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Tabor Foundation v. Regional Transportation District

Supreme Court of Colorado, En Banc

April 23, 2018

TABOR Foundation, a Colorado non-profit corporation; and Penn Pfiffner, Petitioners
v.
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.

          OPINION

          HOOD JUSTICE.

         ¶1 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.

         ¶2 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.

         ¶3 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 appeals.

         I. Facts and Procedural History

         ¶4 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.

         ¶5 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.

         ¶6 The Staff Fiscal Note for the Bill projected that the exemption changes would result in a 0.6% net revenue increase for the Districts.

         ¶7 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.

         ¶8 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 ...


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