NFIB Petitions for Reconsideration in TABOR Lawsuit

Date: April 11, 2017

Last week the National Federation of Independent Business joined with the Colorado Secretary of State in a calling upon the Colorado Court of Appeals to reconsider a decision handed-down last month in NFIB v. Williams. This joint filing is a bit unusual given that NFIB is suing the Secretary’s office for violating the Colorado Taxpayer Bill of Rights. To be sure, in most cases either the plaintiff or the defendant would request reconsideration of a problematic decision. But here NFIB (as plaintiff) and the Secretary (as defendant) both agree—notwithstanding our respective legal positions—that the Court of Appeals made a mistake in remanding our lawsuit back to district court for further factual development.

At issue in this lawsuit is the Secretary’s practice of adjusting business filing fees to cover non-business related expenses incurred by the Secretary of State’s office. For example, Colorado businesses are currently funding Colorado’s elections with their business filings fees. And the Secretary takes the position that his department can adjust business licensing fees as high he might like to cover any expense his office might incur. Yet as we’ve argued all along these aren’t lawful fees at all. They’re illegal taxes—which should have been voted upon by the people of Colorado, rather than unilaterally imposed at the discretion of the Secretary.

But last month the Court of Appeals decided that it couldn’t resolve this question without knowing more facts. While the decision helpfully reversed a lower court’s judgement that the Secretary’s “fees” were lawfully imposed by virtue of a statute pre-dating TABOR, the Court of Appeals said that it was unclear whether the Secretary had adjusted business filing rates since enactment of TABOR in 1992. However, the district court had previously recognized—and the parties agreed—that the Secretary adjusted business licensing fees numerous times. Thus, the only question left is whether those changes constituted illegal tax increases or not?

Considering this joint-filing, we’re hopeful that the Court of Appeals will issue another decision. In the interim, we’ll keep you posted on further developments in this case. For more information, check-out this Denver Business Journal article discussing last month’s decision.

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