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Colorado Taxpayers File Supreme Court Reply Brief in RTD Taxes Lawsuit

Jul 24, 2017 | by William Perry Pendley

DENVER, CO.  A Colorado group that defends taxpayers’ rights today filed its reply brief following the decision of the Colorado Supreme Court to review a ruling by the Colorado Court of Appeals that upheld a ruling by a Denver County District Court rejecting its argument that new taxes being collected by three Colorado governmental entities violate the Taxpayer’s Bill of Rights (TABOR).  The TABOR Foundation alleged in its 2013 lawsuit that, under the Colorado Constitution, its members should have been allowed to vote on new taxes the 2013 General Assembly authorized to be collected by the Regional Transportation District (RTD) and the Scientific and Cultural Facilities District (SCFD).  The lawsuit names the RTD, the SCFD, and the Department of Revenue—government districts defined by TABOR—whose tax policies require voter approval.  TABOR Foundation, represented by Mountain States Legal Foundation (MSLF), seeks declaratory and injunctive relief and an order requiring refund of all revenues collected, plus interest, as TABOR requires.  The state district court ruled in February of 2015, days after oral arguments; the Court of Appeals ruled in June of 2016, six weeks after arguments.  The Supreme Court granted the petition on January 23, 2017.

“The Supreme Court should rule the districts violated TABOR by taxing items that were exempt from taxation without securing voter approval in advance and should bar the districts from taxing those items until they receive voter approval,” said William Perry Pendley of MSLF.  “Plus, the Supreme Court must abandon its ‘beyond a reasonable doubt’ standard because it is outdated, impossible to apply to questions of law, and subordinates courts to the actions of governmental entities when they impose taxes in violation of TABOR; moreover, the test puts an impossible evidentiary burden on taxpayers and voids TABOR.” 

In 2013, the General Assembly enacted HB13-1272, which authorizes the RTD and SCFD, for the first time, to levy sales and use taxes on food, beverages, cigarettes, advertising materials, and food containers.  Both RTD and SCFD lobbied in support of the bill and RTD identified projects that will receive the increased revenues generated by the bill.  The food tax applies to “candy,” or “a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruit, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces.  ‘Candy’ shall not include any preparation containing flour and shall require no refrigeration.”  The beverage tax applies to “soft drinks,” or “nonalcoholic beverages that contain natural or artificial sweeteners,” but not “beverages that contain milk or milk products, soy, rice, or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume.”

The cigarette tax includes items “likely to be offered to, or purchased by, consumers as a cigarette.”  The advertising tax applies to “advertising materials that are distributed in Colorado by any person engaged solely and exclusively in the business of providing cooperative direct mail advertising.”  The food container tax applies to “nonessential” food and beverage items, such as utensils, napkins, grocery bags, bags for bulk produce, carryout containers for leftover food, straws, toothpicks, stirring sticks, cup sleeves. 

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.

For more information:  TABOR Foundation v. RTD

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