result in a 0.6% net revenue increase
for the Districts.
Once the Bill took effect, the Districts began collecting the
taxes based on the new exemptions, and did so without seeking
voter approval for the tax change.
The TABOR Foundation (the "Foundation") sued the
Districts, claiming that the Bill violated the Taxpayer Bill
of Rights ("TABOR"), Colo. Const. art. X, §
20. Section 4 of TABOR requires, as relevant here, that
districts "have voter approval in advance for . . . any
new tax . . . or a tax policy change directly causing a net
tax revenue gain to any district." The Foundation noted
that the Bill was projected to increase revenue, and it
argued that the removal of exemptions-which allowed the
Districts to ...