Wal-Mart Stores, Inc., a Delaware corporation; and Sam's West, Inc., an Arkansas corporation, Plaintiffs-Appellants,
Pikes Peak Rural Transportation Authority and Colorado Department of Revenue, Defendants-Appellees.
and County of Denver District Court No. 15CV33347 Honorable
Michael A. Martinez, Judge
Greenberg Traurig LLP, Brian L. Duffy, Naomi G. Beer, Tyler
D. Coombe, John K. Crisham, Denver, Colorado; Brownstein
Hyatt Farber Shreck LLP, Martha L. Fitzgerald, Denver,
Colorado, for Plaintiffs-Appellants
Schwartz McNab Kamper & Forbes, LLC, Peter C. Forbes,
Denver, Colorado; Icenogle Seaver Pogue, PC, Jennifer L.
Ivey, Denver, Colorado, for Defendant-Appellee Pikes Peak
Rural Transportation Authority
Cynthia H. Coffman, Attorney General, Scott R. Bauer, Senior
Assistant Attorney General, Benjamin Kapnik, Assistant
Attorney General, Denver, Colorado, for Defendant-Appellee
Colorado Department of Revenue
Wynetta P. Massey, City Attorney, Anne H. Turner, Senior
Assistant City Attorney, Colorado Springs, Colorado, for
Amicus Curiae City of Colorado Springs
Johnson, City Attorney, Fountain, Colorado, for Amicus Curiae
City of Fountain
1 In 2014, the City of Fountain annexed a parcel of vacant
land (the Property) from unincorporated El Paso County. After
the Pikes Peak Rural Transportation Authority announced its
intention to collect a 1% sales tax from recently built
retail businesses on the Property, the operators of the
businesses, WalMart Stores, Inc., and Sam's West, Inc.,
filed a declaratory judgment action against the Authority and
the Colorado Department of Revenue (DOR). They sought a
declaration that defendants could not collect sales and use
taxes on the Property because the Property was now a part of
Fountain, which was not a member of the Authority.
2 Resolution of the issue presented required answers to two
questions: first, can a municipality remove property from the
boundaries of a regional transportation authority simply by
annexing the property; and second, is such authority's
statutory power to tax preempted by article XX, section 6 of
the Colorado Constitution, which gives home-rule cities the
power to collect sales taxes within their own borders?
3 The district court answered both questions "no, "
as do we. We therefore affirm the judgment in favor of
4 Colorado's Regional Transportation Authority Law (RTA
Law), sections 43-4-601 to -621, C.R.S. 2017, allows
municipalities, counties, special districts, and the state to
combine to provide regional transportation services and to
collect sales and use taxes to pay for such services.
§§ 43-4-602(4), -605(1)(j)(I), C.R.S. 2017. The
Authority was established in accordance with the RTA Law in
2004, pursuant to an intergovernmental agreement (IGA) among
El Paso County and various municipalities in the county. The
Property at issue here was in unincorporated El Paso County
in 2004 and thus was within the boundaries of the Authority.
5 The Authority collects a 1% sales tax on retail sales
within its boundaries and uses the tax revenues for
transportation projects. Among other projects, it has spent
$25, 000, 000 on improvements to Highway 83, which runs
adjacent to the Property.
6 Fountain, a home-rule city in El Paso County, has never
been a member of the Authority. After Fountain annexed the
Property in 2014, defendants opened stores on the previously
undeveloped Property. As Fountain businesses, the stores were
required to collect and remit to the city a 3% Fountain sales
and use tax and a .75% Fountain transportation tax.
7 The DOR collects sales tax on behalf of both Fountain and
8 Plaintiffs filed a complaint seeking a declaratory judgment
that the Authority and the DOR could not collect a tax from
the stores because (1) upon annexation by Fountain, the
Property was removed from the Authority's territory and
thus was not subject to taxation by the Authority; and, (2)
as a home-rule city with plenary taxation powers, Fountain
had the sole authority to levy sales taxes on the annexed
Property. Defendants counterclaimed, asserting that
Fountain's annexation did not remove the Property from
the Authority's territory, and that the city's
plenary tax power did not preclude additional taxation.
Agreeing that there were no disputed issues of material fact,
the parties filed cross-motions for summary judgment. In a
detailed written order, the district court denied
plaintiffs' motion and entered summary judgment for
Standard of Review and Controlling Legal Principles
9 This is an appeal of a summary judgment, and it involves
questions of statutory interpretation. Our review is thus de
novo. Gibbons v. Ludlow, 2013 CO 49, ¶ 11
(summary judgment); Goodman v. Heritage ...