DENVER, Colo., July 1, 2015—The National Federation of Independent Business (NFIB) yesterday filed a motion for summary judgment in its case against the state of Colorado’s practice of using revenue collected from business fees to finance elections and other non-business related programs in violation of the state constitution.
In the case, NFIB v. Williams, the association argues that most of the more than $20 million in business licensing fees collected by the state amount to unconstitutional tax under the Taxpayer Bill of Rights (TABOR). Colorado doesn’t deny that over half of the revenue it collects as part of its business licensing fee program is being spent to fund statewide elections, including a portion of which is a direct subsidy to counties to help offset their election costs. Elections inure to the benefit of all citizens of Colorado and, as a result, should be paid for by all taxpayers, NFIB says. The current diversion of business licensing fees paid only by Colorado businesses is inappropriate and a clear violation of TABOR.
“On behalf of my over 7,000 members, we look forward to having this issue resolved,” said Tony Gagliardi, Colorado state director for NFIB. “For too many years, the fees paid by small-business owners have been used for purposes well beyond regulating those business that pay these fees. Under the present practice, business fees paid by small businesses could be used to fund any government function, whether it be elections, transportation, or human services.”
Karen Harned, executive director of NFIB’s small-business legal center, said that small businesses are an easy target for policymakers hungry for revenue but cautious about angering voters.
“It’s clear that the state is using fees on businesses, which must have a business-specific purpose, as a way to supplement the general treasury,” she said. “That’s clearly unconstitutional under the Colorado Taxpayer Bill of Rights. This case has national implications for small business. If Colorado can get away with substituting fees on businesses for general taxes, other states will quickly see that as the path of least resistance. We need to confront this unfair practice here so it doesn’t spread.”
The lawsuit and the Dec. 22, 2014 news release announcing the filing of it can be read here.
###
For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.
National Federation of Independent Business/Colorado
1580 Logan St. Suite 520
Denver, CO 80203
303-831-6099
Twitter: @NFIB_CO
