I submit to you an unhappy scenario: you have saved, booked, and prepared for a wonderful vacation this summer, only to test positive for COVID right before your much anticipated departure. The bug has wrecked your dream vacation, and you are stuck at home, under quarantine, left with only the comforts of Netflix and food deliveries. Then to add insult to injury, you find your chicken chow mein delivery comes with a brand new additional 27-cent delivery tax.
Once you get much beyond those handful of things that Adam Smith outlined as its necessary functions, government really only excels at two things: creating inflation and adding insult to injury. Colorado’s new delivery tax/fee/dues/tithe manages to do both.
The new fee is a bitter legacy of SB21-260, the enormous bill from last year that was sold as a way to provide for some base skeleton funding for transportation infrastructure, in exchange for some funding for a pile of utopic “alternative transportation” pet projects. Deep within the many-page act one finds section 11, establishing the Clean Fleet Enterprise within the CDPHE, for the enlightened purpose of “supporting and incentivizing” the use of electric vehicles by owners of vehicle fleets. It does this by authorizing the imposition of a retail delivery fee, to be paid by Transportation Network Companies (think Uber, Lyft, etc.) and, turns out, by anyone purchasing anything delivered by a vehicle (as opposed to, one presumes, by horse, camel, scooter, magic carpet, or the transcendental power of yogic meditation).
Well, accordingly, a week before this new fee is to be inflicted on everyone, the Department of Revenue holds a rule-making hearing. It was a virtually packed house, packed enough that a great many people were unable to log onto the Zoom meeting. That didn’t dissuade the DOR, which nonetheless promulgated this rule imposing the fee.
So now, with inflation exceeding even what it was when Jimmy Carter introduced the term “stagflation” into the vernacular, and gasoline prices making those that created gas lines in the 1970s look nostalgically quaint, a new delivery fee is being attached to everything that you have driven to your door.
Aside from being another kick in the pants to someone stuck at home sick in the middle of summer, 27 cents may not seem like that much of a deal, but for two things: first, all of these taxes/fees/dues/tithes/duties/contributions/levies/tariffs or what have you add up, until, as that most poignant of sayings concerning government goes, “a million here and a million there and pretty soon you are talking about real money.” The Common Sense Institute last year did the sums and all of the taxes and fees imposed on Coloradans since 2018 comes in at $1.8 billion, which approaches real money.
The more acute point with this new fee is the fact that businesses now have to spend thousands of dollars to upgrade their software to collect this extra $20 or $30. These things don’t just happen automatically; a change in sales tax policy is not merely a simple transfer based on the honour system. The software that businesses use to calculate, collect, and remit a new fee, whatever the amount, is complex and changes to it come at a pretty steep cost.
To further complicate it, under the newly established rule municipalities are allowed to decide whether or not they wish to impose this tax at the city level. Not all will come to the same decision — Boulder and Fort Morgan are quite different places come to find out — making the software upgrades even more complicated, and ergo, more expensive.
On top of all that is the perennial issue of sidestepping TABOR, which remains the law despite how strenuously some may wish it otherwise. Call it a fee all you want, but it operates exactly like a tax, and will be enforced exactly like a tax — through standard sales tax audits and the imposition of tax liens on unpaid fees.
Further insult is lumped onto the injury this new tax does when one pauses to consider all of the great work the Simplify Colorado Sales Tax Coalition has done over the past several years to simplify the state’s infamously convoluted sales tax scheme. This now throws a new grenade into the freshly re-ordered and tidied system.
This is the Fourth of July gift that the Colorado State government has bestowed on the people; to wit, a new tax which will accomplish nothing, save pile on further injury and insult.
Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.