Tabor Found., Non-Profit Corp. v. Reg'l Transp. Dist.
| Decision Date | 23 April 2018 |
| Docket Number | Supreme Court Case No. 16SC639 |
| Parties | TABOR FOUNDATION, a Colorado non-profit corporation; and Penn Pfiffner, Petitioners, v. REGIONAL TRANSPORTATION DISTRICT; Lorraine Anderson, Kate Williams, Bonnie Archuleta, Paul Daniel Solano, Barbara Deadwyler, Claudia Folska, Larry Hoy, Bob Broom, Ken Mihalik, Judy Lubow, Natalie Menten, Doug Tisdale, Charles Sisk, Tina Francone, and Jeff Walker, Directors of the Regional Transportation District; Scientific and Cultural Facilities District ; Kathy Imel, Damon Barry, Deborah Malden, Dan Hopkins, Rob Johnson, Kendra Black, Peggy Lehmann, Harold Logan Jr., Ann Speer, Lynn Jeffers, and Elaine Torres, Directors of the Scientific and Cultural Facilities District ; Colorado Department of Revenue; and Barbara Brohl, Executive Director of the Colorado Department of Revenue, Respondents. |
| Court | Colorado Supreme Court |
Attorneys for Petitioners: Mountain States Legal Foundation, Steven J. Lechner, Lakewood, Colorado
Attorney for Respondents Regional Transportation District and Directors of the Regional Transportation District: Rolf G. Asphaug, Denver, Colorado
Attorneys for Respondents Scientific and Cultural Facilities District and Directors of the Scientific and Cultural Facilities District: Norton & Smith, P.C., Charles E. Norton, Denver, Colorado Icenogle Seaver Pogue P.C., Alan D. Pogue, Denver, Colorado
Attorneys for Respondents Colorado Department of Revenue and Barbara Brohl: Cynthia H. Coffman, Attorney General, Frederick R. Yarger, Solicitor General, Claudia Brett Goldin, First Assistant Attorney General, Robert H. Dodd, Jr., Assistant Solicitor General, Denver, Colorado
Attorneys for Amicus Curiae Colorado Municipal League: Butler Snow LLP, Martina Hinojosa, Dee P. Wisor, Denver, Colorado
¶ 1 The Regional Transportation District and the Scientific and Cultural Facilities District are funded by a broad sales tax with a few exemptions. Originally, the two Districts' sales taxes covered the same items as the State of Colorado's general sales tax. But over the years, lawmakers added and removed exemptions, sometimes for the State and sometimes for the Districts. As the exemptions for the State and the Districts gradually diverged, tax collection became increasingly complicated for both vendors and the revenue department. To make it easier for everyone, the General Assembly passed House Bill 13-1272, adding and removing exemptions on the Districts' taxes to realign them with the State's. This yielded a projected net increase in the Districts' annual tax revenue of 0.6%. And it is with this projected increase in tax revenue that this otherwise mundane plot thickens.
¶ 2 When the Districts began collecting the altered sales tax without holding a vote, the TABOR Foundation sued. It argued that the Bill created a "new tax" or effected a "tax policy change" and therefore required voter approval under Colorado's Taxpayer Bill of Rights, Colo. Const. art. X, § 20 (4)(a). The trial court granted the Districts summary judgment on stipulated facts, and a division of the court of appeals affirmed.
¶ 3 We clarify that legislation causing only an incidental and de minimis tax-revenue increase does not amount to a "new tax" or a "tax policy change." H.B. 13-1272 is such a bill: It serves to simplify tax collection and ease administrative burdens, and it only incidentally increases the Districts' tax revenues by a de minimis amount. Accordingly, we conclude that H.B. 13-1272 does not violate the constitution, and we affirm the judgment of the court of appeals.
¶ 4 House Bill 13-1272 (the "Bill") adjusted sales tax exemptions for the Regional Transportation District and the Scientific and Cultural Facilities District ("RTD" and "SCFD," respectively, or the "Districts," collectively). The Bill's "intended purpose" was to "simplify the administration and collection of sales and use tax" for the Districts. Ch. 337, sec. 1, 2013 Colo. Sess. Laws 1964, 1964. The legislative declaration recognized that the Districts generally shared a sales- and use-tax base with the State: tangible personal property. Yet certain types of property were exempt from taxation by the Districts but not by the State, and vice versa. The declaration explained that applying these few disparate exemptions to an otherwise common tax base "leads to confusion for taxpayers and ... is an administrative burden for vendors who collect and remit the tax to the state." Id.
