Filing fees vex business group, secretary of state

Wayne Williams



The Colorado Secretary of State’s Office and the National Federation of Independent Business both have asked the Colorado Supreme Court to look into whether business filing fees used to fund state elections is a violation of the Taxpayer’s Bill of Rights.

Filing their petitions on the same day last week, the two are asking slightly different questions based on a March ruling from the Colorado Court of Appeals.

While Secretary of State Wayne Williams argues that his office has been required to charge fees to fund its services since Colorado became a state in 1876, long pre-dating TABOR’s passage in 1992, the business federation says those fees are used to defray the office’s general expenses, and therefore are a tax.

The secretary’s office collects about $22.5 million a year in business filing and license fees and has always used them to pay for the same services since statehood.

“The state is imposing an illegal tax on small businesses to fund obligations,” said Karen Harned, executive director of the federation’s small business legal center. “That should be a cost shared by everyone rather than just Colorado’s entrepreneurs.”

The case was first filed against Williams’ office by the federation in Denver District Court in 2014.

A year later, District Judge Bruce Jones ruled in favor of Williams’ office, saying the fees don’t violate TABOR because they traditionally only have been used to fund the office’s costs, and not generally those of the state.

But a three-judge panel of the Court of Appeals reversed that ruling, stopping short of saying the fees are really a tax, but ordering the lower court “to determine whether the business and licensing charges have been adjusted or increased since the passage of TABOR in 1992, so as to require voter approval for the adjustments.”

The petition filed by the independent business federation, which represents more than 7,000 small businesses in Colorado, including several on the Western Slope, asks the high court to make clear that the fees are a tax.

The secretary’s petition asks the court to apply its own previous rulings on the matter, that fees assessed before TABOR became law don’t require voter approval even if they are increased.

“The court’s precedent establishes that administrative adjustments to funding mechanisms that predate TABOR render its prospective voter-approval requirement inapplicable,” reads the secretary’s petition, which was filed by the Colorado Attorney General’s Office. “The (Court of Appeals) decision places the state’s decades-old election funding scheme in jeopardy. It should be corrected now, removing the cloud of uncertainty that will otherwise hang over the funding statute during the years of additional litigation that a remand will entail.”

It is unknown when, or if, the court will decide to take the case.

If it doesn’t, it will head back to district court, where attorneys in the case will have to pore over 25 years of fees charged by the secretary’s office.


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