We welcomed the news late Friday that the IRS has agreed not to tax Coloradans’ TABOR refunds after all.

And almost as much, we welcomed news earlier the same day that Colorado’s full Washington, D.C., delegation had told the agency to keep its mitts off of our taxpayers’ money. It was good to see Gov. Jared Polis weigh in, as well, echoing the same sentiment in a call to the agency’s leadership to register his concerns.

Evidently, it worked.

The political leaders spoke out in response to an IRS public statement on Feb. 3 saying the agency, “is aware of questions involving special tax refunds or payments made by states in 2022,” and is, “working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers.” The IRS statement also suggested waiting for that clarification before filing tax returns.

Although the IRS seemed to lump Colorado’s refunds in with “a variety of state programs that distributed these payments in 2022,” our TABOR refunds are of course nothing new. And they don’t have much in common with refunds in other states. Ever since Colorado voters adopted the Taxpayer’s Bill of Rights back in 1992, the state’s constitution has required state and local governments to return any revenue collected in excess of the rates of growth plus inflation. Government cannot keep the extra cash unless it seeks voters’ permission.

Last summer, the state sent TABOR refund checks – $750 for individual filers and $1,500 for joint filers – to millions of Coloradans to return excess revenue collected in the last fiscal year.

Those refunds never have been taxed in the past – not since TABOR was enacted. There shouldn’t have been any “questions” about them, and no new “clarity” was warranted.

It’s a relief the matter is now settled in Colorado’s favor, owing no doubt, at least in part, to the timely intervention of our elected officials.

Both of Colorado’s U.S. senators and all eight of its members in the U.S. House – yes, from both parties – had signed a letter to Internal Revenue Service Acting Commission Doug O’Donnell urging him “to treat Colorado Taxpayer’s Bill of Rights (TABOR) revenue payments as nontaxable income – keeping with previous … precedent for the past thirty years.”

“Expecting Coloradans to now pay part of these revenue payments back would impose a significant burden on Colorado taxpayers, introduce considerable compliance costs for taxpayers who did not anticipate having to add their TABOR revenue payments to their joint or single filings, and cost Coloradans hundreds of additional dollars in tax liability,” the letter stated.

Our elected leaders’ willingness to stand up for TABOR against the feds is heartening first and foremost because it helped firm up the case for getting the IRS to back off.

It’s also encouraging to see such bipartisanship on TABOR’s behalf – after decades of resistance to it by most Democrats and even some Republicans.

TABOR’s adoption by voters was followed by years of struggle getting state and local governments to comply with the amendment’s taxing and spending limits. It has involved epic court battles and seemingly endless attempts by government entities to skirt TABOR’s provisions.

It’s a milestone when Colorado’s top elected leaders – especially ruling Democrats – spell out TABOR’s provisions and stand up for them, on the record, in a letter to the IRS. Could it represent something of a consensus, at long last, on one of the most important and prudent policy innovations in modern Colorado history?

Denver Gazette Editorial Board