¶ 5 To accomplish this simplification and administrative reduction, the Bill removed and added sales- and use-tax exemptions for the Districts to realign the Districts' tax base with the State's. The Bill removed exemptions from the Districts' taxes for sales and use of cigarettes, direct-mail advertising materials, candy, soft drinks, and nonessential food containers. It added exemptions from the Districts' taxes for sales and use of low-emitting motor vehicles, power sources and their parts, machinery, and machine tools. Just for the SCFD, the Bill added an exemption for vending-machine sales of food.
¶ 6 The Staff Fiscal Note for the Bill projected that the exemption changes would result in a 0.6% net revenue increase for the Districts.
¶ 7 Once the Bill took effect, the Districts began collecting the taxes based on the new exemptions, and did so without seeking voter approval for the tax change.
¶ 8 The TABOR Foundation (the "Foundation") sued the Districts, claiming that the Bill violated the Taxpayer Bill of Rights ("TABOR"), Colo. Const. art. X, § 20. Section 4 of TABOR requires, as relevant here, that districts "have voter approval in advance for ... any new tax ... or a tax policy change directly causing a net tax revenue gain to any district." The Foundation noted that the Bill was projected to increase revenue, and it argued that the removal of exemptions—which allowed the Districts to begin taxing items they couldn't before—amounted to a "new tax" or a "tax policy change."
¶ 9 The parties stipulated to a set of facts, and the trial court granted the Districts summary judgment. It reasoned that the Bill was not a "new tax" because it was merely an administrative adjustment to an existing tax. Nor did the Bill effect a "tax policy change," said the court, because the dictionary defined "policy" as a "high level overall plan," and the Bill did not alter a high-level overall plan.
¶ 10 A division of the court of appeals affirmed on similar grounds. It bolstered its opinion with the additional conclusion that the voters had already approved a sales tax on all items when they approved initially funding the Districts.
¶ 11 The Foundation petitioned this court for review, and we granted certiorari.1
¶ 12 H.B. 13-1272 removed some sales-tax exemptions for the Districts resulting in a projected net revenue increase. The Foundation argues the Bill2 violates TABOR because it amounts to a "new tax" or a "tax policy change directly causing a net tax revenue gain" that lacks voter approval. The Districts respond that the Bill is neither a new tax nor a tax policy change because it is merely administrative, adding some exemptions while removing others and resulting in only a marginal revenue increase.
¶ 13 We start by setting out the standard of review, the framework for analyzing constitutional challenges, and the principles for interpreting statutes and constitutions. We then examine the provisions of TABOR at issue. Next, we ask whether the Bill either creates a "new tax" or effects a "tax policy change" under section 4 of TABOR. We conclude that it does neither. Under the constitutional text and our precedent, "new tax" and "tax policy change" are best read to exclude legislation that causes only an incidental and de minimis tax revenue increase. We determine that the Bill, viewed (as it must be) in light of the Districts' annual tax revenues and budgets, causes only an incidental and de minimis revenue increase.3 Therefore, we conclude that H.B. 13-1272 does not violate TABOR.
¶ 14 We review summary judgments and interpret statutes and constitutions de novo. Burton v. Colo. Access, 2018 CO 11, ¶ 19, ––– P.3d –––– (summary judgment); Campaign Integrity Watchdog v. All. for a Safe & Indep. Woodmen Hills, 2018 CO 7, ¶ 19, 409 P.3d 357, 361 (). When the parties do not dispute the material facts, summary judgment is appropriate if the moving party is entitled to judgment as a matter of law. Ryan Ranch Cmty. Assoc., Inc. v. Kelley, 2016 CO 65, ¶ 23, 380 P.3d 137, 142.
¶ 15 We presume a statute is constitutional, and we have long required parties challenging the constitutionality of statutes to prove unconstitutionality beyond a reasonable doubt. See Dean v. People, 2016 CO 14, ¶ 8, 366 P.3d 593, 596 ; Alexander v. People, 7 Colo. 155, 2 P. 894, 896 (1884). The Foundation asks us to reconsider the beyond-a-reasonable-doubt standard for constitutional challenges, or at least for challenges to statutes under TABOR. See United Air Lines, Inc. v. City & Cty. of Denver, 973 P.2d 647, 655–59 (Colo. App. 1998) (Briggs, J., specially concurring) (). It urges us to adopt a less onerous "plain showing" standard instead. See United States v. Morrison, 529 U.S. 598, 607, 120 S.Ct. 1740, 146 L.Ed.2d 658 (2000) . But because we conclude the Foundation has failed to prove H.B. 13-1272 unconstitutional under either standard, we decline to reconsider our choice of standards today.
¶ 16 "In construing statutes and citizen initiatives, we attempt to...
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